H.B. No. 456
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 the
2-11 person 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) "Public company" means a corporation whose shares
2-22 are listed on the New York Stock Exchange and that has total assets
2-23 that exceed $1 billion.
2-24 (11) "Staff leasing services" means an arrangement by
2-25 which employees of a licensee are assigned to work at a client
2-26 company and in which employment responsibilities are in fact shared
2-27 by the licensee and the client company, the employee's assignment
3-1 is intended to be of a long-term or continuing nature, rather than
3-2 temporary or seasonal in nature, and a majority of the workforce at
3-3 a client company worksite or a specialized group within that
3-4 workforce consists of assigned employees of the licensee. The term
3-5 does not include:
3-6 (A) a temporary help service;
3-7 (B) an independent contractor;
3-8 (C) a public company or any other person in
3-9 which that public company has a direct or indirect ownership
3-10 interest in excess of 33-1/3 percent, including ownership through
3-11 subsidiaries and affiliates; or
3-12 (D) a temporary common worker agency or employer
3-13 as defined in Volume 15, Article 5221a-10, Vernon's Texas Civil
3-14 Statutes.
3-15 (12) "Staff leasing services company" means an
3-16 individual business entity that offers staff leasing services.
3-17 (13) "Temporary employee" means an employee hired for
3-18 a temporary help service.
3-19 (14) "Temporary help service" means an arrangement by
3-20 which an organization hires its own employees and assigns them to
3-21 clients to support or supplement the client's workforce in special
3-22 work situations such as employee absences, temporary skill
3-23 shortages, seasonal workloads, or special assignments and projects.
3-24 SECTION 2. RULES; INTERAGENCY COOPERATION. (a) The
3-25 commissioner shall adopt rules as necessary to administer this Act.
3-26 (b) Rules shall be adopted in compliance with the
3-27 Administrative Procedure and Texas Register Act (Article 6252-13a,
4-1 Vernon's Texas Civil Statutes).
4-2 (c) Each licensee is governed and controlled by this Act and
4-3 the rules adopted by the commissioner.
4-4 (d) Notwithstanding any other provision of this Act, nothing
4-5 in this Act preempts the existing statutory or rulemaking authority
4-6 of any other state agency or entity to regulate staff leasing
4-7 services in a manner that is consistent with the statutory
4-8 authority of that state agency or entity.
4-9 (e) Each state agency that, in performing duties under other
4-10 law, affects the regulation of staff leasing services shall
4-11 cooperate with the department, the commissioner, and other state
4-12 agencies as necessary to fully implement and enforce this Act. In
4-13 particular, the Texas Employment Commission, the Texas Department
4-14 of Insurance, the Texas Workers' Compensation Commission, and the
4-15 attorney general's office shall assist in the implementation of
4-16 this Act and shall provide information to the department on
4-17 request.
4-18 SECTION 3. LICENSE REQUIRED; APPLICATION. (a) A person may
4-19 not engage in or offer staff leasing services in this state without
4-20 holding a license issued under this Act.
4-21 (b) Each person that desires an original or renewal staff
4-22 leasing services company license shall file with the department a
4-23 written application accompanied by the application fee.
4-24 (c) The department may require an applicant for a license to
4-25 provide information and certifications necessary to determine that
4-26 the applicant meets the licensing requirements of this Act. The
4-27 department may also require the applicant to provide information
5-1 and certifications necessary to determine whether individuals
5-2 affiliated with the applicant are qualified to serve as controlling
5-3 persons.
5-4 (d) An applicant or licensee is ineligible for a license for
5-5 two years after the date of final department action on the denial
5-6 or revocation of a license applied for or issued under this Act.
5-7 This restriction does not apply to a denial or revocation of a
5-8 license if the basis of the action was:
5-9 (1) an inadvertent error or omission in the
5-10 application if that error or omission is promptly corrected;
5-11 (2) the experience documented to the department was
5-12 insufficient at the time of the previous application; or
5-13 (3) the department was unable to complete the criminal
5-14 background investigation required under Section 4 of this Act
5-15 because of insufficient information received from a local, state,
5-16 or federal law enforcement agency.
