R E S O L U T I O N

 1-1           BE IT RESOLVED by the House of Representatives of the State

 1-2     of Texas, 75th Legislature, Regular Session, 1997, That House Rule

 1-3     13, Section 9(a), be suspended in part as provided by House Rule

 1-4     13, Section 9(f), to enable the conference committee appointed to

 1-5     resolve the differences on H.B. 1391 to consider and take action on

 1-6     the following matters:

 1-7           1.  House Rule 13, Section 9(a)(4), is suspended to permit

 1-8     the committee to add new SECTIONS 1-6, 8-13, 14(b) and (c), 15, and

 1-9     16(a)-(c) of the bill to read as follows:

1-10           SECTION 1.  Section 2, Air Conditioning and Refrigeration

1-11     Contractor License Law (Article 8861, Vernon's Texas Civil

1-12     Statutes), is amended by amending Subdivisions (6) and (7) and

1-13     adding Subdivisions (14) and (15) to read as follows:

1-14                 (6)  "Person" means an individual, firm, partnership,

1-15     corporation, association, or other organization or combination of

1-16     entities or organizations.

1-17                 (7)  "Air conditioning and refrigeration maintenance

1-18     work" means repair work and all other work required for the

1-19     continued normal performance of an environmental air conditioning

1-20     system, commercial refrigeration system or equipment, or process

1-21     cooling or heating system.  The term does not include the

1-22     installation of a total replacement of the system or the

1-23     installation or repair of boilers or pressure vessels [that must be

1-24     installed by licensed persons pursuant to rules and regulations

 2-1     adopted by the commissioner] under Chapter 755, Health and Safety

 2-2     Code.

 2-3                 (14)  "Air conditioning and refrigeration contracting

 2-4     company" means a person or other entity that performs air

 2-5     conditioning and refrigeration contracting.

 2-6                 (15)  "Direct personal supervision" means directing and

 2-7     verifying work performed by another person that requires a license

 2-8     under this Act and includes hiring, training, and consulting with

 2-9     an employee, personally observing and checking the work of an

2-10     employee, and having responsibility for handling customer

2-11     complaints.

2-12           SECTION 2.  Section 3(e), Air Conditioning and Refrigeration

2-13     Contractor License Law (Article 8861, Vernon's Texas Civil

2-14     Statutes), is amended to read as follows:

2-15           (e)  The commissioner shall prescribe the method and content

2-16     of examinations administered under this Act and shall set

2-17     compliance requirements for the examinations.  The examinations

2-18     [shall be offered only in Travis County and] shall be offered on a

2-19     quarterly basis at locations designated by the commissioner.

2-20           SECTION 3.  Section 3A, Air Conditioning and Refrigeration

2-21     Contractor License Law (Article 8861, Vernon's Texas Civil

2-22     Statutes), is amended by adding Subsection (i) to read as follows:

2-23           (i)  Section 8, Article 6252-33, Revised Statutes, does not

2-24     apply to the advisory board.

2-25           SECTION 4.  Section 3B, Air Conditioning and Refrigeration

2-26     Contractor License Law (Article 8861, Vernon's Texas Civil

2-27     Statutes), is amended to read as follows:

 3-1           Sec. 3B.  LICENSE REQUIRED.  (a)  Unless the person is

 3-2     exempted under Section 6 of this Act, a person may not perform air

 3-3     conditioning and refrigeration contracting without a license under

 3-4     this Act.  An individual is not required to hold a license under

 3-5     this Act if the individual is a bona fide employee of an air

 3-6     conditioning  and refrigeration contracting company that has a

 3-7     license holder whose license is assigned to the company and who has

 3-8     responsibility for direct personal supervision of the individual.

 3-9           (b)  An air conditioning and refrigeration contracting

3-10     company that is not exempt under this Act must employ a person who

3-11     is a license holder under this Act and whose license is assigned to

3-12     the company.

3-13           SECTION 5.  The Air Conditioning and Refrigeration Contractor

3-14     License Law (Article 8861, Vernon's Texas Civil Statutes) is

3-15     amended by adding Section 3C to read as follows:

3-16           Sec. 3C.  ENFORCEMENT OF CONTRACTS.  (a)  A person who

3-17     performs air conditioning and refrigeration contracting without

3-18     holding the appropriate license under this Act may not collect a

3-19     fee or otherwise enforce a contract for the services performed.  To

3-20     enforce a contract for the performance of air conditioning and

3-21     refrigeration contracting, the person who performs the services

3-22     must present proof that the person holds a license under this Act

3-23     at the time the contract is signed and the work performed.

