1-1 By: Seidlits (Senate Sponsor - Harris of Dallas) H.B. No. 456
1-2 (In the Senate - Received from the House May 5, 1993;
1-3 May 6, 1993, read first time and referred to Committee on Economic
1-4 Development; May 21, 1993, reported adversely, with favorable
1-5 Committee Substitute by the following vote: Yeas 10, Nays 0;
1-6 May 21, 1993, sent to printer.)
1-7 COMMITTEE VOTE
1-8 Yea Nay PNV Absent
1-9 Parker x
1-10 Lucio x
1-11 Ellis x
1-12 Haley x
1-13 Harris of Dallas x
1-14 Harris of Tarrant x
1-15 Leedom x
1-16 Madla x
1-17 Rosson x
1-18 Shapiro x
1-19 Wentworth x
1-20 COMMITTEE SUBSTITUTE FOR H.B. No. 456 By: Harris of Dallas
1-21 A BILL TO BE ENTITLED
1-22 AN ACT
1-23 relating to the regulation of certain staff leasing services;
1-24 providing penalties.
1-25 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-26 SECTION 1. DEFINITIONS. In this Act:
1-27 (1) "Applicant" means a business seeking to be
1-28 licensed under this Act or seeking the renewal of a license under
1-29 this Act.
1-30 (2) "Client company" means a person that contracts
1-31 with a licensee and is assigned employees by the licensee under
1-32 that contract.
1-33 (3) "Commission" means the Texas Commission of
1-34 Licensing and Regulation.
1-35 (4) "Commissioner" means the commissioner of licensing
1-36 and regulation.
1-37 (5) "Controlling person" means:
1-38 (A) an officer or director of a corporation
1-39 seeking to offer staff leasing services, a shareholder holding 10
1-40 percent or more of the voting stock of a corporation seeking to
1-41 offer staff leasing services, or a partner of a partnership seeking
1-42 to offer staff leasing services; or
1-43 (B) an individual who possesses, directly or
1-44 indirectly, the power to direct or cause the direction of the
1-45 management or policies of a company seeking to offer staff leasing
1-46 services through the ownership of voting securities, by contract or
1-47 otherwise.
1-48 (6) "Department" means the Texas Department of
1-49 Licensing and Regulation.
1-50 (7) "Independent contractor" means a person who
1-51 contracts to perform work or provide a service for the benefit of
1-52 another and who:
1-53 (A) is paid by the job, not by the hour or some
1-54 other time-measured basis;
1-55 (B) is free to hire as many helpers as the
1-56 person desires and to determine what each helper will be paid; and
1-57 (C) is free to work for other contractors, or to
1-58 send helpers to work for other contractors, while under contract to
1-59 the hiring employer.
1-60 (8) "Licensee" means a person licensed under this Act
1-61 to provide staff leasing services.
1-62 (9) "Person" means an individual, association,
1-63 corporation, organization, government or governmental subdivision
1-64 or agency, business trust, estate trust, joint venture,
1-65 partnership, or other legal entity.
1-66 (10) "Public company" means a corporation whose shares
1-67 are listed on the New York Stock Exchange and that has total assets
1-68 that exceed $1 billion.
2-1 (11) "Staff leasing services" means an arrangement by
2-2 which employees of a licensee are assigned to work at a client
2-3 company and in which employment responsibilities are in fact shared
2-4 by the licensee and the client company, the employee's assignment
2-5 is intended to be of a long-term or continuing nature, rather than
2-6 temporary or seasonal in nature, and a majority of the workforce at
2-7 a client company worksite or a specialized group within that
2-8 workforce consists of assigned employees of the licensee. The term
2-9 does not include:
2-10 (A) a temporary help service;
2-11 (B) an independent contractor; or
2-12 (C) a public company or any other person in
2-13 which that public company has a direct or indirect ownership
2-14 interest in excess of 33-1/3 percent, including ownership through
2-15 subsidiaries and affiliates.
2-16 (12) "Staff leasing services company" means an
2-17 individual business entity that offers staff leasing services.