5-17 (e) An applicant or licensee is ineligible for a license for
5-18 one year after the date of final department action on the denial or
5-19 revocation of a license applied for or issued under this Act if:
5-20 (1) the basis of the denial or revocation was that one
5-21 or more of the controlling persons affiliated with the applicant or
5-22 licensee was determined by the department to be unsuitable; or
5-23 (2) that unsuitable controlling person has in fact
5-24 ceased to be a controlling person of the applicant or licensee.
5-25 SECTION 4. LICENSE REQUIREMENTS. (a) To be qualified to
5-26 serve as a controlling person of a licensee under this Act, that
5-27 person must be at least 18 years of age, be of good moral
6-1 character, and have educational, managerial, or business experience
6-2 relevant to:
6-3 (1) operation of a business entity offering staff
6-4 leasing services; or
6-5 (2) service as a controlling person of a staff leasing
6-6 services company.
6-7 (b) For the purposes of this section, "good moral character"
6-8 means a personal history of honesty, trustworthiness, fairness, a
6-9 good reputation for fair dealing, and respect for the rights of
6-10 others and for the laws of this state and nation.
6-11 (c) The department shall conduct a thorough background
6-12 investigation of each individual applicant and of each controlling
6-13 person of each applicant to determine whether that applicant or
6-14 controlling person is qualified under this Act. The department may
6-15 deny an application for the issuance or renewal of a license if it
6-16 finds that a controlling person is not qualified under this Act.
6-17 The investigation must include:
6-18 (1) the submission of fingerprints for processing
6-19 through appropriate local, state, and federal law enforcement
6-20 agencies; and
6-21 (2) examination by the department of police or other
6-22 law enforcement records maintained by local, state, or federal law
6-23 enforcement agencies.
6-24 (d) Department background investigations are governed by
6-25 this Act and by Article 6252-13c, Revised Statutes, and Sections
6-26 2-5, Acts of the 67th Legislature, Regular Session, 1981 (Article
6-27 6252-13d, Vernon's Texas Civil Statutes). Conviction of a crime
7-1 does not automatically disqualify a controlling person, require the
7-2 revocation of a license, or require the denial of an application
7-3 for a new or renewed license. The department shall consider
7-4 criminal convictions as provided by Article 6252-13c, Revised
7-5 Statutes, and Sections 2-5, Acts of the 67th Legislature, Regular
7-6 Session, 1981 (Article 6252-13d, Vernon's Texas Civil Statutes).
7-7 (e) Each licensee shall maintain a registered agent for the
7-8 service of process in this state.
7-9 (f) An applicant for an original or renewal license must
7-10 demonstrate a net worth as follows:
7-11 (1) $50,000 if the applicant employs fewer than 250
7-12 assigned employees;
7-13 (2) $75,000 if the applicant employs at least 250 but
7-14 not more than 750 assigned employees;
7-15 (3) $100,000 if the applicant employs more than 750
7-16 assigned employees.
7-17 (g) For purposes of Subsection (f) of this section,
7-18 "assigned employee" means a full-time employee whose normal work
7-19 week is at least 25 hours per week and whose work is performed in
7-20 this state. The term does not include an employee hired to support
7-21 or supplement the client's workforce in special work situations,
7-22 such as employee absences, temporary skill shortages, seasonal
7-23 workloads, or special assignments and projects.
7-24 (h) The applicant shall demonstrate the net worth to the
7-25 department by providing the department with the applicant's
7-26 financial statement or a copy of the applicant's most recent
7-27 federal tax return. The net worth requirement may also be
8-1 satisfied through guarantees, letters of credit, or other security
8-2 acceptable to the department. A guaranty is not acceptable to
8-3 satisfy this subsection unless the applicant submits sufficient
8-4 evidence to satisfy the department that the guarantor has adequate
8-5 resources to satisfy the obligations of the guaranty.
