By:  Ellis, Nelson                                    S.B. No. 1131

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to the regulation of cosmetologists; providing an

 1-2     administrative penalty.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Subsection (l), Section 4, Chapter 1036, Acts of

 1-5     the 62nd Legislature, Regular Session, 1971 (Article 8451a,

 1-6     Vernon's Texas Civil Statutes), as amended by Chapter 777, Acts of

 1-7     the 73rd Legislature, 1993, is redesignated as Subsection (m) and

 1-8     amended to read as follows:

 1-9           (m) [(l)]  The commission by rule shall establish and assess

1-10     fees in amounts reasonable and necessary to cover the cost of

1-11     administering this Act on all persons and entities licensed or

1-12     regulated under this Act [reasonable and necessary fees].

1-13           SECTION 2.  Subsection (d), Section 10, Chapter 1036, Acts of

1-14     the 62nd Legislature, Regular Session, 1971 (Article 8451a,

1-15     Vernon's Texas Civil Statutes), is amended to read as follows:

1-16           (d)  The applicant is entitled to an operator license if the

1-17     applicant [he] possesses the qualifications enumerated in

1-18     Subsection (b) of this section, satisfactorily completes the

1-19     examination, pays a [$35] license fee established by the

1-20     commission, and has not committed an act that constitutes a ground

1-21     for denial of a license.

1-22           SECTION 3.  Subsection (d), Section 11, Chapter 1036, Acts of

1-23     the 62nd Legislature, Regular Session, 1971 (Article 8451a,

 2-1     Vernon's Texas Civil Statutes), is amended to read as follows:

 2-2           (d)  The applicant is entitled to a manicurist license if the

 2-3     applicant [he] possesses the qualifications enumerated in

 2-4     Subsection (b) of this section, satisfactorily completes the

 2-5     examination, pays a [$35] license fee established by the

 2-6     commission, and has not committed an act that constitutes a ground

 2-7     for denial of a license.

 2-8           SECTION 4.  Subsection (d), Section 12, Chapter 1036, Acts of

 2-9     the 62nd Legislature, Regular Session, 1971 (Article 8451a,

2-10     Vernon's Texas Civil Statutes), is amended to read as follows:

2-11           (d)  The applicant is entitled to an instructor license if

2-12     the applicant [he] possesses qualifications enumerated in

2-13     Subsection (b) of this section, satisfactorily completes the

2-14     examination, pays a [$50] license fee established by the

2-15     commission, and has not committed an act that constitutes a ground

2-16     for denial of a license.

2-17           SECTION 5.  Subsection (d), Section 13, Chapter 1036, Acts of

2-18     the 62nd Legislature, Regular Session, 1971 (Article 8451a,

2-19     Vernon's Texas Civil Statutes), is amended to read as follows:

2-20           (d)  The applicant is entitled to a specialty certificate if

2-21     the applicant [he] possesses the qualifications enumerated in

2-22     Subsection (b) of this section, pays a [$35] certificate fee

2-23     established by the commission, and has not committed an act that

2-24     constitutes a ground for denial of a certificate.

2-25           SECTION 6.  Subsection (d), Section 13A, Chapter 1036, Acts

 3-1     of the 62nd Legislature, Regular Session, 1971 (Article 8451a,

 3-2     Vernon's Texas Civil Statutes), is amended to read as follows:

 3-3           (d)  The applicant is entitled to a facialist specialty

 3-4     license if the applicant possesses the qualifications enumerated in

 3-5     Subsection (b) of this section, satisfactorily completes the

 3-6     examination, pays a [$35] license fee established by the

 3-7     commission, and has not committed an act that constitutes a ground

 3-8     for denial of a license.

 3-9           SECTION 7.  Subsection (b), Section 15, Chapter 1036, Acts of

3-10     the 62nd Legislature, Regular Session, 1971 (Article 8451a,

3-11     Vernon's Texas Civil Statutes), is amended to read as follows:

3-12           (b)  A temporary license shall be issued on submission of an

3-13     application form prescribed by the commission and payment of a

3-14     [$45] temporary license fee established by the commission if the

3-15     applicant meets the requirements of Subsection (a) of this section.