2-18 (13) "Temporary employee" means an employee hired for
2-19 a temporary help service.
2-20 (14) "Temporary help service" means an arrangement by
2-21 which an organization hires its own employees and assigns them to
2-22 clients to support or supplement the client's workforce in special
2-23 work situations such as employee absences, temporary skill
2-24 shortages, seasonal workloads, or special assignments and projects.
2-25 SECTION 2. RULES; INTERAGENCY COOPERATION. (a) The
2-26 commissioner shall adopt rules as necessary to administer this Act.
2-27 (b) Rules shall be adopted in compliance with the
2-28 Administrative Procedure and Texas Register Act (Article 6252-13a,
2-29 Vernon's Texas Civil Statutes).
2-30 (c) Each licensee is governed and controlled by this Act and
2-31 the rules adopted by the commissioner.
2-32 (d) Notwithstanding any other provision of this Act, nothing
2-33 in this Act preempts the existing statutory or rulemaking authority
2-34 of any other state agency or entity to regulate staff leasing
2-35 services in a manner that is consistent with the statutory
2-36 authority of that state agency or entity.
2-37 (e) Each state agency that, in performing duties under other
2-38 law, affects the regulation of staff leasing services shall
2-39 cooperate with the department, the commissioner, and other state
2-40 agencies as necessary to fully implement and enforce this Act. In
2-41 particular, the Texas Employment Commission, the Texas Department
2-42 of Insurance, the Texas Workers' Compensation Commission, and the
2-43 attorney general's office shall assist in the implementation of
2-44 this Act and shall provide information to the department on
2-45 request.
2-46 SECTION 3. LICENSE REQUIRED; APPLICATION. (a) A person may
2-47 not engage in or offer staff leasing services in this state without
2-48 holding a license issued under this Act.
2-49 (b) Each person that desires an original or renewal staff
2-50 leasing services company license shall file with the department a
2-51 written application accompanied by the application fee.
2-52 (c) The department may require an applicant for a license to
2-53 provide information and certifications necessary to determine that
2-54 the applicant meets the licensing requirements of this Act. The
2-55 department may also require the applicant to provide information
2-56 and certifications necessary to determine whether individuals
2-57 affiliated with the applicant are qualified to serve as controlling
2-58 persons.
2-59 (d) An applicant or licensee is ineligible for a license for
2-60 two years after the date of final department action on the denial
2-61 or revocation of a license applied for or issued under this Act.
2-62 This restriction does not apply to a denial or revocation of a
2-63 license if the basis of the action was:
2-64 (1) an inadvertent error or omission in the
2-65 application if that error or omission is promptly corrected;
2-66 (2) the experience documented to the department was
2-67 insufficient at the time of the previous application; or
2-68 (3) the department was unable to complete the criminal
2-69 background investigation required under Section 4 of this Act
2-70 because of insufficient information received from a local, state,
3-1 or federal law enforcement agency.
3-2 (e) An applicant or licensee is ineligible for a license for
3-3 one year after the date of final department action on the denial or
3-4 revocation of a license applied for or issued under this Act if:
3-5 (1) the basis of the denial or revocation was that one
3-6 or more of the controlling persons affiliated with the applicant or
3-7 licensee was determined by the department to be unsuitable; and
3-8 (2) that unsuitable controlling person has in fact
3-9 ceased to be a controlling person of the applicant or licensee.
3-10 SECTION 4. LICENSE REQUIREMENTS. (a) To be qualified to
3-11 serve as a controlling person of a licensee under this Act, that
3-12 person must be at least 18 years of age, be of good moral
3-13 character, and have educational, managerial, or business experience
3-14 relevant to:
3-15 (1) operation of a business entity offering staff
3-16 leasing services; or
3-17 (2) service as a controlling person of a staff leasing
3-18 services company.
3-19 (b) For the purposes of this section, "good moral character"
3-20 means a personal history of honesty, trustworthiness, fairness, a
3-21 good reputation for fair dealing, and respect for the rights of
3-22 others and for the laws of this state and nation.
