C.S.H.B. 329 78(R)    BILL ANALYSIS

C.S.H.B. 329
By: Naishtat
Licensing & Administrative Procedures
Committee Report (Substituted)


Currently, the State of Texas does not have the ability to regulate mold
assessors or remediators.  There are laws regulating most occupations that
perform health-related services, such as pest control contractors, water
well drillers, and industrial hygienists.  We also have laws that require
licensure and training for professionals who remove lead-based paint and
Dozens of complaints have been made to the Texas Department of Health
Toxic Substances Division and to my office concerning unscrupulous
companies which hold themselves out to be experts with little or no
training.  They often identify what they believe is dangerous mold and
recommend expensive renovations.  We have learned of mold companies that
perform the assessment and than the remediation and then rent the
homeowners an apartment while the removal takes place - blatant conflicts
of interest.   These practices result in increased costs to homeowners,
schools and other public buildings, and to insurance companies. A Dallas
code-compliance investigator is reported as saying, "Until somebody comes
in and buckles them down, it's a free ride.  And you're not doing anything
illegal yet.  You're not breaking the law yet, because there is no law." 

CSHB 329 will require mold assessors and remediators to be licensed
through a program implemented by the Texas Board of Health, eliminate
conflicts of interest, and provide for a statewide education and outreach
program to inform citizens about how to recognize, prevent and mitigate
mold problems, protect homeowners from abuse, and provide information
about the health effects of mold growth. The substitute will also prohibit
certain underwriting or rating decisions based on previous water or mold


It is the committee's opinion that rulemaking authority is expressly
granted to the Texas Board of Health in SECTION 1 (Sections 1958.053,
1958.054, 1958.056(b), 1958.101(b), 1958.103, 1958.105, 1958.106, and
1958.151(d), Occupations Code) and to the commissioner of insurance in
SECTION 2 (Article 21.21-11. Sec. 4, Insurance Code) of this bill.   


SECTION 1 of CSHB 329 amends Subtitle B, Title 12, Occupations Code, by
adding Chapter 1958, as follows: Chapter 1958 Mold Assessors and
Remediators; Subchapter A. General Provisions 
Section 1958.001 - defines terms used in the bill including "mold," "mold
assessment," and "mold remediation." 

Section 1958.002 SCOPE OF AUTHORITY. Defines the Department of Health's
scope of authority.  The chapter applies only to the regulation of
mold-related activities that affect indoor air quality.  The chapter does
not apply to routine cleanings when not performed for mold remediation;
when the diagnosis, repair, or replacement of plumbing, heating,
ventilation, air conditioning, or electrical systems and appliances;
commercial or residential real estate inspections; and the incidental
discovery or emergency containment of potential mold contamination during
the conduct or performance of services listed in this subsection. Also if
a pest control inspection conducted by a person regulated under Chapter

Sections 1958.003-1958.050 are reserved for expansion

 Subchapter B, outlines Powers and Duties in Section 1958.051 - GENERAL
general powers and duties of the department will be to protect the public
from the adverse health effects of mold. 

Section 1958.052 - EDUCATION PROGRAM - (a) requires the Department of
Health to develop and conduct an education and outreach program to
disseminate information to the public about molds.  (b) allows the
department to contract with other governmental entities or other persons
to provide the program. 

Section 1958.053 - GENERAL RULEMAKING AUTHORITY - gives the Board of
Health rule making authority to administer the chapter. 

PRACTICES - directs the board to establish minimum standards for
conducting mold assessment and remediation 

Section 1958.055 - FEES - allows the department to establish reasonable
fees to administer the licensure program to recover the cost of
administering the program. 

Section 1958.056 - INSPECTIONS - (a) requires that the department conduct
compliance inspections and (b) requires the board to adopt rules for
compliance inspections. 

Section 1958.057 - COMPLAINTS - requires the department to investigate
complaints regarding mold-related activities. 

Sections 1958.058-1958.100 are reserved for expansion.

Subchapter C outlines license requirements beginning in Section 1958.101 -
LICENSE REQUIRED; RULES (a) prohibits a person from engaging in mold
assessment of mold remediation unless the person holds a license. (b)
requires the board to adopt rules regarding the scope of mold-related work
and license renewals. 

Section 1958.102 - EXEMPTIONS - provides for exemptions from licensure (a)
a property owner, tenant, managing agent and employees thereof that
perform mold assessments or remediation on their own property without
compensation (b)b an employee of a licensed holder who perform mold
assessments or remediation while supervised by a licensed holder. 

Section 1958.103 - RULES REGARDING LICENSE APPLICATION - requires the
board to adopt rules regarding license applications which establish
minimum requirements, type, term, qualifications, renewal and liability

Section 1958.104 - EXAMINATION - authorizes the department to require a
competency examination to qualify for the license. 

