1-1  By:  Carona (Senate Sponsor - Cain)                    H.B. No. 796
    1-2        (In the Senate - Received from the House May 4, 1995;
    1-3  May 5, 1995, read first time and referred to Committee on Economic
    1-4  Development; May 23, 1995, reported favorably by the following
    1-5  vote:  Yeas 6, Nays 0; May 23, 1995, sent to printer.)
    1-6                         A BILL TO BE ENTITLED
    1-7                                AN ACT
    1-8  relating to the regulation of air conditioning and refrigeration
    1-9  contractors; providing penalties.
   1-10        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
   1-11        SECTION 1.  Sections 2(7) and (9), Air Conditioning and
   1-12  Refrigeration Contractor License Law (Article 8861, Vernon's Texas
   1-13  Civil Statutes), are amended to read as follows:
   1-14              (7)  "Air conditioning and refrigeration maintenance
   1-15  work" means repair work and all other work required for the
   1-16  continued normal performance of an environmental air conditioning
   1-17  system, commercial refrigeration system or equipment, or process
   1-18  cooling or heating system.  The term does not include the
   1-19  installation  of a total replacement of the system or the
   1-20  installation or repair of boilers or pressure vessels <that must be
   1-21  installed by licensed persons pursuant to rules and regulations
   1-22  adopted by the commissioner> under Chapter 755, Health and Safety
   1-23  Code.
   1-24              (9)  "Air conditioning and refrigeration contracting"
   1-25  means the design,  installation, construction, maintenance,
   1-26  service, repair, alteration, or modification of a product or of
   1-27  equipment in environmental air conditioning, commercial
   1-28  refrigeration, or process cooling or heating systems.  The term
   1-29  includes cleaning equipment and duct materials as required for the
   1-30  proper operation of such a system.
   1-31        SECTION 2.  Section 3(e), Air Conditioning and Refrigeration
   1-32  Contractor License Law (Article 8861, Vernon's Texas Civil
   1-33  Statutes), is amended to read as follows:
   1-34        (e)  The commissioner shall prescribe the method and content
   1-35  of examinations administered under this Act and shall set
   1-36  compliance requirements for the examinations.  The examinations
   1-37  <shall be offered only in Travis County and> shall be offered on a
   1-38  quarterly basis at locations designated by the commissioner.
   1-39        SECTION 3.  Section 3A, Air Conditioning and Refrigeration
   1-40  Contractor License Law (Article 8861, Vernon's Texas Civil
   1-41  Statutes), is amended by adding Subsection (i) to read as follows:
   1-42        (i)  Section 8, Article 6252-33, Revised Statutes, does not
   1-43  apply to the advisory board.
   1-44        SECTION 4.  Section 3B, Air Conditioning and Refrigeration
   1-45  Contractor License Law (Article 8861, Vernon's Texas Civil
   1-46  Statutes), is amended to read as follows:
   1-47        Sec. 3B.  LICENSE REQUIRED; CITATION.  (a)  Unless the person
   1-48  is exempted under Section 6 of this Act, a person may not perform
   1-49  air conditioning and refrigeration contracting without a license
   1-50  under this Act.
   1-51        (b)  A representative of the department or a municipal
   1-52  official may issue a citation to a person who performs air
   1-53  conditioning and refrigeration contracting without a license issued
   1-54  under this Act.  To the extent authorized by Chapter 29, Government
   1-55  Code, the municipal court has concurrent jurisdiction with a
   1-56  justice court of a precinct in which the municipality is located in
   1-57  a case arising from a citation issued under this subsection.
   1-58        SECTION 5.  The Air Conditioning and Refrigeration Contractor
   1-59  License Law (Article 8861, Vernon's Texas Civil Statutes) is
   1-60  amended by adding Section 3C to read as follows:
   1-61        Sec. 3C.  ENFORCEMENT OF CONTRACTS.  (a)  A person who
   1-62  performs air conditioning and refrigeration contracting without
   1-63  holding the appropriate license under this Act may not collect a
   1-64  fee or otherwise enforce a contract for the services performed.  To
   1-65  enforce a contract for the performance of air conditioning and
   1-66  refrigeration contracting, the person who performs the services
   1-67  must present proof that the person holds a license under this Act
   1-68  at the time the contract is signed and the work performed.
    2-1        (b)  The commissioner shall adopt rules relating to the
    2-2  manner in which proof may be presented under this section.
    2-3        SECTION 6.  Sections 4(f) and (g), Air Conditioning and
    2-4  Refrigeration Contractor License Law (Article 8861, Vernon's Texas
    2-5  Civil Statutes), are amended to read as follows:
    2-6        (f)  The application must be made on a form prescribed by the
    2-7  commissioner and must specify the class of license and each
    2-8  endorsement the applicant seeks.   The application must be verified
    2-9  and must be accompanied by:
   2-10              (1)  <evidence of the insurance coverage required under
   2-11  this Act;>
   2-12              <(2)>  a statement of the applicant's practical
   2-13  experience; and
   2-14              (2) <(3)>  the examination fee.
