By Carona                                              S.R. No. 987

         75R17554 CAG-D                           

                                 R E S O L U T I O N

 1-1           BE IT RESOLVED by the Senate of the State of Texas, 75th

 1-2     Legislature, Regular Session, 1997, That Senate Rule 12.03 be

 1-3     suspended in part as provided by Senate Rule 12.08 to enable the

 1-4     conference committee appointed to resolve the differences on H.B.

 1-5     1391 to consider and take action on the following matters:

 1-6           1.  Senate Rule 12.03(4) is suspended to permit the committee

 1-7     to add new SECTIONS 1-6, 8-13, 14(b) and (c), 15, and 16(a)-(c) of

 1-8     the bill to read as follows:

 1-9           SECTION 1.  Section 2, Air Conditioning and Refrigeration

1-10     Contractor License Law (Article 8861, Vernon's Texas Civil

1-11     Statutes), is amended by amending Subdivisions (6) and (7) and

1-12     adding Subdivisions (14) and (15) to read as follows:

1-13                 (6)  "Person" means an individual, firm, partnership,

1-14     corporation, association, or other organization or combination of

1-15     entities or organizations.

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

 2-1     Code.

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

 2-3     company" means a person or other entity that performs air

 2-4     conditioning and refrigeration contracting.

 2-5                 (15)  "Direct personal supervision" means directing and

 2-6     verifying work performed by another person that requires a license

 2-7     under this Act and includes hiring, training, and consulting with

 2-8     an employee, personally observing and checking the work of an

 2-9     employee, and having responsibility for handling customer

2-10     complaints.

2-11           SECTION 2.  Section 3(e), Air Conditioning and Refrigeration

2-12     Contractor License Law (Article 8861, Vernon's Texas Civil

2-13     Statutes), is amended to read as follows:

2-14           (e)  The commissioner shall prescribe the method and content

2-15     of examinations administered under this Act and shall set

2-16     compliance requirements for the examinations.  The examinations

2-17     [shall be offered only in Travis County and] shall be offered on a

2-18     quarterly basis at locations designated by the commissioner.

2-19           SECTION 3.  Section 3A, Air Conditioning and Refrigeration

2-20     Contractor License Law (Article 8861, Vernon's Texas Civil

2-21     Statutes), is amended by adding Subsection (i) to read as follows:

2-22           (i)  Section 8, Article 6252-33, Revised Statutes, does not

2-23     apply to the advisory board.

2-24           SECTION 4.  Section 3B, Air Conditioning and Refrigeration

2-25     Contractor License Law (Article 8861, Vernon's Texas Civil

2-26     Statutes), is amended to read as follows:

2-27           Sec. 3B.  LICENSE REQUIRED.  (a)  Unless the person is

 3-1     exempted under Section 6 of this Act, a person may not perform air

 3-2     conditioning and refrigeration contracting without a license under

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

 3-4     this Act if the individual is a bona fide employee of an air

 3-5     conditioning  and refrigeration contracting company that has a

 3-6     license holder whose license is assigned to the company and who has

 3-7     responsibility for direct personal supervision of the individual.

 3-8           (b)  An air conditioning and refrigeration contracting

 3-9     company that is not exempt under this Act must employ a person who

3-10     is a license holder under this Act and whose license is assigned to

3-11     the company.

3-12           SECTION 5.  The Air Conditioning and Refrigeration Contractor

3-13     License Law (Article 8861, Vernon's Texas Civil Statutes) is

3-14     amended by adding Section 3C to read as follows:

3-15           Sec. 3C.  ENFORCEMENT OF CONTRACTS.  (a)  A person who

3-16     performs air conditioning and refrigeration contracting without

3-17     holding the appropriate license under this Act may not collect a

3-18     fee or otherwise enforce a contract for the services performed.  To

3-19     enforce a contract for the performance of air conditioning and

3-20     refrigeration contracting, the person who performs the services

3-21     must present proof that the person holds a license under this Act

3-22     at the time the contract is signed and the work performed.

3-23           (b)  The commissioner shall adopt rules relating to the

3-24     manner in which proof may be presented under this section.