8-6 (i) In calculating net worth, an applicant shall include
8-7 adequate reserves for all taxes and insurance, including reserves
8-8 for claims incurred but not paid and for claims incurred but not
8-9 reported under plans of self-insurance for health benefits. The
8-10 calculation of net worth by an applicant shall be made according to
8-11 Section 448, Internal Revenue Code (26 U.S.C. Section 448).
8-12 (j) A document submitted to establish net worth must reflect
8-13 the net worth as of a date not earlier than six months before the
8-14 date on which the application is submitted. A document submitted
8-15 to establish net worth must be prepared or certified by an
8-16 independent certified public accountant. Information supplied
8-17 regarding net worth, including copies of federal tax returns, is
8-18 proprietary and confidential and is exempt from disclosure to third
8-19 parties, other than to other governmental agencies with a
8-20 reasonable legitimate purpose for obtaining the information.
8-21 SECTION 5. FEES. (a) Each applicant for an original or
8-22 renewal license shall pay to the department on the issuance of the
8-23 license or license renewal a fee set by the commission by rule, in
8-24 an amount not to exceed $3,000 for a staff leasing services company
8-25 license.
8-26 (b) The commission is authorized to charge reasonable fees
8-27 for license applications and renewals, investigations, inspections,
9-1 and any other administrative or enforcement responsibilities
9-2 created under this Act.
9-3 SECTION 6. STAFF LEASING SERVICES AGREEMENT. A licensee
9-4 shall establish the terms of a staff leasing services agreement by
9-5 a written contract between the licensee and the client company.
9-6 The licensee shall give written notice of the agreement as it
9-7 affects assigned employees to each employee assigned to a client
9-8 company worksite.
9-9 SECTION 7. CONTRACT REQUIREMENTS. (a) A contract between a
9-10 licensee and a client company must provide that the licensee:
9-11 (1) reserves the right of direction and control over
9-12 employees assigned to a client's worksites;
9-13 (2) assumes responsibility for the payment of wages to
9-14 the assigned employees without regard to payments by the client to
9-15 the licensee;
9-16 (3) assumes responsibility for the payment of payroll
9-17 taxes and collection of taxes from payroll on assigned employees;
9-18 (4) retains the right to hire, fire, discipline, and
9-19 reassign the assigned employees; and
9-20 (5) retains the right of direction and control over
9-21 the adoption of employment and safety policies and the management
9-22 of workers' compensation claims, claim filings, and related
9-23 procedures.
9-24 (b) A licensee is responsible for its contractual duties and
9-25 responsibilities to manage, maintain, collect, and make timely
9-26 payments for:
9-27 (1) insurance premiums;
10-1 (2) benefit and welfare plans;
10-2 (3) other employee withholding; and
10-3 (4) any other expressed responsibility within the
10-4 scope of the contract for fulfilling the duties imposed under this
10-5 section.
10-6 (c) A licensee shall:
10-7 (1) comply with all appropriate state and federal laws
10-8 relating to reporting, sponsoring, filing, and maintaining benefit
10-9 and welfare plans;
10-10 (2) maintain adequate books and records regarding its
10-11 duties and responsibilities;
10-12 (3) maintain and make available at all times to the
10-13 commissioner the following information, which shall be treated as
10-14 proprietary and confidential and is exempt from disclosure to third
10-15 parties, except other governmental agencies with a reasonable and
10-16 legitimate purpose for obtaining the information:
10-17 (A) the correct name, address, and telephone
10-18 number of each client company;
10-19 (B) each client company contract; and
10-20 (C) a listing by classification code as
10-21 described in the "Standard Industrial Classification Manual,"
10-22 published by the United States Office of Management and Budget, of
10-23 each client company;
10-24 (4) notify the department of any addition or deletion
10-25 of a controlling person as listed on the license application or
10-26 renewal form by providing the name of the person not later than the
10-27 30th day after the date on which the person is added or deleted as
11-1 a controlling person; and
11-2 (5) provide a notarized biographical history to the
11-3 department in connection with the addition of a new controlling
11-4 person.
