By Seidlits H.B. No. 456 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the regulation of certain staff leasing services; 1-3 providing penalties. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. DEFINITIONS. In this Act: 1-6 (1) "Applicant" means a business seeking to be 1-7 licensed under this Act or seeking the renewal of a license under 1-8 this Act. 1-9 (2) "Client company" means a person that contracts 1-10 with a licensee and is assigned employees by the licensee under 1-11 that contract. 1-12 (3) "Commission" means the Texas Commission of 1-13 Licensing and Regulation. 1-14 (4) "Commissioner" means the commissioner of licensing 1-15 and regulation. 1-16 (5) "Controlling person" means: 1-17 (A) an officer or director of a corporation 1-18 seeking to offer staff leasing services, a shareholder holding 10 1-19 percent or more of the voting stock of a corporation seeking to 1-20 offer staff leasing services, or a partner of a partnership seeking 1-21 to offer staff leasing services; or 1-22 (B) an individual who possesses, directly or 1-23 indirectly, the power to direct or cause the direction of the 1-24 management or policies of a company seeking to offer staff leasing 2-1 services through the ownership of voting securities, by contract or 2-2 otherwise. 2-3 (6) "Department" means the Texas Department of 2-4 Licensing and Regulation. 2-5 (7) "Independent contractor" means a person who 2-6 contracts to perform work or provide a service for the benefit of 2-7 another and who: 2-8 (A) is paid by the job, not by the hour or some 2-9 other time-measured basis; 2-10 (B) is free to hire as many helpers as he 2-11 desires and to determine what each helper will be paid; and 2-12 (C) is free to work for other contractors, or to 2-13 send helpers to work for other contractors, while under contract to 2-14 the hiring employer. 2-15 (8) "Licensee" means a person licensed under this Act 2-16 to provide staff leasing services. 2-17 (9) "Person" means an individual, association, 2-18 corporation, organization, government or governmental subdivision 2-19 or agency, business trust, estate trust, joint venture, 2-20 partnership, or other legal entity. 2-21 (10) "Staff leasing services" means an arrangement by 2-22 which employees of a licensee are assigned to work at a client 2-23 company and in which employment responsibilities are in fact shared 2-24 by the licensee and the client company, the employee's assignment 2-25 is intended to be of a long-term or continuing nature, rather than 2-26 temporary or seasonal in nature, and a majority of the workforce at 2-27 a client company worksite or a specialized group within that 3-1 workforce consists of assigned employees of the licensee. The term 3-2 does not include: 3-3 (A) temporary help services; 3-4 (B) an independent contractor; or 3-5 (C) a public company or any other person in 3-6 which such public company has a direct or indirect ownership 3-7 interest in excess of 33-1/3 percent, including ownership through 3-8 subsidiaries and affiliates. For the purpose of this Act, "public 3-9 company" means a corporation whose shares are listed on the New 3-10 York Stock Exchange with total assets exceeding one billion 3-11 dollars. 3-12 (11) "Staff leasing services company" means an 3-13 individual business entity that offers staff leasing services. 3-14 (12) "Temporary employee" means an employee hired for 3-15 a temporary help service. 3-16 (13) "Temporary help service" means an arrangement by 3-17 which an organization hires its own employees and assigns them to 3-18 clients to support or supplement the client's workforce in special 3-19 work situations such as employee absences, temporary skill 3-20 shortages, seasonal workloads, or special assignments and projects. 3-21 SECTION 2. RULES. (a) The commissioner shall adopt rules 3-22 as necessary to administer this Act. 3-23 (b) Rules shall be adopted in compliance with the 3-24 Administrative Procedure and Texas Register Act (Article 6252-13a, 3-25 Vernon's Texas Civil Statutes). 3-26 (c) Each licensee is governed and controlled by this Act and 3-27 the rules adopted by the commissioner. 4-1 (d) Notwithstanding any other provision of this Act, nothing 4-2 in this Act preempts the existing statutory or rulemaking authority 4-3 of any other state agency or entity to regulate staff leasing 4-4 services consistent with their statutory authority. 