By Seidlits H.B. No. 456
Substitute the following for H.B. No. 456:
By Campbell C.S.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 licensed
1-7 under this Act or seeking the renewal of a license under this Act.
1-8 (2) "Client company" means a person that contracts with a
1-9 licensee and is assigned employees by the licensee under that
1-10 contract.
1-11 (3) "Commission" means the Texas Commission of Licensing and
1-12 Regulation.
1-13 (4) "Commissioner" means the commissioner of licensing and
1-14 regulation.
1-15 (5) "Controlling person" means:
1-16 (A) an officer or director of a corporation seeking to
1-17 offer staff leasing services, a shareholder holding 10 percent or
1-18 more of the voting stock of a corporation seeking to offer staff
1-19 leasing services, or a partner of a partnership seeking to offer
1-20 staff leasing services; or
1-21 (B) an individual who possesses, directly or
1-22 indirectly, the power to direct or cause the direction of the
1-23 management or policies of a company seeking to offer staff leasing
1-24 services through the ownership of voting securities, by contract or
2-1 otherwise.
2-2 (6) "Department" means the Texas Department of Licensing and
2-3 Regulation.
2-4 (7) "Independent contractor" means a person who contracts to
2-5 perform work or provide a service for the benefit of another and
2-6 who:
2-7 (A) is paid by the job, not by the hour or some other
2-8 time-measured basis;
2-9 (B) is free to hire as many helpers as he desires and
2-10 to determine what each helper will be paid; and
2-11 (C) is free to work for other contractors, or to send
2-12 helpers to work for other contractors, while under contract to the
2-13 hiring employer.
2-14 (8) "Licensee" means a person licensed under this Act to
2-15 provide staff leasing services.
2-16 (9) "Person" means an individual, association, corporation,
2-17 organization, government or governmental subdivision or agency,
2-18 business trust, estate trust, joint venture, partnership, or other
2-19 legal entity.
2-20 (10) "Staff leasing services" means an arrangement by which
2-21 employees of a licensee are assigned to work at a client company
2-22 and in which employment responsibilities are in fact shared by the
2-23 licensee and the client company, the employee's assignment is
2-24 intended to be of a long-term or continuing nature, rather than
2-25 temporary or seasonal in nature, and a majority of the workforce at
2-26 a client company worksite or a specialized group within that
2-27 workforce consists of assigned employees of the licensee. The term
3-1 does not include:
3-2 (A) temporary help services;
3-3 (B) an independent contractor, or
3-4 (C) a public company or any other person in which such
3-5 public company has a direct or indirect ownership interest in
3-6 excess of 33 1/3%, including ownership through subsidiaries and
3-7 affiliates. For the purpose of this Act, "public company" means a
3-8 corporation whose shares are listed on the New York Stock Exchange
3-9 with total assets exceeding One Billion Dollars.
3-10 (11) "Staff leasing services company" means an individual
3-11 business entity that offers staff leasing services.
3-12 (12) "Temporary employee" means an employee hired for a
3-13 temporary help service.
3-14 (13) "Temporary help service" means an arrangement by which
3-15 an organization hires its own employees and assigns them to clients
3-16 to support or supplement the client's workforce in special work
3-17 situations such as employee absences, temporary skill shortages,
3-18 seasonal workloads, or special assignments and projects.
3-19 SECTION 2. RULES. (a) The commissioner shall adopt rules
3-20 as necessary to administer this Act.
3-21 (b) Rules shall be adopted in compliance with the
3-22 Administrative Procedure and Texas Register Act (Article 6252-13a,
3-23 Vernon's Texas Civil Statutes).
3-24 (c) Each licensee is governed and controlled by this Act and
3-25 the rules adopted by the commissioner.
3-26 (d) Notwithstanding any other provision of this Act, nothing
3-27 in this Act preempts the existing statutory or rulemaking authority
4-1 of any other state agency or entity to regulate staff leasing
4-2 services consistent with their statutory authority.
4-3 SECTION 3. LICENSE REQUIRED; APPLICATION. (a) A person may
4-4 not engage in or offer staff leasing services in this state without
4-5 holding a license issued under this Act.
4-6 (b) Each person that desires an original or renewal staff
4-7 leasing services company license shall file with the department a
4-8 written application accompanied by the application fee.
4-9 (c) The department may require an applicant for a license to
4-10 provide information and certifications necessary to determine that
4-11 the applicant meets the licensing requirements of this Act. The
4-12 department may also require the applicant to provide information
4-13 and certifications necessary to determine whether individuals
4-14 affiliated with the applicant are qualified to serve as controlling
4-15 persons.
