TITLE economic-regulation

Part I. Railroad Commission of Texas

Chapter 20. Administration

Subchapter C. Gifts to the Commission

16 TAC §20.201

The Railroad Commission proposes new §20.201, concerning gifts to the commission. Under Texas Civil Statutes, Article 6447i, the commission may apply for, request, solicit, contract for, receive, accept, and administer gifts, grants, and donations of money or other assistance from any source to carry out any commission purpose or power authorized by law. Texas Natural Resources Code, §113.243(e), permits the commission to apply for, request, solicit, contract for, receive, and accept gifts, grants, and other assistance from any source for the purposes of Subchapter I of Chapter 113. Texas Government Code, §2255.001, requires a state agency that is authorized by statute to accept money from a private donor to adopt rules governing the relationship between the donor and the agency and its employees. Texas Government Code, §572.051, provides guidance to state officials and employees who may be accepting gifts on behalf of their agencies. Finally, Texas Government Code, Chapter 575, requires an agency to accept a gift by majority vote in an open meeting.

Proposed new §20.201 incorporates these statutory requirements, limitations, and guidelines in a general manner by establishing the process for the commission's evaluation and acceptance of a gift within the purview of the executive director, who would be responsible for ensuring that the donor of a potential gift meets all the statutory requirements and that the potential gift would assist the commission in carrying out an authorized purpose. Under proposed new §20.201, an entity may make a gift to the commission by first filing with the executive director a written notice of intent to make a gift. The notice must include the type of gift (e.g., equipment, money, expert assistance, etc.), the date the gift would be made, a statement as to how the gift would assist the commission in carrying out its duties, an estimate of the value of the gift, and a statement of the donor's party status in contested cases pending before the commission. The commission has developed a form (Notice of Gift to Railroad Commission of Texas Pursuant to 16 TAC 20.201) which donors may use, but which is not required.

Upon receiving a notice of intent to make a gift, the executive director will notify the appropriate division director, who will respond with a written recommendation whether the commission should accept the potential donation, and the Office of General Counsel, which will furnish a report regarding the donor's party status in any contested cases pending before the commission. Donors are required to notify the executive director immediately if there is a change in the donor's party status after filing a notice of intent to make a gift but prior to acceptance of the gift.

After receiving the staff recommendation and party status report, the executive director will process the notice of intent to make a gift depending on whether the estimated value is either less than $500 or $500 or more. For proposed gifts with an estimated value of less than $500, the executive director will make a determination whether to accept the gift or not, and will notify the donor and the appropriate division director in writing. If the estimated value of a proposed gift is $500 or more, the executive director will give notice that the commission will consider the matter at an open meeting and will forward copies of the notice of intent to make a gift and the staff's information and recommendation to the commissioners. The consideration of the potential gift will be in open meeting, and any vote regarding the gift will be commemorated in a signed order of the commission. The commission staff is directed to take all appropriate steps to receive gifts and to account for them properly in the records of the commission.

Kathy Pyka, director, Finance and Administration Division, has determined that for each year of the first five years that the rule as proposed will be in effect, there may be fiscal implications for state government. The commission could benefit from donations of money or other assistance, but it is not possible to estimate whether such gifts will be made or the value of any such gifts. Any additional financial reporting requirements will be handled by current staff within existing accounting programs. There will be no fiscal implications for local government.

Ms. Pyka has also determined that the public benefit anticipated as a result of enforcing or administering the rule will be the opportunity for the commission to receive gifts of money or other assistance which will aid the commission in carrying out its multiple duties and which will be reviewed under guidelines that will ensure public confidence in the process. The terms and conditions set out in proposed subsection (b) make it clear that the commission will not accept gifts that might reasonably tend to influence a commissioner or employee in the discharge of official duties; that a commissioner or employee knows or should know is being offered with the intent to influence a commissioner's or employee's official conduct; that could reasonably be expected to impair a commissioner's or employee's independent judgment in the performance of the commissioner's or employee's official duties; or that is being offered for having exercised the commission's or an employee's official powers or performed the commission's or employee's official duties in favor of another.

The cost of compliance for individuals and small businesses is limited to the completion and filing of a notice of the individual's or small business's intent to make a gift to the commission and including a description and an estimate of the value of the intended gift; the donor may minimize this effort by using the RRC gift form. Such gift-giving is voluntary; therefore, no entity will be compelled to participate in this process. Because the commission is prohibited from accepting a gift from a party to a contested case from inception of the case to the 30th day after a commission order has become final, a person wishing to make a gift to the commission may have to schedule business at the commission in such a way as to enable the commission to comply with the time limits for accepting a gift. There are no scheduling limits applicable to the commission's acceptance of gifts from entities that are not parties to contested cases pending at the commission.

Comments may be submitted to Mary Ross McDonald, Deputy General Counsel, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas, 78711-2967. The commission will accept comments for 30 days following publication of this proposal in the Texas Register .

The commission proposes new §20.201 under Texas Civil Statutes, Article 6447i, which authorizes the commission to apply for, request, solicit, contract for, receive, accept, and administer gifts, grants, and donations of money or other assistance from any source to carry out any commission purpose or power authorized by law; Texas Natural Resources Code, §113.243(e), which permits the commission to apply for, request, solicit, contract for, receive, and accept gifts, grants, and other assistance from any source for the purposes of Subchapter I of Chapter 113; Texas Government Code, §572.051, which sets forth guidelines for acceptance of gifts by state agency officials and employees; Texas Government Code, §2255.001, which requires a state agency that is authorized by statute to accept money from a private donor to adopt rules governing the relationship between the donor and the agency and its employees; and Texas Government Code, Chapter 575, which requires an agency to accept a gift by majority vote in an open meeting.

