By Lindsay S.B. No. 1014
76R7287 JMM-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the licensing and regulation of certain contractors;
1-3 providing penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. DEFINITIONS. In this Act:
1-6 (1) "Advisory board" means the Contractor Licensing
1-7 Advisory Board.
1-8 (2) "Commission" means the Texas Commission of
1-9 Licensing and Regulation.
1-10 (3) "Commissioner" means the commissioner of licensing
1-11 and regulation.
1-12 (4) "Contracting" means the business of undertaking or
1-13 offering to undertake, for a fixed price, commission, fee, or wage,
1-14 as a general or prime contractor, the construction or installation
1-15 or supervision of the construction or installation of a highway,
1-16 road, street, bridge, sewer, storm drain system, water main,
1-17 pipeline, publicly owned treatment works, underground private or
1-18 public utilities, underground telecommunications system, or any
1-19 related service to the extent the construction, installation, or
1-20 supervision is to be paid for by, or the item constructed or
1-21 installed is to be maintained by, a federal, state, or local
1-22 governmental entity.
1-23 (5) "Contractor" means a person who engages in
1-24 contracting.
2-1 (6) "Department" means the Texas Department of
2-2 Licensing and Regulation.
2-3 (7) "Person" has the meaning assigned by Section
2-4 311.005, Government Code.
2-5 SECTION 2. LICENSE REQUIRED. A person, other than a
2-6 governmental entity, may not engage in the business of contracting
2-7 unless the person holds a license issued under this Act.
2-8 SECTION 3. CONTRACTOR LICENSING ADVISORY BOARD. (a) The
2-9 Contractor Licensing Advisory Board is established as an advisory
2-10 board to the department. The advisory board consists of six
2-11 members appointed by the commissioner. A member holds office for a
2-12 term of two years, with three members' terms expiring February 1
2-13 each year. The commissioner shall designate a member to serve as
2-14 the board's presiding officer.
2-15 (b) Three of the members appointed under Subsection (a) of
2-16 this section must be contractors eligible for a license under this
2-17 Act. The remaining three members of the advisory board shall
2-18 represent the general public but must be familiar with the
2-19 contracting industry.
2-20 (c) The commissioner may remove a member of the advisory
2-21 board for inefficiency or neglect of duty in office. If a vacancy
2-22 occurs on the advisory board, the commissioner shall appoint a
2-23 member who represents the same interests as the former member to
2-24 serve for the unexpired term.
2-25 (d) The advisory board shall meet at least twice each year
2-26 at the call of the presiding officer at the place designated by the
2-27 presiding officer. A decision of the advisory board is not valid
3-1 unless supported by a majority of the members present at the
3-2 meeting at which the decision is made.
3-3 (e) The advisory board shall advise the commissioner in
3-4 adopting rules, setting fees, establishing registration renewal
3-5 requirements, and enforcing and administering this Act.
3-6 (f) A member is not entitled to compensation. Reimbursement
3-7 of members for expenses incurred for service on the advisory board
3-8 is subject to Section 2110.004, Government Code.
3-9 SECTION 4. ISSUANCE OF LICENSE; RULES. (a) The
3-10 commissioner shall issue a license to an applicant who possesses
3-11 the qualifications for a license required by this Act or a rule
3-12 adopted under this Act.
3-13 (b) The commissioner shall:
3-14 (1) adopt rules relating to issuing a license under
3-15 this Act; and
3-16 (2) prescribe all forms required under this Act.
3-17 (c) A license issued under this Act is valid for one year
3-18 from the date of issuance.
3-19 SECTION 5. LICENSE REQUIREMENTS; EXAMINATION. (a) To
3-20 qualify for a license under this Act, a person must apply on a form
3-21 prescribed by the commissioner and pay any application, license,
3-22 and examination fees required by the commission.
3-23 (b) The advisory board shall investigate the qualifications
3-24 of each applicant for a license under this Act and advise the
3-25 commissioner with regard to the qualifications of each applicant.
3-26 The advisory board shall consider:
3-27 (1) the applicant's experience and ability;
4-1 (2) whether the applicant has been convicted of a
4-2 felony;
4-3 (3) the applicant's safety record;
4-4 (4) the applicant's character and past record;
4-5 (5) the ability of the applicant to read plans and
4-6 specifications and to estimate costs;
4-7 (6) the applicant's financial condition;
4-8 (7) the applicant's construction ethics; and
4-9 (8) any other qualification the advisory board
4-10 determines necessary.
4-11 (c) An applicant for a license who receives a favorable
4-12 recommendation by the advisory board and is approved by the
4-13 commissioner must pass an examination prescribed by the
4-14 commissioner with the advice of the advisory board. An applicant
4-15 who fails the examination may be given one opportunity to be
4-16 reexamined without payment of an additional fee.
4-17 SECTION 6. FINANCIAL STATEMENT; BOND. (a) An applicant
4-18 for an original license or for renewal of a license must furnish to
4-19 the commissioner an audited financial statement that includes a
4-20 balance sheet, income statement, statement of cash flow, and
4-21 retained earnings statement and is prepared according to generally
4-22 accepted accounting principles and certified by a certified public
4-23 accountant licensed in this state. The statement must be dated not
4-24 later than the 60th day after the expiration date of the fiscal
4-25 year of the applicant or license holder and state the assets,
4-26 liabilities, and net worth of the person. The financial statement
4-27 submitted under this section is confidential and may not be
5-1 disclosed except as required by law.
