NDT S.B. 229 75(R)BILL ANALYSIS LICENSING & ADMINISTRATIVE PROCEDURES S.B. 229 By: Carona (Kubiak) 5-20-97 Committee Report (Amended) BACKGROUND The Air Conditioning and Refrigeration Contractor License Law (Article 8861, V.T.C.S.) requires those persons engaging in environmental air conditioning, commercial refrigeration, or process heating or cooling to be examined and licensed by the State of Texas. S.B. 229 sets forth regulations and penalties pertaining to air conditioning and refrigeration contracting that are related to the need for establishing certain license practices and enforcing contracts. PURPOSE S.B. 229 sets forth regulations and penalties pertaining to air conditioning and refrigeration contracting. RULEMAKING AUTHORITY Rulemaking authority is granted under SECTION 5, The Air Conditioning and Refrigeration Contractor License Law (Article 8861, Vernon's Texas Civil Statutes) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Sections 2(7) and (9), Article 8861, V.T.C.S. (Air Conditioning and Refrigeration Contractor License Law) to redefine "air conditioning and refrigeration maintenance word" and "air conditioning and refrigeration contracting." SECTION 2. Amends Section 3(e), Article 8861, V.T.C.S., to requires the examinations to be offered on a quarterly basis at locations designated by the Texas Commissioner of Licensing and Regulation (commissioner), SECTION 3. Amends Section 3A, Article 8861, V.T.C.S., by adding Subsection (i), to provide that Section 8, Article 6252-33, V.T.C.S., does no apply to the Air Conditioning and Refrigeration Contractors Advisory Board (advisory board). SECTION 4. Amends Section 3B, Article 8861, V.T.C.S., as follows: Sec. 3B. New heading: LICENSE REQUIRED; CITATION. Authorizes a representative of the Department of Licensing and Regulation (department) or a municipal official to issue a citation to a person who performs air conditioning and refrigeration contracting without a license issued under this Act. Provides that the municipal court has concurrent jurisdiction with a justice court of a precinct in which the municipality is located in a case arising from a citation issued under this subsection to the extent authorized by Chapter 29, Government Code. Makes a conforming change. SECTION 5. Amends Article 8861, V.T.C.S., by adding Section 3C, as follows: Sec. 3C. ENFORCEMENT OF CONTRACTS. Prohibits a person who performs air conditioning and refrigeration contracting without holding the appropriate license from collecting a fee or otherwise enforcing a contract for the services performed. Requires a person to present proof that the person holds license at the time the contract is signed and the work performed in order to enforce a contract. Requires the commissioner to adopt rules relating to the manner in which proof may be presented under this section. SECTION 6. Amends Section 4(f) and (g), Article 8861, V.T.C.S., to delete text requiring an application to be accompanied be evidence of the insurance coverage required under this Act. Requires the commissioner ro issue an air conditioning and refrigeration contractor licence to a person who furnishes evidence of the insurance coverage and performs certain activities required under this Act. Makes conforming and nonsubstantive changes. SECTION 7. REPORTING REQUIREMENT. Amends Section 7, Article 8861, V.T.C.S., to require each air conditioning and refrigeration contractor, rather that person, to notify the corresponding municipal authority that the person has obtained a state license. Authorizes the amount of a fee imposed on a contractor to be set by the municipality only in the amount reasonable and necessary to implement this section. Makes conforming changes. SECTION 8. Amends Section 8, Article 8861, V.T.C.S., to provide that a person commits a Class A, rather that Class B, misdemeanor if the person knowingly and intentionally engages in air conditioning and refrigeration contracting without a license. SECTION 9. Amends Section 9, Article 8861, V.T.C.S., to provide that a license issued by a municipality of this state that complies with the requirements of this section is valid under the terms of the license within that municipality. Requires an applicant for a municipal license to pass an examination and meet specific experience requirements Makes a conforming change. SECTION 10. Amends Section 23(c), Article 6573a, V.T.C.S., (The Real Estate License Act) by adding Subdivision (4), to require a business entity that inspects certain systems as part of a real estate inspection to employ a person who holds the appropriate air conditioning and refrigeration contractor licenses and endorsements under Article 8861, V.T.C.S. Authorizes an employee who does no hold a license or endorsement to perform the inspection under the direction of the license holder. Defines "inspection." SECTION 11. Amends Section 25, Article 6573b, V.T.C.S., (Residential Service Company Act) to provide that any person who performs air conditioning refrigeration in compliance with the Air Conditioning and Refrigeration Contractor License Law, Article 8861, V.T.C.S., is exempt from the provisions of this Act. Makes a conforming change. SECTION 12. Makes application of this Act prospective. SECTION 13. Provides that the change in law made to SECTION 9, Article 8861, V.T.C.S., excerpt as provided by Subsection (b), prospective. Requires a municipality to adopt examination requirements in compliance with this section not later that January 1, 1998. Requires a person who holds a municipal license to satisfy the examination requirements imposed under Section 9(b), Article 8861, V.T.C.S., not later that June 1, 1998. SECTION 14. (a) Effective date: September 1, 1997. (b) Requires the commissioner of licensing and regulation to adopt rules as required by Section 3C, Article 8861, V.T.C.S., not later that December 31, 1997. (c) and (d) Make application of this Act prospective. SECTION 15. Emergency clause. EXPLANATION OF AMENDMENTS Committee Amendment #1 amends Section 7 on page 6, line 5, after "on" add "residential"; after "evaporate coolers" add "up to and including 6,500 cubic feet per minute (cfm)" Committee Amendment #2 amends SECTION 1, pg.1, line 9, (6) "Person" means an individual, a firm, partnership, corporation, association or other organization, or any combination of any thereof. In SECTION 1 of the bill, insert an new Subsection 14 and 15 as follows: (14) "Air conditioning and refrigeration contracting company" means any person, corporation, partnership, association, or other entity that performs air conditioning and refrigeration contracting. (15) "Direct Personal Supervision" means directing and verifying work requiring a license under the Act by means of hiring, training, and consulting with employees, personally observing and checking work of employees, and having responsibility for handling customer complaints. Committee Amendment #3 amends SECTION 4, by amending Sec 3B as follows: (a) Unless the person is exempted under Section 6 of this Act, a person may not perform air conditioning and refrigeration contracting without a license under this Act. A person is not required to be individually licensed under the Act if the person is a bona fide employee of a company which has a license holder who has direct personal supervision over him or her. (b) An air conditioning and refrigeration contracting company that is not exempt under the Act must employ a license holder(s) in each permanent office whose license is assigned to that company. In SECTION 7, Amend as follows: (g) A person who assists in the performance of air conditioning and refrigeration contracting work under the supervision of a licensee as a bona fide employee is not required to be licensed. Committee Amendment #4 amends Committee Amendment #3 as follows: (b) An air conditioning and refrigeration contracting company that is not exempt under the Act must employ a license holder(s) in each permanent office whose license is assigned to that company. Committee Amendment #5 amends Page 1, line 22 as follows: "The term includes cleaning equipment and duct materials as required for the proper operation of such a system."