1-1     By:  Yarbrough (Senate Sponsor - Carona)              H.B. No. 1822
 1-2           (In the Senate - Received from the House May 10, 1999;
 1-3     May 10, 1999, read first time and referred to Committee on Economic
 1-4     Development; May 14, 1999, reported favorably by the following
 1-5     vote:  Yeas 7, Nays 0; May 14, 1999, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to the regulation of air conditioning and refrigeration
 1-9     contractors; providing penalties.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1.  Sections 2(7) and (9), Air Conditioning and
1-12     Refrigeration Contractor License Law (Article 8861, Vernon's Texas
1-13     Civil Statutes), are amended to read as follows:
1-14                 (7)  "Air conditioning and refrigeration maintenance
1-15     work" means repair work and all other work required for the
1-16     continued normal performance of an environmental air conditioning
1-17     system, commercial refrigeration system or equipment, or process
1-18     cooling or heating system.  The term does not include the
1-19     installation of a total replacement of the system or the
1-20     installation or repair of boilers or pressure vessels that must be
1-21     installed [by licensed persons] pursuant to rules and regulations
1-22     adopted by the commissioner under Chapter 755, Health and Safety
1-23     Code.
1-24                 (9)  "Air conditioning and refrigeration contracting"
1-25     means to perform or offer to perform the design, installation,
1-26     construction, maintenance, service, repair, alteration, or
1-27     modification of a product or of equipment in environmental air
1-28     conditioning, commercial refrigeration, or process cooling or
1-29     heating systems.
1-30           SECTION 2.  Section 2, Air Conditioning and Refrigeration
1-31     Contractor License Law (Article 8861, Vernon's Texas Civil
1-32     Statutes), is amended by adding Subdivision (14) to read as
1-33     follows:
1-34                 (14)  "Air conditioning and refrigeration contracting
1-35     company" means any person, sole proprietorship, corporation,
1-36     partnership, association, or other business entity that performs or
1-37     offers to perform air conditioning and refrigeration contracting to
1-38     the general public.
1-39           SECTION 3.  Sections 3(b) and (m), Air Conditioning and
1-40     Refrigeration Contractor License Law (Article 8861, Vernon's Texas
1-41     Civil Statutes), are amended to read as follows:
1-42           (b)  The executive director [commissioner] may issue an
1-43     emergency order as necessary to enforce this Act if the executive
1-44     director [commissioner] determines that an emergency exists
1-45     requiring immediate action to protect the public health and safety.
1-46     The order may be issued without notice and hearing or with any
1-47     notice and hearing that the executive director [commissioner]
1-48     considers practicable under the circumstances.  If an emergency
1-49     order is issued under this subsection without a hearing, the
1-50     executive director [commissioner] shall set the time and place for
1-51     a hearing to affirm, modify, or set aside the emergency order.  The
1-52     executive director may issue cease and desist orders.
1-53           (m)  A representative of the department [commission] or a
1-54     municipal air conditioning or refrigeration inspector within the
1-55     jurisdiction of the municipality may issue a citation to a person
1-56     who violates Section 10(e) or (f) of this Act.
1-57           SECTION 4.  Section 3B, Air Conditioning and Refrigeration
1-58     Contractor License Law (Article 8861, Vernon's Texas Civil
1-59     Statutes), is amended to read as follows:
1-60           Sec. 3B.  LICENSE REQUIRED; CITATION.  (a)  Unless the person
1-61     is exempted under Section 6 of this Act, a person may not perform
1-62     air conditioning and refrigeration contracting without a license
1-63     under this Act.
1-64           (b)  An air conditioning and refrigeration contracting
 2-1     company must employ full time in each permanent office a license
 2-2     holder whose license is assigned to that company.
 2-3           (c)  A municipal or county official may issue a citation to
 2-4     an air conditioning and refrigeration contracting company that
 2-5     performs air conditioning and refrigeration contracting without a
 2-6     license issued under this Act, if the person is not exempt from the
 2-7     provisions of this Act.