4-5 SECTION 3. LICENSE REQUIRED; APPLICATION. (a) A person may 4-6 not engage in or offer staff leasing services in this state without 4-7 holding a license issued under this Act. 4-8 (b) Each person that desires an original or renewal staff 4-9 leasing services company license shall file with the department a 4-10 written application accompanied by the application fee. 4-11 (c) The department may require an applicant for a license to 4-12 provide information and certifications necessary to determine that 4-13 the applicant meets the licensing requirements of this Act. The 4-14 department may also require the applicant to provide information 4-15 and certifications necessary to determine whether individuals 4-16 affiliated with the applicant are qualified to serve as controlling 4-17 persons. 4-18 (d) An applicant or licensee is ineligible for a license for 4-19 two years after the date of final department action on the denial 4-20 or revocation of a license applied for or issued under this Act. 4-21 This restriction does not apply to a denial or revocation of a 4-22 license if the basis of the action was: 4-23 (1) an inadvertent error or omission in the 4-24 application if that error or omission is promptly corrected; 4-25 (2) the experience documented to the department was 4-26 insufficient at the time of the previous application; or 4-27 (3) the department was unable to complete the criminal 5-1 background investigation required under Section 4 of this Act 5-2 because of insufficient information received from a local, state, 5-3 or federal law enforcement agency. 5-4 (e) An applicant or licensee is ineligible for a license for 5-5 one year after the date of final department action on the denial or 5-6 revocation of a license applied for or issued under this Act if the 5-7 basis of the action was that one or more of the controlling persons 5-8 affiliated with the applicant or licensee was determined by the 5-9 department to be unsuitable, if that unsuitable controlling person 5-10 has in fact ceased to be a controlling person of the applicant or 5-11 licensee. 5-12 SECTION 4. LICENSE REQUIREMENTS. (a) To be qualified to 5-13 serve as a controlling person of a licensee under this Act, that 5-14 person must be at least 18 years of age, be of good moral 5-15 character, and have educational, managerial, or business experience 5-16 relevant to: 5-17 (1) operation of a business entity offering staff 5-18 leasing services; or 5-19 (2) service as a controlling person of a staff leasing 5-20 services company. 5-21 (b) For the purposes of this section, "good moral character" 5-22 means a personal history of honesty, trustworthiness, fairness, a 5-23 good reputation for fair dealing, and respect for the rights of 5-24 others and for the laws of this state and nation. 5-25 (c) The department shall conduct a thorough background 5-26 investigation of each individual applicant and of each controlling 5-27 person of each applicant to determine whether that applicant or 6-1 controlling person is qualified under this Act. The department may 6-2 deny an application for the issuance or renewal of a license if it 6-3 finds that a controlling person is not qualified under this Act. 6-4 The investigation must include: 6-5 (1) the submission of fingerprints for processing 6-6 through appropriate local, state, and federal law enforcement 6-7 agencies; and 6-8 (2) examination by the department of police or other 6-9 law enforcement records maintained by local, state, or federal law 6-10 enforcement agencies. 6-11 (d) Department background investigations are governed by 6-12 this Act and by Article 6252-13c and Article 6252-13d, Vernon's 6-13 Texas Civil Statutes. Conviction of a crime does not automatically 6-14 disqualify a controlling person, require the revocation of a 6-15 license, or require the denial of an application for a new or 6-16 renewed license. The department shall consider criminal 6-17 convictions as provided by Article 6252-13c and Article 6252-13d, 6-18 Vernon's Texas Civil Statutes. 6-19 (e) Each licensee shall maintain a registered agent for the 6-20 service of process in this state. 6-21 (f) An applicant for an original or renewal license must 6-22 demonstrate a net worth as follows: 6-23 (1) $50,000 if the applicant employs fewer than 250 6-24 assigned employees; 6-25 (2) $75,000 if the applicant employs at least 250 but 6-26 not more than 750 assigned employees; or 6-27 (3) $100,000 if the applicant employs more than 750 7-1 assigned employees. 