HBA-MPA H.B. 1822 76(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 1822 By: Yarbrough Licensing & Administrative Procedures 7/15/1999 Enrolled BACKGROUND AND PURPOSE Prior to the 76th Legislature, the Air Conditioning and Refrigeration Contractor License Law (Act) required any air conditioning and refrigeration contractor doing business in Texas to hold either a municipal or a state license. It provided several exemptions from licensure, most notably for apartment maintenance staff. There were 11,000 licensed contractors in Texas, and they reported that there may have been that many unlicenced contractors operating outside the Act. The Act was administered by the Texas Department of Licensing and Regulation, and 60 percent of the department's investigations involved the Act. The department has received funding to maintain only minimal enforcement of the Act. It has been able to investigate consumer complaints, but has not had adequate staff to pursue unlicenced contractors and bring them into compliance. H.B. 1822 clarifies provisions of the Act and strengthens penalties for operating as a contractor without a license. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate rulemaking authority to state officer, department, agency, or institution. 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 add repair of boilers or pressure vessels and delete licensed persons in reference to operations not included under the term "air conditioning and refrigeration maintenance work." Defines "air conditioning and refrigeration contracting" as performing or offering to perform certain tasks on specified equipment. SECTION 2. Amends Section 2, Article 8861, V.T.C.S., by adding Subsection (14), to define "air conditioning and refrigeration contracting company." SECTION 3. Amends Sections 3(b) and (m), Article 8861, V.T.C.S., to authorize the executive director to issue a cease and desist order if the executive director determines that an emergency exists requiring immediate action to protect the public health and safety. Authorizes a representative of the Texas Department of Licensing and Regulation (department), rather than Texas Commission of Licensing and Regulation, to issue a citation for violation of Section 10(e) or (f) (Sale and Use of Refrigerants). Makes a conforming change. SECTION 4. Amends Section 3B, Article 8861, V.T.C.S., by creating Subsection (a) from existing text and adding Subsections (b) and (c), as follows: Sec. 3B. New title: LICENSE REQUIRED; CITATION. (b) Provides that an air conditioning and refrigeration contracting company must employ full time at each permanent office at least one person licensed to perform the contracting, and whose license is assigned to the company. (c) Authorizes a municipal or county official to issue a citation to an air conditioning and refrigeration contracting company that performs air conditioning and refrigeration contracting without the required license, unless exempt under this article. SECTION 5. Amends Article 8861, V.T.C.S., by adding Section3C, to prohibit an air conditioning and refrigeration contracting company from enforcing a contract or collecting a fee for air conditioning and refrigeration contracting unless a properly licensed person is employed at the time the contract is performed. SECTION 6. Amends Sections 4(f) and (g), Article 8861, V.T.C.S., to delete from Subsection (f) the provision that an application for an air conditioning and refrigeration contractor license must be accompanied by evidence of required insurance coverage. Adds this requirement to Subsection (g), and deletes the requirement to pay an examination fee. Substitutes the executive director for the commissioner of licensing and regulation as the person required to issue a license. Makes conforming and nonsubstantive changes. SECTION 7. Amends Section 5(a), Article 8861, V.T.C.S., to provide that failure to provide proper installation, service, or, rather than and, mechanical integrity constitutes a violation. SECTION 8. Amends Section 6(a)(6), Article 8861, V.T.C.S., to specify an exemption for work performed on residential refrigerators, freezers, and ice machines. SECTION 9. Amends Section 7, Article 8861, V.T.C.S., to create new Subsections (a) and (b) from existing text and add Subsection (c) authorizing a municipality to impose a reasonable fee necessary to cover the cost of the implementation of this section. SECTION 10. Amends Section 8, Article 8861, V.T.C.S., to provide that a person commits a Class C, rather than Class B, misdemeanor by knowingly or intentionally engaging in air conditioning and refrigeration contracting without an appropriate license. SECTION 11. Amends Section 9, Article 8861, V.T.C.S., to provide that an applicant for a municipal license must pass an examination covering the same subjects as the examination required by the department for the same type of work the applicant proposes to perform, and meet the experience requirement under Section 4(e), Article 8861, V.T.C.S. Makes conforming and nonsubstantive changes. SECTION 12. Amends Sections 10(h), Article 8861, V.T.C.S., to provide that an offense under this section is a Class C, rather than Class B, misdemeanor SECTION 14. Amends Section 10, Article 8861, V.T.C.S., by adding Subsection (j), to provide that a person is authorized to purchase refrigerants if the person is exempt under Section 6(a) because the person performs air conditioning and refrigeration contracting for an electric or gas utility, an industrial operation, on portable, self-contained, or temporary equipment, or in motor vehicles. SECTION 14. Makes application of Section 8, Article 8861, V.T.C.S., as changed by this Act prospective. SECTION 15. (a) Makes application of Section 9, Article 8861, V.T.C.S., as changed by this Act prospective, except as provided by Subsection (b). Requires a municipality subject to that section to adopt examination requirements no later than January 1, 2000. (b) Provides that a person who holds a municipal license on the effective date of this Act must satisfy the examination requirements imposed under Section 9(b), Article 8861, V.T.C.S., as amended by this Act no later than June 1, 2000, in order for that person to continue to engage in the practice of air conditioning and refrigeration contracting after September 1, 1999. SECTION 16. Effective date: September 1, 1999. Requires that the commissioner of licensing and regulation adopt rules as required by Section 3C, Article 8861, V.T.C.S., no later than December 31, 1999. SECTION 17.Emergency clause.