 2-8           SECTION 5.  The Air Conditioning and Refrigeration Contractor
 2-9     License Law (Article 8861, Vernon's Texas Civil Statutes) is
2-10     amended by adding Section 3C to read as follows:
2-11           Sec. 3C.  ENFORCEMENT OF CONTRACTS.  An air conditioning and
2-12     refrigeration contracting company that performs air conditioning
2-13     and refrigeration contracting without employing a licensee with the
2-14     appropriate license under this Act may not collect a fee or
2-15     otherwise enforce a contract for the services performed.  To
2-16     enforce a contract for the performance of air conditioning and
2-17     refrigeration contracting, the air conditioning and refrigeration
2-18     contracting company that performs the services must have been
2-19     licensed at the time the contract is signed and at the time the
2-20     work is performed.
2-21           SECTION 6.  Sections 4(f) and (g), Air Conditioning and
2-22     Refrigeration Contractor License Law (Article 8861, Vernon's Texas
2-23     Civil Statutes), are amended to read as follows:
2-24           (f)  The application must be made on a form prescribed by the
2-25     commissioner and must specify the class of license and each
2-26     endorsement the applicant seeks.  The application must be verified
2-27     and must be accompanied by:
2-28                 (1)  [evidence of the insurance coverage required under
2-29     this Act;]
2-30                 [(2)]  a statement of the applicant's practical
2-31     experience; and
2-32                 (2) [(3)]  the examination fee.
2-33           (g)  The executive director [commissioner] shall issue an air
2-34     conditioning and refrigeration contractor license to an applicant
2-35     who possesses the required qualifications, passes the appropriate
2-36     examinations, furnishes evidence of the insurance coverage required
2-37     under this Act, and pays the [examination fee and the] original
2-38     license fee required by this Act.  An applicant who fails an
2-39     examination is eligible for reexamination.
2-40           SECTION 7.  Section 5(a), Air Conditioning and Refrigeration
2-41     Contractor License Law (Article 8861, Vernon's Texas Civil
2-42     Statutes), is amended to read as follows:
2-43           (a)  A violation of this Act or a rule adopted under this Act
2-44     is a ground for the denial, suspension, or revocation of a license
2-45     issued under this Act.  The failure to provide proper installation,
2-46     service, or [and] mechanical integrity under this Act constitutes a
2-47     violation of this Act.  An intentional or knowing misrepresentation
2-48     of necessary services, services to be provided, or services that
2-49     have been provided, or a fraudulent promise made to influence,
2-50     persuade, or induce an individual to contract for services
2-51     constitutes a violation of this Act and a ground for the suspension
2-52     or revocation of a license issued under this Act.
2-53           SECTION 8.  Section 6(a), Air Conditioning and Refrigeration
2-54     Contractor License Law (Article 8861, Vernon's Texas Civil
2-55     Statutes), is amended to read as follows:
2-56           (a)  This Act does not apply to a person who:
2-57                 (1)  performs air conditioning and refrigeration
2-58     contracting in a building owned solely by him as his home;
2-59                 (2)  performs air conditioning or refrigeration
2-60     maintenance work if (i) the person is a maintenance man or
2-61     maintenance engineer who is a regular bona fide employee of the
2-62     property owner, the property lessee, or the management company
2-63     managing the property where the maintenance work is being
2-64     performed, (ii) the work is performed in connection with the
2-65     business in which the person is employed, and (iii) the person and
2-66     the person's employer referred to in (i) above do not engage in the
2-67     occupation of air conditioning and refrigeration contracting for
2-68     the general public;
2-69                 (3)  performs air conditioning and refrigeration
 3-1     contracting and is regularly employed by a regulated electric or
 3-2     gas utility;
 3-3                 (4)  is licensed as a professional engineer under The
 3-4     Texas Engineering Practice Act (Article 3271a, Vernon's Texas Civil
 3-5     Statutes), performs work in connection with the business in which
 3-6     the person is employed, and does not engage in the practice of air
 3-7     conditioning and refrigeration contracting for the general public;
 3-8                 (5)  performs process cooling or heating work for an
 3-9     industrial operation such as a chemical plant, petrochemical plant,
3-10     refinery, natural gas plant, or natural gas treating plant when
3-11     employed by that operation;
3-12                 (6)  performs air conditioning and refrigeration
3-13     contracting on:
3-14                       (A)  a portable or self-contained ductless air
3-15     conditioning [or refrigeration] product that has a cooling capacity
3-16     of three tons or less;
3-17                       (B)  a portable or self-contained heating product
3-18     that does not require the forced movement of air outside the
3-19     heating unit; [or]
3-20                       (C)  environmental air conditioning equipment
3-21     that is intended for temporary use and is not fixed in place; or
3-22                       (D)  residential refrigerators, freezers, and ice
3-23     machines; or
3-24                 (7)  performs air conditioning services only on a motor
3-25     vehicle air conditioning unit or who employs a person who performs
3-26     air conditioning services only on a motor vehicle air conditioning
3-27     unit.