7-2 The applicant shall demonstrate the net worth to the 7-3 department by providing the department with the applicant's 7-4 financial statement or a copy of the applicant's most recent 7-5 federal tax return. The net worth requirement may also be 7-6 satisfied through guaranties, letters of credit, or other security 7-7 acceptable to the department. A guaranty is not acceptable to 7-8 satisfy this subsection unless the applicant submits sufficient 7-9 evidence to satisfy the department that the guarantor has adequate 7-10 resources to satisfy the obligations of the guaranty. 7-11 (g) In calculating net worth, a licensee shall include 7-12 adequate reserves for all taxes and insurance, including reserves 7-13 for claims incurred but not paid and for claims incurred but not 7-14 reported under plans of self-insurance for health benefits. 7-15 (h) A document submitted to establish net worth must reflect 7-16 the net worth as of a date not earlier than six months before the 7-17 date on which the application is submitted. A document submitted 7-18 to establish net worth must be prepared or certified by an 7-19 independent certified public accountant. Information supplied 7-20 regarding net worth, including copies of federal tax returns, is 7-21 proprietary and confidential and is exempt from disclosure to third 7-22 parties, other than to other governmental agencies with a 7-23 reasonable legitimate purpose for obtaining the information. 7-24 SECTION 5. FEES. (a) Each applicant for an original or 7-25 renewal license shall pay to the department on the issuance of the 7-26 license or license renewal a fee set by the commission by rule, in 7-27 an amount not to exceed $3,000 for a staff leasing services company 8-1 license. 8-2 (b) The department is authorized to charge reasonable fees 8-3 for license applications and renewals, investigations, inspections, 8-4 and any other administrative or enforcement responsibilities 8-5 created under this Act. 8-6 SECTION 6. STAFF LEASING SERVICES AGREEMENT. A licensee 8-7 shall establish the terms of a staff leasing services agreement by 8-8 a written contract between the licensee and the client company. 8-9 The licensee shall give written notice of the agreement as it 8-10 affects assigned employees to each employee assigned to a client 8-11 company worksite. 8-12 SECTION 7. CONTRACT REQUIREMENTS; STATUS AS EMPLOYER. (a) 8-13 A contract between a licensee and a client company must provide 8-14 that the licensee: 8-15 (1) reserves the right of direction and control over 8-16 employees assigned to a client's worksites; 8-17 (2) assumes responsibility for the payment of wages to 8-18 the assigned employees without regard to payments by the client to 8-19 the licensee; 8-20 (3) assumes responsibility for the payment of payroll 8-21 taxes and collection of taxes from payroll on assigned employees; 8-22 (4) retains the right to hire, fire, discipline, and 8-23 reassign the assigned employees; and 8-24 (5) retains the right of direction and control over 8-25 the adoption of employment and safety policies and the management 8-26 of workers' compensation claims, claim filings, and related 8-27 procedures. 9-1 (b) Except as provided by other sections of this Act, for 9-2 the purposes of the law of this state, a licensee is the employer 9-3 of the employees assigned to a client company. This Act does not 9-4 affect the rights, duties, or liabilities of licensees, client 9-5 companies, or employees under federal law. 9-6 (c) A licensee is responsible for its contractual duties and 9-7 responsibilities to manage, maintain, collect, and make timely 9-8 payments of: 9-9 (1) insurance premiums; 9-10 (2) benefit and welfare plans; 9-11 (3) other employee withholding; and 9-12 (4) any other expressed responsibility within the 9-13 scope of the contract between the client company with assigned 9-14 employees for fulfilling the duties imposed under this section. 9-15 (d) A licensee shall: 9-16 (1) comply with all appropriate state and federal laws 9-17 relating to reporting, sponsoring, filing, and maintaining benefit 9-18 and welfare plans; 9-19 (2) maintain adequate books and records regarding its 9-20 duties and responsibilities; 9-21 (3) maintain and make available at all times to the 9-22 commissioner: 9-23 (i) the correct name, address, and telephone 9-24 number of each client company; 9-25 (ii) each client company contract; and 9-26 (iii) a listing by classification code as 9-27 described in the "Standard Industrial Classification Manual," 10-1 published by the United States Office of Management and Budget, of 10-2 each client company; and 10-3 (4) notify the department of any addition or deletion 10-4 of a controlling person as listed on the license application or 10-5 renewal form by providing the name of the person not later than 30 10-6 days after the date the person was added or deleted as a 10-7 controlling person. A notarized biographical history shall be 10-8 provided to the department in connection with the addition of a new 10-9 controlling person. 