Texas Civil Statutes, Article 6447i; Texas Natural Resources Code, §113.243(e); Texas Government Code, §2255.001; and Texas Government Code, §572.051 and Chapter 575, are affected by proposed new §20.201.

Issued in Austin, Texas, on March 23, 1999.

§20.201.Gifts to the Commission.

(a)

Definitions. The following words and terms when used in this section shall have the following meanings, unless the context clearly indicates otherwise.

(1)

Commission--The Railroad Commission of Texas.

(2)

Commissioner--A member of the commission.

(3)

Contested case--A proceeding, including a ratemaking or licensing proceeding, in which the legal rights, duties or privileges of a party are to be determined by the commission after an opportunity for adjudicative hearing. For purposes of this section, the term does not include matters that are handled administratively without a hearing.

(4)

Decision in a contested case--That final order of the commission that disposes of all issues in a contested case.

(5)

Employee--A full-time or part-time employee of the commission.

(6)

Gift--A donation of money, property, or other assistance conveyed to the commission and over which the commission has complete title, control, or discretion. The term does not include items that are temporarily in the commission's possession for testing or research purposes; a person's participation as a speaker or presenter in a commission-sponsored conference or seminar; or payments made pursuant to Texas Natural Resources Code, §89.084.

(7)

Inception of the case--The date an application, complaint, petition, statement of intent, or other request for commission action, ruling, or relief is determined to require a hearing or the date a matter is referred to the Office of General Counsel, whichever is earlier.

(8)

Money--Cash or negotiable instruments.

(9)

Other assistance--The gift of personnel or expertise in a particular professional or technical area.

(10)

Party--A person or a state agency named or admitted as a party to a contested case pending before the commission.

(11)

Person--An individual; a partnership, limited partnership, joint venture, cooperative, corporation, association, or any other business organization or entity; a trust; an estate; a public or private institution of higher education; or a state agency, county, municipality, council of government, school district or other governmental subdivision.

(12)

Property--Real property or personal property, both tangible and intangible.

(b)

Terms and conditions. The commission may apply for, request, solicit, contract for, receive, accept, and administer gifts, grants, and donations of money or other assistance from any source to carry out any commission purpose or power authorized by law except as follows:

(1)

The commission shall not accept a gift from a party in a contested case during the period from the inception of the contested case until the 30th day after the date the decision in a contested case becomes final under Texas Government Code, §2001.144.

(2)

The commission shall not solicit or accept any gift:

(A)

that might reasonably tend to influence a commissioner or commission employee in the discharge of official duties, or that the commissioner or commission employee knows or should know is being offered with the intent to influence the commissioner's or commission employee's official conduct;

(B)

that could reasonably be expected to impair a commissioner's or commission employee's independence of judgment in the performance of the commissioner's or commission employee's official duties; or

(C)

for having exercised the commission's or a commission employee's official powers or performed the commission's or commission employee's official duties in favor of another.

(c)

Notice of intent to make a gift. A person wishing to make a gift to the commission shall file with the executive director a completed RRC Gift Form, Notice of Gift to Railroad Commission of Texas, or a letter including the following information:

Figure: 16 TAC 20.201(c)

(1)

the complete legal name, address, and telephone number of the donor;

(2)

a description of the intended gift;

(3)

the date on which the gift would be made;

(4)

a statement describing the manner in which the intended gift would assist the commission in carrying out its duties;

(5)

an estimate of the value of the gift; and

(6)

a statement regarding the donor's party status in any contested case pending before the commission:

(A)

If the donor is a party in a contested case pending before the commission, the notice shall include the docket number, style, and filing date of every contested case in which the donor is a party.

(B)

If the donor is not a party in any contested case pending before the commission, the notice shall include either the docket number, style, and date the order was signed in the most recent contested case in which the donor was a party or a statement that the donor has never been a party to a contested case before the commission.

(7)

The executive director shall forward the form or letter to the appropriate division director for review.

(d)

Division director review. The division director to whom the executive director has forwarded a copy of the form or letter shall review the form or letter within 10 business days. The director shall indicate on the form whether:

(1)

the intended gift would assist the commission in carrying out its duties and, if so, how;

(2)

the intended gift would provide a broad or general benefit to the commission in carrying out its purposes and powers that would exceed any particular benefit that the donor might realize as a result of making the gift;

(3)

the division director agrees with the estimated value of the gift and, if not, the division director's estimate of the value of the gift and the reason for the difference of opinion; and

(4)

the commission should accept the intended gift and, if not, the reasons the division director recommends against accepting the intended gift.

(5)

The division director shall forward the form or letter to the Office of General Counsel for review.

(e)

Office of General Counsel review. Upon receipt of a form or letter from a division director, the Office of General Counsel shall review the form or letter within 10 business days regarding the intended donor's status as a party in any proceeding pending before the commission.

(1)

The review shall indicate whether the date on which the donor intends to make the gift to the commission meets the requirements of subsection (b)(1) of this section and if not, shall state a date or dates which would meet the requirements of subsection (b)(1) of this section.

(2)

The Office of General Counsel shall forward the reviewed form or letter to the executive director for final review.

(f)

Executive director review. Upon receipt of a form or letter reviewed by a division director and the Office of General Counsel, the executive director shall review the form or letter within 10 business days to ensure that all information required this section is included.