3-24           (b)  The commissioner shall adopt rules relating to the

3-25     manner in which proof may be presented under this section.

3-26           SECTION 6.  Sections 4(f) and (g), Air Conditioning and

3-27     Refrigeration Contractor License Law (Article 8861, Vernon's Texas

 4-1     Civil Statutes), are amended to read as follows:

 4-2           (f)  The application must be made on a form prescribed by the

 4-3     commissioner and must specify the class of license and each

 4-4     endorsement the applicant seeks.  The application must be verified

 4-5     and must be accompanied by:

 4-6                 (1)  [evidence of the insurance coverage required under

 4-7     this Act;]

 4-8                 [(2)]  a statement of the applicant's practical

 4-9     experience; and

4-10                 (2) [(3)]  the examination fee.

4-11           (g)  The commissioner shall issue an air conditioning and

4-12     refrigeration contractor license to an applicant who possesses the

4-13     required qualifications, passes the appropriate examinations,

4-14     furnishes evidence of the insurance coverage required under this

4-15     Act, and pays the [examination fee and the] original license fee

4-16     required by this Act.  An applicant who fails an examination is

4-17     eligible for reexamination.

4-18           SECTION 8.  Section 6(a), Air Conditioning and Refrigeration

4-19     Contractor License Law (Article 8861, Vernon's Texas Civil

4-20     Statutes), is amended to read as follows:

4-21           (a)  This Act does not apply to a person who:

4-22                 (1)  performs air conditioning and refrigeration

4-23     contracting in a building owned solely by him as his home;

4-24                 (2)  performs air conditioning or refrigeration

4-25     maintenance work if (i) the person is a maintenance man or

4-26     maintenance engineer who is a regular bona fide employee of the

4-27     property owner, the property lessee, or the management company

 5-1     managing the property where the maintenance work is being

 5-2     performed, (ii) the work is performed in connection with the

 5-3     business in which the person is employed, and (iii) the person and

 5-4     the person's employer referred to in (i) above do not engage in the

 5-5     occupation of air conditioning and refrigeration contracting for

 5-6     the general public;

 5-7                 (3)  performs air conditioning and refrigeration

 5-8     contracting and is regularly employed by a regulated electric or

 5-9     gas utility;

5-10                 (4)  is licensed as a professional engineer under The

5-11     Texas Engineering Practice Act (Article 3271a, Vernon's Texas Civil

5-12     Statutes), performs work in connection with the business in which

5-13     the person is employed, and does not engage in the practice of air

5-14     conditioning and refrigeration contracting for the general public;

5-15                 (5)  performs process cooling or heating work for an

5-16     industrial operation such as a chemical plant, petrochemical plant,

5-17     refinery, natural gas plant, or natural gas treating plant when

5-18     employed by that operation;

5-19                 (6)  performs air conditioning and refrigeration

5-20     contracting on:

5-21                       (A)  a portable or self-contained ductless air

5-22     conditioning or refrigeration product that has a cooling capacity

5-23     of three tons or less;

5-24                       (B)  a portable or self-contained heating product

5-25     that does not require the forced movement of air outside the

5-26     heating unit; or

5-27                       (C)  environmental air conditioning equipment

 6-1     that is intended for temporary use and is not fixed in place; [or]

 6-2                 (7)  performs air conditioning services only on a motor

 6-3     vehicle air conditioning unit or who employs a person who performs

 6-4     air conditioning services only on a motor vehicle air conditioning

 6-5     unit; or

 6-6                 (8)  performs air conditioning and refrigeration

 6-7     maintenance work on residential evaporative coolers, including

 6-8     coolers that are not larger than 6,500 cubic feet per minute.

 6-9           SECTION 9.  Section 7, Air Conditioning and Refrigeration

6-10     Contractor License Law (Article 8861, Vernon's Texas Civil

6-11     Statutes), is amended to read as follows:

6-12           Sec. 7.  REPORTING REQUIREMENT.  (a)  Each air conditioning

6-13     and refrigeration contractor [person] licensed under this Act shall

6-14     notify the municipal authority who has control of the enforcement

6-15     of regulations relative to air conditioning and refrigeration

6-16     contracting in the municipality in which the person is engaged in

6-17     air conditioning and refrigeration contracting that the person has

6-18     obtained a state license.

6-19           (b)  The notification must be in the form required by the

6-20     municipality.