3-16           SECTION 8.  Subsection (a), Section 16, Chapter 1036, Acts of

3-17     the 62nd Legislature, Regular Session, 1971 (Article 8451a,

3-18     Vernon's Texas Civil Statutes), is amended to read as follows:

3-19           (a)  A duplicate license or certificate shall be issued upon

3-20     application on a form prescribed by the commission and on the

3-21     payment of a [$35] fee established by the commission.

3-22           SECTION 9.  Subsection (b), Section 17, Chapter 1036, Acts of

3-23     the 62nd Legislature, Regular Session, 1971 (Article 8451a,

3-24     Vernon's Texas Civil Statutes), is amended to read as follows:

3-25           (b)  The applicant shall submit an application on a form

 4-1     prescribed by the commission and pay a [$100] fee established by

 4-2     the commission, plus the applicable license or certification fee.

 4-3           SECTION 10.  Subsection (b), Section 18, Chapter 1036, Acts

 4-4     of the 62nd Legislature, Regular Session, 1971 (Article 8451a,

 4-5     Vernon's Texas Civil Statutes), is amended to read as follows:

 4-6           (b)  A student permit shall be issued on submission of an

 4-7     application form prescribed by the commission and payment of a

 4-8     [$25] fee established by the commission that [which] must accompany

 4-9     the application.

4-10           SECTION 11.  Subsections (b) and (c), Section 19, Chapter

4-11     1036, Acts of the 62nd Legislature, Regular Session, 1971 (Article

4-12     8451a, Vernon's Texas Civil Statutes), are amended to read as

4-13     follows:

4-14           (b)  An applicant for a beauty shop license must submit an

4-15     application on a form prescribed by the commission.  The

4-16     application must contain proof of the particular requisites for a

4-17     beauty shop as established by the commission and must be verified

4-18     by the applicant.  With the application, the applicant must submit

4-19     an [a $35] inspection fee established by the commission.

4-20           (c)  The applicant is entitled to a beauty shop license if

4-21     the application shows compliance with the rules of the commission

4-22     and the applicant pays[,] a [$45] license fee established by the

4-23     commission [is paid,] and [he] has not committed an act that

4-24     constitutes a ground for denial of a license.

4-25           SECTION 12.  Subsections (b) and (c), Section 20, Chapter

 5-1     1036, Acts of the 62nd Legislature, Regular Session, 1971 (Article

 5-2     8451a, Vernon's Texas Civil Statutes), are amended to read as

 5-3     follows:

 5-4           (b)  An applicant for a specialty shop license must submit an

 5-5     application on a form prescribed by the commission.  The

 5-6     application must contain proof of the particular requisites for a

 5-7     specialty shop as established by the commission and must be

 5-8     verified by the applicant.  With the application, the applicant

 5-9     must submit an [a $35] inspection fee established by the

5-10     commission.

5-11           (c)  The applicant is entitled to a specialty shop license if

5-12     the application shows compliance with the rules and regulations of

5-13     the commission and the applicant pays[,] a [$45] license fee

5-14     established by the commission [is paid,] and [he] has not committed

5-15     an act that constitutes a ground for denial of a license.

5-16           SECTION 13.  Chapter 1036, Acts of the 62nd Legislature,

5-17     Regular Session, 1971 (Article 8451a, Vernon's Texas Civil

5-18     Statutes), is amended by adding Section 20B to read as follows:

5-19           Sec. 20B.  NONTRANSFERABILITY OF LICENSE.  A license issued

5-20     under this Act is not transferable.

