1-1           By:  Carona, Truan                               S.B. No. 229

 1-2           (In the Senate - Filed January 16, 1997; January 21, 1997,

 1-3     read first time and referred to Committee on International

 1-4     Relations, Trade, and Technology; February 6, 1997, reported

 1-5     favorably by the following vote:  Yeas 7, Nays 0; February 6, 1997,

 1-6     sent to printer.)

 1-7                            A BILL TO BE ENTITLED

 1-8                                   AN ACT

 1-9     relating to the regulation of air conditioning and refrigeration

1-10     contractors; providing penalties.

1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-12           SECTION 1.  Subdivisions (7) and (9), Section 2, Air

1-13     Conditioning and Refrigeration Contractor License Law (Article

1-14     8861, Vernon's Texas Civil Statutes), are amended to read as

1-15     follows:

1-16                 (7)  "Air conditioning and refrigeration maintenance

1-17     work" means repair work and all other work required for the

1-18     continued normal performance of an environmental air conditioning

1-19     system, commercial refrigeration system or equipment, or process

1-20     cooling or heating system.  The term does not include the

1-21     installation of a total replacement of the system or the

1-22     installation or repair of boilers or pressure vessels [that must be

1-23     installed by licensed persons pursuant to rules and regulations

1-24     adopted by the commissioner] under Chapter 755, Health and Safety

1-25     Code.

1-26                 (9)  "Air conditioning and refrigeration contracting"

1-27     means the design, installation, construction, maintenance, service,

1-28     repair, alteration, or modification of a product or of equipment in

1-29     environmental air conditioning, commercial refrigeration, or

1-30     process cooling or heating systems.  The term includes cleaning

1-31     equipment and duct materials as required for the proper operation

1-32     of such a system.

1-33           SECTION 2.  Subsection (e), Section 3, Air Conditioning and

1-34     Refrigeration Contractor License Law (Article 8861, Vernon's Texas

1-35     Civil Statutes), is amended to read as follows:

1-36           (e)  The commissioner shall prescribe the method and content

1-37     of examinations administered under this Act and shall set

1-38     compliance requirements for the examinations.  The examinations

1-39     [shall be offered only in Travis County and] shall be offered on a

1-40     quarterly basis at locations designated by the commissioner.

1-41           SECTION 3.  Section 3A, Air Conditioning and Refrigeration

1-42     Contractor License Law (Article 8861, Vernon's Texas Civil

1-43     Statutes), is amended by adding Subsection (i) to read as follows:

1-44           (i)  Section 8, Article 6252-33, Revised Statutes, does not

1-45     apply to the advisory board.

1-46           SECTION 4.  Section 3B, Air Conditioning and Refrigeration

1-47     Contractor License Law (Article 8861, Vernon's Texas Civil

1-48     Statutes), is amended to read as follows:

1-49           Sec. 3B.  LICENSE REQUIRED; CITATION.  (a)  Unless the person

1-50     is exempted under Section 6 of this Act, a person may not perform

1-51     air conditioning and refrigeration contracting without a license

1-52     under this Act.

1-53           (b)  A representative of the department or a municipal

1-54     official may issue a citation to a person who performs air

1-55     conditioning and refrigeration contracting without a license issued

1-56     under this Act.  To the extent authorized by Chapter 29, Government

1-57     Code, the municipal court has concurrent jurisdiction with a

1-58     justice court of a precinct in which the municipality is located in

1-59     a case arising from a citation issued under this subsection.

1-60           SECTION 5.  The Air Conditioning and Refrigeration Contractor

1-61     License Law (Article 8861, Vernon's Texas Civil Statutes) is

1-62     amended by adding Section 3C to read as follows:

1-63           Sec. 3C.  ENFORCEMENT OF CONTRACTS.  (a)  A person who

1-64     performs air conditioning and refrigeration contracting without

 2-1     holding the appropriate license under this Act may not collect a

 2-2     fee or otherwise enforce a contract for the services performed.  To

 2-3     enforce a contract for the performance of air conditioning and

 2-4     refrigeration contracting, the person who performs the services

 2-5     must present proof that the person holds a license under this Act

 2-6     at the time the contract is signed and the work performed.

 2-7           (b)  The commissioner shall adopt rules relating to the

 2-8     manner in which proof may be presented under this section.

 2-9           SECTION 6.  Subsections (f) and (g), Section 4, Air

2-10     Conditioning and Refrigeration Contractor License Law (Article

2-11     8861, Vernon's Texas Civil Statutes), are amended to read as

2-12     follows:

2-13           (f)  The application must be made on a form prescribed by the

2-14     commissioner and must specify the class of license and each

2-15     endorsement the applicant seeks.  The application must be verified

2-16     and must be accompanied by:

2-17                 (1)  [evidence of the insurance coverage required under

2-18     this Act;]

2-19                 [(2)]  a statement of the applicant's practical

2-20     experience; and

2-21                 (2) [(3)]  the examination fee.