3-25           SECTION 6.  Sections 4(f) and (g), Air Conditioning and

3-26     Refrigeration Contractor License Law (Article 8861, Vernon's Texas

3-27     Civil Statutes), are amended to read as follows:

 4-1           (f)  The application must be made on a form prescribed by the

 4-2     commissioner and must specify the class of license and each

 4-3     endorsement the applicant seeks.  The application must be verified

 4-4     and must be accompanied by:

 4-5                 (1)  [evidence of the insurance coverage required under

 4-6     this Act;]

 4-7                 [(2)]  a statement of the applicant's practical

 4-8     experience; and

 4-9                 (2) [(3)]  the examination fee.

4-10           (g)  The commissioner shall issue an air conditioning and

4-11     refrigeration contractor license to an applicant who possesses the

4-12     required qualifications, passes the appropriate examinations,

4-13     furnishes evidence of the insurance coverage required under this

4-14     Act, and pays the [examination fee and the] original license fee

4-15     required by this Act.  An applicant who fails an examination is

4-16     eligible for reexamination.

4-17           SECTION 8.  Section 6(a), Air Conditioning and Refrigeration

4-18     Contractor License Law (Article 8861, Vernon's Texas Civil

4-19     Statutes), is amended to read as follows:

4-20           (a)  This Act does not apply to a person who:

4-21                 (1)  performs air conditioning and refrigeration

4-22     contracting in a building owned solely by him as his home;

4-23                 (2)  performs air conditioning or refrigeration

4-24     maintenance work if (i) the person is a maintenance man or

4-25     maintenance engineer who is a regular bona fide employee of the

4-26     property owner, the property lessee, or the management company

4-27     managing the property where the maintenance work is being

 5-1     performed, (ii) the work is performed in connection with the

 5-2     business in which the person is employed, and (iii) the person and

 5-3     the person's employer referred to in (i) above do not engage in the

 5-4     occupation of air conditioning and refrigeration contracting for

 5-5     the general public;

 5-6                 (3)  performs air conditioning and refrigeration

 5-7     contracting and is regularly employed by a regulated electric or

 5-8     gas utility;

 5-9                 (4)  is licensed as a professional engineer under The

5-10     Texas Engineering Practice Act (Article 3271a, Vernon's Texas Civil

5-11     Statutes), performs work in connection with the business in which

5-12     the person is employed, and does not engage in the practice of air

5-13     conditioning and refrigeration contracting for the general public;

5-14                 (5)  performs process cooling or heating work for an

5-15     industrial operation such as a chemical plant, petrochemical plant,

5-16     refinery, natural gas plant, or natural gas treating plant when

5-17     employed by that operation;

5-18                 (6)  performs air conditioning and refrigeration

5-19     contracting on:

5-20                       (A)  a portable or self-contained ductless air

5-21     conditioning or refrigeration product that has a cooling capacity

5-22     of three tons or less;

5-23                       (B)  a portable or self-contained heating product

5-24     that does not require the forced movement of air outside the

5-25     heating unit; or

5-26                       (C)  environmental air conditioning equipment

5-27     that is intended for temporary use and is not fixed in place; [or]

 6-1                 (7)  performs air conditioning services only on a motor

 6-2     vehicle air conditioning unit or who employs a person who performs

 6-3     air conditioning services only on a motor vehicle air conditioning

 6-4     unit; or

 6-5                 (8)  performs air conditioning and refrigeration

 6-6     maintenance work on residential evaporative coolers, including

 6-7     coolers that are not larger than 6,500 cubic feet per minute.

 6-8           SECTION 9.  Section 7, Air Conditioning and Refrigeration

 6-9     Contractor License Law (Article 8861, Vernon's Texas Civil

6-10     Statutes), is amended to read as follows:

6-11           Sec. 7.  REPORTING REQUIREMENT.  (a)  Each air conditioning

6-12     and refrigeration contractor [person] licensed under this Act shall

6-13     notify the municipal authority who has control of the enforcement

6-14     of regulations relative to air conditioning and refrigeration

6-15     contracting in the municipality in which the person is engaged in

6-16     air conditioning and refrigeration contracting that the person has

6-17     obtained a state license.

6-18           (b)  The notification must be in the form required by the

6-19     municipality.