(1)

The executive director may request that the person filing the notice of intent to make a gift supply additional information regarding the donor, the intended gift, its estimated value, its usefulness to the commission, the donor's party status, or any other information that the executive director deems relevant to the intended gift.

(2)

If the executive director finds all information on the form or letter to be satisfactory and the value of the gift is less than $500, the executive director shall approve the gift by signing and dating the RRC Gift Form and shall forward copies of the form to the donor, the appropriate division director, the Finance and Administration Division, and the Office of General Counsel.

(3)

If the executive director finds all information on the form or letter to be satisfactory and the value of the gift is $500 or more, the executive director shall:

(A)

give notice that the commission will consider the matter at an open meeting; and

(B)

request that the Office of General Counsel draft an order consistent with the staff recommendation regarding acceptance of the intended gift.

(4)

In an open meeting, the commission shall consider the intended gift and shall vote on whether to accept the gift. The commission shall commemorate the vote by signing an order.

(g)

Upon a commission order or an executive director decision accepting a gift, the executive director shall ensure that the commission staff takes all appropriate steps to receive the gift and to account for it properly in the records of the commission.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State, on March 23, 1999.

TRD-9901733

Mary Ross McDonald

Deputy General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: May 9, 1999

For further information, please call: (512) 463-7008


Part IV. Texas Department of Licensing and Regulation

Chapter 75. Air Conditioning and Refrigeration Contractor License Law

Texas Department of Licensing and Regulation proposes the repeal of §§75.1, 75.10, 75.20-75.26, 75.30, 75.40, 75.60, 75.65, 75.70, 75.80, 75.90. 75.91, 75.100 and new §§75.1, 75.10, 75.20-75.26, 75.30, 75.40, 75.65, 75.70, 75.80, 75.90 and 75.100 concerning air conditioning and refrigeration contractors. The proposed new rules replace existing rules that are simultaneously proposed for repeal. The new rules rearrange, consolidate, and revise existing language for clarification, along with deleting several items already stated in the Department's enabling legislation, Texas Revised Civil Statutes Annotated, Article 9100 (Vernon 1991).

The justification is that the rules were reviewed to ensure that the language was clear, that statutory provisions were not being needlessly restated, that reasons exist for the continued existence of all rules, and to address newly perceived problems.

In §75.10. Definitions, new definitions were added for "Full time employee" to make it clear how much time a full time employee must devote to the company to which his license is assigned; for "Licensee" to clarify to whom the rules apply; and for "Repair work" to clarify the definition in the statute. All other changes to this section are wording changes for clarity that do not change the meaning of the definition.

In §75.20. Licensing Requirements-Application and Experience Requirements, a new provision is being added to serve notice that obtaining a license by fraud or misrepresentation is grounds for sanctions or penalties. The number of classroom hours equivalent to a semester hour were changed from 45 to 40, as this is more accurate. All other changes were for clarification.

In §75.21. Licensing Requirements-Examinations, the time period within which an applicant must complete an exam that was either cancelled or rescheduled has been deleted, so that the only time period the applicant must meet is the basic two year window to pass the exam from the date of notice of eligibility. This will simplify handling for the Department as well as for applicants. Also, the description of the type of information to be provided to applicants as an analysis of failed exams has been deleted, as type of analysis is relatively standard in licensing examination situations. The subparagraph describing the basis for reciprocal agreements was removed because it is not needed, since all such agreements are contracts negotiated between the agency in each state with jurisdiction. All other changes in this section are for clarification.

In §75.22. License Requirements-General, §75.70(r) has been moved to this section because it fits better with the subject matter. A new section has been added that prohibits altering a license or ID card to facilitate prosecution of such violations. A new section has been added that notifies licensees that they are responsible for mechanical integrity of their work regardless of any contracts with builders or home warranty companies, because many complaints are being filed by consumers who have been harmed by licensees who believed they were not responsible if their contract specified actions or omissions contrary to mechanical integrity. Other changes in this section are for clarity of language.

The changes in §75.23. Licensing Requirements-Temporary Licenses, are for simplification and clarification. The changes in §75.24. Licensing Requirements-Renewal, change the requirement that renewals must be received by the expiration date to a requirement that they be postmarked by the expiration date, which eliminates penalizing the licensee for slow or undelivered postal service. The requirement to send renewal requests at least thirty days before expiration in order to complete renewal of the license before expiration has been deleted, since there is no penalty for mailing a renewal less than 30 days before expiration other than being unable to legally perform air conditioning and refrigeration work until an expired license is renewed. Other changes in this section are for simplification.

The changes in §75.25. Licensing Requirements - Reissuance eliminate restatement of requirements stated elsewhere. §75.26. Certificates of Registration is amended by adding a statement that the Certificate of Registration does not authorize the holder to perform air conditioning and refrigeration work not covered by the appropriate exemption in the Act, so that it will be clear to all holders of Certificates of Registration that they cannot legally perform this work on the side on equipment not owned by their employer. The section is also amended by adding an exemption for purchasing requirements for use in equipment containing less than a half-ounce of refrigerant, because use of such small amounts is not considered to be within the intent of the Act. Other changes are for clarification.

§75.30. Exemptions has been restated for clarity, and an exemption has been added for persons who perform air conditioning contracting on unducted fireplace stores, as these stoves were not in existence when original exemptions were listed in the Act, and installations of unducted stoves do not affect the operation of air conditioning and heating systems covered by the Act.

§75.40 has been restated to eliminate a listing of the required items on a certificate of insurance, since the Department's form is required and the items are listed on the form. Other changes are for clarification.

