By Yarbrough                                          H.B. No. 1822
         76R1304 GJH-F                           
                                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.  Section 2(7), Air Conditioning and Refrigeration
 1-6     Contractor License Law (Article 8861, Vernon's Texas Civil
 1-7     Statutes), is amended to read as follows:
 1-8                 (7)  "Air conditioning and refrigeration maintenance
 1-9     work" means repair work and all other work required for the
1-10     continued normal performance of an environmental air conditioning
1-11     system, commercial refrigeration system or equipment, or process
1-12     cooling or heating system.  The term does not include the
1-13     installation of a total replacement of the system or the
1-14     installation or repair of boilers or pressure vessels that must be
1-15     installed [by licensed persons] pursuant to rules and regulations
1-16     adopted by the commissioner under Chapter 755, Health and Safety
1-17     Code.
1-18           SECTION 2.  Section 3(b), Air Conditioning and Refrigeration
1-19     Contractor License Law (Article 8861, Vernon's Texas Civil
1-20     Statutes), is amended to read as follows:
1-21           (b)  The commissioner may issue an emergency order, including
1-22     a cease and desist order, as necessary to enforce this Act if the
1-23     commissioner determines that an emergency exists requiring
1-24     immediate action to protect the public health and safety.  The
 2-1     order may be issued without notice and hearing or with any notice
 2-2     and hearing that the commissioner considers practicable under the
 2-3     circumstances.  If an emergency order is issued under this
 2-4     subsection without a hearing, the commissioner shall set the time
 2-5     and place for a hearing to affirm, modify, or set aside the
 2-6     emergency order.
 2-7           SECTION 3.  Section 3B, Air Conditioning and Refrigeration
 2-8     Contractor License Law (Article 8861, Vernon's Texas Civil
 2-9     Statutes), is amended to read as follows:
2-10           Sec. 3B.  REQUIREMENTS TO PERFORM AIR CONDITIONING AND
2-11     REFRIGERATION CONTRACTING [LICENSE REQUIRED].  (a)  A [Unless the
2-12     person is exempted under Section 6 of this Act, a] person may not
2-13     perform air conditioning and refrigeration contracting unless:
2-14                 (1)  the person is exempt under Section 6 of this Act;
2-15     or
2-16                 (2)  the person practices within the scope of a
2-17     municipal license as permitted by Section 9 of this Act [without a
2-18     license under this Act].
2-19           (b)  A person, corporation, partnership, or other legal
2-20     entity may not offer to perform or perform air conditioning and
2-21     refrigeration contracting unless the person, corporation,
2-22     partnership, or other legal entity:
2-23                 (1)  employs full-time at each permanent office of the
2-24     person, corporation, partnership, or other legal entity at least
2-25     one licensee whose license qualifies the person for all of the air
2-26     conditioning and refrigeration contracting performed or offered to
2-27     be performed by that office;
 3-1                 (2)  files with the advisory board the name of at least
 3-2     one person who meets the requirements of Subdivision (1) of this
 3-3     subsection; and
 3-4                 (3)  uses only appropriately licensed individuals and
 3-5     the assistants of appropriately licensed individuals to perform air
 3-6     conditioning and refrigeration contracting.
 3-7           (c)  If a person whose name is on file with the advisory
 3-8     board as required by Subsection (b)(2) of this section no longer
 3-9     meets the requirements of Subsection (b)(1) of this section, the
3-10     person, corporation, partnership, or other legal entity that
3-11     qualifies under Subsection (b) of this section to offer to perform
3-12     and to perform air conditioning and refrigeration contracting shall
3-13     comply with Subsection (b)(2) of this section not later than the
3-14     30th day after the first day the person whose name is on file with
3-15     the advisory board no longer meets the requirements of Subsection
3-16     (b)(1) of this section.
3-17           SECTION 4.  Sections 4(f) and (g), Air Conditioning and
3-18     Refrigeration Contractor License Law (Article 8861, Vernon's Texas
3-19     Civil Statutes), are amended to read as follows:
3-20           (f)  The application must be made on a form prescribed by the
3-21     commissioner and must specify the class of license and each
3-22     endorsement the  applicant seeks.  The application must be verified
3-23     and must be accompanied by:
3-24                 (1)  [evidence of the insurance coverage required under
3-25     this Act;]
3-26                 [(2)]  a statement of the applicant's practical
3-27     experience; and
 4-1                 (2) [(3)]  the examination fee.
 4-2           (g)  The commissioner shall issue an air conditioning and
 4-3     refrigeration contractor license to an applicant who possesses the
 4-4     required qualifications, passes the appropriate examinations,
 4-5     furnishes evidence of the insurance coverage required under this
 4-6     Act, and pays the [examination fee and the] original license fee
 4-7     required by this Act.  An applicant who fails an examination is
 4-8     eligible for reexamination.