5-21           SECTION 14.  Subsection (d), Section 21, Chapter 1036, Acts

5-22     of the 62nd Legislature, Regular Session, 1971 (Article 8451a,

5-23     Vernon's Texas Civil Statutes), is amended to read as follows:

5-24           (d)  Each application for a private beauty culture school

5-25     license must be accompanied by payment of a [$500] license fee

 6-1     established by the commission and an [a $200] inspection fee

 6-2     established by the commission.  Each application for certification

 6-3     as a public secondary or public postsecondary beauty culture school

 6-4     must be accompanied by an [a $200] inspection fee established by

 6-5     the commission.  The inspection fee is charged for each inspection

 6-6     trip required before approval of the license or certificate.

 6-7           SECTION 15.  Subsection (b), Section 21A, Chapter 1036, Acts

 6-8     of the 62nd Legislature, Regular Session, 1971 (Article 8451a,

 6-9     Vernon's Texas Civil Statutes), is amended to read as follows:

6-10           (b)  The commission shall determine the amount of the fee by

6-11     applying a percentage to each school's annual renewal fee.  The

6-12     percentage is the rate determined by the commission that, when

6-13     applied to the total of all renewal fees, will result in the

6-14     collection of $200,000 for deposit in the fund in the first three

6-15     years that the fee is collected.  [The fee assessed under this

6-16     section may not exceed $200 per year.]

6-17           SECTION 16.  Subsections (e), (f), (g), and (i), Section 33,

6-18     Chapter 1036, Acts of the 62nd Legislature, Regular Session, 1971

6-19     (Article 8451a, Vernon's Texas Civil Statutes), are amended to read

6-20     as follows:

6-21           (e)  A license that has been expired for less than 30 days

6-22     may be renewed.  A renewal license shall be issued on submission of

6-23     a completed application form prescribed by the commission and

6-24     payment of the renewal fee, plus a [$10] delinquency fee

6-25     established by the commission.

 7-1           (f)  Except as provided by Subsection (h) of this section, a

 7-2     license that has been expired for more than 30 days but less than

 7-3     five years may be renewed.  A renewal license shall be issued on

 7-4     submission of an application, payment of the fee established by

 7-5     this Act for each year the license has been expired, and payment of

 7-6     a delinquency fee established by the commission.  [Delinquency fees

 7-7     under this subsection are:]

 7-8                 [(1)  operator or specialty license            $25;]

 7-9                 [(2)  instructor license                       $50;]

7-10                 [(3)  manicurist license                       $25; and]

7-11                 [(4)  beauty or specialty salon license        $35.]

7-12           (g)  An applicant for renewal of a license that has been

7-13     expired for more than five years shall be issued a license on

7-14     submission of an application, payment of the examination fee,

7-15     satisfactory completion of the examination, and payment of a [$50]

7-16     reinstatement fee established by the commission.

7-17           (i)  An applicant for renewal of a license must have a high

7-18     school diploma or an equivalent of a high school diploma or have

7-19     passed an Ability to Benefit from Training examination [The

7-20     commission by rule shall establish the delinquency fee for a booth

7-21     rental license].

7-22           SECTION 17.  The heading to Section 40, Chapter 1036, Acts of

7-23     the 62nd Legislature, Regular Session, 1971 (Article 8451a,

7-24     Vernon's Texas Civil Statutes), is amended to read as follows:

7-25           Sec. 40.  CRIMINAL PENALTIES.

 8-1           SECTION 18.  Chapter 1036, Acts of the 62nd Legislature,

 8-2     Regular Session, 1971 (Article 8451a, Vernon's Texas Civil

 8-3     Statutes), is amended by adding Section 40A to read as follows:

 8-4           Sec. 40A.  ADMINISTRATIVE PENALTY.  (a)  The commission may

 8-5     impose an administrative penalty against a person licensed or

 8-6     regulated under this Act who violates this Act or a rule or order

 8-7     adopted under this Act.

 8-8           (b)  The penalty for a violation may be in an amount not to

 8-9     exceed $1,000.  Each day a violation continues or occurs is a

8-10     separate violation for purposes of imposing a penalty.