5-2 (b) An applicant for an original license or for renewal of a
5-3 license under this Act must furnish to the board a performance bond
5-4 issued by a surety authorized to issue bonds in this state in an
5-5 amount prescribed by the commissioner.
5-6 SECTION 7. FEES. The commission by rule shall set
5-7 application, registration, and examination fees under this Act.
5-8 SECTION 8. LICENSE RENEWAL. (a) A person holding a license
5-9 may renew the license by:
5-10 (1) completing the renewal application form prescribed
5-11 by the commissioner;
5-12 (2) paying the renewal fee set by the commission; and
5-13 (3) meeting any other requirement for renewal required
5-14 by this Act or by rule of the commissioner.
5-15 (b) A holder of a license under this Act who fails to renew
5-16 the license before the date the license expires must pay a late fee
5-17 set by the commission in addition to the other renewal requirements
5-18 of this section.
5-19 SECTION 9. COMMISSIONER AND DEPARTMENT DUTIES;
5-20 INVESTIGATIONS. (a) The commissioner shall enforce this Act.
5-21 (b) The department shall investigate allegations of
5-22 violations of this Act.
5-23 SECTION 10. SUSPENSION, REVOCATION, AND RENEWAL OF LICENSE;
5-24 REISSUANCE. (a) After a hearing, the commissioner shall suspend
5-25 or revoke a license on a finding that:
5-26 (1) the license holder's past performance or safety
5-27 record is unsatisfactory;
6-1 (2) the license holder has failed to pay labor and
6-2 material bills in a timely manner;
6-3 (3) the license holder has failed to adequately carry
6-4 out the contracts into which the license holder has entered;
6-5 (4) the license holder wilfully disregarded or
6-6 violated this Act or a rule adopted under this Act;
6-7 (5) the license holder wilfully aided or abetted
6-8 another in the violation of this Act or a rule adopted under this
6-9 Act;
6-10 (6) the license holder was convicted for a crime an
6-11 essential element of which is misstatement, fraud, or dishonesty or
6-12 a felony; or
6-13 (7) the license holder engaged in dishonorable or
6-14 unethical conduct likely to deceive, defraud, or harm the public.
6-15 (b) The commissioner may reissue a license to a person whose
6-16 license has been revoked if the person applies in writing to the
6-17 department and shows good cause to justify reissuing the license.
6-18 The commissioner may not reissue a license before the first
6-19 anniversary of the date the license was revoked.
6-20 SECTION 11. DUTY OF GOVERNMENTAL ENTITIES; VOID CONTRACTS.
6-21 (a) A governmental entity may not execute a contract for an agency
6-22 or political subdivision of the state or issue a building or other
6-23 permit if the contract or permit involves the services of a
6-24 contractor who is not licensed under this Act. Before the contract
6-25 may be executed or the permit issued, the contractor must provide
6-26 proof to the governmental entity that the person is licensed under
6-27 this Act.
7-1 (b) A governmental entity shall report to the department the
7-2 name of any contractor who offers to enter into a contract or
7-3 applies for a permit in violation of this Act.
7-4 (c) A contract issued or awarded in violation of this Act is
7-5 void.
7-6 SECTION 12. OFFENSE; ADMINISTRATIVE PENALTY. (a) A person
7-7 commits an offense if the person knowingly or intentionally acts as
7-8 a contractor in violation of this Act. An offense under this
7-9 subsection is a Class B misdemeanor.
7-10 (b) A person who violates this Act or a rule adopted under
7-11 this Act is subject to an administrative penalty assessed by the
7-12 commission as provided by Section 17, Article 9100, Revised
7-13 Statutes.
7-14 SECTION 13. TRANSITION. (a) In making the initial
7-15 appointments to the Contractor Licensing Advisory Board, the
7-16 commissioner shall designate three members for terms expiring on
7-17 February 1, 2001, and three members for terms expiring on February
7-18 1, 2002.
7-19 (b) The commissioner shall issue a license under this Act to
7-20 an applicant who presents evidence satisfactory to the advisory
7-21 board and the commissioner that the applicant has acted as a
7-22 contractor for not less than three years preceding the effective
7-23 date of this Act. An applicant under this subsection who pays the
7-24 required license fee is entitled to a license without satisfying
7-25 the other requirements for issuance of a license under this Act.
7-26 This subsection expires September 1, 2000.
7-27 SECTION 14. EFFECTIVE DATE. (a) Except as provided by
8-1 Subsection (b) of this section, this Act takes effect September 1,
8-2 1999.
8-3 (b) Sections 2, 11, and 12 of this Act take effect March 1,
8-4 2000.
8-5 SECTION 15. EMERGENCY. The importance of this legislation
8-6 and the crowded condition of the calendars in both houses create an
8-7 emergency and an imperative public necessity that the
8-8 constitutional rule requiring bills to be read on three several
8-9 days in each house be suspended, and this rule is hereby suspended.