11-5 SECTION 8. LIMITED LICENSE. (a) The commissioner by rule
11-6 shall provide for the issuance of a limited license for a person
11-7 that offers staff leasing services in this state on a limited basis
11-8 and that is primarily engaged in offering staff leasing services in
11-9 another state. The principal place of business of a person
11-10 offering staff leasing services that applies for a license under
11-11 this section must be located in a state other than this state.
11-12 (b) For the purposes of this section, a person offers staff
11-13 leasing services on a limited basis if the person employs fewer
11-14 than 20 assigned employees.
11-15 (c) A person offering staff leasing services on a limited
11-16 basis must comply with all provisions of this Act with respect to
11-17 those services performed within this state.
11-18 SECTION 9. ISSUANCE AND TERM OF LICENSES. (a) The
11-19 department shall issue a license to an applicant determined to meet
11-20 the requirements of this Act. The department shall issue the
11-21 license not later than the 90th day after the date on which the
11-22 completed application is filed with the department.
11-23 (b) A license issued by the department under this Act is
11-24 valid for one year. The department shall renew a license on
11-25 receipt of a renewal application approved by the department and
11-26 payment of the required renewal fees.
11-27 SECTION 10. EMPLOYEE BENEFIT PLANS; REQUIRED DISCLOSURE.
12-1 (a) A licensee may sponsor and maintain employee benefit plans for
12-2 the benefit of assigned employees. A client company may include
12-3 assigned employees in any benefit plan sponsored by the client
12-4 company.
12-5 (b) Each licensee shall disclose to the department, each
12-6 client company, and its assigned employees information relating to
12-7 any insurance or benefit plan provided for the benefit of its
12-8 assigned employees. The information must include:
12-9 (1) the type of coverage;
12-10 (2) the identity of each insurer for each type of
12-11 coverage;
12-12 (3) the amount of benefits provided for each type of
12-13 coverage and to whom or on whose behalf benefits are to be paid;
12-14 (4) the policy limits on each insurance policy; and
12-15 (5) whether the coverage is fully insured, partially
12-16 insured, or fully self-funded.
12-17 (c) The commissioner by rule may require the filing by
12-18 licensees of other reports that are reasonably necessary to the
12-19 implementation of this Act.
12-20 SECTION 11. WORKERS' COMPENSATION INSURANCE. (a) A
12-21 licensee may elect to obtain workers' compensation insurance
12-22 coverage for its assigned employees through an insurance company as
12-23 defined under Section 1.03, Texas Workers' Compensation Act
12-24 (Article 8308-1.03, Vernon's Texas Civil Statutes), or through
12-25 self-insurance as provided under Chapter D, Article 3, Texas
12-26 Workers' Compensation Act (Article 8308-3.51 et seq., Vernon's
12-27 Texas Civil Statutes).
13-1 (b) If a licensee maintains workers' compensation insurance,
13-2 it shall pay workers' compensation insurance premiums based on the
13-3 experience rating of the client company for the first two years the
13-4 client company has a contract with the licensee and as further
13-5 provided by rule by the Texas Department of Insurance.
13-6 (c) For workers' compensation insurance purposes, a licensee
13-7 and its client company shall be co-employers. If a licensee elects
13-8 to obtain workers' compensation insurance, the client company and
13-9 the licensee are subject to Sections 3.08 and 4.01, Texas Workers'
13-10 Compensation Act (Articles 8308-3.08 and 8308-4.01, Vernon's Texas
13-11 Civil Statutes).
13-12 (d) If a licensee does not elect to obtain workers'
13-13 compensation insurance, both the licensee and the client company
13-14 are subject to Sections 3.03, 3.04, and 3.22, Texas Workers'
13-15 Compensation Act (Articles 8308-3.03, 8308-3.04, and 8308-3.22,
13-16 Vernon's Texas Civil Statutes).