6-20           (c)  The amount of a fee imposed by a municipality on a

6-21     contractor to provide notice under this section may be set by the

6-22     municipality only in the amount reasonable and necessary to

6-23     implement this section.

6-24           SECTION 10.  Section 8, Air Conditioning and Refrigeration

6-25     Contractor License Law (Article 8861, Vernon's Texas Civil

6-26     Statutes), is amended to read as follows:

6-27           Sec. 8.  PENALTY.  Except as provided in Section 9, a person

 7-1     commits an offense if the person knowingly or intentionally engages

 7-2     in air conditioning and refrigeration contracting without a license

 7-3     issued under this Act.  An offense under this section is a Class A

 7-4     [B] misdemeanor.

 7-5           SECTION 11.  Section 9, Air Conditioning and Refrigeration

 7-6     Contractor License Law (Article 8861, Vernon's Texas Civil

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

 7-8           Sec. 9.  Municipal Regulation.  (a)  A license issued by a

 7-9     municipality of this state that complies with the requirements of

7-10     this section is valid under the terms of the license within that

7-11     municipality.  However, a license issued under this Act is valid

7-12     throughout the state, and the holder and people under supervision

7-13     are not required to hold a municipal license to practice air

7-14     conditioning and refrigeration contracting in any municipality

7-15     within this state.

7-16           (b)  An applicant for a municipal license must:

7-17                 (1)  pass an examination that covers the same subjects

7-18     as the examination required by the commissioner for an air

7-19     conditioning and refrigeration contractor license of the class of

7-20     work that the municipal applicant proposes to perform; and

7-21                 (2)  meet experience requirements that are at least as

7-22     strict as those required under Section 4(e) of this Act for an air

7-23     conditioning and refrigeration contractor license.

7-24           (c)  A municipality may by ordinance adopt and enforce

7-25     standards for air conditioning and refrigeration contractors that

7-26     are consistent with the standards established under this Act.  The

7-27     municipality shall report violations of the ordinance to the

 8-1     commissioner not later than the 10th day after the date on which

 8-2     the municipality takes action to enforce the ordinance.  Conviction

 8-3     of an offense under the municipal ordinance is a ground for the

 8-4     denial, suspension, or revocation of a license issued under this

 8-5     Act.

 8-6           SECTION 12.  Section 23(c), The Real Estate License Act

 8-7     (Article 6573a, Vernon's Texas Civil Statutes), is amended by

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

 8-9                 (4)  In addition to the license requirements imposed

8-10     under Subdivisions (1), (2), and (3) of this subsection, a business

8-11     entity that inspects an environmental air conditioning system,

8-12     commercial refrigeration system, or process cooling or heating

8-13     system as part of a real estate inspection conducted under this Act

8-14     must employ a person who holds the appropriate air conditioning and

8-15     refrigeration contractor licenses and endorsements under the Air

8-16     Conditioning and Refrigeration Contractor License Law (Article

8-17     8861, Vernon's Texas Civil Statutes).  An employee who does not

8-18     hold a license or endorsement under the Air Conditioning and

8-19     Refrigeration Contractor License Law (Article 8861, Vernon's Texas

8-20     Civil Statutes) may perform the inspection under the direction of

8-21     the license holder.  For purposes of this Act, an inspection of

8-22     environmental air conditioning, commercial refrigeration, and

8-23     process cooling and heating equipment means an inspection that

8-24     includes the use of electronic instruments, gauges, thermometers,

8-25     mechanical instruments, or other meters that require direct in-line

8-26     connection to the refrigeration system.

8-27           SECTION 13.  Section 25, Residential Service Company Act

 9-1     (Article 6573b, Revised Statutes), is amended to read as follows:

 9-2           Sec. 25.  Exemptions.  The provisions of this Act shall not

 9-3     apply to any of the following persons and transactions, and each

 9-4     and all of the following persons and transactions are hereby

 9-5     exempted from the provisions of this Act, to wit:

 9-6                 (a)  performance guarantees given by either the builder

 9-7     of a home or the manufacturer or seller of an appliance or other

 9-8     system or component;

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

9-10     before the effective date of this Act;

