76R8586 T                           
         By Yarbrough                                          H.B. No. 1822
         Substitute the following for H.B. No. 1822:
         By Moreno of Harris                               C.S.H.B. No. 1822
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the regulation of air conditioning and refrigeration
 1-3     contractors; providing penalties.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subdivisions (7) and (9), Section 2, Air
 1-6     Conditioning and Refrigeration Contractor License Law (Article
 1-7     8861, Vernon's Texas Civil Statutes), are amended to read as
 1-8     follows:
 1-9                 (7)  "Air conditioning and refrigeration maintenance
1-10     work" means repair work and all other work required for the
1-11     continued normal performance of an environmental air conditioning
1-12     system, commercial refrigeration system or equipment, or process
1-13     cooling or heating system.  The term does not include the
1-14     installation of a total replacement of the system or the
1-15     installation or repair of boilers or pressure vessels that must be
1-16     installed [by licensed persons] pursuant to rules and regulations
1-17     adopted by the commissioner under Chapter 755, Health and Safety
1-18     Code.
1-19                 (9)  "Air conditioning and refrigeration contracting"
1-20     means to perform or offer to perform the design, installation,
1-21     construction, maintenance, service, repair, alteration, or
1-22     modification of a product or of equipment in environmental air
1-23     conditioning, commercial refrigeration, or process cooling or
1-24     heating systems.
 2-1           SECTION 2.  Section 2, Air Conditioning and Refrigeration
 2-2     Contractor License Law (Article 8861, Vernon's Texas Civil
 2-3     Statutes) is amended by adding Subdivision (14), to read as
 2-4     follows:
 2-5                 (14)  "Air conditioning and refrigeration contracting
 2-6     company" means any person, sole proprietorship, corporation,
 2-7     partnership, association, or other business entity that performs or
 2-8     offers to perform air conditioning and refrigeration contracting to
 2-9     the general public.
2-10           SECTION 3.  Subdivisions (b) and (m), Section 3, Air
2-11     Conditioning and Refrigeration Contractor License Law (Article
2-12     8861, Vernon's Texas Civil Statutes), are amended to read as
2-13     follows:
2-14           (b)  The executive director may issue an emergency order as
2-15     necessary to enforce this Act if the executive director determines
2-16     that an emergency exists requiring immediate action to protect the
2-17     public health and safety.  The order may be issued without notice
2-18     and hearing or with any notice and hearing that the executive
2-19     director considers practicable under the circumstances.  If an
2-20     emergency order is issued under this subsection without a hearing,
2-21     the executive director shall set the time and place for a hearing
2-22     to affirm, modify, or set aside the emergency order.  The executive
2-23     director may issue cease and desist orders.
2-24           (m)  A representative of the Department [commission] or a
2-25     municipal air conditioning or refrigeration inspector within the
2-26     jurisdiction of the municipality may issue a citation to a person
2-27     who violates Section 10(e) or (f) of this Act.
 3-1           SECTION 4.  Section 3B, Air Conditioning and Refrigeration
 3-2     Contractor License Law (Article 8861, Vernon's Texas Civil
 3-3     Statutes), is amended to read as follows:
 3-4           Sec. 3B.  LICENSE REQUIRED; CITATION.  (a)  Unless the person
 3-5     is exempted under Section 6 of this Act, a person may not perform
 3-6     air conditioning and refrigeration contracting without a license
 3-7     under this Act.
 3-8           (b)  An air conditioning and refrigeration contracting
 3-9     company must employ full time in each permanent office a license
3-10     holder whose license is assigned to that company.
3-11           (c)  A municipal or county official may issue a citation to
3-12     an air conditioning and refrigeration contracting company which
3-13     performs air conditioning and refrigeration contracting without a
3-14     license issued under this Act, if the person is not exempt from the
3-15     provisions of this Act.
3-16           SECTION 5.  The Air Conditioning and Refrigeration Contractor
3-17     License Law (Article 8861, Vernon's Texas Civil Statutes) is
3-18     amended by adding Section 3C to read as follows:
3-19           Sec. 3C.  ENFORCEMENT OF CONTRACTS.  An air conditioning and
3-20     refrigeration contracting company that performs air conditioning
3-21     and refrigeration contracting without employing a licensee with the
3-22     appropriate license under this Act may not collect a fee or
3-23     otherwise enforce a contract for the services performed.  To
3-24     enforce a contract for the performance of air conditioning and
3-25     refrigeration contracting, the air conditioning and refrigeration
3-26     contracting company that performs the services must have been
3-27     licensed at the time the contract is signed and at the time the
 4-1     work is performed.