§75.60. Responsibilities of the Department has been deleted because some of the subject matter is covered sufficiently in the statute and the rest is handled by forms and procedures. The changes in §75.65. Advisory Board, are for clarification and readability.

75.70. Responsibilities of the Licensee, has been amended by adding a provision that prohibits subcontracting design of a system to an unlicensed person, firm, or corporation, because design of the system commits the licensee to installing equipment that may not be appropriate for the space for which it is designed. Design of a system is the unassignable foundation for proper operation of a system, and allowing unlicensed subcontractors to design a system is contrary to the intent of the Act. The rule subsection in 75.70 requiring the licensee to register with municipalities in the form required by each municipality has been deleted because it is covered in the statute. The requirement in the subsection in 75.70 that contractors show their company name and license number on a sign at job sites that are not identified by a marked vehicle has been deleted because this is considered unnecessarily restrictive.

The subsection in 75.70 regarding advertising has been amended to exempt ads by manufacturers and distributors endorsing contractors in phone directories and to require that advertising in electronic media contain the license number. Manufacturer's and distributor's ads do not need to show the license number because they are primarily intended to advertise the manufacturer's products. Electronic media advertising is a new area that the Department believes should follow the same rules for public information on licensing as other media. All other changes in §75.70 are for clarification and simplification.

In §75.80. Fees, application fees are now not refundable because an application received requires a substantial amount of processing whether or not the person actually takes an examination. The fee for a lost, revised, or duplicate wallet card has been raised to $25, since a wallet card reprint requires that the license also be printed, and the time required to process is the same as for a lost or revised license. The fee for rescheduling an exam has been raised to $30 to more closely track actual costs to process the request. Other changes in this section are for clarification.

§75.90. Sanctions - Administrative Sanctions/Penalties has been restated for greater accuracy. §75.91. Sanctions - Revocations, Suspension, or Denial Because of a Criminal Conviction has been deleted because it restates provisions in other applicable law.

The rule in §75.100. Technical Requirements concerning requirements of The Texas Boiler Law, Health and Safety Code, Chapter 755, has been deleted because the Department believes the Boiler Law speaks for itself and the rule is not needed. The subsection of 75.100 relating to electrical connections has been restated for clarification.

The subsection of 75.100 relating to fuel gas piping that may be installed by a licensee under the Act has been amended to limit connection of such piping to existing shut-off valves because if a licensee changed out or removed a shut-off valve or tied into an opening rather than a valve, he would be required by most municipalities to pull a permit for plumbing work in order to have the gas system tested by the municipality, and most licensees do not have the requisite plumbing license.

The subsection of 75.100 relating to drain piping has been amended by adding a requirement that all such piping be installed in accordance with applicable plumbing and building codes, because licensees need to understand that preferences of a customer and manufacturer's recommendations do not excuse failure to follow codes. The changes to the subsection of 75.100 relating to duct cleaning are for the purpose of clarification.

Jimmy Martin, Manager, Consumer Protection Section, of the Texas Department of Licensing and Regulation, has determined that for the first five-year period these sections are in effect additional revenues for the state will be approximately $3,870 per year, which will offset rising costs of processing rescheduled exams.

Mr. Martin also has determined that for each year of the first five years these sections are in effect the public benefit anticipated as a result of enforcing the sections will be more consumer protection and a clearer understanding of requirements by the regulated industry.

The anticipated economic effect on small businesses and who are required to comply with these sections as proposed will be approximately the same as it presently is with no anticipated additional cost to small businesses nor to persons who may be required to comply with the sections as proposed.

Comments on the proposal may be submitted to Jimmy G. Martin, Manager, Consumer Protection Section, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711, facsimile (512) 475-2872, or by e-mail: jimmy.martin@license.state.tx.us. The deadline for comments is thirty days after publication in the Texas Register .

16 TAC §§75.1, 75.10, 75.20-75.26, 75.30, 75.40, 75.60, 75.65, 75.70, 75.80, 75.90. 75.91, 75.100

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Department of Licensing and Regulation or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The repeal is proposed under Texas Revised Civil Statutes Annotated, Article 8861 Vernon (1997) which authorizes the Executive Director of the Texas Department of Licensing and Regulation to promulgate and enforce a code of rules and take all action necessary to assure compliance with the intent and purpose of the Article.

The Articles affected by the repeal are Texas Revised Civil Statutes Annotated, Article 8861 (Vernon 1997) and Texas Revised Civil Statutes Annotated, Article 9100 (Vernon 1991).

§75.1.Authority.

§75.10.Definitions.

§75.20.Licensing Requirements-Applications.

§75.21.Licensing Requirements-Examinations.

§75.22.Licensing Requirements-General.

§75.23.Licensing Requirements-Temporary Licenses.

§75.24.Licensing Requirements-Renewal.

§75.25.Licensing Requirements-Reissuance.

§75.26.Certificates of Registration.

§75.30.Exemptions.

§75.40.Insurance Requirements.

§75.60.Responsibilities of the Department-Exams.

§75.65.Advisory Boards.

§75.70.Responsibilities of the Licensee.

§75.80.Fees.

§75.90.Sanctions-Administrative Sanctions/Penalties.

§75.91.Sanctions-Revocation, Suspension, or Denial Because of a Criminal Conviction.

§75.100.Technical Requirements.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State, on March 24, 1999.

TRD-9901769

Rachelle A. Martin

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: May 9, 1999

For further information, please call: (512) 463-7348


16 TAC §§75.1, 75.10, 75.20-75.26, 75.30, 75.40, 75.65, 75.70, 75.80, 75.90, 75.100

The new rules are proposed under Texas Revised Civil Statutes Annotated, Article 8861, (Vernon 1997) which authorizes the Texas Department of Licensing and Regulation to promulgate and enforce a code of rules and take all action necessary to assure compliance with the intent and purpose of the Article.