 4-9           SECTION 5.  Section 5(a), Air Conditioning and Refrigeration
4-10     Contractor License Law (Article 8861, Vernon's Texas Civil
4-11     Statutes), is amended to read as follows:
4-12           (a)  A violation of this Act or a rule adopted under this Act
4-13     is a ground for the denial, suspension, or revocation of a license
4-14     issued under this Act.  The failure to provide proper installation,
4-15     service, or [and] mechanical integrity under this Act constitutes a
4-16     violation of this Act.  An intentional or knowing misrepresentation
4-17     of necessary services, services to be provided, or services that
4-18     have been provided, or a fraudulent promise made to influence,
4-19     persuade, or induce an individual to contract for services
4-20     constitutes a violation of this Act and a ground for the suspension
4-21     or revocation of a license issued under this Act.
4-22           SECTION 6.  Section 6(a), 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)  Except as provided by Section 10 of this Act, this
4-26     [This] Act does not apply to a person who:
4-27                 (1)  performs air conditioning and refrigeration
 5-1     contracting in a building owned solely by the person [him] as the
 5-2     person's [his] home;
 5-3                 (2)  performs air conditioning or refrigeration
 5-4     maintenance work if (i) the person is a maintenance person [man] or
 5-5     maintenance engineer who is a regular bona fide employee of the
 5-6     property owner, the property lessee, or the management company
 5-7     managing the property where the maintenance work is being
 5-8     performed, (ii) the work is performed in connection with the
 5-9     business in which the person is employed, and (iii) the person and
5-10     the person's employer referred to in (i) above do not engage in the
5-11     occupation of air conditioning and refrigeration contracting for
5-12     the general public;
5-13                 (3)  performs air conditioning and refrigeration
5-14     contracting and is regularly employed by a regulated electric or
5-15     gas utility;
5-16                 (4)  is licensed as a professional engineer under The
5-17     Texas Engineering Practice Act (Article 3271a, Vernon's Texas Civil
5-18     Statutes), performs work in connection with the business in which
5-19     the person is employed, and does not engage in the practice of air
5-20     conditioning and refrigeration contracting for the general public;
5-21                 (5)  performs process cooling or heating work for an
5-22     industrial operation such as a chemical plant, petrochemical plant,
5-23     refinery, natural gas plant, or natural gas treating plant when
5-24     employed by that operation;
5-25                 (6)  performs air conditioning and refrigeration
5-26     contracting on:
5-27                       (A)  a portable or self-contained ductless air
 6-1     conditioning or refrigeration product that has a cooling capacity
 6-2     of three tons or less;
 6-3                       (B)  a portable or self-contained heating product
 6-4     that does not require the forced movement of air outside the
 6-5     heating unit; or
 6-6                       (C)  environmental air conditioning equipment
 6-7     that is intended for temporary use and is not fixed in place; or
 6-8                 (7)  performs air conditioning services only on a motor
 6-9     vehicle air conditioner [conditioning unit] or who employs a person
6-10     who performs air conditioning services only on a motor vehicle air
6-11     conditioner [conditioning unit].
6-12           SECTION 7.  Section 7, Air Conditioning and Refrigeration
6-13     Contractor License Law (Article 8861, Vernon's Texas Civil
6-14     Statutes), is amended to read as follows:
6-15           Sec. 7.  REPORTING REQUIREMENT.  (a)  Each person licensed
6-16     under this Act shall notify the municipal authority who has control
6-17     of the enforcement of regulations relative to air conditioning and
6-18     refrigeration contracting in the municipality in which the person
6-19     is engaged in air conditioning and refrigeration contracting that
6-20     the person has obtained a state license.
6-21           (b)  The notification must be in the form required by the
6-22     municipality.
6-23           (c)  A municipal authority may impose a fee to process a
6-24     notification under this section in an amount reasonable and
6-25     necessary to cover the municipality's cost of administering this
6-26     section.
6-27           SECTION 8.  The Air Conditioning and Refrigeration Contractor
 7-1     License Law (Article 8861, Vernon's Texas Civil Statutes) is
 7-2     amended by adding Section 7A to read as follows:
 7-3           Sec. 7A.  ENFORCEABILITY OF CERTAIN CONTRACTS.  (a)  A
 7-4     person, corporation, partnership, or other legal entity may not
 7-5     enforce a contract or collect a fee for air conditioning and
 7-6     refrigeration contracting unless the person, corporation,
 7-7     partnership, or other legal entity meets the requirements of
 7-8     Section 3B of this Act at the time the contract is entered into and
 7-9     at the time the contract is performed.