4-16 (d) An applicant or licensee is ineligible for a license for
4-17 two years after the date of final department action on the denial
4-18 or revocation of a license applied for or issued under this Act.
4-19 This restriction does not apply to a denial or revocation of a
4-20 license if the basis of the action was:
4-21 (1) an inadvertent error or omission in the
4-22 application if that error or omission is promptly corrected;
4-23 (2) the experience documented to the department was
4-24 insufficient at the time of the previous application;
4-25 (3) the department was unable to complete the criminal
4-26 background investigation required under Section 6 of this Act
4-27 because of insufficient information received from a local, state,
5-1 or federal law enforcement agency; or
5-2 (f) An applicant or licensee is ineligible for a license for
5-3 one year after the date of final department action on the denial or
5-4 revocation of a license applied for or issued under this Act if the
5-5 basis of the action was that one or more of the controlling persons
5-6 affiliated with the applicant or licensee was determined by the
5-7 department to be unsuitable, if that unsuitable controlling person
5-8 has in fact ceased to be a controlling person of the applicant or
5-9 licensee.
5-10 SECTION 4. LICENSE REQUIREMENTS. (a) To be qualified to
5-11 serve as a controlling person of a licensee under this Act, that
5-12 person must be at least 18 years of age, be of good moral
5-13 character, and have educational, managerial, or business experience
5-14 relevant to:
5-15 (1) operation of a business entity offering staff
5-16 leasing services; or
5-17 (2) service as a controlling person of a staff leasing
5-18 services company.
5-19 (b) For the purposes of this section, "good moral character"
5-20 means a personal history of honesty, trustworthiness, fairness, a
5-21 good reputation for fair dealing, and respect for the rights of
5-22 others and for the laws of this state and nation.
5-23 (c) The department shall conduct a thorough background
5-24 investigation of each individual applicant and of each controlling
5-25 person of each applicant to determine whether that applicant or
5-26 controlling person is qualified under this Act. The department may
5-27 deny an application for the issuance or renewal of a license if it
6-1 finds that a controlling person is not qualified under this Act.
6-2 The investigation must include:
6-3 (1) the submission of fingerprints for processing
6-4 through appropriate local, state, and federal law enforcement
6-5 agencies; and
6-6 (2) examination by the department of police or other
6-7 law enforcement records maintained by local, state, or federal law
6-8 enforcement agencies.
6-9 (d) Department background investigations are governed by
6-10 this Act and by Article 6252-13c and Article 6252-13d, Vernon's
6-11 Texas Civil Statutes. Conviction of a crime does not automatically
6-12 disqualify a controlling person, require the revocation of a
6-13 license, or require the denial of an application for a new or
6-14 renewed license. The department shall consider criminal
6-15 convictions as provided by Article 6252-13c and Article 6252-13d,
6-16 Vernon's Texas Civil Statutes.
6-17 (e) Each licensee shall maintain a registered agent for the
6-18 service of process in this state.
6-19 (f) An applicant for an original or renewal license must
6-20 demonstrate a net worth as follows:
6-21 (1) $50,000 if the applicant employs fewer than 250
6-22 assigned employees;
6-23 (2) $75,000 if the applicant employs at least 250 but
6-24 not more than 750 assigned employees;
6-25 (3) $100,000 if the applicant employs more than 750
6-26 assigned employees.
6-27 The applicant shall demonstrate the net worth to the
7-1 department by providing the department with the applicant's
7-2 financial statement or a copy of the applicant's most recent
7-3 federal tax return. The net worth requirement may also be
7-4 satisfied through guarantees, letters of credit, or other security
7-5 acceptable to the department. A guaranty is not acceptable to
7-6 satisfy this subsection unless the applicant submits sufficient
7-7 evidence to satisfy the department that the guarantor has adequate
7-8 resources to satisfy the obligations of the guaranty.
7-9 (g) In calculating net worth, a licensee shall include
7-10 adequate reserves for all taxes and insurance, including reserves
7-11 for claims incurred but not paid and for claims incurred but not
7-12 reported under plans of self-insurance for health benefits.
7-13 (h) A document submitted to establish net worth must reflect
7-14 the net worth as of a date not earlier than six months before the
7-15 date on which the application is submitted. A document submitted
7-16 to establish net worth must be prepared or certified by an
7-17 independent certified public accountant. Information supplied
7-18 regarding net worth, including copies of federal tax returns, is
7-19 proprietary and confidential and is exempt from disclosure to third
7-20 parties, other than to other governmental agencies with a
7-21 reasonable legitimate purpose for obtaining the information.