13-17 (e) After the expiration of the two-year period under
13-18 Subsection (b) of this section, if the client company either
13-19 obtains a new workers' compensation insurance policy in its own
13-20 name or adds its former assigned workers to an existing policy, the
13-21 premium for the workers' compensation insurance policy of the
13-22 client company shall be based on the lower of:
13-23 (1) the experience modifier of the client company
13-24 before entering into the staff leasing arrangement; or
13-25 (2) the experience modifier of the licensee at the
13-26 time the staff leasing arrangement terminated.
13-27 (f) On request, the Texas Department of Insurance shall
14-1 provide the necessary calculations to the prospective workers'
14-2 compensation insurer of the client company in order to comply with
14-3 Subsection (e) of this section.
14-4 SECTION 12. HEALTH BENEFIT PLANS. (a) A licensee may not
14-5 sponsor a plan of self-insurance for health benefits except as
14-6 permitted by the Employee Retirement Income Security Act of 1974
14-7 (29 U.S.C. Section 1001 et seq.).
14-8 (b) For purposes of this section, a "plan of self-insurance"
14-9 includes any arrangement except an arrangement under which an
14-10 insurance carrier authorized to do business in this state has
14-11 issued an insurance policy that covers all of the obligations of
14-12 the health benefits plan.
14-13 (c) A licensee that has a plan of self-insurance for health
14-14 benefits for its leased employees in effect as of March 1, 1993,
14-15 has until March 1, 1994, to bring its plan into compliance with the
14-16 requirement of this section. This subsection expires March 31,
14-17 1994.
14-18 SECTION 13. UNEMPLOYMENT TAXES; PAYROLL. (a) A licensee is
14-19 the employer of an assigned employee for purposes of the Texas
14-20 Unemployment Compensation Act (Article 5221b-1 et seq., Vernon's
14-21 Texas Civil Statutes) and Article 5155, Revised Statutes. In
14-22 addition to any other reports required to be filed by law, a
14-23 licensee shall report quarterly to the Texas Employment Commission
14-24 the name, address, telephone number, federal income tax
14-25 identification number, and classification code as described in the
14-26 "Standard Industrial Classification Manual" as published by the
14-27 United States Office of Management and Budget of each client
15-1 company on a form prescribed by the Texas Employment Commission.
15-2 (b) On contracting with a client company, a licensee shall
15-3 notify the Texas Employment Commission of the contract. The
15-4 notification shall be made in the form prescribed by the Texas
15-5 Employment Commission.
15-6 (c) For purposes of the Texas Unemployment Compensation Act
15-7 (Article 5221b-1 et seq., Vernon's Texas Civil Statutes), in the
15-8 event of the termination of a contract between a licensee and a
15-9 client company or the failure by a staff leasing entity to submit
15-10 reports or make tax payments as required by that Act, the
15-11 contracting client company shall be treated as a new employer
15-12 without a previous experience record unless that client company is
15-13 otherwise eligible for an experience rating.
15-14 SECTION 14. POSTING OF LICENSES. (a) The commissioner by
15-15 rule shall determine the form and content of:
15-16 (1) the licenses issued under this Act; and
15-17 (2) notices required to be posted under this section.
15-18 (b) Each license issued under this Act must be posted in a
15-19 conspicuous place in the principal place of business in this state
15-20 of the licensee. Each licensee shall display, in a place that is
15-21 in clear and unobstructed public view, a notice stating that the
15-22 business operated at the location is licensed and regulated by the
15-23 department and that any questions or complaints should be directed
15-24 to the department.
15-25 SECTION 15. LICENSE NOT ASSIGNABLE; CHANGES OF NAME OR
15-26 LOCATION. (a) A licensee may not conduct business under any name
15-27 other than that specified in the license. A license issued under
16-1 this Act is not assignable. A licensee may not conduct business
16-2 under any fictitious or assumed name without prior written
16-3 authorization from the department. The department may not
16-4 authorize the use of a name that is so similar to that of a public
16-5 office or agency or to that of another licensee that the public may
16-6 be confused or misled by its use. A licensee may not conduct
16-7 business under more than one name unless it has obtained a separate
16-8 license for each name.