6-21           (c)  The amount of a fee imposed by a municipality on a

6-22     contractor to provide notice under this section may be set by the

6-23     municipality only in the amount reasonable and necessary to

6-24     implement this section.

6-25           SECTION 10.  Section 8, Air Conditioning and Refrigeration

6-26     Contractor License Law (Article 8861, Vernon's Texas Civil

6-27     Statutes), is amended to read as follows:

 7-1           Sec. 8.  PENALTY.  Except as provided in Section 9, a person

 7-2     commits an offense if the person knowingly or intentionally engages

 7-3     in air conditioning and refrigeration contracting without a license

 7-4     issued under this Act.  An offense under this section is a Class A

 7-5     [B] misdemeanor.

 7-6           SECTION 11.  Section 9, Air Conditioning and Refrigeration

 7-7     Contractor License Law (Article 8861, Vernon's Texas Civil

 7-8     Statutes), is amended to read as follows:

 7-9           Sec. 9.  Municipal Regulation.  (a)  A license issued by a

7-10     municipality of this state that complies with the requirements of

7-11     this section is valid under the terms of the license within that

7-12     municipality.  However, a license issued under this Act is valid

7-13     throughout the state, and the holder and people under supervision

7-14     are not required to hold a municipal license to practice air

7-15     conditioning and refrigeration contracting in any municipality

7-16     within this state.

7-17           (b)  An applicant for a municipal license must:

7-18                 (1)  pass an examination that covers the same subjects

7-19     as the examination required by the commissioner for an air

7-20     conditioning and refrigeration contractor license of the class of

7-21     work that the municipal applicant proposes to perform; and

7-22                 (2)  meet experience requirements that are at least as

7-23     strict as those required under Section 4(e) of this Act for an air

7-24     conditioning and refrigeration contractor license.

7-25           (c)  A municipality may by ordinance adopt and enforce

7-26     standards for air conditioning and refrigeration contractors that

7-27     are consistent with the standards established under this Act.  The

 8-1     municipality shall report violations of the ordinance to the

 8-2     commissioner not later than the 10th day after the date on which

 8-3     the municipality takes action to enforce the ordinance.  Conviction

 8-4     of an offense under the municipal ordinance is a ground for the

 8-5     denial, suspension, or revocation of a license issued under this

 8-6     Act.

 8-7           SECTION 12.  Section 23(c), The Real Estate License Act

 8-8     (Article 6573a, Vernon's Texas Civil Statutes), is amended by

 8-9     adding Subdivision (4) to read as follows:

8-10                 (4)  In addition to the license requirements imposed

8-11     under Subdivisions (1), (2), and (3) of this subsection, a business

8-12     entity that inspects an environmental air conditioning system,

8-13     commercial refrigeration system, or process cooling or heating

8-14     system as part of a real estate inspection conducted under this Act

8-15     must employ a person who holds the appropriate air conditioning and

8-16     refrigeration contractor licenses and endorsements under the Air

8-17     Conditioning and Refrigeration Contractor License Law (Article

8-18     8861, Vernon's Texas Civil Statutes).  An employee who does not

8-19     hold a license or endorsement under the Air Conditioning and

8-20     Refrigeration Contractor License Law (Article 8861, Vernon's Texas

8-21     Civil Statutes) may perform the inspection under the direction of

8-22     the license holder.  For purposes of this Act, an inspection of

8-23     environmental air conditioning, commercial refrigeration, and

8-24     process cooling and heating equipment means an inspection that

8-25     includes the use of electronic instruments, gauges, thermometers,

8-26     mechanical instruments, or other meters that require direct in-line

8-27     connection to the refrigeration system.

 9-1           SECTION 13.  Section 25, Residential Service Company Act

 9-2     (Article 6573b, Revised Statutes), is amended to read as follows:

 9-3           Sec. 25.  Exemptions.  The provisions of this Act shall not

 9-4     apply to any of the following persons and transactions, and each

 9-5     and all of the following persons and transactions are hereby

 9-6     exempted from the provisions of this Act, to wit:

 9-7                 (a)  performance guarantees given by either the builder

 9-8     of a home or the manufacturer or seller of an appliance or other

 9-9     system or component;

9-10                 (b)  any residential service contract executed on or

9-11     before the effective date of this Act;

