BILL ANALYSIS


                                                        H.B. 1028
                                            By: Oliveira (Sibley)
                                             Economic Development
                                                         05-22-95
                              Senate Committee Report (Unamended)
BACKGROUND

The 73rd Legislature passed S.B. 939, which provides for
administrative penalty procedures and criminal penalties in
relation to the employment of children (Child Labor Laws). S.B. 939
passed prior to the codification of the Labor Code, and,
consequently, the provisions of the bill are not part of the Labor
Code, which makes it difficult for employers to find the statutes.

Also, in enforcing the Child Labor Laws, the Texas Employment
Commission (TEC) has encountered cases in which an employer has
previously employed children but fires the child as soon as TEC
begins to investigate the employer. The statute addresses only
current employment and some employers attempt to avoid TEC scrutiny
by claiming once the child is fired the employer cannot be charged
under the statute.

PURPOSE

As proposed, H.B. 1028 provides for the enforcement of certain
regulations regarding the employment of children.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 51.021(a), Labor Code, to authorize the
Texas Employment Commission (commission), or a person designated by
the commission, during working hours, to inspect a place where
there is reason to believe that a child is employed or has been
employed within the last two years; and to collect information
concerning the employment of a child who works or has worked within
the last two years at that place.

SECTION 2. Amends Chapter 51C, Labor Code, by adding Section
51.024, as follows:

     Sec. 51.024. POWERS OF COMMISSION; PENALTY. (a) Authorizes the
     commission to require reports, conduct investigations, and
     take other action it considers necessary to implement this
     chapter.
     
     (b) Authorizes a member of the commission or an authorized
       representative of the commission, in the discharge of the
       duties imposed by this chapter, to administer oaths and
       affirmations, take dispositions, certify official acts, and
       issue subpoenas to compel the attendance of witnesses who
       may be found within 100 miles of the relevant event and the
       production of books, papers, correspondence, memoranda, or
       other records considered necessary as evidence in the
       administration of this chapter. Requires the commission,
       notwithstanding Chapter 152 or 154, Local Government Code,
       or any other state law, to pay the fee of a sheriff or
       constable for serving a subpoena under this subsection from
       the administrative funds of the commission, and the
       comptroller shall issue a warrant for that fee as directed
       by the commission.
       
       (c) Provides that in the case of contumacy or other refusal
       to obey a subpoena issued by a member of the commission or
       a representative of the commission, a county court or
       district court within the jurisdiction of which the inquiry
       is conducted or the person guilty of contumacy or refusal to
       obey is found, resides, or transacts business has
       jurisdiction on application by the commission or its
       representative to issue to the person an order requiring the
       person to appear before a commissioner, the commission, or
       a representative of the commission to produce evidence or
       give testimony regarding the matter under investigation.
       Authorizes failure to obey the court order to be punished by
       the court as contempt.
       
       (d) Provides that a person commits an offense if the person,
       without just cause, fails or refuses to obey a commission
       subpoena to attend and testify; answer any lawful inquiry;
       or produce books, papers, correspondence, memoranda, or
       other records.
       
       (e) Provides that an offense under Subsection (d) is
       punishable by a fine of not less than $200, confinement for
       not more than 60 days, or by both fine and confinement.
       Provides that each day of violation constitutes a separate
       offense.
       
       SECTION 3.   Amends Chapter 51D, Labor Code, by adding Section
51.033, as follows:

     Sec. 51.033. ADMINISTRATIVE PENALTY. (a) Authorizes the
     commission, if the commission determines that a person who
     employs a child has violated this chapter or a rule adopted
     under this chapter, to assess an administrative penalty
     against that person as provided by this section.
     
     (b) Authorizes the penalty for a violation to be in an
       amount not to exceed $10,000.
       
       (c) Sets forth provisions on which the amount of the penalty
       shall be based.
       
       (d) Requires the commission, if after examination of a
       possible violation and the facts relating to that possible
       violation, the commission determines that a violation has
       occurred, to issue a preliminary determination that states
       the facts on which the determination is based, the fact that
       an administrative penalty is to be imposed, and the amount
       of the penalty.
       
       (e) Requires the commission, no later than 14 days after the
       date the report is issued, to give written notice of the
       preliminary determination to the person charged with the
       violation. Requires the notice to include a brief summary of
       the alleged violation and a statement of the amount of the
       recommended penalty and to inform the person that the person
       has a right to a hearing on the occurrence of the violation,
       the amount of the penalty, or both the occurrence of the
       violation and the amount of the penalty.
       