10-10 (e) No licensee or any controlling person of a licensee 10-11 shall have an ownership interest of any nature of greater than 10 10-12 percent in any of the client companies with which it has an 10-13 agreement. 10-14 SECTION 8. LIMITED LICENSE; RECIPROCITY. (a) The 10-15 commissioner by rule shall provide for the issuance of a limited 10-16 license for a person that offers staff leasing services in this 10-17 state on a limited basis and that is primarily engaged in offering 10-18 staff leasing services in another state. The commissioner by rule 10-19 shall provide for reciprocity for a person offering staff leasing 10-20 services that is licensed in another state and primarily engaged in 10-21 business outside this state. The principal place of business of a 10-22 person offering staff leasing services that applies for a license 10-23 under this section must be located in a state other than this 10-24 state. 10-25 (b) For the purposes of this section, a person offers staff 10-26 leasing services on a limited basis if the person employs fewer 10-27 than 20 assigned employees. 11-1 SECTION 9. ISSUANCE AND TERM OF LICENSES. (a) The 11-2 department shall issue a license to an applicant determined to meet 11-3 the requirements of this Act. The department shall issue the 11-4 license not later than the 90th day after the date on which the 11-5 completed application is filed with the department. 11-6 (b) A license issued by the department under this Act is 11-7 valid for one year. The department shall renew a license on 11-8 receipt of a renewal application approved by the department and 11-9 payment of the required renewal fees. 11-10 SECTION 10. EMPLOYEE BENEFIT PLANS; REQUIRED DISCLOSURE. 11-11 (a) A licensee may sponsor and maintain employee benefit plans for 11-12 the benefit of assigned employees. A client company may include 11-13 assigned employees in any benefit plan sponsored by the client 11-14 company. 11-15 (b) Each licensee shall disclose to the department, each 11-16 client company, and its assigned employees information relating to 11-17 any insurance or benefit plan provided for the benefit of its 11-18 assigned employees. The information must include: 11-19 (1) the type of coverage; 11-20 (2) the identity of each insurer for each type of 11-21 coverage; 11-22 (3) the amount of benefits provided for each type of 11-23 coverage and to whom or on whose behalf benefits are to be paid; 11-24 (4) the policy limits on each insurance policy; and 11-25 (5) whether the coverage is fully insured, partially 11-26 insured, or fully self-funded. 11-27 (c) The commissioner by rule may require the filing by 12-1 licensees of other reports that are reasonably necessary to the 12-2 implementation of this Act. 12-3 SECTION 11. WORKERS' COMPENSATION INSURANCE. (a) A 12-4 licensee may elect to obtain workers' compensation insurance 12-5 coverage in the same manner as any other employer. If coverage is 12-6 obtained, that insurance must comply with the applicable provisions 12-7 of the Insurance Code and be consistent with rules adopted by the 12-8 Texas Department of Insurance. A licensee is entitled to the same 12-9 rights to obtain all types of insurance coverage, including 12-10 endorsements, as may be obtained by other business entities doing 12-11 business in this state. 12-12 (b) If a licensee maintains workers' compensation insurance, 12-13 it shall pay workers' compensation insurance premiums based on the 12-14 experience rating of a client company for the first two years the 12-15 client company has a contract with the licensee. 12-16 (c) For the purposes of workers' compensation insurance, a 12-17 licensee and its client company shall be co-employers. If a 12-18 licensee elects to obtain workers' compensation insurance, then the 12-19 client company and the licensee shall be subject to Sections 3.08 12-20 and 4.01 of the Texas Workers' Compensation Act (Articles 8308-3.08 12-21 and 8308-4.01, Vernon's Texas Civil Statutes). 