3-28           SECTION 9.  Section 7, Air Conditioning and Refrigeration
3-29     Contractor License Law (Article 8861, Vernon's Texas Civil
3-30     Statutes), is amended to read as follows:
3-31           Sec. 7.  REPORTING REQUIREMENT.  (a)  Each person licensed
3-32     under this Act shall notify the municipal authority who has control
3-33     of the enforcement of regulations relative to air conditioning and
3-34     refrigeration contracting in the municipality in which the person
3-35     is engaged in air conditioning and refrigeration contracting that
3-36     the person has obtained a state license.
3-37           (b)  The notification must be in the form required by the
3-38     municipality.
3-39           (c)  The amount of a fee imposed by a municipality on a
3-40     contractor to provide notice under this section may be set by the
3-41     municipality only in an amount reasonable and necessary to
3-42     implement this section.
3-43           SECTION 10.  Section 8, Air Conditioning and Refrigeration
3-44     Contractor License Law (Article 8861, Vernon's Texas Civil
3-45     Statutes), is amended to read as follows:
3-46           Sec. 8.  PENALTY.  Except as provided in Section 9, a person
3-47     commits an offense if the person knowingly or intentionally engages
3-48     in air conditioning and refrigeration contracting without a license
3-49     issued under this Act.   An offense under this section is a Class C
3-50     [B] misdemeanor.
3-51           SECTION 11.  Section 9, Air Conditioning and Refrigeration
3-52     Contractor License Law (Article 8861, Vernon's Texas Civil
3-53     Statutes), is amended to read as follows:
3-54           Sec. 9.  MUNICIPAL REGULATION.  (a)  A license issued by a
3-55     municipality of this state that complies with the requirements of
3-56     this section is valid under the terms of the license within that
3-57     municipality.  However, a license issued [under this Act] by the
3-58     department is valid throughout the state, and the holder and people
3-59     under supervision are not required to hold a municipal license to
3-60     practice air conditioning and refrigeration contracting in any
3-61     municipality within this state.
3-62           (b)  An applicant for a municipal license must:
3-63                 (1)  pass an examination that covers the same subjects
3-64     as the examination required by the commissioner for an air
3-65     conditioning and refrigeration contractor license of the class of
3-66     work that the municipal applicant proposes to perform; and
3-67                 (2)  meet experience requirements that are at least as
3-68     strict as those required under Section 4(e) of this Act for an air
3-69     conditioning and refrigeration contractor license.
 4-1           (c)  A municipality may by ordinance adopt and enforce
 4-2     standards for air conditioning and refrigeration contractors that
 4-3     are consistent with the standards established under this Act.  The
 4-4     municipality shall report violations of the ordinance to the
 4-5     commissioner not later than the 10th day after the date on which
 4-6     the municipality takes action to enforce the ordinance.  Conviction
 4-7     of an offense under the municipal ordinance is a ground for the
 4-8     denial, suspension, or revocation of a license issued under this
 4-9     Act.
4-10           SECTION 12.  Section 10(h), Air Conditioning and
4-11     Refrigeration Contractor License Law (Article 8861, Vernon's Texas
4-12     Civil Statutes), is amended to read as follows:
4-13           (h)  A person commits an offense if the person purchases a
4-14     refrigerant or equipment containing a refrigerant in this state in
4-15     violation of Subsection (c), (e), or (f) of this section.  An
4-16     offense under this subsection is a Class C [B] misdemeanor.
