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.