12-22 (d) If a licensee does not elect to obtain workers' 12-23 compensation insurance, then both the licensee and the client 12-24 company shall be subject to Sections 3.03, 3.04, and 3.22 of the 12-25 Texas Workers' Compensation Act (Articles 8308-3.03, 8308-3.04, and 12-26 8308-3.22, Vernon's Texas Civil Statutes). In any personal injury 12-27 action filed by an assigned worker where the licensee has not 13-1 obtained workers' compensation coverage, the licensee and the 13-2 client company are jointly and severally liable for all damages 13-3 awarded to an employee assigned to that client company at the time 13-4 of the injury. 13-5 (e) When an arrangement between a licensee and a client 13-6 company terminates after two years, if the client company either 13-7 obtains a new workers' compensation insurance policy in its own 13-8 name or adds its former assigned workers to an existing policy, the 13-9 premium for the workers' compensation insurance policy of the 13-10 client company shall be based on either: 13-11 (1) the experience modifier of the client company 13-12 prior to entering into the staff leasing arrangement; or 13-13 (2) the experience modifier of the licensee at the 13-14 time the staff leasing arrangement terminated, whichever is lowest. 13-15 Upon request, the Texas Department of Insurance shall provide 13-16 the necessary calculations to the prospective workers' compensation 13-17 insurer of the client company in order to comply with this 13-18 provision. 13-19 SECTION 12. HEALTH BENEFIT PLANS. (a) No licensee shall 13-20 sponsor a plan of self-insurance for health benefits, except as may 13-21 be permitted by the Employee Retirement Income Security Act of 1974 13-22 (Pub. L. No. 93-406). 13-23 (b) A licensee having a plan of self-insurance for health 13-24 benefits for its leased employees in effect as of March 1, 1993, 13-25 shall be granted a period of 12 months from March 1, 1993, to bring 13-26 its plan into compliance with the requirement of this section. 13-27 (c) For purposes of this section, a "plan for 14-1 self-insurance" shall exclude any arrangement where an admitted 14-2 insurance carrier has issued a policy of insurance responsible for 14-3 all of the obligations of the health plan. 14-4 SECTION 13. UNEMPLOYMENT TAXES. (a) A licensee is the 14-5 employer for the purposes of the Texas Unemployment Compensation 14-6 Act (Article 5221b-1 et seq., Vernon's Texas Civil Statutes). In 14-7 addition to any other reports required to be filed by law, a 14-8 licensee shall report to the Texas Employment Commission the name, 14-9 address, telephone number, federal income tax identification 14-10 number, and classification code as described in the "Standard 14-11 Industrial Classification Manual" as published by the United States 14-12 Office of Management and Budget of each client company on a form 14-13 prescribed by the Texas Employment Commission on a quarterly basis. 14-14 (b) A licensee shall notify the Texas Employment Commission 14-15 when it contracts with a client company. Such notification shall 14-16 be made on a form established by the Texas Employment Commission. 14-17 (c) For purposes of the Texas Unemployment Compensation Act 14-18 (Article 5221b-1 et seq., Vernon's Texas Civil Statutes), in the 14-19 event of the termination of a contract between a licensee and a 14-20 client company or the failure by a staff leasing entity to submit 14-21 reports or make tax payments as required by the Act, the 14-22 contracting client company shall be treated as a new employer 14-23 without a previous experience record, unless the client company is 14-24 otherwise eligible for an experience rating. 14-25 SECTION 14. POSTING OF LICENSES. (a) The commissioner by 14-26 rule shall determine the form and content of: 14-27 (1) the licenses issued under this Act; and 15-1 (2) notices required to be posted under this section. 15-2 (b) Each license issued under this Act must be posted in a 15-3 conspicuous place in the principal place of business in this state 15-4 of the licensee. Each licensee shall display, in a place that is 15-5 in clear and unobstructed public view, a notice stating that the 15-6 business operated at the location is licensed and regulated by the 15-7 department and that any questions or complaints should be directed 15-8 to the department. 