   2-15        (g)  The commissioner shall issue an air conditioning and
   2-16  refrigeration contractor license to an applicant who possesses the
   2-17  required qualifications, passes the appropriate examinations,
   2-18  furnishes evidence of the insurance coverage required under this
   2-19  Act, and pays the <examination fee and the> original license fee
   2-20  required by this Act.  An applicant who fails an examination is
   2-21  eligible for reexamination.
   2-22        SECTION 7.  Section 7, Air Conditioning and Refrigeration
   2-23  Contractor License Law (Article 8861, Vernon's Texas Civil
   2-24  Statutes), is amended to read as follows:
   2-25        Sec. 7.  REPORTING REQUIREMENT.  (a)  Each air conditioning
   2-26  and refrigeration contractor <person> licensed under this Act shall
   2-27  notify the municipal authority who has control of the enforcement
   2-28  of regulations relative to air conditioning and refrigeration
   2-29  contracting in the municipality in which the person is engaged in
   2-30  air conditioning and refrigeration contracting that the person has
   2-31  obtained a state license.
   2-32        (b)  The notification must be in the form required by the
   2-33  municipality.
   2-34        (c)  The amount of a fee imposed by a municipality on a
   2-35  contractor to provide notice under this section must be an amount
   2-36  reasonable and necessary to implement this section.
   2-37        SECTION 8.  Section 8, Air Conditioning and Refrigeration
   2-38  Contractor License Law (Article 8861, Vernon's Texas Civil
   2-39  Statutes), is amended to read as follows:
   2-40        Sec. 8.  PENALTY.  Except as provided in Section 9, a person
   2-41  commits an offense if the person knowingly or intentionally engages
   2-42  in air conditioning and refrigeration contracting without a license
   2-43  issued under this Act.  An offense under this section is a Class A
   2-44  <B> misdemeanor.
   2-45        SECTION 9.  Section 9, Air Conditioning and Refrigeration
   2-46  Contractor License Law (Article 8861, Vernon's Texas Civil
   2-47  Statutes), is amended to read as follows:
   2-48        Sec. 9.  Municipal Regulation.  (a)  A license issued by a
   2-49  municipality of this state that complies with the requirements of
   2-50  this section is valid under the terms of the license within that
   2-51  municipality.  However, a license issued under this Act is valid
   2-52  throughout the state, and the holder and people under supervision
   2-53  are not required to hold a municipal license to practice air
   2-54  conditioning and refrigeration contracting in any municipality
   2-55  within this state.
   2-56        (b)  An applicant for a municipal license must:
   2-57              (1)  pass an examination that covers the same subjects
   2-58  as the examination required by the commissioner for an air
   2-59  conditioning and refrigeration contractor license of the class of
   2-60  work that the municipal applicant proposes to perform; and
   2-61              (2)  meet experience requirements that are at least as
   2-62  strict as those required under Section 4(e) of this Act for an air
   2-63  conditioning and refrigeration contractor license.
   2-64        (c)  A municipality may by ordinance adopt and enforce
   2-65  standards for air conditioning and refrigeration contractors that
   2-66  are consistent with the standards established under this Act.  The
   2-67  municipality shall report violations of the ordinance to the
   2-68  commissioner not later than the 10th day after the date on which
   2-69  the municipality takes action to enforce the ordinance.  Conviction
   2-70  of an offense under the municipal ordinance is a ground for the
    3-1  denial, suspension, or revocation of a license issued under this
    3-2  Act.
    3-3        SECTION 10.  Section 23(c), The Real Estate License Act
    3-4  (Article 6573a, Vernon's Texas Civil Statutes), is amended by
    3-5  adding Subdivision (4) to read as follows:
    3-6              (4)  In addition to the license requirements imposed
    3-7  under Subdivisions (1)-(3) of this subsection, a business entity
    3-8  that inspects an environmental air conditioning system, commercial
    3-9  refrigeration system, or process cooling or heating system as part
   3-10  of a real estate inspection conducted under this Act must employ a
   3-11  person who holds the appropriate air conditioning and refrigeration
   3-12  contractor licenses and endorsements under the Air Conditioning and
   3-13  Refrigeration Contractor License Law (Article 8861, Vernon's Texas
   3-14  Civil Statutes).  An employee who does not hold a license or
   3-15  endorsement under the Air Conditioning and Refrigeration Contractor
   3-16  License Law (Article 8861, Vernon's Texas Civil Statutes) may
   3-17  perform the inspection under the direction of the license holder.