The Articles affected by the new rules are Texas Revised Civil Statutes Annotated, Article 8861 (Vernon 1997) and Texas Revised Civil Statutes Annotated, Article 9100 (Vernon 1991).

§75.1.Authority.

The sections in this chapter are authorized by the Air Conditioning and Refrigeration Contractor License Law, and the Texas Department of Licensing and Regulation, Texas Revised Civil Statutes Annotated Articles 8861 (the Act) and 9100.

§75.10.Definitions.

The following words and terms have the following meanings:

(1)

Advertising or Advertisement-Any commercial message which promotes the services of an air conditioning and refrigeration contractor. The terms do not include one line listings or signs which state only the business name.

(2)

Air conditioning and refrigeration subcontractor-A person or firm who contracts with a licensed air conditioning contractor for a portion of work requiring a license under the Act. The subcontractor contracts to perform a task according to his own methods, and is subject to the contractor's control only as to the end product or final result of his work.

(3)

Air conditioning or heating unit-A stand-alone system with its own controls that conditions the air for a specific space and does not require a connection to other equipment, piping, or ductwork in order to function.

(4)

Assumed name-As defined in the Business and Commerce Code, Title 4, Chapter 36, Subchapter A, Section 36.02.

(5)

Biomedical Remediation-The treatment of ducts, plenums, or other portions of air conditioning or heating systems to reduce or eliminate the presence of molds, mildews, or other contaminants.

(6)

Boiler-As defined in the Health and Safety Code, Title 9, Subtitle A, Chapter 755.Boilers.

(7)

Business affiliation-The business organization with which a licensee elects to affiliate.

(8)

Cheating-Attempting to obtain, obtaining, providing, or using answers to examination questions by deceit, fraud, dishonesty, or deception.

(9)

Contracting-Agreeing to perform work, either verbally or in writing, or performing work, either personally or through an employee or subcontractor.

(10)

Cryogenics-refrigeration that deals with producing temperatures ranging from:

(A)

-250 degrees F to Absolute Zero (-459.69 degrees F);

(B)

-156.6 degrees C to -273.16 degrees C;

(C)

116.5 K to 0 K; or

(D)

209.69 degrees F to 0 degrees R.

(11)

Direct personal supervision-Directing and verifying the design, installation, construction, maintenance, service, repair, alteration, or modification of a product or equipment for compliance with mechanical integrity.

(12)

Employee-An individual who performs tasks assigned to him by his employer. The employee is subject to the deduction of social security and federal income taxes from his pay. An employee may be full time, part time, or seasonal. Simultaneous employment with a temporary employment agency, a staff leasing agency, or other employer does not affect his status as an employee.

(13)

Employer-One who employs the services of others, pays their wages, deducts the required social security and federal income taxes from the employee's pay, and directs and controls the employee's performance.

(14)

Full time employee-an employee who is present on the job 40 hours a week, or at least 80% of the time the company is offering air conditioning and refrigeration contracting services to the public, whichever is less.

(15)

Licensee-an individual holding a license of the class and endorsement appropriate to the work performed under the Act and these rules.

(16)

Permanent office-Any business location at which contractual agreements to perform work requiring a license under the Act are arranged and where supervising control for those contracts originate. Temporary construction sites or a location at which employees of a licensee work under contract to provide service, maintenance and repair work for a large facility are not permanent offices.

(17)

Primary process medium-a refrigerant or other primary process fluid that is classified in the current ANSI/ASHRAE Standard 34 as Safety Group A1, A2, B1, or B2. Safety Groups A3 and B3 refrigerants are specifically excluded.

(18)

Proper installation-installing air conditioning or refrigeration equipment in accordance with:

(A)

applicable municipal ordinances and codes adopted by a municipality where the installation occurs;

(B)

current Uniform Mechanical Codes, Standard Mechanical and Standard Gas Codes, and International Mechanical Codes in areas where no code has been adopted;

(C)

the manufacturer's instructions; and

(D)

all requirements for safety and the proper performance of the function for which the equipment or product was designed.

(19)

Repair work-diagnosing and repairing problems with air conditioning, commercial refrigeration, or process cooling or heating equipment, and remedying or attempting to remedy the problem. Repair work does not mean simultaneous replacement of the condensing unit, furnace, evaporator coil, and unitary indoor equipment.

§75.20.Licensing Requirements - Application and Experience Requirements.

(a)

Examination fees must accompany the application. The application must be complete, meet all Department requirements, and be received by the Department not less than 45 days prior to an examination date.

(b)

An applicant who wishes to use credit for air conditioning and refrigeration courses to fulfill up to two years of the required 36 months of experience with the tools of the trade must furnish a copy of:

(1)

a transcript or diploma showing a degree in air conditioning engineering, refrigeration engineering, or mechanical engineering;

(2)

a transcript, certificate or diploma in a course emphasizing hands-on training with the tools of the trade; or

(3)

transcript of courses taken without earning a certificate or diploma emphasizing hands-on training with the tools of the trade. Transcripts must be from schools authorized or approved by the Texas Workforce Commission, the U.S. Department of Education, the Coordinating Board of the Texas College & University System, or other organizations recognized by the Department. Credit will be allowed at the rate of one month credit for every two months of completed training. Thirty semester hours are equivalent to six months credit of experience. Forty classroom hours are equivalent to one semester hour.