9-12                 (c)  any service contract, guarantee, or warranty

9-13     intending to guarantee or warrant the repairs or service of a home

9-14     appliance, system, or component, provided such service contract,

9-15     guarantee, or warranty is issued by a person who has sold,

9-16     serviced, repaired, or provided replacement of such appliance,

9-17     system, or component at the time of, or prior to the issuance of

9-18     such contract, guarantee, or warranty; and provided further that

9-19     the person issuing the service contract, guarantee, or warranty

9-20     does not engage in the business of a service company;

9-21                 (d)  any person engaging in the business of structural

9-22     pest control in compliance with the Texas Structural Pest Control

9-23     Act, as amended (Article 135b-6, Vernon's Texas Civil Statutes,

9-24     1925);

9-25                 (e)  any person who performs air conditioning and

9-26     refrigeration contracting in compliance with the Air Conditioning

9-27     and Refrigeration Contractor License Law (Article 8861, Vernon's

 10-1    Texas Civil Statutes); and

 10-2                (f)  any service or maintenance contract or agreement,

 10-3    or warranty, which provides for, warrants, or guarantees, the

 10-4    maintenance, repair, service, replacement, or operation or

 10-5    performance, of any product or part thereof, including but not

 10-6    limited to a structural component, the appliances, or the

 10-7    electrical, plumbing, heating, cooling or air-conditioning systems

 10-8    in or of a building or residence, provided such service or

 10-9    maintenance contract or agreement, or warranty is sold, offered for

10-10    sale, or issued by the manufacturer or merchant who manufactured or

10-11    sold such product or part thereof.

10-12          SECTION 14.  (b)  Section 8, Air Conditioning and

10-13    Refrigeration Contractor License Law (Article 8861, Vernon's Texas

10-14    Civil Statutes), as amended by this Act, applies only to an offense

10-15    committed on or after the effective date of this Act.  For purposes

10-16    of this section, an offense is committed before the effective date

10-17    of this Act if any element of the offense occurs before that date.

10-18          (c)  An offense committed before the effective date of this

10-19    Act is governed by the law in effect when the offense was

10-20    committed, and the former law is continued in effect for that

10-21    purpose.

10-22          SECTION 15.  (a)  Except as provided by Subsection (b) of

10-23    this section, Section 9, Air Conditioning and Refrigeration

10-24    Contractor License Law (Article 8861, Vernon's Texas Civil

10-25    Statutes), as amended by this Act, applies to a municipal license

10-26    that is issued or renewed on or after the effective date of this

10-27    Act.  A municipality subject to that section shall adopt

 11-1    examination requirements in compliance with that section not later

 11-2    than January 1, 1998.

 11-3          (b)  To continue to engage in the practice of air

 11-4    conditioning and refrigeration contracting after September 1, 1997,

 11-5    a person who holds a municipal license on the effective date of

 11-6    this Act must satisfy the examination requirements of Section 9(b),

 11-7    Air Conditioning and Refrigeration Contractor License Law (Article

 11-8    8861, Vernon's Texas Civil Statutes), as amended by this Act, not

 11-9    later than June 1, 1998.

11-10          SECTION 16.  (a)  Not later than December 31, 1997, the

11-11    commissioner of licensing and regulation shall adopt rules as

11-12    required by Section 3C, Air Conditioning and Refrigeration

11-13    Contractor License Law (Article 8861, Vernon's Texas Civil

11-14    Statutes), as added by this Act.

11-15          (b)  Section 23(c), The Real Estate License Act (Article

11-16    6573a, Vernon's Texas Civil Statutes), as amended by this Act,

11-17    applies only to a real estate inspection that is conducted on or

11-18    after the effective date of this Act.  A real estate inspection

11-19    conducted before that date is governed by the law in effect on the

11-20    date that the inspection occurs, and the former law is continued in

11-21    effect for that purpose.

11-22          (c)  Section 25, Residential Service Company Act (Article

11-23    6573b, Revised Statutes), as amended by this Act, applies only to a

11-24    residential service contract that is entered into on or after the

11-25    effective date of this Act.  A residential service contract that is

11-26    entered into before that date is governed by the law in effect on

11-27    the date that the contract is entered into, and the former law is

 12-1    continued in effect for that purpose.

 12-2          Explanation:  This change is necessary to allow for the

 12-3    effective regulation and licensure of air conditioning and

 12-4    refrigeration contractors and the work performed by the

 12-5    contractors, their employees, and others.

                                                                      Kubiak

                                             _______________________________

                                                   Speaker of the House

               I certify that H.R. No. 1331 was adopted by the House on June

         1, 1997, by a non-record vote.

                                             _______________________________

                                                 Chief Clerk of the House