2-22           (g)  The commissioner shall issue an air conditioning and

2-23     refrigeration contractor license to an applicant who possesses the

2-24     required qualifications, passes the appropriate examinations,

2-25     furnishes evidence of the insurance coverage required under this

2-26     Act, and pays the [examination fee and the] original license fee

2-27     required by this Act.  An applicant who fails an examination is

2-28     eligible for reexamination.

2-29           SECTION 7.  Section 7, Air Conditioning and Refrigeration

2-30     Contractor License Law (Article 8861, Vernon's Texas Civil

2-31     Statutes), is amended to read as follows:

2-32           Sec. 7.  REPORTING REQUIREMENT.  (a)  Each air conditioning

2-33     and refrigeration contractor [person] licensed under this Act shall

2-34     notify the municipal authority who has control of the enforcement

2-35     of regulations relative to air conditioning and refrigeration

2-36     contracting in the municipality in which the person is engaged in

2-37     air conditioning and refrigeration contracting that the person has

2-38     obtained a state license.

2-39           (b)  The notification must be in the form required by the

2-40     municipality.

2-41           (c)  The amount of a fee imposed by a municipality on a

2-42     contractor to provide notice under this section may be set by the

2-43     municipality only in the amount reasonable and necessary to

2-44     implement this section.

2-45           SECTION 8.  Section 8, 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. 8.  PENALTY.  Except as provided in Section 9, a person

2-49     commits an offense if the person knowingly or intentionally engages

2-50     in air conditioning and refrigeration contracting without a license

2-51     issued under this Act.  An offense under this section is a Class A

2-52     [B] misdemeanor.

2-53           SECTION 9.  Section 9, Air Conditioning and Refrigeration

2-54     Contractor License Law (Article 8861, Vernon's Texas Civil

2-55     Statutes), is amended to read as follows:

2-56           Sec. 9.  Municipal Regulation.  (a)  A license issued by a

2-57     municipality of this state that complies with the requirements of

2-58     this section is valid under the terms of the license within that

2-59     municipality.  However, a license issued under this Act is valid

2-60     throughout the state, and the holder and people under supervision

2-61     are not required to hold a municipal license to practice air

2-62     conditioning and refrigeration contracting in any municipality

2-63     within this state.

2-64           (b)  An applicant for a municipal license must:

2-65                 (1)  pass an examination that covers the same subjects

2-66     as the examination required by the commissioner for an air

2-67     conditioning and refrigeration contractor license of the class of

2-68     work that the municipal applicant proposes to perform; and

2-69                 (2)  meet experience requirements that are at least as

 3-1     strict as those required under Section 4(e) of this Act for an air

 3-2     conditioning and refrigeration contractor license.

 3-3           (c)  A municipality may by ordinance adopt and enforce

 3-4     standards for air conditioning and refrigeration contractors that

 3-5     are consistent with the standards established under this Act.  The

 3-6     municipality shall report violations of the ordinance to the

 3-7     commissioner not later than the 10th day after the date on which

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

 3-9     of an offense under the municipal ordinance is a ground for the

3-10     denial, suspension, or revocation of a license issued under this

3-11     Act.

3-12           SECTION 10.  Subsection (c), Section 23, The Real Estate

3-13     License Act (Article 6573a, Vernon's Texas Civil Statutes), is

3-14     amended by adding Subdivision (4) to read as follows:

3-15                 (4)  In addition to the license requirements imposed

3-16     under Subdivisions (1), (2), and (3) of this subsection, a business

3-17     entity that inspects an environmental air conditioning system,

3-18     commercial refrigeration system, or process cooling or heating

3-19     system as part of a real estate inspection conducted under this Act

3-20     must employ a person who holds the appropriate air conditioning and

3-21     refrigeration contractor licenses and endorsements under the Air

3-22     Conditioning and Refrigeration Contractor License Law (Article

3-23     8861, Vernon's Texas Civil Statutes).  An employee who does not

3-24     hold a license or endorsement under the Air Conditioning and

3-25     Refrigeration Contractor License Law (Article 8861, Vernon's Texas

3-26     Civil Statutes) may perform the inspection under the direction of

3-27     the license holder.  For purposes of this Act, "inspection" of

3-28     environmental air conditioning, commercial refrigeration, and

3-29     process cooling and heating equipment means an inspection that

3-30     includes the use of electronic instruments, gauges, thermometers,

3-31     mechanical instruments, or other meters that require direct in-line

3-32     connection to the refrigerant system.