7-22 SECTION 5. FEES. (a) Each applicant for an original or
7-23 renewal license shall pay to the department on the issuance of the
7-24 license or license renewal a fee set by the commission by rule, in
7-25 an amount not to exceed $3,000 for a staff leasing services company
7-26 license.
7-27 (b) The department is authorized to charge reasonable fees
8-1 for license applications and renewals, investigations, inspections
8-2 and any other administrative or enforcement responsibilities
8-3 created under this Act.
8-4 SECTION 6. STAFF LEASING SERVICES AGREEMENT. A licensee
8-5 shall establish the terms of a staff leasing services agreement by
8-6 a written contract between the licensee and the client company.
8-7 The licensee shall give written notice of the agreement as it
8-8 affects assigned employees to each employee assigned to a client
8-9 company worksite.
8-10 SECTION 7. CONTRACT REQUIREMENTS; STATUS AS EMPLOYER. (a)
8-11 A contract between a licensee and a client company must provide
8-12 that the licensee:
8-13 (1) reserves the right of direction and control over
8-14 employees assigned to a client's worksites;
8-15 (2) assumes responsibility for the payment of wages to
8-16 the assigned employees without regard to payments by the client to
8-17 the licensee;
8-18 (3) assumes responsibility for the payment of payroll
8-19 taxes and collection of taxes from payroll on assigned employees;
8-20 (4) retains the right to hire, fire, discipline, and
8-21 reassign the assigned employees; and
8-22 (5) retains the right of direction and control over
8-23 the adoption of employment and safety policies and the management
8-24 of workers' compensation claims, claim filings, and related
8-25 procedures.
8-26 (b) Except as provided by other sections of this Act, for
8-27 the purposes of the law of this state, a licensee is the employer
9-1 of the employees assigned to a client company. This Act does not
9-2 affect the rights, duties or liabilities of licensees, client
9-3 companies, or employees under federal law.
9-4 (c) A licensee is responsible for it's contractual duties
9-5 and responsibilities to manage, maintain, collect, and make timely
9-6 payments of:
9-7 (1) insurance premiums;
9-8 (2) benefit and welfare plans;
9-9 (3) other employee withholding;
9-10 (4) any other expressed responsibility within the
9-11 scope of the contract between the client company with assigned
9-12 employees for fulfilling the duties imposed under this section.
9-13 (d) A licensee shall:
9-14 (1) comply with all appropriate state and federal laws
9-15 relating to reporting, sponsoring, filing, and maintaining benefit
9-16 and welfare plans;
9-17 (2) maintain adequate books and records regarding its
9-18 duties and responsibilities; and
9-19 (3) maintain and make available at all times to the
9-20 commissioner:
9-21 (i) the correct name, address, and telephone
9-22 number of each client company,
9-23 (ii) each client company contract; and
9-24 (iii) a listing by classification code as
9-25 described in the "Standard Industrial Classification Manual",
9-26 published by the United States Office of Management and Budget, of
9-27 each client company;
10-1 (4) notify the department of any addition or deletion
10-2 of a controlling person as listed on the license application or
10-3 renewal form by providing the name of the person not later than 30
10-4 days after the date the person was added or deleted as a
10-5 controlling person. A notarized biographical history shall be
10-6 provided to the department in connection with the addition of a new
10-7 controlling person.
10-8 (e) No licensee or any controlling person of a licensee
10-9 shall have an ownership interest of any nature of greater than 10%
10-10 in any of the client companies with which it has an agreement.
10-11 SECTION 8. LIMITED LICENSE; RECIPROCITY. (a) The
10-12 commissioner by rule shall provide for the issuance of a limited
10-13 license for a person that offers staff leasing services in this
10-14 state on a limited basis and that is primarily engaged in offering
10-15 staff leasing services in another state. The commissioner by rule
10-16 shall provide for reciprocity for a person offering staff leasing
10-17 services that is licensed in another state and primarily engaged in
10-18 business outside this state. The principal place of business of a
10-19 person offering staff leasing services that applies for a license
10-20 under this section must be located in a state other than this
10-21 state.
10-22 (b) For the purposes of this section, a person offers staff
10-23 leasing services on a limited basis if the person employs fewer
10-24 than 20 assigned employees.
10-25 SECTION 9. ISSUANCE AND TERM OF LICENSES. (a) The
10-26 department shall issue a license to an applicant determined to meet
10-27 the requirements of this Act. The department shall issue the
11-1 license not later than the 90th day after the date on which the
11-2 completed application is filed with the department.
11-3 (b) A license issued by the department under this Act is
11-4 valid for one year. The department shall renew a license on
11-5 receipt of a renewal application approved by the department and
11-6 payment of the required renewal fees.