Section 1958.105 - CONTINUING EDUCATION - (a) requires the board to
develop rules concerning continuing education; (b) authorizes the board to
establish rules for continuing education providers including requirements
for accreditation,  curriculum and training, and qualifications. 

Section1958.106 - RECIPROCITY - requires the board to adopt rules to
provide for reciprocity with states that have similar licensing programs. 

Sections 1958.107-1958.150 are reserved for expansion.

the license holder to notify the department not later than the fifth day
before the date on which a license holder starts mold remediation; (b)
requires the license holder to provide a certificate of mold remediation
to the property owner and the department not later than the 10th day after
the remediation is completed and sets criteria for certificate; c) verbal
notice is allowed under a  designation of an emergency where a delay in
service would increase mold contamination; (d) requires the board to adopt
rules (1) describing the information that must be provided in the notice,
certificate and (2) authorizing verbal notification in an emergency; (e)
provides that when a school or other public building has been issued a
certificate of remediation  and the owner or persons authorized by such
entity to determine whether the building should be reoccupied shall not be
held civilly liable  for damages. 

Section 1958.152 - CONFLICT OF INTEREST -(a) prohibits a license holder
from performing both mold assessment and remediation at the same property,
(b) prohibits a person from owning an interest in entities that perform
assessment and remediation services on the same project. 

Section 1958.153 - MOLD REMEDIATION IN SMALL AREAS - (a) this section
applies if the mold contamination affects a total area of 10 square feet
or less; (b) requires remediation be done (1) by following the United
States Environmental Protection Agency (EPA) publication titled, "Mold
Remediation in Schools and Commercial Buildings" set forth as of March 1,
2003; or (2) using the EPA's guidelines adopted by the board; (c)
remediation performed under this section does not require notice under
Section 1958.151(a). 

mandates record keeping provision for mold remediators. 

Sections 1958.155-1958.200 are reserved for expansion.

Section 1958.201 - DISCIPLINARY ACTION - sets out disciplinary action for
violation of rules. Requires the department to (1) revoke, suspend or
refuse to renew the license; (2) impose an administrative penalty; (3)
bring action to collect a civil penalty; or (4) reprimand the person. 

Sections 1958.202-1958.250 are reserved for expansion.

Section 1958.251 - IMPOSITION OF ADMINISTRATIVE PENALTIES -authorizes the
commissioner to impose an administrative penalty on a person who violates
this chapter or a rule adopted or order issued under this chapter. 

Section 1958.252 - AMOUNT OF PENALTY - (a) prohibits the amounts of
from exceeding $5,000 a day for each violation; each day may be considered
a separate violation; (b) requires the commissioner to consider the
following to determine the amount of the penalty (1) whether the violation
was committed knowingly, intentionally, or fraudulently; (2) the
seriousness of the violation,  (3) hazards created to the health and
safety of the public; (4) history of previous violations; and (5) any
other matter that justice may require. 

Section 1958.253 - EXCEPTION TO ADMINISTRATIVE PENALTY - (a) authorizes
the commissioner not to impose a penalty if the person provides conclusive
evidence that the violations have been corrected and all actual damages
paid, not later than the 10th day after the date of written notice of a
violation; (b) this section does not apply to a violation alleged under
Section 1598.101 or 1958.152. 

Section 1958.254. NOTICE; OPPORTUNITY FOR HEARING; ORDER - (a) authorizes
the commissioner to impose a penalty only after the person charged is
given a written notice and the opportunity for a hearing; (b) the
substitute provides that written notice state the facts that constitute
the rule or law on which the violation is based; (c) If a hearing is held,
requires the commissioner to make findings of fact and issue a written
decision as to (1) occurrence of the violation, (2) the amount of any
penalty that is warranted; (d) if the person charged does not exercise the
opportunity for a hearing, the commissioner having  determined that a
violation occurred and the amount of penalty that is warranted, is
authorized to impose a penalty and order the person to pay; (e) the
commissioner is required to inform the person charged of the amount of any
penalty, not later than the 30th days after the date an order is issued;
(f) authorizes the commissioner to consolidate a hearing with another

later than  within 30 days after the decision is final, the person is
required to: (1) pay the penalty or (2) file a petition for judicial
review contesting the fact of the violation, the amount of the penalty or
both; (b) within the 30-day period, the person is authorized to stay the
enforcement of the penalty by (1) paying the penalty for placement in an
escrow account or (2) give the commissioner a bond that  is for the amount
of the penalty and is effective until judicial review of the decision or

Section 1958.256 - COLLECTION OF PENALTY - authorizes the  attorney
general to bring a civil action to recover administrative  penalty at the
request of the commissioner. 

Section 1958.257 - JUDICIAL REVIEW - provides for judicial review of a
decision or order to be initiated by filing a petition in Travis County
district court and is under the substantial evidence rule in the
Government Code. 

requires the commissioner to , if after judicial review the penalty is
reduced or is not upheld by the court, (1) remit the appropriate amount
plus accrued interest not later than the 30th day after the date of the
determination;  (2) execute a release of the bond. 