3-33           SECTION 11.  Section 25, Residential Service Company Act

3-34     (Article 6573b, Revised Statutes), is amended to read as follows:

3-35           Sec. 25.  Exemptions.  The provisions of this Act shall not

3-36     apply to any of the following persons and transactions, and each

3-37     and all of the following persons and transactions are hereby

3-38     exempted from the provisions of this Act, to wit:

3-39                 (a)  performance guarantees given by either the builder

3-40     of a home or the manufacturer or seller of an appliance or other

3-41     system or component;

3-42                 (b)  any residential service contract executed on or

3-43     before the effective date of this Act;

3-44                 (c)  any service contract, guarantee, or warranty

3-45     intending to guarantee or warrant the repairs or service of a home

3-46     appliance, system, or component, provided such service contract,

3-47     guarantee, or warranty is issued by a person who has sold,

3-48     serviced, repaired, or provided replacement of such appliance,

3-49     system, or component at the time of, or prior to the issuance of

3-50     such contract, guarantee, or warranty; and provided further that

3-51     the person issuing the service contract, guarantee, or warranty

3-52     does not engage in the business of a service company;

3-53                 (d)  any person engaging in the business of structural

3-54     pest control in compliance with the Texas Structural Pest Control

3-55     Act, as amended (Article 135b-6, Vernon's Texas Civil Statutes,

3-56     1925);

3-57                 (e)  any person who performs air conditioning and

3-58     refrigeration contracting in compliance with the Air Conditioning

3-59     and Refrigeration Contractor License Law (Article 8861, Vernon's

3-60     Texas Civil Statutes); and

3-61                 (f)  any service or maintenance contract or agreement,

3-62     or warranty, which provides for, warrants, or guarantees, the

3-63     maintenance, repair, service, replacement, or operation or

3-64     performance, of any product or part thereof, including but not

3-65     limited to a structural component, the appliances, or the

3-66     electrical, plumbing, heating, cooling or air-conditioning systems

3-67     in or of a building or residence, provided such service or

3-68     maintenance contract or agreement, or warranty is sold, offered for

3-69     sale, or issued by the manufacturer or merchant who manufactured or

 4-1     sold such product or part thereof.

 4-2           SECTION 12.  (a)  The change in law made to Section 8, Air

 4-3     Conditioning and Refrigeration Contractor License Law (Article

 4-4     8861, Vernon's Texas Civil Statutes), by this Act applies only to

 4-5     an offense committed on or after the effective date of this Act.

 4-6     For purposes of this section, an offense is committed before the

 4-7     effective date of this Act if any element of the offense occurs

 4-8     before that date.

 4-9           (b)  An offense committed before the effective date of this

4-10     Act is governed by the law in effect when the offense was

4-11     committed, and the former law is continued in effect for that

4-12     purpose.

4-13           SECTION 13.  (a)  Except as provided by Subsection (b) of

4-14     this section, the change in law made to Section 9, Air Conditioning

4-15     and Refrigeration Contractor License Law (Article 8861, Vernon's

4-16     Texas Civil Statutes), by this Act applies to a municipal license

4-17     that is issued or renewed on or after the effective date of this

4-18     Act.  A municipality subject to that section shall adopt

4-19     examination requirements in compliance with that section not later

4-20     than January 1, 1998.

4-21           (b)  To continue to engage in the practice of air

4-22     conditioning and refrigeration contracting after September 1, 1997,

4-23     a person who holds a municipal license on the effective date of

4-24     this Act must satisfy the examination requirements imposed under

4-25     Subsection (b), Section 9, Air Conditioning and Refrigeration

4-26     Contractor License Law (Article 8861, Vernon's Texas Civil

4-27     Statutes), as amended by this Act, not later than June 1, 1998.

4-28           SECTION 14.  (a)  This Act takes effect September 1, 1997.

4-29           (b)  Not later than December 31, 1997, the commissioner of

4-30     licensing and regulation shall adopt rules as required by Section

4-31     3C, Air Conditioning and Refrigeration Contractor License Law

4-32     (Article 8861, Vernon's Texas Civil Statutes), as added by this

4-33     Act.

4-34           (c)  Subsection (c), Section 23, The Real Estate License Act

4-35     (Article 6573a, Vernon's Texas Civil Statutes), as amended by this

4-36     Act, applies only to a real estate inspection that is conducted on

4-37     or after the effective date of this Act.  A real estate inspection

4-38     conducted before that date is governed by the law in effect on the

4-39     date that the inspection occurs, and the former law is continued in

4-40     effect for that purpose.

4-41           (d)  Section 25, Residential Service Company Act (Article

4-42     6573b, Revised Statutes), as amended by this Act, applies only to a

4-43     residential service contract that is entered into on or after the

4-44     effective date of this Act.  A residential service contract that is

4-45     entered into before that date is governed by the law in effect on

4-46     the date that the contract is entered into, and the former law is

4-47     continued in effect for that purpose.

4-48           SECTION 15.  The importance of this legislation and the

4-49     crowded condition of the calendars in both houses create an

4-50     emergency and an imperative public necessity that the

4-51     constitutional rule requiring bills to be read on three several

4-52     days in each house be suspended, and this rule is hereby suspended.

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