       (f) Authorizes the person, no later than 21 days after the
       notice is mailed, to make a written request for a hearing on
       the occurrence of the violation, the amount of the penalty,
       or both the occurrence of the violation and the amount of
       the penalty.
       
       (g) Requires the commission, if the person requests a
       hearing, to set a hearing and give notice of the hearing to
       the person no later than 21 days after a request for the
       hearing is received by the commission. Requires the
       commission, no later than 45 days after the hearing notice
       is mailed, to conduct the hearing. Provides that the hearing
       is subject to the commission rules and hearing procedures
       used by the commission to determine a claim under Title 4A,
       but is not subject to Chapter 2001, Government Code.
       Requires the hearings examiner to issue a decision.
       
       (h) Requires the commission, if it is determined after the
       hearing that a penalty may be imposed, to enter a written
       order to that effect. Requires the commission to notify the
       person in writing of the decision and the amount of the
       penalty imposed by mailing the notice to the person at the
       person's last known address. Provides that the order of the
       commission becomes final 14 days after the date of mailing,
       unless, within 14 days after the date of the mailing, the
       hearing is reopened by commission order or the person files
       a written motion for rehearing.
       
       (i) Requires the notice of the commission's order to include
       a statement of the right of the person to judicial review of
       the order.
       
       (j) Requires a person, no later than 30 days after the
       commission's final order is mailed, to:
       
       (1) pay the amount of the penalty;
         
         (2) pay the amount of the penalty and file a petition for
         judicial review contesting the occurrence of the
         violation, the amount of the penalty, or both the
         occurrence of the violation and the amount of the penalty;
         or
         
         (3) without paying the amount of the penalty, file a
         petition for judicial review contesting the occurrence of
         the violation, the amount of the penalty, or both the
         occurrence of the violation and the amount of the penalty.
       (k) Authorizes a person who acts under Subsection (j)(3),
       within a 30-day period, to:
       
       (1) stay enforcement of the penalty by:
         
           (A) paying the amount of the penalty to the court for
         placement in an      escrow account; or
           
           (B) giving to the court a supersedeas bond approved
         by the court that is for  the amount of the penalty
         and that is effective until all judicial review of the  commission's order is final; or
           
         (2) request the court to stay enforcement of the penalty
         by:
         
           (A) filing with the court a sworn affidavit of the
         person stating that the   person is financially unable to
         pay the amount of the penalty and is     financially unable
         to give the supersedeas bond; and
         
           (B) giving a copy of the affidavit to the commission
         by certified mail.
       (l) Authorizes the commission, if the commission receives a
       copy of an affidavit under Subsection (k)(2), to file with
       the court no later than five days after the copy is received
       a contest to the affidavit. Requires the court to hold a
       hearing on the facts alleged in the affidavit as soon as
       practicable and to stay the enforcement of the penalty on
       finding that the alleged facts are true. Provides that the
       person who files an affidavit has the burden of proving that
       the person is financially unable to pay the amount of the
       penalty and to give a supersedeas bond.
       
       (m) Authorizes the commission, if the person does not pay
       the amount of the penalty and the enforcement of the penalty
       is not stayed, to refer the matter to the attorney general
       for collection of the amount of the penalty.
       
       (n) Provides that judicial review of the order of the
       commission is instituted by bringing an action as provided
       by Chapter 212E and is under the substantial evidence rule.
       
       (o) Authorizes the court, if the court sustains the
       occurrence of the violation, to uphold or reduce the amount
       of the penalty and order the person to pay the full or
       reduced amount of the penalty. Requires the court, if the
       court does not sustain the occurrence of the violation, to
       order that a penalty is not owed.
       
       (p) Requires the court, when the judgment of the court
       becomes final, to proceed under this subsection. Requires
       the court, if the person paid the amount of the penalty and
       if that amount is reduced or is not upheld by the court, to
       order that the appropriate amount plus accrued interest be
       remitted to the person. Provides that the rate of the
       interest is the rate charged on loans to depository
       institutions by the New York Federal Reserve Bank, and the
       interest shall be paid for the period beginning on the date
       the penalty was paid and ending on the date the penalty is
       remitted. Requires the court, if the person gave a
       supersedeas bond and if the amount of the penalty is not
       upheld by the court, to order the release of the bond.
       Requires the court, if the person gave a supersedeas bond
       and if the amount of the penalty is reduced, to order the
       release of the bond after the person pays the amount.
       