(c)

Obtaining a license by fraud or false representation is grounds for an administrative sanction and/or penalty.

§75.21.Licensing Requirements - Examinations.

(a)

A passing grade is 70%.

(b)

An applicant must pass an exam within two years of the date of the notice of eligibility to avoid reapplying.

(c)

An applicant who does not show up for a scheduled exam may reschedule an exam up to six months after the date of the exam, provided the applicant pays the re-exam fee.

(d)

An applicant who wishes to reschedule a written exam must send to the Department, a rescheduling fee and a written request to reschedule, which must be received no later than ten days before the examination.

(e)

An applicant may request a waiver of the reschedule fee one time for an emergency reschedule. The reason for the emergency reschedule must be submitted to the Department in writing no later than ten working days after the exam for which the applicant was scheduled. The Department will determine if the circumstances constitute an emergency.

(f)

An applicant may request individual arrangements for an exam, based on disability, in accordance with the Americans with Disabilities Act, and/or language translation needs.

(1)

The request must be in writing and received by the Department at least 45 days before the exam date.

(2)

Requests must specify the type of special arrangement needed and the basis for the request.

(3)

Proof of disability may be required.

(4)

Language translation requests must specify the language in with the examination is requested.

(5)

Language translation costs shall be paid by the applicant. Reciprocal agreements with other states to waive exam requirements must be pre-approved by the Department.

(g)

Cheating on an examination is grounds for an administrative sanction and/or penalty.

(h)

An applicant is not eligible to take the same exam more often than every 30 days.

(i)

An applicant who has passed an exam for a particular class and endorsement and has been licensed or is eligible for licensure in that class and endorsement, may not retake that examination.

(j)

Applicants have six months from the date of the exam results to complete the licensure process. If six months has elapsed, an applicant desiring licensure must begin the process anew.

§75.22.Licensing Requirements - General.

(a)

Unless licensed under the provisions of the Act, with a license of the class and endorsement appropriate for the work described or advertised, it is unlawful for any person, partnership, firm, or corporation to perform or offer to perform air conditioning and refrigeration contracting or to use a license number that is not assigned to that person, partnership, firm, or corporation.

(b)

All air conditioning and refrigeration contractor's licenses expire three years after the date issued, renewed, or reissued.

(c)

A license number that has been relinquished, revoked, or expired shall not be reassigned to any licensee.

(d)

Endorsement Codes are as follows: Environmental Air Conditioning-E; Commercial Refrigeration & Process Cooling and Heating-R; Combined Endorsements-C. License numbers shall have the following form: Title/Class/Number/Endorsement code-TACL/A/000000/C.

(e)

A holder of a Class B license may design, install, construct, maintain, service, repair, alter, or modify individual units of 25 tons or less of cooling capacity or 1.5 million Btu/h or less of heating capacity. In a building or a complex of buildings having more than one air conditioning or heating unit, the combined cooling capacity may exceed 25 tons and heating capacity may exceed 1.5 million Btu/h, as long as each complete individual unit does not exceed the capacities stated above.

(f)

Any contractor who has a Class B license with one or two endorsements may upgrade either endorsement by passing the Class A examination for that endorsement.

(g)

A contractor who wishes to have endorsements of different classes must have a separate license for each endorsement. The licenses will not have concurrent expiration dates unless both are issued on the same date.

(h)

A contractor may have only one endorsement per license when he has two licenses. Both licenses must have the same business affiliation and permanent and business addresses.

(i)

The insurance requirement for separate licenses can be met with a single policy with limits at least as high as those required for a Class A license. A waiver of insurance for one license automatically applies to both licenses.

(j)

Any violation of the law or the rules and regulations resulting in disciplinary action for one license may result in disciplinary action for the other license.

(k)

Unlicensed persons who operate as general contractors and subcontract work requiring a license under the Act may not bid or contract for a job that consists solely of work requiring a license under the Act unless the person or company has a bona fide employee whose license is assigned to the company. If a general contractor advertises that air conditioning, heating, or commercial refrigeration work is available as part of a job, the ad must state that air conditioning work will be performed by a licensed contractor.

(l)

Altering a license or ID card in any way is prohibited and is grounds for a sanction and/or penalty.

(m)

If a licensee contracts with a general contractor or a home warranty company to provide installation or service that requires a license under the Act, the licensee remains responsible for the mechanical integrity of that work.

§75.23.Licensing Requirements - Temporary Licenses.

(a)

A company owner or officer, whose only license holder is suddenly no longer available due to death, disability, or dissolution of a partnership or corporation, may request a temporary license. A temporary license is not available to:

(1)

a new unlicensed owner of a company who was not an owner or officer of the company before it was dissolved; or

(2)

an employee of a sole proprietorship if the licensed owner closes or sells the business.

(b)

The temporary license request must be made by an owner or partner who was affiliated with the firm at the time the license holder became unavailable. The person who will hold the temporary license must meet all eligibility requirements to take an examination for a license.

(c)

The request must:

(1)

be in writing;

(2)

state the reason for the request including the circumstances and legal organization of the company involved;

(3)

include a completed application with all applicable fees; and

(4)

include a new certificate of insurance covering the company and the temporary license holder.

(d)

A non-renewable temporary license may be granted for a period extending 30 days beyond the date of an examination, which must be taken no later than 90 days after the temporary license is granted. The temporary license period may not exceed six months.

(e)

A temporary license number assigned by the Department must be shown on company vehicles, and must be printed or stamped on invoices and proposals. The temporary license shall be numbered by the Department as follows: Title/Class/Number/Endorsement code/Temporary Designation.