15-9 SECTION 15. LICENSE NOT ASSIGNABLE; CHANGES OF NAME OR 15-10 LOCATION. (a) A licensee may not conduct business under any name 15-11 other than that specified in the license. A license issued under 15-12 this Act is not assignable. A licensee may not conduct business 15-13 under any fictitious or assumed name without prior written 15-14 authorization from the department. The department may not 15-15 authorize the use of a name that is so similar to that of a public 15-16 office or agency or to that of another licensee that the public may 15-17 be confused or misled by its use. A licensee may not conduct 15-18 business under more than one name unless it has obtained a separate 15-19 license for each name. 15-20 (b) A licensee may change its licensed name at any time by 15-21 notifying the department and paying a fee for each change of name. 15-22 The commission by rule shall set the fee for a name change in an 15-23 amount not to exceed $50. A licensee may change its name on 15-24 renewal of the license without the payment of the name change fee. 15-25 (c) A licensee must notify the department in writing of: 15-26 (1) any change in the location of its primary business 15-27 office; 16-1 (2) the addition of more business offices; or 16-2 (3) a change in the location of business records 16-3 maintained by the licensee. 16-4 SECTION 16. PROHIBITED ACTS; CRIMINAL PENALTY. (a) A 16-5 person may not: 16-6 (1) engage in staff leasing services without holding a 16-7 license under this Act as a staff leasing services company; 16-8 (2) use the name or title "staff leasing company," 16-9 "employee leasing company," "licensed staff leasing company," or 16-10 "staff leasing services company," or otherwise represent that it is 16-11 licensed under this Act, unless the entity holds a license issued 16-12 under this Act; 16-13 (3) represent as the person's own the license of 16-14 another person or represent that a person is licensed if the person 16-15 does not hold a license; 16-16 (4) give false or forged evidence to the department in 16-17 connection with obtaining or renewing a license or in connection 16-18 with disciplinary proceedings under this Act; or 16-19 (5) use or attempt to use a license that has expired 16-20 or been revoked. 16-21 (b) A person that violates Subsection (a) of this section 16-22 commits an offense. An offense under this subsection is a Class A 16-23 misdemeanor. 16-24 (c) The commissioner may notify the attorney general of a 16-25 violation, and the attorney general may apply to a district court 16-26 in Travis County for leave to file suit in the nature of quo 16-27 warranto or for injunctive relief, or both. The attorney general 17-1 shall not be required to post a bond for injunction. 17-2 SECTION 17. DISCIPLINARY ACTIONS. (a) For the purposes of 17-3 this section, "conviction" includes a plea of nolo contendere or a 17-4 finding of guilt, regardless of adjudication. 17-5 (b) Disciplinary action may be taken against a licensee by 17-6 the department on any of the following grounds: 17-7 (1) the conviction of a licensee or any controlling 17-8 person of a licensee of bribery, fraud, or intentional or material 17-9 misrepresentation in obtaining, attempting to obtain, or renewing a 17-10 license; 17-11 (2) the conviction of a licensee or any controlling 17-12 person of a licensee of a crime that relates to the operation of a 17-13 staff leasing service or the ability of the licensee or any 17-14 controlling person of a licensee to operate a staff leasing 17-15 service; 17-16 (3) the conviction of a licensee or any controlling 17-17 person of a licensee of a crime that relates to the classification, 17-18 misclassification, or underreporting of employees under the Texas 17-19 Workers' Compensation Act (Article 8308-1.01 et seq., Vernon's 17-20 Texas Civil Statutes); 17-21 (4) the conviction of a licensee or any controlling 17-22 person of a licensee of a crime that relates to the establishment 17-23 or maintenance of a self-insurance program, whether health 17-24 insurance, workers' compensation insurance, or other insurance; 17-25 (5) the conviction of a licensee or any controlling 17-26 person of a licensee of a crime that relates to fraud, deceit, or 17-27 misconduct in the operation of a staff leasing service; 18-1 (6) engaging in staff leasing services without a 18-2 license; 18-3 (7) transferring or attempting to transfer a license 18-4 issued under this Act; 18-5 (8) violating this Act or any order or rule issued by 18-6 the department or commissioner under this Act; 18-7 (9) failing to notify the department, in writing, of 18-8 the felony conviction