11-7 SECTION 10. EMPLOYEE BENEFIT PLANS; REQUIRED DISCLOSURE.
11-8 (a) A licensee may sponsor and maintain employee benefit plans for
11-9 the benefit of assigned employees. A client company may include
11-10 assigned employees in any benefit plan sponsored by the client
11-11 company.
11-12 (b) Each licensee shall disclose to the department, each
11-13 client company, and its assigned employees information relating to
11-14 any insurance or benefit plan provided for the benefit of its
11-15 assigned employees. The information must include:
11-16 (1) the type of coverage;
11-17 (2) the identity of each insurer for each type of
11-18 coverage;
11-19 (3) the amount of benefits provided for each type of
11-20 coverage and to whom or on whose behalf benefits are to be paid;
11-21 (4) the policy limits on each insurance policy; and
11-22 (5) whether the coverage is fully insured, partially
11-23 insured, or fully self-funded.
11-24 (c) The commissioner by rule may require the filing by
11-25 licensees of other reports that are reasonably necessary to the
11-26 implementation of this Act.
11-27 SECTION 11. WORKERS' COMPENSATION INSURANCE. (a) A
12-1 licensee may elect to obtain workers' compensation insurance
12-2 coverage in the same manner as any other employer. If coverage is
12-3 obtained, that insurance must comply with the applicable provisions
12-4 of the Insurance Code and consistent with rules adopted by the
12-5 Texas Department of Insurance. A licensee is entitled to the same
12-6 rights to obtain all types of insurance coverage, including
12-7 endorsements, as may be obtained by other business entities doing
12-8 business in this state.
12-9 (b) If a licensee maintains workers' compensation insurance,
12-10 it shall pay workers' compensation insurance premium based on the
12-11 experience rating of a client company for the first two years the
12-12 client company has a contract with the licensee.
12-13 (c) For the purposes of workers' compensation insurance, a
12-14 licensee and its client company shall be co-employers. If a
12-15 licensee elects to obtain workers' compensation insurance, then the
12-16 client company and the licensee shall be subject to Sections 3.08
12-17 and 4.01 of the Texas Workers' Compensation Act (Articles 8308-3.08
12-18 and 8308-4.01, Vernon's Texas Civil Statutes).
12-19 (d) If a licensee does not elect to obtain workers'
12-20 compensation insurance, then both the licensee and the client
12-21 company shall be subject to Sections 3.03, 3.04 and 3.22 of the
12-22 Texas Workers' Compensation Act (Articles 8308-3.03, 8308-3.04, and
12-23 8308-3.22, Vernon's Texas Civil Statutes). In any personal injury
12-24 action filed by an assigned worker where the licensee has not
12-25 obtained workers' compensation coverage, the licensee and the
12-26 client company are jointly and severally liable for all damages
12-27 awarded to an employee assigned to that client company at the time
13-1 of the injury.
13-2 (e) When an arrangement between a licensee and a client
13-3 company terminates, if the client company either obtains a new
13-4 workers' compensation insurance policy in its own name or adds its
13-5 former assigned workers to an existing policy, the premium for the
13-6 workers' compensation insurance policy of the client company shall
13-7 be based on either:
13-8 (1) the experience modifier of the client company at the
13-9 time the staff leasing arrangement was terminated,
13-10 (2) the experience modifier of the client company prior to
13-11 entering into the staff leasing arrangement, or
13-12 (3) the experience modifier of the licensee at the time the
13-13 staff leasing arrangement terminated, whichever is lowest.
13-14 Upon request, the Texas Department of Insurance shall provide
13-15 the necessary calculations to the prospective workers' compensation
13-16 insurer of the client company in order to comply with this
13-17 provision.
13-18 SECTION 12. HEALTH BENEFIT PLANS. (a) No licensee shall
13-19 sponsor a plan of self-insurance for health benefits, except as may
13-20 be permitted by Pub. L. No., 93-406, the Employee Retirement Income
13-21 Security Act.
13-22 (b) A licensee having a plan of self-insurance for health
13-23 benefits for its leased employees in effect as of March 1, 1993,
13-24 shall be granted a period for twelve months from March 1, 1993, to
13-25 bring its plan into compliance with the requirement of this
13-26 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 number
14-10 and classification code as described in the "Standard Industrial
14-11 Classification Manual" as published by the U.S. Office of
14-12 Management and Budget of each client company on a form prescribed
14-13 by the 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 5221 b-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 which 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 in
16-26 Travis County for leave to file suit in the nature of quo warranto
16-27 or for injunctive relief, or both. The Attorney General shall not
17-1 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 under-reporting 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 which 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.