(f)

The Executive Director may waive any provision under this section and issue a temporary license for just cause.

§75.24.Licensing Requirements - Renewal.

(a)

A license that is not renewed within 30 days after expiration and has been expired for a period of less than six months may be reissued upon meeting the conditions of a license renewal.

(b)

The request for renewal must be postmarked by the expiration date. Any request postmarked after the expiration date will be assessed a late fee.

(c)

A renewal request must contain:

(1)

the licensee's name, license number, permanent address and telephone number;

(2)

the business name, physical address and telephone number with which the licensee is affiliated;

(3)

all appropriate fees; and

(4)

evidence of the applicable insurance requirement if the current insurance expires less than 30 days after renewing.

§75.25.Licensing Requirements - Reissuance.

(a)

A license that has expired for a period of less than six months may be reissued upon meeting the conditions of a license renewal.

(b)

A license that has expired for a period of more than six months may not be reissued. The former license holder may obtain a new license in the same manner as a new applicant, including taking the applicable exam and payment of all required fees.

§75.26.Certificate of Registration.

(a)

Persons exempt under Article 8861, Sections 6(a)(2) and 6(a)(4) who purchase refrigerants and equipment containing refrigerants shall first request a Certificate of Registration on an application form provided by the Department. The Certificate of Registration fee shall accompany the application.

(b)

Persons who purchase refrigerants or equipment containing refrigerants shall, at the time of purchasing such items, provide to the seller a picture identification along with the Certificate of Registration.

(c)

The Certificate of Registration remains valid if the exempt person changes employment and continues to perform work that is exempt under the same section of the Act. Changes in employment and leaving or re-entering the exempt work category must be reported to the Department within 30 days of the change.

(d)

A Certificate of Registration is invalid if the exempt person ceases to be employed as defined under Section 6 (a)(2) or 6 (a)(4) of the Act.

(e)

A Certificate of Registration does not:

(1)

replace any other requirement for purchasing refrigerant products under the Federal Clean Air Act amendments of 1990 and federal administrative rules adopted under that section; nor

(2)

authorize the certificate holder to perform air conditioning and refrigeration work that is not covered by the appropriate exemption from licensing in the Act.

(f)

A flammable refrigerant or refrigerant substitute that contains a liquid petroleum-based product that has been listed as acceptable by the Environmental Protection Agency, may be sold and used in accordance with rules issued by the Environmental Protection Agency.

(g)

Equipment containing a half-ounce or less of refrigerant may be purchased without a license or a Certificate of Registration.

§75.30.Exemptions.

Licensure requirements under the Act and these Rules do not apply to:

(1)

persons who conduct air conditioning and refrigeration contracting, are employed by a regulated public utility facility and perform those services exclusively for the utility facility;

(2)

an individual who performs air conditioning and refrigeration maintenance work on equipment and property owned by him if he does not engage in the occupation of air conditioning and refrigeration contracting for the general public. This exemption applies only to the property owner and not to others who may attempt to assist the owner.

(3)

those who hold a valid Certificate of Authorization issued by the American Society of Mechanical Engineers or The National Board of Boiler and Pressure Vessel Inspectors that are:

(A)

appropriate for the scope of work to be performed, and

(B)

performed solely on boilers as defined in the Health and Safety Code, Title 9, Subtitle A, Chapter 755. Boiler; or

(4)

a person who performs air conditioning contracting on unducted fireplace stoves.

§75.40.Insurance Requirements.

(a)

Class A licensees shall maintain commercial general liability insurance at all times during a license period:

(1)

of at least $300,000 per occurrence (combined for property damage and bodily injury);

(2)

of at least $300,000 aggregate (total amount the policy will pay for property damage and bodily injury coverage);

(3)

of at least $300,000 aggregate for products and completed operations, and

(4)

with a deductible no higher than $1,000.

(b)

Class B licensees shall maintain commercial liability insurance at all times during a license period:

(1)

of at least $100,000 per occurrence (combined for property damage and bodily injury);

(2)

of at least $100,000 aggregate (total amount the policy will pay for property damage and bodily injury coverage);

(3)

of at least $100,000 aggregate for products and completed operations, and

(4)

with a deductible no higher than $500.

(c)

Insurance must be obtained from an admitted company or an eligible surplus lines carrier, as defined in the Texas Insurance Code, Article 1.14-2.

(d)

If a deductible exceeds the level allowed for a Class A or a Class B license, the contractors' business affiliation is considered to be self-insured. Any contractor whose business affiliation is self-insured must provide an affidavit of responsibility and a certified financial statement showing a net worth of at least the amount required by the deductible for that particular license.

(e)

A license applicant or licensee shall furnish to the Department a completed certificate of insurance on a form provided by the Department.

(f)

Insurance coverage specified in this section shall be maintained during the license period.

(g)

Requests to waive the insurance requirements because the license holder does not contract with the public shall:

(1)

be submitted in writing to the Department;

(2)

contain a detailed explanation of the conditions under which the waiver is requested; and

(3)

be accompanied by a confirmation of employment by the current employer when working under the license of another contractor as an employee.

§75.65.Advisory Board.

(a)

The purpose of the Air Conditioning and Refrigeration Contractors Advisory Board is to advise the Executive Director on adopting rules, enforcing and administering the Act, and setting fees.

(b)

Recommendations of the Board will be transmitted to the Executive Director through the General Counsel.

(c)

Board meetings are called by the chair. Meetings in excess of one every six months may be authorized by the Executive Director.

(d)

Expenses reimbursed to board members is limited to authorized expenses incurred while traveling to and from board meetings.