of any controlling person not later than the 18-9 30th day after the date on which that conviction is final; 18-10 (10) failing to cooperate with an investigation, 18-11 examination, or audit of the licensee's records conducted by the 18-12 licensee's insurance company or the insurance company's designee, 18-13 as allowed by the insurance contract or as authorized by law by the 18-14 Texas Department of Insurance; 18-15 (11) failing to notify the department and the Texas 18-16 Department of Insurance not later than the 30th day after the 18-17 effective date of the change of any change in ownership, principal 18-18 business address, or the address of accounts and records; 18-19 (12) failing to correct any tax filings or payment 18-20 deficiencies within a reasonable time as determined by the 18-21 commissioner; 18-22 (13) refusing, after reasonable notice, to meet 18-23 reasonable health and safety requirements within the licensee's 18-24 control and made known to the licensee by a federal or state 18-25 agency; 18-26 (14) a delinquency in the payment of the licensee's 18-27 insurance premiums other than those subject to a legitimate 19-1 dispute; 19-2 (15) a delinquency in the payment of any employee 19-3 benefit plan premiums or contributions other than those subject to 19-4 a legitimate dispute; or 19-5 (16) knowingly making a material misrepresentation to 19-6 an insurance company, or to the department or other governmental 19-7 agency. 19-8 (c) On a finding that a licensee has violated one or more 19-9 provisions of Subsection (b) of this section, the department may: 19-10 (1) deny an application for a license; 19-11 (2) revoke, restrict, or refuse to renew a license; 19-12 (3) impose an administrative penalty in an amount not 19-13 less than $1,000 per violation, but not more than $50,000; 19-14 (4) issue a reprimand; or 19-15 (5) place the licensee on probation for the period and 19-16 subject to conditions that the department specifies. 19-17 (d) On revocation of a license, the licensee shall 19-18 immediately return the revoked license to the department. 19-19 (e) Disciplinary action may be taken, a denial of an 19-20 application for a new or renewal license or a revocation of a 19-21 license may be done, or a determination that a controlling person 19-22 is unqualified may be made by the department only subject to the 19-23 Administrative Procedure and Texas Register Act (Article 6252-13a, 19-24 Vernon's Texas Civil Statutes), with notice to, and an opportunity 19-25 for a hearing by, the affected applicant, licensee, or controlling 19-26 person. 19-27 (f) If a license is revoked or renewal is denied, the 20-1 affected licensee may request a reinstatement hearing after a 20-2 minimum of one year. The department may reinstate or renew the 20-3 license only if the cause of the nonrenewal or revocation has been 20-4 corrected. 20-5 SECTION 18. FEES USED FOR ADMINISTRATION. All fees 20-6 collected by the department under this Act shall be used to 20-7 implement this Act. 20-8 SECTION 19. EFFECT OF OTHER LAW. This Act does not exempt a 20-9 client of a licensee, or any assigned employee, from any other 20-10 license requirements imposed under local, state, or federal law. 20-11 An employee who is licensed, registered, or certified under law and 20-12 who is assigned to a client company is considered to be an employee 20-13 of the client company for the purpose of that license, 20-14 registration, or certification, but otherwise remains the employee 20-15 of the licensee as provided in this Act. 20-16 SECTION 20. EFFECTIVE DATE; TRANSITION. (a) Except as 20-17 provided by Subsection (b) of this section, this Act takes effect 20-18 September 1, 1993. 20-19 (b) A person is not required to hold a license under this 20-20 Act to provide staff leasing services until March 1, 1994. 20-21 (c) No person who applies for a license on or before March 20-22 1, 1994, and whose application is granted, shall be liable for any 20-23 act, omission, or representation that would be lawful under its 20-24 license had the license been in effect at the time of such act, 20-25 omission, or representation. 20-26 SECTION 21. EMERGENCY. The importance of this legislation 20-27 and the crowded condition of the calendars in both houses create an 21-1 emergency and an imperative public necessity that the 21-2 constitutional rule requiring bills to be read on three several 21-3 days in each house be suspended, and this rule is hereby suspended.