3-23 (c) The department shall conduct a thorough background
3-24 investigation of each individual applicant and of each controlling
3-25 person of each applicant to determine whether that applicant or
3-26 controlling person is qualified under this Act. The department may
3-27 deny an application for the issuance or renewal of a license if it
3-28 finds that a controlling person is not qualified under this Act.
3-29 The investigation must include:
3-30 (1) the submission of fingerprints for processing
3-31 through appropriate local, state, and federal law enforcement
3-32 agencies; and
3-33 (2) examination by the department of police or other
3-34 law enforcement records maintained by local, state, or federal law
3-35 enforcement agencies.
3-36 (d) Department background investigations are governed by
3-37 this Act and by Article 6252-13c, Revised Statutes, and Sections
3-38 2-5, Acts of the 67th Legislature, Regular Session, 1981 (Article
3-39 6252-13d, Vernon's Texas Civil Statutes). Conviction of a crime
3-40 does not automatically disqualify a controlling person, require the
3-41 revocation of a license, or require the denial of an application
3-42 for a new or renewed license. The department shall consider
3-43 criminal convictions as provided by Article 6252-13c, Revised
3-44 Statutes, and Sections 2-5, Acts of the 67th Legislature, Regular
3-45 Session, 1981 (Article 6252-13d, Vernon's Texas Civil Statutes).
3-46 (e) Each licensee shall maintain a registered agent for the
3-47 service of process in this state.
3-48 (f) An applicant for an original or renewal license must
3-49 demonstrate a net worth as follows:
3-50 (1) $50,000 if the applicant employs fewer than 250
3-51 assigned employees;
3-52 (2) $75,000 if the applicant employs at least 250 but
3-53 not more than 750 assigned employees;
3-54 (3) $100,000 if the applicant employs more than 750
3-55 assigned employees.
3-56 (g) For purposes of Subsection (f) of this section,
3-57 "assigned employee" means a full-time employee whose normal work
3-58 week is at least 25 hours per week and whose work is performed in
3-59 this state. The term does not include an employee hired to support
3-60 or supplement the client's workforce in special work situations,
3-61 such as employee absences, temporary skill shortages, seasonal
3-62 workloads, or special assignments and projects.
3-63 (h) The applicant shall demonstrate the net worth to the
3-64 department by providing the department with the applicant's
3-65 financial statement or a copy of the applicant's most recent
3-66 federal tax return. The net worth requirement may also be
3-67 satisfied through guarantees, letters of credit, or other security
3-68 acceptable to the department. A guaranty is not acceptable to
3-69 satisfy this subsection unless the applicant submits sufficient
3-70 evidence to satisfy the department that the guarantor has adequate
4-1 resources to satisfy the obligations of the guaranty.
4-2 (i) In calculating net worth, an applicant shall include
4-3 adequate reserves for all taxes and insurance, including reserves
4-4 for claims incurred but not paid and for claims incurred but not
4-5 reported under plans of self-insurance for health benefits. The
4-6 calculation of net worth by an applicant shall be made according to
4-7 Section 448, Internal Revenue Code (26 U.S.C. Section 448).
4-8 (j) A document submitted to establish net worth must reflect
4-9 the net worth as of a date not earlier than six months before the
4-10 date on which the application is submitted. A document submitted
4-11 to establish net worth must be prepared or certified by an
4-12 independent certified public accountant. Information supplied
4-13 regarding net worth, including copies of federal tax returns, is
4-14 proprietary and confidential and is exempt from disclosure to third
4-15 parties, other than to other governmental agencies with a
4-16 reasonable legitimate purpose for obtaining the information.
4-17 SECTION 5. FEES. (a) Each applicant for an original or
4-18 renewal license shall pay to the department on the issuance of the
4-19 license or license renewal a fee set by the commission by rule, in
4-20 an amount not to exceed $3,000 for a staff leasing services company
4-21 license.
4-22 (b) The commission is authorized to charge reasonable fees
4-23 for license applications and renewals, investigations, inspections,
4-24 and any other administrative or enforcement responsibilities
4-25 created under this Act.