4-17           SECTION 13.  Section 10, Air Conditioning and Refrigeration
4-18     Contractor License Law (Article 8861, Vernon's Texas Civil
4-19     Statutes), is amended by adding Subsection (j), to read as follows:
4-20           (j)  This section does not apply to persons exempt under
4-21     Section 6(a)(3), (5), or (7) of this Act.
4-22           SECTION 14.  Section 23(c), The Real Estate License Act
4-23     (Article 6573a, Vernon's Texas Civil Statutes), is amended by
4-24     adding Subdivision (4) to read as follows:
4-25                 (4)  In addition to the license requirements imposed
4-26     under Subdivisions (1), (2), and (3) of this subsection, a business
4-27     entity that inspects an environmental air conditioning system,
4-28     commercial refrigeration system, or process cooling or heating
4-29     system as part of a real estate inspection conducted under this Act
4-30     must employ a  person who holds the appropriate air conditioning
4-31     and refrigeration contractor licenses and endorsements under the
4-32     Air Conditioning and Refrigeration Contractor License Law (Article
4-33     8861, Vernon's Texas Civil Statutes), or an appropriate municipal
4-34     license.  An employee who does not hold a license may perform the
4-35     inspection under the direction of a licensee licensed under this
4-36     Act.  For purposes of this Act, "inspection" of environmental air
4-37     conditioning, commercial refrigeration, and process cooling and
4-38     heating equipment means an inspection that includes the use of
4-39     electronic instruments, gauges, thermometers, mechanical
4-40     instruments, or other meters that require direct in-line connection
4-41     to the refrigeration system.
4-42           SECTION 15.  (a)  The change in law made to Section 8, Air
4-43     Conditioning and Refrigeration Contractor License Law (Article
4-44     8861, Vernon's Texas Civil Statutes), by this Act applies only to
4-45     an offense committed on or after the effective date of this Act.
4-46     For purposes of this section, an offense is committed before the
4-47     effective date of this Act if any element of the offense occurs
4-48     before that date.
4-49           (b)  An offense committed before the effective date of this
4-50     Act is governed by the law in effect when the offense was
4-51     committed, and the former law is continued in effect for that
4-52     purpose.
4-53           SECTION 16.  (a)  Except as provided by Subsection (b) of
4-54     this section, the change in law made to Section 9, Air Conditioning
4-55     and Refrigeration Contractor License Law (Article 8861, Vernon's
4-56     Texas Civil Statutes), by this Act applies to a municipal license
4-57     that is issued or renewed on or after the effective date of this
4-58     Act.  A municipality subject to that section shall adopt
4-59     examination requirements in compliance with that section not later
4-60     than January 1, 2000.
4-61           (b)  To continue to engage in the practice of air
4-62     conditioning and refrigeration contracting after September 1, 1999,
4-63     a person who holds a municipal license on the effective date of
4-64     this Act must satisfy the examination requirements imposed under
4-65     Section 9(b), Air Conditioning and Refrigeration Contractor License
4-66     Law (Article 8861, Vernon's Texas Civil Statutes), as amended by
4-67     this Act, not later than June 1, 2000.
4-68           SECTION 17.  (a)  This Act takes effect September 1, 1999.
4-69           (b)  Not later than December 31, 1999, the commissioner of
 5-1     licensing and regulation shall adopt rules as required by Section
 5-2     3C, Air Conditioning and Refrigeration Contractor License Law
 5-3     (Article 8861, Vernon's Texas Civil Statutes), as added by this
 5-4     Act.
 5-5           (c)  Section 23(c), The Real Estate License Act (Article
 5-6     6573a, Vernon's Texas Civil Statutes), as amended by this Act,
 5-7     applies only to a real estate inspection that is conducted on or
 5-8     after the effective date of this Act.  A real estate inspection
 5-9     conducted before that date is governed by the law in effect on the
5-10     date that the inspection occurs, and the former law is continued in
5-11     effect for that purpose.
5-12           SECTION 18.  The importance of this legislation and the
5-13     crowded condition of the calendars in both houses create an
5-14     emergency and an imperative public necessity that the
5-15     constitutional rule requiring bills to be read on three several
5-16     days in each house be suspended, and this rule is hereby suspended.
5-17                                  * * * * *