9-11                 (c)  any service contract, guarantee, or warranty

9-12     intending to guarantee or warrant the repairs or service of a home

9-13     appliance, system, or component, provided such service contract,

9-14     guarantee, or warranty is issued by a person who has sold,

9-15     serviced, repaired, or provided replacement of such appliance,

9-16     system, or component at the time of, or prior to the issuance of

9-17     such contract, guarantee, or warranty; and provided further that

9-18     the person issuing the service contract, guarantee, or warranty

9-19     does not engage in the business of a service company;

9-20                 (d)  any person engaging in the business of structural

9-21     pest control in compliance with the Texas Structural Pest Control

9-22     Act, as amended (Article 135b-6, Vernon's Texas Civil Statutes,

9-23     1925);

9-24                 (e)  any person who performs air conditioning and

9-25     refrigeration contracting in compliance with the Air Conditioning

9-26     and Refrigeration Contractor License Law (Article 8861, Vernon's

9-27     Texas Civil Statutes); and

 10-1                (f)  any service or maintenance contract or agreement,

 10-2    or warranty, which provides for, warrants, or guarantees, the

 10-3    maintenance, repair, service, replacement, or operation or

 10-4    performance, of any product or part thereof, including but not

 10-5    limited to a structural component, the appliances, or the

 10-6    electrical, plumbing, heating, cooling or air-conditioning systems

 10-7    in or of a building or residence, provided such service or

 10-8    maintenance contract or agreement, or warranty is sold, offered for

 10-9    sale, or issued by the manufacturer or merchant who manufactured or

10-10    sold such product or part thereof.

10-11          SECTION 14.  (b)  Section 8, Air Conditioning and

10-12    Refrigeration Contractor License Law (Article 8861, Vernon's Texas

10-13    Civil Statutes), as amended by this Act, applies only to an offense

10-14    committed on or after the effective date of this Act.  For purposes

10-15    of this section, an offense is committed before the effective date

10-16    of this Act if any element of the offense occurs before that date.

10-17          (c)  An offense committed before the effective date of this

10-18    Act is governed by the law in effect when the offense was

10-19    committed, and the former law is continued in effect for that

10-20    purpose.

10-21          SECTION 15.  (a)  Except as provided by Subsection (b) of

10-22    this section, Section 9, Air Conditioning and Refrigeration

10-23    Contractor License Law (Article 8861, Vernon's Texas Civil

10-24    Statutes), as amended by this Act, applies to a municipal license

10-25    that is issued or renewed on or after the effective date of this

10-26    Act.  A municipality subject to that section shall adopt

10-27    examination requirements in compliance with that section not later

 11-1    than January 1, 1998.

 11-2          (b)  To continue to engage in the practice of air

 11-3    conditioning and refrigeration contracting after September 1, 1997,

 11-4    a person who holds a municipal license on the effective date of

 11-5    this Act must satisfy the examination requirements of Section 9(b),

 11-6    Air Conditioning and Refrigeration Contractor License Law (Article

 11-7    8861, Vernon's Texas Civil Statutes), as amended by this Act, not

 11-8    later than June 1, 1998.

 11-9          SECTION 16.  (a)  Not later than December 31, 1997, the

11-10    commissioner of licensing and regulation shall adopt rules as

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

11-12    Contractor License Law (Article 8861, Vernon's Texas Civil

11-13    Statutes), as added by this Act.

11-14          (b)  Section 23(c), The Real Estate License Act (Article

11-15    6573a, Vernon's Texas Civil Statutes), as amended by this Act,

11-16    applies only to a real estate inspection that is conducted on or

11-17    after the effective date of this Act.  A real estate inspection

11-18    conducted before that date is governed by the law in effect on the

11-19    date that the inspection occurs, and the former law is continued in

11-20    effect for that purpose.

11-21          (c)  Section 25, Residential Service Company Act (Article

11-22    6573b, Revised Statutes), as amended by this Act, applies only to a

11-23    residential service contract that is entered into on or after the

11-24    effective date of this Act.  A residential service contract that is

11-25    entered into before that date is governed by the law in effect on

11-26    the date that the contract is entered into, and the former law is

11-27    continued in effect for that purpose.

 12-1          Explanation: This change is necessary to allow for the

 12-2    effective regulation and licensure of air conditioning and

 12-3    refrigeration contractors and the work performed by the

 12-4    contractors, their employees, and others.