4-26 SECTION 6. STAFF LEASING SERVICES AGREEMENT. A licensee
4-27 shall establish the terms of a staff leasing services agreement by
4-28 a written contract between the licensee and the client company.
4-29 The licensee shall give written notice of the agreement as it
4-30 affects assigned employees to each employee assigned to a client
4-31 company worksite.
4-32 SECTION 7. CONTRACT REQUIREMENTS. (a) A contract between a
4-33 licensee and a client company must provide that the licensee:
4-34 (1) reserves the right of direction and control over
4-35 employees assigned to a client's worksites;
4-36 (2) assumes responsibility for the payment of wages to
4-37 the assigned employees without regard to payments by the client to
4-38 the licensee;
4-39 (3) assumes responsibility for the payment of payroll
4-40 taxes and collection of taxes from payroll on assigned employees;
4-41 (4) retains the right to hire, fire, discipline, and
4-42 reassign the assigned employees; and
4-43 (5) retains the right of direction and control over
4-44 the adoption of employment and safety policies and the management
4-45 of workers' compensation claims, claim filings, and related
4-46 procedures.
4-47 (b) A licensee is responsible for its contractual duties and
4-48 responsibilities to manage, maintain, collect, and make timely
4-49 payments for:
4-50 (1) insurance premiums;
4-51 (2) benefit and welfare plans;
4-52 (3) other employee withholding; and
4-53 (4) any other expressed responsibility within the
4-54 scope of the contract for fulfilling the duties imposed under this
4-55 section.
4-56 (c) A licensee shall:
4-57 (1) comply with all appropriate state and federal laws
4-58 relating to reporting, sponsoring, filing, and maintaining benefit
4-59 and welfare plans;
4-60 (2) maintain adequate books and records regarding its
4-61 duties and responsibilities;
4-62 (3) maintain and make available at all times to the
4-63 commissioner the following information, which shall be treated as
4-64 proprietary and confidential and is exempt from disclosure to third
4-65 parties, except other governmental agencies with a reasonable and
4-66 legitimate purpose for obtaining the information:
4-67 (A) the correct name, address, and telephone
4-68 number of each client company;
4-69 (B) each client company contract; and
4-70 (C) a listing by classification code as
5-1 described in the "Standard Industrial Classification Manual,"
5-2 published by the United States Office of Management and Budget, of
5-3 each client company;
5-4 (4) notify the department of any addition or deletion
5-5 of a controlling person as listed on the license application or
5-6 renewal form by providing the name of the person not later than the
5-7 30th day after the date on which the person is added or deleted as
5-8 a controlling person; and
5-9 (5) provide a notarized biographical history to the
5-10 department in connection with the addition of a new controlling
5-11 person.
5-12 SECTION 8. LIMITED LICENSE. (a) The commissioner by rule
5-13 shall provide for the issuance of a limited license for a person
5-14 that offers staff leasing services in this state on a limited basis
5-15 and that is primarily engaged in offering staff leasing services in
5-16 another state. The principal place of business of a person
5-17 offering staff leasing services that applies for a license under
5-18 this section must be located in a state other than this state.
5-19 (b) For the purposes of this section, a person offers staff
5-20 leasing services on a limited basis if the person employs fewer
5-21 than 20 assigned employees.
5-22 (c) A person offering staff leasing services on a limited
5-23 basis must comply with all provisions of this Act with respect to
5-24 those services performed within this state.
5-25 SECTION 9. ISSUANCE AND TERM OF LICENSES. (a) The
5-26 department shall issue a license to an applicant determined to meet
5-27 the requirements of this Act. The department shall issue the
5-28 license not later than the 90th day after the date on which the
5-29 completed application is filed with the department.
5-30 (b) A license issued by the department under this Act is
5-31 valid for one year. The department shall renew a license on
5-32 receipt of a renewal application approved by the department and
5-33 payment of the required renewal fees.
5-34 SECTION 10. EMPLOYEE BENEFIT PLANS; REQUIRED DISCLOSURE.