8-11           (c)  The amount of the penalty shall be based on:

8-12                 (1)  the seriousness of the violation, including the

8-13     nature, circumstances, extent, and gravity of any prohibited acts,

8-14     and the hazard or potential hazard created to the health, safety,

8-15     or economic welfare of the public;

8-16                 (2)  the economic harm to property or the environment

8-17     caused by the violation;

8-18                 (3)  the history of previous violations;

8-19                 (4)  the amount necessary to deter future violations;

8-20                 (5)  efforts to correct the violation; and

8-21                 (6)  any other matter that justice may require.

8-22           (d)  The executive director, on a determination that a

8-23     violation has occurred, may issue to the commission a report that

8-24     states the facts on which the determination is based and the

8-25     director's recommendation on the imposition of a penalty, including

 9-1     a recommendation on the amount of the penalty.

 9-2           (e)  Within 14 days after the date the report is issued, the

 9-3     executive director shall give written notice of the report to the

 9-4     person.  The notice may be given by certified mail.  The notice

 9-5     must include a brief summary of the alleged violation and a

 9-6     statement of the amount of the recommended penalty and must inform

 9-7     the person that the person has a right to a hearing on the

 9-8     occurrence of the violation, the amount of the penalty, or both the

 9-9     occurrence of the violation and the amount of the penalty.

9-10           (f)  Within 20 days after the date the person receives the

9-11     notice, the person in writing may accept the determination and

9-12     recommended penalty of the executive director or may make a written

9-13     request for a hearing on the occurrence of the violation, the

9-14     amount of the penalty, or both the occurrence of the violation and

9-15     the amount of the penalty.

9-16           (g)  If the person accepts the determination and recommended

9-17     penalty of the executive director, the commission by order shall

9-18     approve the determination and impose the recommended penalty.

9-19           (h)  If the person requests a hearing or fails to respond

9-20     timely to the notice, the executive director shall set a hearing

9-21     and give notice of the hearing to the person.  The hearing shall be

9-22     held by an administrative law judge of the State Office of

9-23     Administrative Hearings.  The administrative law judge shall make

9-24     findings of fact and conclusions of law and promptly issue to the

9-25     commission a proposal for a decision about the occurrence of the

 10-1    violation and the amount of a proposed penalty.  Based on the

 10-2    findings of fact, conclusions of law, and proposal for a decision,

 10-3    the commission by order may find that a violation has occurred and

 10-4    impose a penalty or may find that no violation occurred.

 10-5          (i)  The notice of the commission's order given to the person

 10-6    under Chapter 2001, Government Code, must include a statement of

 10-7    the right of the person to judicial review of the order.

 10-8          (j)  Within 30 days after the date the commission's order

 10-9    becomes final as provided by Section 2001.144, Government Code, the

10-10    person shall:

10-11                (1)  pay the amount of the penalty;

10-12                (2)  pay the amount of the penalty and file a petition

10-13    for judicial review contesting the occurrence of the violation, the

10-14    amount of the penalty, or both the occurrence of the violation and

10-15    the amount of the penalty; or

10-16                (3)  without paying the amount of the penalty, file a

10-17    petition for judicial review contesting the occurrence of the

10-18    violation, the amount of the penalty, or both the occurrence of the

10-19    violation and the amount of the penalty.

10-20          (k)  Within 30 days after the date the commission's order

10-21    becomes final, a person who acts under Subsection (j)(3) of this

10-22    section may:

10-23                (1)  stay enforcement of the penalty by:

10-24                      (A)  paying the amount of the penalty to the

10-25    court for placement in an escrow account; or

 11-1                      (B)  giving to the court a supersedeas bond that

 11-2    is approved by the court for the amount of the penalty and that is

 11-3    effective until all judicial review of the commission's order is

 11-4    final; or

 11-5                (2)  request the court to stay enforcement of the

 11-6    penalty by:

 11-7                      (A)  filing with the court a sworn affidavit of

 11-8    the person stating that the person is financially unable to pay the

 11-9    amount of the penalty and is financially unable to give the

11-10    supersedeas bond; and

11-11                      (B)  giving a copy of the affidavit to the

11-12    executive director by certified mail.