16-9 (b) A licensee may change its licensed name at any time by
16-10 notifying the department and paying a fee for each change of name.
16-11 The commission by rule shall set the fee for a name change in an
16-12 amount not to exceed $50. A licensee may change its name on
16-13 renewal of the license without the payment of the name change fee.
16-14 (c) A licensee must notify the department in writing of:
16-15 (1) any change in the location of its primary business
16-16 office;
16-17 (2) the addition of more business offices; or
16-18 (3) a change in the location of business records
16-19 maintained by the licensee.
16-20 SECTION 16. PROHIBITED ACTS; CRIMINAL PENALTY. (a) A
16-21 person may not:
16-22 (1) engage in staff leasing services without holding a
16-23 license under this Act as a staff leasing services company;
16-24 (2) use the name or title "staff leasing company,"
16-25 "employee leasing company," "licensed staff leasing company," or
16-26 "staff leasing services company," or otherwise represent that it is
16-27 licensed under this Act, unless the entity holds a license issued
17-1 under this Act;
17-2 (3) represent as the person's own the license of
17-3 another person or represent that a person is licensed if the person
17-4 does not hold a license;
17-5 (4) give materially false or forged evidence to the
17-6 department in connection with obtaining or renewing a license or in
17-7 connection with disciplinary proceedings under this Act; or
17-8 (5) use or attempt to use a license that has expired
17-9 or been revoked.
17-10 (b) A person that violates Subsection (a) of this section
17-11 commits an offense. An offense under this subsection is a Class A
17-12 misdemeanor.
17-13 (c) The commissioner may notify the attorney general of a
17-14 violation, and the attorney general may apply to a district court
17-15 in Travis County for permission to file suit in the nature of quo
17-16 warranto or for injunctive relief, or both. The attorney general
17-17 may not be required to post a bond for injunctive relief.
17-18 SECTION 17. DISCIPLINARY ACTIONS. (a) For purposes of this
17-19 section, "conviction" includes a plea of nolo contendere or a
17-20 finding of guilt, regardless of adjudication.
17-21 (b) Disciplinary action may be taken against a licensee by
17-22 the department on any of the following grounds:
17-23 (1) the conviction of a licensee or any controlling
17-24 person of a licensee of bribery, fraud, or intentional or material
17-25 misrepresentation in obtaining, attempting to obtain, or renewing a
17-26 license;
17-27 (2) the conviction of a licensee or any controlling
18-1 person of a licensee of a crime that relates to the operation of a
18-2 staff leasing service or the ability of the licensee or any
18-3 controlling person of a licensee to operate a staff leasing
18-4 service;
18-5 (3) the conviction of a licensee or any controlling
18-6 person of a licensee of a crime that relates to the classification,
18-7 misclassification, or under-reporting of employees under the Texas
18-8 Workers' Compensation Act (Article 8308-1.01 et seq., Vernon's
18-9 Texas Civil Statutes);
18-10 (4) the conviction of a licensee or any controlling
18-11 person of a licensee of a crime that relates to the establishment
18-12 or maintenance of a self-insurance program, whether health
18-13 insurance, workers' compensation insurance, or other insurance;
18-14 (5) the conviction of a licensee or any controlling
18-15 person of a licensee of a crime that relates to fraud, deceit, or
18-16 misconduct in the operation of a staff leasing service;
18-17 (6) engaging in staff leasing services without a
18-18 license;
18-19 (7) transferring or attempting to transfer a license
18-20 issued under this Act;
18-21 (8) violating this Act or any order or rule issued by
18-22 the department or commissioner under this Act;
18-23 (9) failing to notify the department, in writing, of
18-24 the felony conviction of any controlling person not later than the
18-25 30th day after the date on which that conviction is final;
18-26 (10) failing to cooperate with an investigation,
18-27 examination, or audit of the licensee's records conducted by the
19-1 licensee's insurance company or the insurance company's designee,