5-35 (a) A licensee may sponsor and maintain employee benefit plans for
5-36 the benefit of assigned employees. A client company may include
5-37 assigned employees in any benefit plan sponsored by the client
5-38 company.
5-39 (b) Each licensee shall disclose to the department, each
5-40 client company, and its assigned employees information relating to
5-41 any insurance or benefit plan provided for the benefit of its
5-42 assigned employees. The information must include:
5-43 (1) the type of coverage;
5-44 (2) the identity of each insurer for each type of
5-45 coverage;
5-46 (3) the amount of benefits provided for each type of
5-47 coverage and to whom or on whose behalf benefits are to be paid;
5-48 (4) the policy limits on each insurance policy; and
5-49 (5) whether the coverage is fully insured, partially
5-50 insured, or fully self-funded.
5-51 (c) The commissioner by rule may require the filing by
5-52 licensees of other reports that are reasonably necessary to the
5-53 implementation of this Act.
5-54 SECTION 11. WORKERS' COMPENSATION INSURANCE. (a) A
5-55 licensee may elect to obtain workers' compensation insurance
5-56 coverage for its assigned employees through an insurance company as
5-57 defined under Section 1.03, Texas Workers' Compensation Act
5-58 (Article 8308-1.03, Vernon's Texas Civil Statutes), or through
5-59 self-insurance as provided under Chapter D, Article 3, Texas
5-60 Workers' Compensation Act (Article 8308-3.51 et seq., Vernon's
5-61 Texas Civil Statutes).
5-62 (b) If a licensee maintains workers' compensation insurance,
5-63 it shall pay workers' compensation insurance premiums based on the
5-64 experience rating of the client company for the first two years the
5-65 client company has a contract with the licensee and as further
5-66 provided by rule by the Texas Department of Insurance.
5-67 (c) For workers' compensation insurance purposes, a licensee
5-68 and its client company shall be co-employers. If a licensee elects
5-69 to obtain workers' compensation insurance, the client company and
5-70 the licensee is subject to Sections 3.08 and 4.01, Texas Workers'
6-1 Compensation Act (Articles 8308-3.08 and 8308-4.01, Vernon's Texas
6-2 Civil Statutes).
6-3 (d) If a licensee does not elect to obtain workers'
6-4 compensation insurance, both the licensee and the client company
6-5 are subject to Sections 3.03, 3.04, and 3.22, Texas Workers'
6-6 Compensation Act (Articles 8308-3.03, 8308-3.04, and 8308-3.22,
6-7 Vernon's Texas Civil Statutes).
6-8 (e) After the expiration of the two-year period under
6-9 Subsection (b) of this section, if the client company either
6-10 obtains a new workers' compensation insurance policy in its own
6-11 name or adds its former assigned workers to an existing policy, the
6-12 premium for the workers' compensation insurance policy of the
6-13 client company shall be based on the lower of:
6-14 (1) the experience modifier of the client company
6-15 before entering into the staff leasing arrangement; or
6-16 (2) the experience modifier of the licensee at the
6-17 time the staff leasing arrangement terminated.
6-18 (f) On request, the Texas Department of Insurance shall
6-19 provide the necessary calculations to the prospective workers'
6-20 compensation insurer of the client company in order to comply with
6-21 Subsection (e) of this section.
6-22 SECTION 12. HEALTH BENEFIT PLANS. (a) A licensee may not
6-23 sponsor a plan of self-insurance for health benefits except as
6-24 permitted by the Employee Retirement Income Security Act of 1974
6-25 (29 U.S.C. Section 1001 et seq.).
6-26 (b) For purposes of this section, a "plan of self-insurance"
6-27 includes any arrangement except an arrangement under which an
6-28 insurance carrier authorized to do business in this state has
6-29 issued an insurance policy that covers all of the obligations of
6-30 the health benefits plan.
6-31 (c) A licensee that has a plan of self-insurance for health
6-32 benefits for its leased employees in effect as of March 1, 1993,
6-33 has until March 1, 1994, to bring its plan into compliance with the
6-34 requirement of this section. This subsection expires March 31,
6-35 1994.
