HBA-MPA H.B. 1822 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1822 By: Yarbrough Licensing & Administrative Procedures 3/9/1999 Introduced BACKGROUND AND PURPOSE Currently, the Air Conditioning and Refrigeration Contractor License Law (Act) requires any air conditioning and refrigeration contractor doing business in Texas to hold either a municipal or a state license. It provides several exemptions from licensure, most notably for apartment maintenance staff. There are 11,000 licensed contractors in Texas, and they report that there may be that many unlicensed contractors operating outside the Act. The Act is administered by the Texas Department of Licensing and Regulation, and 60 percent of the department's investigations involve 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 unlicensed 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 rulemaking authority is expressly delegated to the commissioner of licensing and regulation in SECTION 8 (Section 7A, Article 8861, V.T.C.S.), of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 2(7), 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." SECTION 2. Amends Section 3(b), Article 8861, V.T.C.S., to authorize the commissioner of licensing and regulation (commissioner) to issue a cease and desist order if the commissioner determines that an emergency exists requiring immediate action to protect the public health and safety. SECTION 3. Amends Section 3B, Article 8861, V.T.C.S., by creating a new Subsection (a) from new and existing text and adding Subsections (b) and (c), as follows: Sec. 3B. New title: REQUIREMENTS TO PERFORM AIR CONDITIONING AND REFRIGERATION CONTRACTING. (a) Prohibits a person from performing air conditioning and refrigeration contracting unless the person is exempt under Section 6 (Exemptions; Restrictions), Article 8861, V.T.C.S., or practices within the scope of a municipal license. (b) Prohibits a person, corporation, partnership, or other legal entity from performing or offering to perform air conditioning or refrigeration contracting unless they employ full-time at each permanent office at least one person licensed to perform the contracting, file the person's name with the Air Conditioning and Refrigeration Contractors Advisory Board (board), and use only appropriately licensed individuals to perform the contracting. (c) Requires the person, corporation, partnership, or other legal entity performing or offering to perform air conditioning or refrigeration contracting, if that person is no longer appropriately licensed, to comply with appropriate license requirements within 30 days. SECTION 4. 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. Makes conforming and nonsubstantive changes. SECTION 5. 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 6. Amends Section 6(a), Article 8861, V.T.C.S., to make conforming and nonsubstantive changes. SECTION 7. 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 municipal authority to impose a reasonable fee necessary to cover the cost of the notification required under this section. SECTION 8. Amends Article 8861, V.T.C.S., by adding Section 7A, to prohibit a person, corporation, partnership, or other legal entity from enforcing a contract or collecting a fee for air conditioning an refrigeration contracting unless the person is properly licensed at the time the contract is performed. Requires the commissioner to adopt rules relating to the manner in which proof may be presented under this section. SECTION 9. 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 10. Amends Article 8861, V.T.C.S., by adding Section 8A, as follows: Sec. 8A. ENFORCEMENT. Authorizes a municipal or county law enforcement officer to issue a citation for a violation of Section 3B (License required), Article 8861, V.T.C.S. Authorizes a representative of the Texas Department of Licensing and Regulation, or a municipal air conditioning or refrigeration inspector within the jurisdiction of the municipality to issue a citation to a person who violates Section 10(e) or (f) (Sale and Use of Refrigerants), Article 8861, V.T.C.S. 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 commissioner for the same type of work, 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(g) and (h), Article 8861, V.T.C.S., to adds to the list of those authorized to purchase refrigerants a person whose use 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. Provides that an offense under this section is a Class C, rather than Class B, misdemeanor. SECTION 13. Amends Section 23(c), Article 6573a, V.T.C.S. (The Real Estate License Act), by adding Subdivision (4), as follows: (4) Provides that a business entity that inspects an environmental air conditioning system, commercial refrigeration system, or process cooling and heating system as part of a real estate inspection must employ a person who holds an appropriate air conditioning and refrigeration contracting license. Authorizes a person who does not hold an appropriate license to perform an inspection under the direction of a license holder. Defines "inspection." SECTION 14. Repeals Section 3(m), Article 8861, V.T.C.S., which authorizes issuance of citations for violations of Section 10(e) or (f). SECTION 15. Makes application of Section 7(c), Article 8861, V.T.C.S., as changed by this Act prospective. SECTION 16. Makes application of Section 7A, Article 8861, V.T.C.S., as added by this Act prospective. SECTION 17. Provides that a person who knowingly or intentionally engages in air conditioning and refrigeration contracting without an appropriate license, or purchases certain refrigerants in violation of Sections 10(c), (e), or (f), Article 8861, V.T.C.S., commits a Class C misdemeanor, unless that person is finally convicted before the effective date of this Act. SECTION 18. Makes application of Section 9, Article 8861, V.T.C.S., as changed by this Act prospective, except that a person who holds a municipal license must satisfy the examination requirements imposed by this Act no later than June 1, 2000, if that person continues the practice of contracting after September 1, 1999. SECTION 19.Effective date: September 1, 1999, except that Sections 6(a), 8, and 10(g) and (h), take effect immediately. Requires that the commissioner adopt rules as required by Section 7A, Article 8861, V.T.C.S., no later than December 31, 1999. Makes application of Section 23(c), Article 6573a, V.T.C.S., as changed by this Act prospective. SECTION 20.Emergency clause.