   3-18  For purposes of this Act, "inspection" of environmental air
   3-19  conditioning, commercial refrigeration, and process cooling and
   3-20  heating equipment means an inspection that includes the use of
   3-21  electronic instruments, gauges, thermometers, mechanical
   3-22  instruments, or other meters that require direct in-line connection
   3-23  to the refrigerant system.
   3-24        SECTION 11.  Section 32.12(a), Education Code, is amended to
   3-25  read as follows:
   3-26        (a)  The following schools or educational institutions are
   3-27  specifically exempt from the provisions of this chapter and are not
   3-28  within the definition of "proprietary school":
   3-29              (1)  a school or educational institution supported by
   3-30  taxation from either a local or State source;
   3-31              (2)  nonprofit schools owned, controlled, operated, and
   3-32  conducted by bona fide religious, denominational, eleemosynary, or
   3-33  similar public institutions exempt from property taxation under the
   3-34  laws of this State, but such schools may choose to apply for a
   3-35  certificate of approval hereunder, and upon approval and issuance,
   3-36  shall be subject to the provisions of this chapter as determined by
   3-37  the administrator;
   3-38              (3)  a school or training program which offers
   3-39  instruction of purely avocational or recreational subjects as
   3-40  determined by the administrator;
   3-41              (4)  a course or courses of instruction or study
   3-42  sponsored by an employer for the training and preparation of its
   3-43  own employees, and for which no tuition fee is charged to the
   3-44  student;
   3-45              (5)  a course or courses of study or instruction
   3-46  sponsored by a recognized trade, business, or professional
   3-47  organization for the instruction of the members of the organization
   3-48  with a closed membership;
   3-49              (6)  private colleges or universities which award a
   3-50  recognized baccalaureate, or higher degree, and which maintain and
   3-51  operate educational programs for which a majority of the credits
   3-52  given are transferable to a college, junior college, or university
   3-53  supported entirely or partly by taxation from either a local or
   3-54  State source;
   3-55              (7)  a school or course which is otherwise regulated
   3-56  and approved under and pursuant to any other law or rulemaking
   3-57  process of the State or approved for continuing education credit by
   3-58  an organization that accredits courses for the maintenance of a
   3-59  license, except as provided by Subsection (c) of this section;
   3-60              (8)  aviation schools or instructors approved by and
   3-61  under the supervision of the Federal Aviation Administration;
   3-62              (9)  a school which offers intensive review courses
   3-63  designed to prepare students for certified public accountancy
   3-64  tests, public accountancy tests, law school aptitude tests, bar
   3-65  examinations, or medical college admissions tests;
   3-66              (10)  a private school offering primary or secondary
   3-67  education, which may include kindergarten or prekindergarten
   3-68  program, and which satisfies the compulsory attendance requirements
   3-69  of Section 21.032 of this code pursuant to Section 21.033(a)(1) of
   3-70  this code; <and>
    4-1              (11)  a course or courses of instruction by bona fide
    4-2  electrical trade associations for the purpose of preparing students
    4-3  for electrical tests required for licensing and for the purpose of
    4-4  providing continuing education to students for the renewal of
    4-5  electrical licenses; and
    4-6              (12)  a course or training program conducted by a
    4-7  nonprofit association of air conditioning and refrigeration
    4-8  contractors approved by the Air Conditioning and Refrigeration
    4-9  Contractors Advisory Board, to provide instruction for technical,
   4-10  business, or license examination preparation programs relating to
   4-11  air conditioning and refrigeration contracting, as that term is
   4-12  defined by the Air Conditioning and Refrigeration Contractor
   4-13  License Law (Article 8861, Vernon's Texas Civil Statutes).