6-36 SECTION 13. UNEMPLOYMENT TAXES; PAYROLL. (a) A licensee is
6-37 the employer of an assigned employee for purposes of the Texas
6-38 Unemployment Compensation Act (Article 5221b-1 et seq., Vernon's
6-39 Texas Civil Statutes) and Article 5155, Revised Statutes. In
6-40 addition to any other reports required to be filed by law, a
6-41 licensee shall report quarterly to the Texas Employment Commission
6-42 the name, address, telephone number, federal income tax
6-43 identification number, and classification code as described in the
6-44 "Standard Industrial Classification Manual" as published by the
6-45 United States Office of Management and Budget of each client
6-46 company on a form prescribed by the Texas Employment Commission.
6-47 (b) On contracting with a client company, a licensee shall
6-48 notify the Texas Employment Commission of the contract. The
6-49 notification shall be made in the form prescribed by the Texas
6-50 Employment Commission.
6-51 (c) For purposes of the Texas Unemployment Compensation Act
6-52 (Article 5221b-1 et seq., Vernon's Texas Civil Statutes), in the
6-53 event of the termination of a contract between a licensee and a
6-54 client company or the failure by a staff leasing entity to submit
6-55 reports or make tax payments as required by that Act, the
6-56 contracting client company shall be treated as a new employer
6-57 without a previous experience record unless that client company is
6-58 otherwise eligible for an experience rating.
6-59 SECTION 14. POSTING OF LICENSES. (a) The commissioner by
6-60 rule shall determine the form and content of:
6-61 (1) the licenses issued under this Act; and
6-62 (2) notices required to be posted under this section.
6-63 (b) Each license issued under this Act must be posted in a
6-64 conspicuous place in the principal place of business in this state
6-65 of the licensee. Each licensee shall display, in a place that is
6-66 in clear and unobstructed public view, a notice stating that the
6-67 business operated at the location is licensed and regulated by the
6-68 department and that any questions or complaints should be directed
6-69 to the department.
6-70 SECTION 15. LICENSE NOT ASSIGNABLE; CHANGES OF NAME OR
7-1 LOCATION. (a) A licensee may not conduct business under any name
7-2 other than that specified in the license. A license issued under
7-3 this Act is not assignable. A licensee may not conduct business
7-4 under any fictitious or assumed name without prior written
7-5 authorization from the department. The department may not
7-6 authorize the use of a name that is so similar to that of a public
7-7 office or agency or to that of another licensee that the public may
7-8 be confused or misled by its use. A licensee may not conduct
7-9 business under more than one name unless it has obtained a separate
7-10 license for each name.
7-11 (b) A licensee may change its licensed name at any time by
7-12 notifying the department and paying a fee for each change of name.
7-13 The commission by rule shall set the fee for a name change in an
7-14 amount not to exceed $50. A licensee may change its name on
7-15 renewal of the license without the payment of the name change fee.
7-16 (c) A licensee must notify the department in writing of:
7-17 (1) any change in the location of its primary business
7-18 office;
7-19 (2) the addition of more business offices; or
7-20 (3) a change in the location of business records
7-21 maintained by the licensee.
7-22 SECTION 16. PROHIBITED ACTS; CRIMINAL PENALTY. (a) A
7-23 person may not:
7-24 (1) engage in staff leasing services without holding a
7-25 license under this Act as a staff leasing services company;
7-26 (2) use the name or title "staff leasing company,"
7-27 "employee leasing company," "licensed staff leasing company," or
7-28 "staff leasing services company," or otherwise represent that it is
7-29 licensed under this Act, unless the entity holds a license issued
7-30 under this Act;
7-31 (3) represent as the person's own the license of
7-32 another person or represent that a person is licensed if the person
7-33 does not hold a license;
7-34 (4) give materially false or forged evidence to the
7-35 department in connection with obtaining or renewing a license or in
7-36 connection with disciplinary proceedings under this Act; or
7-37 (5) use or attempt to use a license that has expired
7-38 or been revoked.