       (q) Authorizes the attorney general to bring a suit in a
       district court in Travis County to enforce a final order
       from which an appeal under this chapter has not been taken.
       Authorizes the court, in the suit and on the request of the
       attorney general, to order payment of attorney's fees and
       other costs of court.
       
       (r) Requires a penalty collected under this section to be
       remitted to the comptroller for deposit in the general
       revenue fund.
       
       SECTION 4.   Amends Chapter 51, Labor Code, by adding Subchapter E,
as follows:

              SUBCHAPTER E. COLLECTION OF PENALTY

     Sec. 51.041. DEFINITION. Defines "asset."
     
     Sec. 51.042. NOTICE OF DELINQUENCY. (a) Authorizes the
     commission, if under final order, a person is determined to be
     delinquent in the payment of any amount, including penalties,
     interest, or other amounts due under this chapter, to notify
     personally or by mail any other person who either possesses or
     controls an asset belonging to the delinquent person; or owes
     a debt to the delinquent person.
     
     (b) Requires a notice under this section to a state officer,
       department, or agency to be given before the officer,
       department, or agency presents to the comptroller the claim
       of the delinquent person.
       
       (c) Authorizes a notice under this section to be given at
       any time after the amount due under this chapter becomes
       delinquent. Requires the notice to state the amount of
       wages, penalties, interest, or other amount due, and any
       additional amount that will accrue by operation of law in a
       period not to exceed 30 days after the date on which the
       notice is given and, in the case of credit, bank, or savings
       account or deposit, is effective only up to that amount.
       
       Sec. 51.043. DUTIES OF NOTICE RECIPIENT. (a) Provides that on
     receipt of a notice under Section 51.042, the person receiving
     the notice:
     
     (1) shall advise the commission no later than 20 days
         after the date on which the notice is received of each
         asset belonging to the delinquent person that is possessed
         or controlled by the person receiving the notice and of
         each debt owed by the person receiving the notice to the
         delinquent person; and
         
         (2) unless the commission consents to an earlier
         disposition, may not transfer or dispose of the asset or
         debt possessed, controlled, or owed by the person
         receiving the notice on the date the person received the
         notice during the 60-day period after the date of receipt
         of the notice.
       (b) Provides that a notice under Section 51.042 that
       attempts to prohibit the transfer or disposition of an asset
       possessed or controlled by a bank is effective if it is
       delivered or mailed to the principal or any branch office of
       the bank, including the office of the bank at which the
       deposit is carried or the credit or property is held.
       
       (c) Provides that a person who receives a notice under this
       subchapter and who transfers or disposes of an asset or debt
       in a manner that violates Subsection (a)(2) is liable to the
       commission for the amount of the indebtedness of the
       delinquent person with respect to whose obligation the
       notice was given, to the extent of the value of the affected
       asset or debt.
       
       Sec. 51.044. LEVY. (a) Authorizes the commission, at any time
     during the 60-day period provided by Section 51.043(a)(2), to
     levy on the asset or debt by delivery of notice of levy.
     
     (b) Requires the person possessing the asset or debt, on
       receipt of the levy notice, to transfer the assets to the
       commission or pay to the commission the amount owed to the
       delinquent person.
       
       Sec. 51.045. NOTICE EFFECT. Provides that a notice delivered
     under this subchapter is effective:
     
     (1) at the time of delivery against all property, rights to
       property, credits, and debts involving the delinquent person
       that are not, as of the date of the notice, subject to a
       preexisting lien, attachment, garnishment, or execution
       issued through a judicial process; and
       
       (2) against all property, rights to property, credits, or
       debts involving the delinquent person that come into the
       possession or control of the person served with the notice
       during the 60-day period provided by Section 51.043(a)(2).
     Sec. 51.046. DISCHARGE OF LIABILITY. Provides that a person
     acting in accordance with the terms of a notice issued by the
     commission under this subchapter is discharged from any
     obligation or liability to the delinquent person with respect
     to the affected property, rights to property, credits, and
     debts of the person affected by compliance with the notice of
     freeze or levy.
SECTION 5. Effective date: September 1, 1995.

SECTION 6. Emergency clause.