19-2 as allowed by the insurance contract or as authorized by law by the
19-3 Texas Department of Insurance;
19-4 (11) failing to notify the department and the Texas
19-5 Department of Insurance not later than the 30th day after the
19-6 effective date of the change of any change in ownership, principal
19-7 business address, or the address of accounts and records;
19-8 (12) failing to correct any tax filings or payment
19-9 deficiencies within a reasonable time as determined by the
19-10 commissioner;
19-11 (13) refusing, after reasonable notice, to meet
19-12 reasonable health and safety requirements within the licensee's
19-13 control and made known to the licensee by a federal or state
19-14 agency;
19-15 (14) a delinquency in the payment of the licensee's
19-16 insurance premiums other than those subject to a legitimate
19-17 dispute;
19-18 (15) a delinquency in the payment of any employee
19-19 benefit plan premiums or contributions other than those subject to
19-20 a legitimate dispute;
19-21 (16) knowingly making a material misrepresentation to
19-22 an insurance company, or to the department or other governmental
19-23 agency;
19-24 (17) failing to maintain the net worth requirements
19-25 required under Section 4 of this Act; or
19-26 (18) using staff leasing services to avert or avoid an
19-27 existing collective bargaining agreement.
20-1 (c) On a finding that a licensee has violated one or more
20-2 provisions of Subsection (b) of this section, the department may:
20-3 (1) deny an application for a license;
20-4 (2) revoke, restrict, or refuse to renew a license;
20-5 (3) impose an administrative penalty in an amount not
20-6 less than $1,000 per violation, but not more than $50,000;
20-7 (4) issue a reprimand; or
20-8 (5) place the licensee on probation for the period and
20-9 subject to conditions that the department specifies.
20-10 (d) On revocation of a license, the licensee shall
20-11 immediately return the revoked license to the department.
20-12 (e) Disciplinary action may be taken, a denial of an
20-13 application for a new or renewal license or a revocation of a
20-14 license may be done, or a determination that a controlling person
20-15 is unqualified may be made by the department only subject to the
20-16 Administrative Procedure and Texas Register Act (Article 6252-13a,
20-17 Vernon's Texas Civil Statutes), with notice to, and an opportunity
20-18 for a hearing by, the affected applicant, licensee, or controlling
20-19 person.
20-20 (f) If a license is revoked or renewal is denied, the
20-21 affected licensee may request a reinstatement hearing after a
20-22 minimum of one year. The department may reinstate or renew the
20-23 license only if the cause of the nonrenewal or revocation has been
20-24 corrected.
20-25 SECTION 18. FEES USED FOR ADMINISTRATION. All fees
20-26 collected by the department under this Act shall be used to
20-27 implement this Act.
21-1 SECTION 19. EFFECT OF OTHER LAW. This Act does not exempt a
21-2 client of a licensee, or any assigned employee, from any other
21-3 license requirements imposed under local, state, or federal law.
21-4 An employee who is licensed, registered, or certified under law and
21-5 who is assigned to a client company is considered to be an employee
21-6 of the client company for the purpose of that license,
21-7 registration, or certification.
21-8 SECTION 20. EFFECTIVE DATE; TRANSITION. (a) Except as
21-9 provided by Subsection (b) of this section, this Act takes effect
21-10 September 1, 1993.
21-11 (b) A person is not required to hold a license under this
21-12 Act to provide staff leasing services until March 1, 1994.
21-13 (c) A person who applies for a license on or before March 1,
21-14 1994, and whose application is granted, is not liable for any act,
21-15 omission, or representation that would be lawful under its license
21-16 had the license been in effect at the time of the act, omission, or
21-17 representation.
21-18 SECTION 21. EMERGENCY. The importance of this legislation
21-19 and the crowded condition of the calendars in both houses create an
21-20 emergency and an imperative public necessity that the
21-21 constitutional rule requiring bills to be read on three several
21-22 days in each house be suspended, and this rule is hereby suspended.