7-39 (b) A person that violates Subsection (a) of this section
7-40 commits an offense. An offense under this subsection is a Class A
7-41 misdemeanor.
7-42 (c) The commissioner may notify the attorney general of a
7-43 violation, and the attorney general may apply to a district court
7-44 in Travis County for permission to file suit in the nature of quo
7-45 warranto or for injunctive relief, or both. The attorney general
7-46 may not be required to post a bond for injunctive relief.
7-47 SECTION 17. DISCIPLINARY ACTIONS. (a) For purposes of this
7-48 section, "conviction" includes a plea of nolo contendere or a
7-49 finding of guilt, regardless of adjudication.
7-50 (b) Disciplinary action may be taken against a licensee by
7-51 the department on any of the following grounds:
7-52 (1) the conviction of a licensee or any controlling
7-53 person of a licensee of bribery, fraud, or intentional or material
7-54 misrepresentation in obtaining, attempting to obtain, or renewing a
7-55 license;
7-56 (2) the conviction of a licensee or any controlling
7-57 person of a licensee of a crime that relates to the operation of a
7-58 staff leasing service or the ability of the licensee or any
7-59 controlling person of a licensee to operate a staff leasing
7-60 service;
7-61 (3) the conviction of a licensee or any controlling
7-62 person of a licensee of a crime that relates to the classification,
7-63 misclassification, or under-reporting of employees under the Texas
7-64 Workers' Compensation Act (Article 8308-1.01 et seq., Vernon's
7-65 Texas Civil Statutes);
7-66 (4) the conviction of a licensee or any controlling
7-67 person of a licensee of a crime that relates to the establishment
7-68 or maintenance of a self-insurance program, whether health
7-69 insurance, workers' compensation insurance, or other insurance;
7-70 (5) the conviction of a licensee or any controlling
8-1 person of a licensee of a crime that relates to fraud, deceit, or
8-2 misconduct in the operation of a staff leasing service;
8-3 (6) engaging in staff leasing services without a
8-4 license;
8-5 (7) transferring or attempting to transfer a license
8-6 issued under this Act;
8-7 (8) violating this Act or any order or rule issued by
8-8 the department or commissioner under this Act;
8-9 (9) failing to notify the department, in writing, of
8-10 the felony conviction of any controlling person not later than the
8-11 30th day after the date on which that conviction is final;
8-12 (10) failing to cooperate with an investigation,
8-13 examination, or audit of the licensee's records conducted by the
8-14 licensee's insurance company or the insurance company's designee,
8-15 as allowed by the insurance contract or as authorized by law by the
8-16 Texas Department of Insurance;
8-17 (11) failing to notify the department and the Texas
8-18 Department of Insurance not later than the 30th day after the
8-19 effective date of the change of any change in ownership, principal
8-20 business address, or the address of accounts and records;
8-21 (12) failing to correct any tax filings or payment
8-22 deficiencies within a reasonable time as determined by the
8-23 commissioner;
8-24 (13) refusing, after reasonable notice, to meet
8-25 reasonable health and safety requirements within the licensee's
8-26 control and made known to the licensee by a federal or state
8-27 agency;
8-28 (14) a delinquency in the payment of the licensee's
8-29 insurance premiums other than those subject to a legitimate
8-30 dispute;
8-31 (15) a delinquency in the payment of any employee
8-32 benefit plan premiums or contributions other than those subject to
8-33 a legitimate dispute;
8-34 (16) knowingly making a material misrepresentation to
8-35 an insurance company, or to the department or other governmental
8-36 agency;
8-37 (17) failing to maintain the net worth requirements
8-38 required under Section 4 of this Act; or
8-39 (18) using staff leasing services to avert or avoid an
8-40 existing collective bargaining agreement.
8-41 (c) On a finding that a licensee has violated one or more
8-42 provisions of Subsection (b) of this section, the department may:
8-43 (1) deny an application for a license;
8-44 (2) revoke, restrict, or refuse to renew a license;
8-45 (3) impose an administrative penalty in an amount not
8-46 less than $1,000 per violation, but not more than $50,000;
8-47 (4) issue a reprimand; or
8-48 (5) place the licensee on probation for the period and
8-49 subject to conditions that the department specifies.
