16 TAC §§65.20, 65.50, 65.60
The Texas Department of Licensing and Regulation ("Department")
adopts amendments to 16 Texas Administrative Code §§65.20, 65.50,
and 65.60, regarding authorizing, nontraditional inspection agencies, and
inspectors employed by such agencies, to perform boiler inspections for the
boiler program as published in the June 10, 2005, issue of the
Texas Register
(30 TexReg 3394). The amendments are adopted without
changes and will not be republished.
These amendments would allow non-insurers to become authorized inspection
agencies, as recommended by the Board of Boiler Rules. The Department believes
that requiring a private entity that performs boiler inspections to be an
insurer of the boiler is no longer necessary and that the amended rules would
continue to promote the safety of boilers. These rules would open up the private
market for boiler inspection services to additional qualified entities.
Current rules require that boiler inspections in Texas must be performed
either by the insurance company that insures the boiler, or by a Department
inspector in the case of an uninsured boiler. No other entities are permitted
to perform boiler inspections.
The apparent rationale for the requirement has been that an insurer of
the boiler has a vested financial interest in the boiler, and so the inspection
is being performed by a person with a financial incentive to perform a thorough
inspection. However, there is no requirement that a boiler be insured. Nor
is there any requirement that an inspection agency insuring the boiler have
a minimum dollar amount of liability. In practice, therefore, the entity performing
the inspection may have little financial interest in the boiler.
The National Board of Boiler and Pressure Vessel Inspectors (NBBI), which
is a private association that promotes national codes and standards for boiler
inspections and accredits authorized inspection agencies, has revised its
standards to allow non-insurers to become authorized inspection agencies.
In light of these changes to the NBBI standards, the Department has reconsidered
the prohibition on non-insurers performing boiler inspections. The Department
has concluded that safety of boilers would not be compromised by allowing
these nontraditional inspection agencies to perform inspections. Under the
amendments, nontraditional inspection agencies would have to meet the same
qualifications and be subject to the same standards that apply to traditional,
insurer inspection agencies.
Chapter 755, Health and Safety Code does not expressly require that authorized
inspection agencies be insurers. Therefore, the Commission has the discretion
to amend its rules to allow non-insurers to become authorized inspection agencies.
The Board of Boiler Rules, which is an advisory body to the Commission, has
recommended the substance of the amendments. The Board based its recommendation
on the work of a task force comprising members of the boiler industry, including
representatives of the insurance industry, owner/users, manufacturers of boilers,
and Department inspectors. The task force concluded that non-insurers should
be allowed to become authorized inspection agencies and recommended the substance
of the amendments.
The amendments to §65.20 require that a boiler be inspected by the
agency that has accepted responsibility for the inspection, rather than requiring
inspection by the agency "where the boiler is insured." All other boilers
would be inspected by the Department. The amended language of §65.50
applies reporting requirements to non-insurer inspection agencies and consolidates
language related to insurance risks. The amendments to §65.60 remove
references to insurance companies in the description of the procedure for
becoming a commissioned inspector.
The Department drafted and distributed the proposed amendments to persons
internal and external to the agency in addition to publishing it in the Texas Register
. The proposal was published in the
June 10, 2005, issue of the
Texas Register
and
the comment period closed on July 10, 2005. No comments were received regarding
the proposed amendments.
The amendments are adopted under Texas Health and Safety Code,
Chapter 755 and Texas Occupations Code, Chapter 51, which authorizes the Commission
to adopt rules as necessary to implement this chapter and any other law establishing
a program regulated by the Department.
The statutory provisions affected by the adoption are those set forth in
Texas Health and Safety Code, Chapter 755 and Texas Occupations Code, Chapter
51. No other statutes, articles, or codes are affected by the adoption.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on August 12, 2005.
TRD-200503375
William H. Kuntz, Jr.
Executive Director
Texas Department of Licensing and Regulation
Effective date: September 1, 2005
Proposal publication date: June 10, 2005
For further information, please call: (512) 463-7348