7-10           (b)  The commissioner shall adopt rules relating to the
7-11     manner in which proof may be presented under this section.
7-12           SECTION 9.  Section 8, Air Conditioning and Refrigeration
7-13     Contractor License Law (Article 8861, Vernon's Texas Civil
7-14     Statutes), is amended to read as follows:
7-15           Sec. 8.  PENALTY.  Except as provided in Section 9, a person
7-16     commits an offense if the person knowingly or intentionally engages
7-17     in air conditioning and refrigeration contracting without a license
7-18     issued under this Act.  An offense under this section is a Class C
7-19     [B] misdemeanor.
7-20           SECTION 10.  The Air Conditioning and Refrigeration
7-21     Contractor License Law (Article 8861, Vernon's Texas Civil
7-22     Statutes) is amended by adding Section 8A to read as follows:
7-23           Sec. 8A.  ENFORCEMENT.  (a)  A municipal or county law
7-24     enforcement officer may issue a citation for a violation of Section
7-25     3B  of this Act.
7-26           (b)  A representative of the department or a municipal air
7-27     conditioning or refrigeration inspector within the jurisdiction of
 8-1     the municipality may issue a citation to a person who violates
 8-2     Section 10(e) or (f) of this Act.
 8-3           SECTION 11.  Section 9, Air Conditioning and Refrigeration
 8-4     Contractor License Law (Article 8861, Vernon's Texas Civil
 8-5     Statutes), is amended to read as follows:
 8-6           Sec. 9.  MUNICIPAL REGULATION.  (a)  A license issued by a
 8-7     municipality of this state that meets the requirements of this
 8-8     section is valid under the terms of the license within that
 8-9     municipality.  However, a license issued by the commissioner [under
8-10     this Act] is valid throughout the state, and the license holder and
8-11     people under the supervision of the license holder are not required
8-12     to hold a municipal license to practice air conditioning and
8-13     refrigeration contracting in any municipality within this state.
8-14           (b)  An applicant for a municipal license must:
8-15                 (1)  pass an examination that covers the same subjects
8-16     that are covered by an examination required by the commissioner for
8-17     the type of work to be permitted by the municipal license; and
8-18                 (2)  meet the experience requirement that is at least
8-19     equivalent to the experience requirement in Section 4(e) of this
8-20     Act.
8-21           (c)  A municipality may by ordinance adopt and enforce
8-22     standards for air conditioning and refrigeration contractors that
8-23     are consistent with the standards established under this Act.  The
8-24     municipality shall report violations of the ordinance to the
8-25     commissioner not later than the 10th day after the date on which
8-26     the municipality takes action to enforce the ordinance.  Conviction
8-27     of an offense under the municipal ordinance is a ground for the
 9-1     denial, suspension, or revocation of a license issued under this
 9-2     Act.
 9-3           SECTION 12.  Sections 10(g) and (h), Air Conditioning and
 9-4     Refrigeration Contractor License Law (Article 8861, Vernon's Texas
 9-5     Civil Statutes), are amended to read as follows:
 9-6           (g)  A purchaser may purchase refrigerants if that person's
 9-7     use is exempt under Section 6(a)(1), (3), (5), (6), or (7) of this
 9-8     Act if the person is authorized to do so under other state or
 9-9     federal law and is not required to provide to a seller evidence of
9-10     the exemption.
9-11           (h)  A person commits an offense if the person purchases a
9-12     refrigerant or equipment containing a refrigerant in this state in
9-13     violation of Subsection (c), (e), or (f) of this section.  An
9-14     offense under this subsection is a Class C [B] misdemeanor.
9-15           SECTION 13.  Section 23(c), The Real Estate License Act
9-16     (Article 6573a, Vernon's Texas Civil Statutes), is amended by
9-17     adding Subdivision (4) to read as follows:
9-18                 (4)  In addition to the license requirements imposed
9-19     under Subdivisions (1)-(3) of this subsection, a business entity
9-20     that inspects an environmental air conditioning system, commercial
9-21     refrigeration system, or process cooling or heating system as part
9-22     of a real estate inspection conducted under this Act must employ a
9-23     person who holds the appropriate air conditioning and refrigeration
9-24     contractor licenses and endorsements under the Air Conditioning and
9-25     Refrigeration Contractor License Law (Article 8861, Vernon's Texas
9-26     Civil Statutes) or an appropriate municipal license.  An employee
9-27     who does not hold a license or endorsement under the Air
 10-1    Conditioning and Refrigeration Contractor License Law (Article
 10-2    8861, Vernon's Texas Civil Statutes) or a municipal license may
 10-3    perform the inspection under the direction of the license holder.