8-50 (d) On revocation of a license, the licensee shall
8-51 immediately return the revoked license to the department.
8-52 (e) Disciplinary action may be taken, a denial of an
8-53 application for a new or renewal license or a revocation of a
8-54 license may be done, or a determination that a controlling person
8-55 is unqualified may be made by the department only subject to the
8-56 Administrative Procedure and Texas Register Act (Article 6252-13a,
8-57 Vernon's Texas Civil Statutes), with notice to, and an opportunity
8-58 for a hearing by, the affected applicant, licensee, or controlling
8-59 person.
8-60 (f) If a license is revoked or renewal is denied, the
8-61 affected licensee may request a reinstatement hearing after a
8-62 minimum of one year. The department may reinstate or renew the
8-63 license only if the cause of the nonrenewal or revocation has been
8-64 corrected.
8-65 SECTION 18. FEES USED FOR ADMINISTRATION. All fees
8-66 collected by the department under this Act shall be used to
8-67 implement this Act.
8-68 SECTION 19. EFFECT OF OTHER LAW. This Act does not exempt a
8-69 client of a licensee, or any assigned employee, from any other
8-70 license requirements imposed under local, state, or federal law.
9-1 An employee who is licensed, registered, or certified under law and
9-2 who is assigned to a client company is considered to be an employee
9-3 of the client company for the purpose of that license,
9-4 registration, or certification.
9-5 SECTION 20. EFFECTIVE DATE; TRANSITION. (a) Except as
9-6 provided by Subsection (b) of this section, this Act takes effect
9-7 September 1, 1993.
9-8 (b) A person is not required to hold a license under this
9-9 Act to provide staff leasing services until March 1, 1994.
9-10 (c) A person who applies for a license on or before March 1,
9-11 1994, and whose application is granted, is not liable for any act,
9-12 omission, or representation that would be lawful under its license
9-13 had the license been in effect at the time of the act, omission, or
9-14 representation.
9-15 SECTION 21. EMERGENCY. The importance of this legislation
9-16 and the crowded condition of the calendars in both houses create an
9-17 emergency and an imperative public necessity that the
9-18 constitutional rule requiring bills to be read on three several
9-19 days in each house be suspended, and this rule is hereby suspended.
9-20 * * * * *
9-21 Austin,
9-22 Texas
9-23 May 21, 1993
9-24 Hon. Bob Bullock
9-25 President of the Senate
9-26 Sir:
9-27 We, your Committee on Economic Development to which was referred
9-28 H.B. No. 456, have had the same under consideration, and I am
9-29 instructed to report it back to the Senate with the recommendation
9-30 that it do not pass, but that the Committee Substitute adopted in
9-31 lieu thereof do pass and be printed.
9-32 Parker,
9-33 Chairman
9-34 * * * * *
9-35 WITNESSES
9-36 FOR AGAINST ON
9-37 ___________________________________________________________________
9-38 Name: Toni Barcellona x
9-39 Representing: CCSI
9-40 City: Austin
9-41 -------------------------------------------------------------------
9-42 Name: Cordell Hull x
9-43 Representing: N.A.A.S.
9-44 City: Austin
9-45 -------------------------------------------------------------------
9-46 Name: Kent Caperton x
9-47 Representing: Diversified Consulting Ser.
9-48 City: Austin
9-49 -------------------------------------------------------------------
9-50 Name: Michael T. Marks x
9-51 Representing: National Staff Leasing Assn.
9-52 City: Austin
9-53 -------------------------------------------------------------------
9-54 Name: Jerald L. Boonssard x
9-55 Representing: Administaff, Inc.
9-56 City: Kingwood
9-57 -------------------------------------------------------------------
9-58 Name: J. Ferris Duhon x
9-59 Representing: Texas Employment Commission
9-60 City: Austin
9-61 -------------------------------------------------------------------