 4-2           SECTION 6.  Subsections (f) and (g), Section 4, Air
 4-3     Conditioning and Refrigeration Contractor License Law (Article
 4-4     8861, Vernon's Texas Civil Statutes), are amended to read as
 4-5     follows:
 4-6           (f)  The application must be made on a form prescribed by the
 4-7     commissioner and must specify the class of license and each
 4-8     endorsement the applicant seeks.  The application must be verified
 4-9     and must be accompanied by:
4-10                 (1)  [evidence of the insurance coverage required under
4-11     this Act;]
4-12                 [(2)]  a statement of the applicant's practical
4-13     experience; and
4-14                 (2) [(3)]  the examination fee
4-15           (g)  The executive director [commissioner] shall issue an air
4-16     conditioning and refrigeration contractor license to an applicant
4-17     who possesses the required qualifications, passes the appropriate
4-18     examinations, furnishes evidence of the insurance coverage required
4-19     under this Act, and pays the [examination fee and the] original
4-20     license fee required by this Act.  An applicant who fails an
4-21     examination is eligible for reexamination.
4-22           SECTION 7.  Section 5, Air Conditioning and Refrigeration
4-23     Contractor License Law (Article 8861, Vernon's Texas Civil
4-24     Statutes), is amended to read as follows:
4-25           (a)  A violation of this Act or a rule adopted under this Act
4-26     is a ground for the denial, suspension, or revocation of a license
4-27     issued under this Act.  The failure to provide proper installation,
 5-1     service, or [and] mechanical integrity under this Act constitutes a
 5-2     violation of this Act.  An intentional or knowing misrepresentation
 5-3     of necessary services, services to be provided, or services that
 5-4     have been provided, or a fraudulent promise made to influence,
 5-5     persuade, or induce an individual to contract for services
 5-6     constitutes a violation of this Act and a ground for the suspension
 5-7     or revocation of a license issued under this Act.
 5-8           SECTION 8.  Section 6, Subsection (a)(6), Air Conditioning
 5-9     and Refrigeration Contractor License Law (Article 8861, Vernon's
5-10     Texas Civil Statutes), is amended to read as follows:
5-11                 (6)  performs air conditioning and refrigeration
5-12     contracting on:
5-13                       (A)  a portable or self-contained ductless air
5-14     conditioning [or refrigeration] product that has a cooling capacity
5-15     of three tons or less;
5-16                       (B)  a portable or self-contained heating product
5-17     that does not require the forced movement of air outside the
5-18     heating unit; or
5-19                       (C)  environmental air conditioning equipment
5-20     that is intended for temporary use and is not fixed in place; or
5-21                       (D)  residential refrigerators, freezers, and ice
5-22     machines;
5-23           SECTION 9.  Section 7, Air Conditioning and Refrigeration
5-24     Contractor License Law (Article 8861, Vernon's Texas Civil
5-25     Statutes), is amended to read as follows:
5-26           Sec. 7.  REPORTING REQUIREMENT.  (a)  Each person licensed
5-27     under this Act shall notify the municipal authority who has control
 6-1     of the enforcement of regulations relative to air conditioning and
 6-2     refrigeration contracting in the municipality in which the person
 6-3     is engaged in air conditioning and refrigeration contracting that
 6-4     the person has obtained a state license.
 6-5           (b)  The notification must be in the form required by the
 6-6     municipality.
 6-7           (c)  The amount of a fee imposed by a municipality on a
 6-8     contractor to provide notice under this section may be set by the
 6-9     municipality only in an amount reasonable and necessary to
6-10     implement this section.
6-11           SECTION 10.  Section 8, Air Conditioning and Refrigeration
6-12     Contractor License Law (Article 8861, Vernon's Texas Civil
6-13     Statutes), is amended to read as follows:
6-14           Sec. 8.  PENALTY.  Except as provided in Section 9, a person
6-15     commits an offense if the person knowingly or intentionally engages
6-16     in air conditioning and refrigeration contracting without a license
6-17     issued under this Act.   An offense under this section is a Class C
6-18     [B] misdemeanor.
6-19           SECTION 11.  Section 9, Air Conditioning and Refrigeration
6-20     Contractor License Law (Article 8861, Vernon's Texas Civil
6-21     Statutes), is amended to read as follows:
6-22           Sec. 9.  MUNICIPAL REGULATION.  (a)  A license issued by a
6-23     municipality of this state that complies with the requirements of
6-24     this section is valid under the terms of the license within that
6-25     municipality.  However, a license issued [under this Act] by the
6-26     Department is valid throughout the state, and the holder and people
6-27     under supervision are not required to hold a municipal license to
 7-1     practice air conditioning and refrigeration contracting in any
 7-2     municipality within this state.
 7-3           (b)  An applicant for a municipal license must:
 7-4                 (1)  pass an examination that covers the same subjects
 7-5     as the examination required by the commissioner for an air
 7-6     conditioning and refrigeration contractor license of the class of
 7-7     work that the municipal applicant proposes to perform; and
 7-8                 (2)  meet experience requirements that are at least as
 7-9     strict as those required under Section 4(e) of this Act for an air
7-10     conditioning and refrigeration contractor license.
7-11           (c)  A municipality may by ordinance adopt and enforce
7-12     standards for air conditioning and refrigeration contractors that
7-13     are consistent with the standards established under this Act.  The
7-14     municipality shall report violations of the ordinance to the
7-15     commissioner not later than the 10th day after the date on which
7-16     the municipality takes action to enforce the ordinance.  Conviction
7-17     of an offense under the municipal ordinance is a ground for the
7-18     denial, suspension, or revocation of a license issued under this
7-19     Act.