 10-4    For purposes of this Act, "inspection" of environmental air
 10-5    conditioning, commercial refrigeration, and process cooling and
 10-6    heating equipment means an inspection that includes the use of
 10-7    electronic instruments, gauges, thermometers, mechanical
 10-8    instruments, or other meters that require direct in-line connection
 10-9    to the refrigerant system.
10-10          SECTION 14.  Section 3(m), Air Conditioning and Refrigeration
10-11    Contractor License Law (Article 8861, Vernon's Texas Civil
10-12    Statutes), is repealed.
10-13          SECTION 15.  Section 7(c), Air Conditioning and Refrigeration
10-14    Contractor License Law (Article 8861, Vernon's Texas Civil
10-15    Statutes), as added by this Act, applies only to a fee imposed for
10-16    a notification processed on or after the effective date of this
10-17    Act.
10-18          SECTION 16.  Section 7A, Air Conditioning and Refrigeration
10-19    Contractor License Law (Article 8861, Vernon's Texas Civil
10-20    Statutes), as added by this Act, applies only to a contract entered
10-21    into on or after the effective date of this Act.  A contract
10-22    entered into before the effective date of this Act is governed by
10-23    the law in effect on the day the contract was entered into, and the
10-24    former law is continued in effect for that purpose.
10-25          SECTION 17.  (a)  Except as provided by Subsection (b) of
10-26    this section, the punishment for an offense under Section 8 or
10-27    10(h), Air Conditioning and Refrigeration Contractor License Law
 11-1    (Article 8861,  Vernon's Texas Civil Statutes), regardless of
 11-2    whether the offense is committed before, on, or after the effective
 11-3    date of the amendments to those sections made by this Act, is the
 11-4    punishment provided by Section 8 or 10(h), Air Conditioning and
 11-5    Refrigeration Contractor  License Law (Article 8861, Vernon's Texas
 11-6    Civil Statutes), as amended by this Act.
 11-7          (b)  This section does not apply to the punishment  of a
 11-8    defendant finally convicted before the effective date of the
 11-9    amendments to Sections 8 and 10(h), Air Conditioning and
11-10    Refrigeration Contractor License Law (Article 8861, Vernon's Texas
11-11    Civil Statutes), made by this Act.  The punishment for a final
11-12    conviction that exists immediately before the effective date of the
11-13    amendments to those sections made by this Act is unaffected by this
11-14    Act.
11-15          SECTION 18.  (a)  Except as provided by Subsection (b) of
11-16    this section, Section 9, Air Conditioning and Refrigeration
11-17    Contractor License Law (Article 8861, Vernon's Texas Civil
11-18    Statutes), as amended by this Act, applies only to a municipal
11-19    license that is issued or renewed on or after the effective date of
11-20    this Act.  A municipality subject to that section shall adopt
11-21    examination requirements in compliance with that  section not later
11-22    than January 1, 2000.
11-23          (b)  To continue to engage in the practice of air
11-24    conditioning and refrigeration contracting after September 1, 1999,
11-25    a person who holds a municipal license on the effective date of
11-26    this Act must satisfy the examination requirements imposed under
11-27    Section 9(b), Air Conditioning and Refrigeration Contractor License
 12-1    Law (Article 8861, Vernon's Texas Civil Statutes), as amended by
 12-2    this Act, not later than June 1, 2000.
 12-3          SECTION 19.  (a)  Except as provided by Subsection (b) of
 12-4    this section, this Act takes effect September 1, 1999.
 12-5          (b)  Sections 6(a), 8,  and 10(g) and (h), Air Conditioning
 12-6    and Refrigeration Contractor License Law (Article 8861, Vernon's
 12-7    Texas Civil Statutes), as amended by this Act, take effect
 12-8    immediately.
 12-9          (c)  Not later than December 31, 1999, the commissioner of
12-10    licensing and regulation shall adopt rules as required by Section
12-11    7A, Air Conditioning and Refrigeration Contractor License Law
12-12    (Article 8861, Vernon's Texas Civil Statutes), as added by this
12-13    Act.
12-14          (d)  Section 23(c), The Real Estate License Act (Article
12-15    6573a, Vernon's Texas Civil Statutes), as amended by this Act,
12-16    applies only to a real estate inspection that is conducted on or
12-17    after the effective date of this Act.  A real estate inspection
12-18    conducted before that date is governed by the law in effect on the
12-19    date that the inspection occurs, and the former law is continued in
12-20    effect for that purpose.
12-21          SECTION 20.  The importance of this legislation and the
12-22    crowded condition of the calendars in both houses create an
12-23    emergency and an imperative public necessity that the
12-24    constitutional rule requiring bills to be read on three several
12-25    days in each house be suspended, and this rule is hereby suspended,
12-26    and that this Act take effect and be in force according to its
12-27    terms, and it is so enacted.