Sections 1958.259-1958.300 are reserved for expansion.

Section 1958.301 - CIVIL PENALTY - (a) a person who violates this chapter
or a rule is liable for a civil penalty in an amount not to exceed $2,000
for the first violation or $10,000 for a second or later violation; (b)
authorizes the commissioner to request the attorney general, or the
district, county or city attorney having jurisdiction to bring an action
to collect a penalty. 

Section 1958.302 - INJUNCTIVE RELIEF - authorizes the commissioner to
request the attorney general or the district, county or city attorney
having jurisdiction to bring an action in Travis County district court for
a restraining order, injunction or other relief the court determines is
appropriate if it appears to the department that a person is violating or
has violated this chapter or a rule adopted under this chapter. 

Art. 21.21-11- Prohibits certain underwriting or rating decisions based on
previous water or mold claim. Requires the commissioner on insurance to
adopt rules to implement this article.  


SECTION 3 of this substitute requires the Texas Board of Heath to adopt
rules required by Chapter 1958, Occupations Code, as added by this Act, by
April 1, 2004. 

SECTION 4 of this substitute states that (a) except as provided by
Subsection (b) of this section, this Act takes effect September 1, 2003.
(b) Section 1958.101(a) Occupations Code, and Subchapters D, E, F, and G,
Chapter 1958, Occupations Code, added by this Act,  take effect July 1,


SECTION 1.  Section 1958.001 clarifies the definitions of "mold
assessment" and "mold remediation."  Section 1958.002 adds language to
assure that related service industries that are in a position to discover
potential mold contamination (but do not perform mold related activities)
are not covered by the Act.  New language also excludes incidental
discovery, reporting, and emergency containment by such service sectors
when not performed to deal with mold. 

Section 1958.101 adds language regarding the issuance of licenses covering
employees of mold assessment companies or mold remediation companies as
specified by board rule.  Section 1958.102 exempts from licensure a
property owner, tenant, managing agent, and employees thereof that perform
mold assessment or remediation on their own property without compensation.
Section 1958.151 (a) reduces advance notice time to 5 days. Advance notice
is not required for mold affecting a total of 10 square feet or less or
mold services performed in  emergency water situations. Emergency services
require notice on the next business day. (b) requires notice to department
upon completion and a certificate from assessor certifying mold is
remediated according to protocol established for the project. (d) the
department shall determine contents of remediation certificate. (e) adds
language providing that when a school or other public building has been
issued a certificate of remediation and the owner or persons authorized by
such entity determine whether the building should be reoccupied shall not
be liable in a civil suit for damages relating to the decision. 

Section 1958.152 changes "property" to the "same project" and adds that a
person may not own an interest in both the entity which performs
assessment services and an entity which performs remediation services on
the same project.  Section 1958.154 provides for mold remediation
licensing and responsibilities requiring that a file on the remediation be
kept by the remediator for a minimum of three years after completion of
the project, make the file available for inspection by the department or
law enforcement entity.  The file must contain materials the department
determines, photographic evidence of the remediation site before and after
the remediation, the written contract, and all invoices.  The remediation
company or contractor must provide the owner of the building with copies
of all photographic evidence required within one week of completion of the

Section 1958.252 stipulates that an administrative penalty may not exceed
$5,000 for each violation, except each day a violation occurs for acting
without a license or violating conflicts of interest is a separate
violation. (b) The commissioner shall also consider knowledge, intent, or
fraud leading to a violation. Section 1958.253 (b) adds a written notice
requirement from the department regarding a potential violation.
Department may summarily dispose of a violation if cured and any damages
are paid by licensee to satisfaction of the department before the matter
goes to a hearing. Written notice and opportunity to cure are not
available for actions without a license or violation of conflicts of
interest rules. 

SECTION 2. Subchapter B, Chapter 21, Insurance Code,  is amended by adding
Article 21.21-11 prohibiting certain underwriting or rating decisions
based on previous water or mold claims. Section 1 defines "insurer,"
"mold," "mold remediation" and "residential property insurance." Section 2
applies the article to each insurer that writes residential property
insurance in this state. Sec. 3 prohibits an insurer from making an
underwriting or rating decision regarding a residential property insurance
policy based in whole or part on whether the applicant has made a previous
claim for damage caused by water or mold, mold remediation has been
performed on the claim, a certificate of mold remediation established
under 1958 has been issued to the property owner, and the property was
inspected by an independent assessor or adjustor that the property does
not contain evidence of mold damage.  Sec. 4 gives the Commissioner rule
making power and provides a penalty under Article 21.21, Insurance Code. 

SECTION 3 was SECTION 2 of the original.

SECTION 4 was SECTION 3 of the original.