7-20           SECTION 12.  Subsection (c), Section 23, The Real Estate
7-21     License Act (Article 6573a, Vernon's Texas Civil Statutes), is
7-22     amended by adding Subdivision (4) to read as follows:
7-23                 (4)  In addition to the license requirements imposed
7-24     under Subdivisions (1), (2), and (3) of this subsection, a business
7-25     entity that inspects an environmental air conditioning system,
7-26     commercial refrigeration system, or process cooling or heating
7-27     system as part of a real estate inspection conducted under this Act
 8-1     must employ a  person who holds the appropriate air conditioning
 8-2     and refrigeration contractor licenses and endorsements under the
 8-3     Air Conditioning and Refrigeration Contractor License Law (Article
 8-4     8861, Vernon's Texas Civil Statutes), or an appropriate municipal
 8-5     license.  An employee who does not hold a license may perform the
 8-6     inspection under the direction of a licensee licensed under this
 8-7     Act.  For purposes of this Act, "inspection" of environmental air
 8-8     conditioning, commercial refrigeration, and process cooling and
 8-9     heating equipment means an inspection that includes the use of
8-10     electronic instruments, gauges, thermometers, mechanical
8-11     instruments, or other meters that require direct in-line connection
8-12     to the refrigeration system.
8-13           SECTION 13.  (a)  The change in law made to Section 8, Air
8-14     Conditioning and Refrigeration Contractor License Law (Article
8-15     8861, Vernon's Texas Civil Statutes), by this Act applies only to
8-16     an offense committed on or after the effective date of this Act.
8-17     For purposes of this section, an offense is committed before the
8-18     effective date of this Act if any element of the offense occurs
8-19     before that date.
8-20           (b)  An offense committed before the effective date of this
8-21     Act is governed by the law in effect when the offense was
8-22     committed, and the former law is continued in effect for that
8-23     purpose.
8-24           SECTION 14.  (a)  Except as provided by Subsection (b) of
8-25     this section, the change in law made to Section 9, Air Conditioning
8-26     and Refrigeration Contractor License Law (Article 8861, Vernon's
8-27     Texas Civil Statutes), by this Act applies to a municipal license
 9-1     that is issued or renewed on or after the effective date of this
 9-2     Act.  A municipality subject to that section shall adopt
 9-3     examination requirements in compliance with that section not later
 9-4     than January 1, 2000.
 9-5           (b)  To continue to engage in the practice of air
 9-6     conditioning and refrigeration contracting after September 1, 1999,
 9-7     a person who holds a municipal license on the effective date of
 9-8     this Act must satisfy the examination requirements imposed under
 9-9     Subsection (b), Section 9, Air Conditioning and Refrigeration
9-10     Contractor License Law (Article 8861, Vernon's Texas Civil
9-11     Statutes), as amended by this Act, not later than June 1, 2000.
9-12           SECTION 15.  Subsection 10(h), Air Conditioning and
9-13     Refrigeration Contractor License Law (Article 8861, Vernon's Texas
9-14     Civil Statutes), is amended to read as follows:
9-15           (h)  A person commits an offense if the person purchases a
9-16     refrigerant or equipment containing a refrigerant in this state in
9-17     violation of Subsection (c), (e), or (f) of this section.  An
9-18     offense under this subsection is a Class C [B] misdemeanor.
9-19           SECTION 16.  Section 10, Air Conditioning and Refrigeration
9-20     Contractor License Law (Article 8861, Vernon's Texas Civil
9-21     Statutes), is amended by adding Subsection (j), to read as follows:
9-22           (j)  This Section does not apply to persons exempt under
9-23     Section 6(a)(3), (5), or (7) of this Act.
9-24           SECTION 17.  (a)  This Act takes effect September 1, 1999.
9-25           (b)  Not later than December 31, 1999, the commissioner of
9-26     licensing and regulation shall adopt rules as required by Section
9-27     3C, Air Conditioning and Refrigeration Contractor License Law
 10-1    (Article 8861, Vernon's Texas Civil Statutes), as added by this
 10-2    Act.
 10-3          (c)  Subsection (c), Section 23, The Real Estate License Act
 10-4    (Article 6573a, Vernon's Texas Civil Statutes), as amended by this
 10-5    Act, applies only to a real estate inspection that is conducted on
 10-6    or after the effective date of this Act.  A real estate inspection
 10-7    conducted before that date is governed by the law in effect on the
 10-8    date that the inspection occurs, and the former law is continued in
 10-9    effect for that purpose.
10-10          SECTION 18.  The importance of this legislation and the
10-11    crowded condition of the calendars in both houses create an
10-12    emergency and an imperative public necessity that the
10-13    constitutional rule requiring bills to be read on three several
10-14    days in each house be suspended, and this rule is hereby suspended.