11-13          (l)  On receipt of a copy of an affidavit under Subsection

11-14    (k)(2) of this section, the executive director may file with the

11-15    court, within five days after the date the copy is received, a

11-16    contest to the affidavit.  The court shall hold a hearing on the

11-17    facts alleged in the affidavit as soon as practicable and shall

11-18    stay the enforcement of the penalty on finding that the alleged

11-19    facts are true.  The person who files an affidavit has the burden

11-20    of proving that the person is financially unable to pay the amount

11-21    of the penalty and to give a supersedeas bond.

11-22          (m)  If the person does not pay the amount of the penalty and

11-23    the enforcement of the penalty is not stayed, the executive

11-24    director may refer the matter to the attorney general for

11-25    collection of the amount of the penalty.

 12-1          (n)  Judicial review of the order of the commission:

 12-2                (1)  is instituted by filing a petition as provided by

 12-3    Subchapter G, Chapter 2001, Government Code; and

 12-4                (2)  is under the substantial evidence rule.

 12-5          (o)  If the court sustains the occurrence of the violation,

 12-6    the court may uphold or reduce the amount of the penalty and order

 12-7    the person to pay the full or reduced amount of the penalty.  If

 12-8    the court does not sustain the occurrence of the violation, the

 12-9    court shall order that no penalty is owed.

12-10          (p)  When the judgment of the court becomes final, the court

12-11    shall proceed under this subsection.  If the person paid the amount

12-12    of the penalty and if that amount is reduced or is not upheld by

12-13    the court, the court shall order that the appropriate amount plus

12-14    accrued interest be remitted to the person.  The rate of the

12-15    interest is the rate charged on loans to depository institutions by

12-16    the New York Federal Reserve Bank, and the interest shall be paid

12-17    for the period beginning on the date the penalty was paid and

12-18    ending on the date the penalty is remitted.  If the person gave a

12-19    supersedeas bond and if the amount of the penalty is not upheld by

12-20    the court, the court shall order the release of the bond.  If the

12-21    person gave a supersedeas bond and if the amount of the penalty is

12-22    reduced, the court shall order the release of the bond after the

12-23    person pays the amount.

12-24          (q)  A penalty collected under this section shall be remitted

12-25    to the comptroller for deposit in the general revenue fund.

 13-1          (r)  All proceedings under this section are subject to

 13-2    Chapter 2001, Government Code.

 13-3          SECTION 19.  Section 34, Chapter 1036, Acts of the 62nd

 13-4    Legislature, Regular Session, 1971 (Article 8451a, Vernon's Texas

 13-5    Civil Statutes), is repealed.

 13-6          SECTION 20.  (a)  This Act takes effect September 1, 1997.

 13-7          (b)  Section 40A, Chapter 1036, Acts of the 62nd Legislature,

 13-8    Regular Session, 1971 (Article 8451a, Vernon's Texas Civil

 13-9    Statutes), as added by this Act, applies only to a violation of or

13-10    a rule adopted under that Act that occurs on or after the effective

13-11    date of this Act.  Section 20B, Chapter 1036, Acts of the 62nd

13-12    Legislature, Regular Session, 1971 (Article 8451a, Vernon's Texas

13-13    Civil Statutes), as added by this Act, applies only to the transfer

13-14    of licenses on or after the effective date of this Act.  The

13-15    changes in law made by Sections 1 through 16 of this Act apply only

13-16    to inspections made or licenses issued or renewed on or after the

13-17    effective date of this Act.  Inspections made or licenses issued or

13-18    renewed before the effective date of this Act are governed by the

13-19    law in effect on the date of inspection, issuance, or renewal, and

13-20    the former law is continued in effect for that purpose.

13-21          SECTION 21.  The importance of this legislation and the

13-22    crowded condition of the calendars in both houses create an

13-23    emergency and an imperative public necessity that the

13-24    constitutional rule requiring bills to be read on three several

13-25    days in each house be suspended, and this rule is hereby suspended.