   4-14        SECTION 12.  Section 25, Residential Service Company Act
   4-15  (Article 6573b, Revised Statutes), is amended to read as follows:
   4-16        Sec. 25.  Exemptions.  The provisions of this Act shall not
   4-17  apply to any of the following persons and transactions, and each
   4-18  and all of the following persons and transactions are hereby
   4-19  exempted from the provisions of this Act, to wit:
   4-20              (a)  performance guarantees given by either the builder
   4-21  of a home or the manufacturer or seller of an appliance or other
   4-22  system or component;
   4-23              (b)  any residential service contract executed on or
   4-24  before the effective date of this Act;
   4-25              (c)  any service contract, guarantee, or warranty
   4-26  intending to guarantee or warrant the repairs or service of a home
   4-27  appliance, system, or component, provided such service contract,
   4-28  guarantee, or warranty is issued by a person who has sold,
   4-29  serviced, repaired, or provided replacement of such appliance,
   4-30  system, or component at the time of, or prior to the issuance of
   4-31  such contract, guarantee, or warranty; and provided further that
   4-32  the person issuing the service contract, guarantee, or warranty
   4-33  does not engage in the business of a service company;
   4-34              (d)  any person engaging in the business of structural
   4-35  pest control in compliance with the Texas Structural Pest Control
   4-36  Act, as amended (Article 135b-6, Vernon's Texas Civil Statutes,
   4-37  1925);
   4-38              (e)  any person who performs air conditioning and
   4-39  refrigeration contracting in compliance with the Air Conditioning
   4-40  and Refrigeration Contractor License Law (Article 8861, Vernon's
   4-41  Texas Civil Statutes); and
   4-42              (f)  any service or maintenance contract or agreement,
   4-43  or warranty, which provides for, warrants, or guarantees, the
   4-44  maintenance, repair, service, replacement, or operation or
   4-45  performance, of any product or part thereof, including but not
   4-46  limited to a structural component, the appliances, or the
   4-47  electrical, plumbing, heating, cooling or air-conditioning systems
   4-48  in or of a building or residence, provided such service or
   4-49  maintenance contract or agreement, or warranty is sold, offered for
   4-50  sale, or issued by the manufacturer or merchant who manufactured or
   4-51  sold such product or part thereof.
   4-52        SECTION 13.  (a)  The change in law made to Section 8, Air
   4-53  Conditioning and Refrigeration Contractor License Law (Article
   4-54  8861, Vernon's Texas Civil Statutes), by this Act applies only to
   4-55  an offense committed on or after the effective date of this Act.
   4-56  For purposes of this section, an offense is committed before the
   4-57  effective date of this Act if any element of the offense occurs
   4-58  before that date.
   4-59        (b)  An offense committed before the effective date of this
   4-60  Act is governed by the law in effect when the offense was
   4-61  committed, and the former law is continued in effect for that
   4-62  purpose.
   4-63        SECTION 14.  (a)  Except as provided by Subsection (b) of
   4-64  this section, the change in law made to Section 9, Air Conditioning
   4-65  and Refrigeration Contractor License Law (Article 8861, Vernon's
   4-66  Texas Civil Statutes), by this Act applies to a municipal license
   4-67  that is issued or renewed on or after the effective date of this
   4-68  Act.  A municipality subject to that section shall adopt
   4-69  examination requirements in compliance with that  section not later
   4-70  than January 1, 1996.
    5-1        (b)  To continue to engage in the practice of air
    5-2  conditioning and refrigeration contracting after September 1, 1995,
    5-3  a person who holds a municipal license on the effective date of
    5-4  this Act must satisfy the examination requirements imposed under
    5-5  Section 9(b), Air Conditioning and Refrigeration Contractor License
    5-6  Law (Article 8861, Vernon's Texas Civil Statutes), as amended by
    5-7  this Act, not later than June 1, 1996.
    5-8        SECTION 15.  (a)  This Act takes effect September 1, 1995.
    5-9        (b)  Not later than December 31, 1995, the commissioner of
   5-10  licensing and regulation shall adopt rules as required by Section
   5-11  3C, Air Conditioning and Refrigeration Contractor License Law
   5-12  (Article 8861, Vernon's Texas Civil Statutes), as added by this
   5-13  Act.
   5-14        (c)  Section 23(c), The Real Estate License Act (Article
   5-15  6573a, Vernon's Texas Civil Statutes), as amended by this Act,
   5-16  applies only to a real estate inspection that is conducted on or
   5-17  after the effective date of this Act.  A real estate inspection
   5-18  conducted before that date is governed by the law in effect on the
   5-19  date that the inspection occurs, and the former law is continued in
   5-20  effect for that purpose.
   5-21        (d)  Section 32.12(a), Education Code, as amended by this
   5-22  Act, applies only to a course or training program conducted by a
   5-23  nonprofit association of air conditioning and refrigeration
   5-24  contractors that is offered on or after the effective date of this
   5-25  Act.  A course or training program offered before that date is
   5-26  governed by the law in effect on the date that the course or
   5-27  program is offered, and the former law is continued in effect for
   5-28  that purpose.
   5-29        (e)  Section 25, Residential Service Company Act (Article
   5-30  6573b, Revised Statutes), as amended by this Act, applies only to a
   5-31  residential service contract that is entered into on or after the
   5-32  effective date of this Act.  A residential service contract that is
   5-33  entered into before that date is governed by the law in effect on
   5-34  the date that the contract is entered into, and the former law is
   5-35  continued in effect for that purpose.
   5-36        SECTION 16.  The importance of this legislation and the
   5-37  crowded condition of the calendars in both houses create an
   5-38  emergency and an imperative public necessity that the
   5-39  constitutional rule requiring bills to be read on three several
   5-40  days in each house be suspended, and this rule is hereby suspended.
   5-41                               * * * * *