(e)

Expenses paid to board members shall be limited to those allowed by the State of Texas Travel Allowance Guide, the Texas Department of Licensing and Regulation policies governing employee travel allowances, and the General Appropriations Act.

(f)

Expenses can be reimbursed to board members only when the legislature has specifically appropriated money for that purpose.

§75.70.Responsibilities of the Licensee.

(a)

The licensee shall:

(1)

if affiliated with a business, choose one business affiliation that will use the licensee's license;

(2)

be a bona fide employee, owner, or officer of the business affiliation, and must work full time at the business affiliation, or permanent office of the business affiliation;

(3)

use his license for one business affiliation and one permanent office at any given time;

(4)

furnish the Department with his or her permanent mailing address and the name, physical address, and telephone number of the business affiliation; and

(5)

furnish to the Department, copies of assumed name registrations.

(b)

A licensee may subcontract portions of work requiring a license under the Act to unlicensed persons, firms, or corporations as long as:

(1)

the licensee actively provides work or service which requires a license, either in person or with the licensee's bona fide employees;

(2)

the work or service provided in person or with the licensee's bona fide employees consists of more than accepting a contract or request for service, scheduling the work, and providing supervision of the work; and

(3)

the licensee is ultimately responsible to the customer for all work performed by the subcontractor.

(c)

The design of a system may not be subcontracted to an unlicensed person, firm or corporation.

(d)

A licensee who subcontracts with an air conditioning and refrigeration company other than his own, must work under the license of the other air conditioning and refrigeration business. The work must be billed by the other air conditioning and refrigeration company, and the licensee working as a subcontractor must be paid by the other company. The licensee who is the contractor, not subcontractor, is responsible for all subcontracted work.

(e)

Each air conditioning and refrigeration company shall have a licensee employed full time in each permanent office operated in Texas. All work requiring a license under the Act shall be under the direct personal supervision of the licensee for that office. The licensee's license number shall appear on all proposals and invoices for that office.

(f)

If a licensee is employed as the license holder for the company or the permanent office of that company, the licensee is responsible for work performed under his supervision. If the owners, officers, or managers of the company do not allow the licensee the authority to supervise, train, or otherwise control compliance with the Act, the licensee is still responsible under the Act.

(g)

If an air conditioning and refrigeration company uses locations other than a permanent office, those locations shall be used only to receive instructions from the permanent office on scheduling of work, to store parts and supplies, and/or to park vehicles. These locations may not be used to contract air conditioning sales or service. The air conditioning and refrigeration company shall provide the address of these other locations to the Department no later than 30 days after the locations are established or changed.

(h)

A licensee may not permit a person or any company with which his or her license is not affiliated to use his or her license for any purpose.

(i)

Each licensee shall display his/her license at the permanent office to which it is assigned.

(j)

Each licensee shall display the license number and company name in letters not less than two inches high on both sides of all vehicles used in conjunction with air conditioning and refrigeration contracting.

(k)

All advertising by licensees designed to solicit air conditioning or refrigeration business shall include the licensee's license number. Advertising which requires the license number includes:

(1)

printed material;

(2)

television ads, except that in nationally placed television advertising, a statement indicating that license numbers are available upon request may be used in lieu of the licensee's license number;

(3)

newspaper ads;

(4)

telephone book ads, except:

(A)

telephone book listings that contain only the name, address, and telephone number;

(B)

manufacturers' and distributors' ads endorsing an air conditioning and refrigeration contractor;

(5)

business cards;

(6)

billboards;

(7)

telephone solicitations, except that the statement that the company is licensed by the state may be substituted unless the consumer requests the number;

(8)

proposals, quotations, and invoices; and

(9)

electronic media such as the Internet and websites, and solicitation through electronic mail.

(l)

Items intended to attract business, other than promotional items of nominal value such as ball caps, tee shirts, and other gifts, must include the license number. Letterheads and printed forms for office use are not required to have the license number included. Signs located outside the contractor's permanent business location are not required to have the license number displayed.

(m)

A licensee must have the following information: “Regulated by The Texas Department of Licensing and Regulation, P. O. Box 12157, Austin, Texas 78711, 1-800-803-9202, 512-463-6599" listed on:

(1)

proposals and invoices;

(2)

written contracts; and

(3)

a sign prominently displayed in the place of business if the consumer or service recipient must visit the place of business for service or products.

(n)

A licensee that also acts as a general contractor may provide a one-time notice stating the information above to customers for whom they provide services requiring a license under the Act.

(o)

If information provided to the Department by the licensee changes, the licensee shall:

(1)

notify the Department, in writing, within 30 days of any change in permanent mailing address, business affiliation, business location, or business telephone number;

(2)

revise the license, if the information is printed on the license by:

(A)

returning the current original license to the Department;

(B)

paying the appropriate revision fee required in Section 75.80 of this title (relating to Fees); and

(C)

providing a revised insurance certificate if the business affiliation name or address has changed.

(p)

The permanent address shall be considered the licensee's permanent mailing address and address of record. All correspondence from the Department will be mailed to that address.

§75.80.Fees.

(a)

Exam Fees. Class A and Class B exam fees are:

(1)

application fee is $50 per applicant; the application fee is not refundable;

(2)

exam and re-exam fee is $50 for each exam requested; and

(3)

reschedule fee is $30.

(b)

License Fees. License fees are:

(1)

Class A or B initial license or renewal fee for three years is $125; and

(2)

late renewal fee is $50.

(c)

Lost, revised, or duplicate license, or wallet card is $25.

(d)

The addition of an endorsement to an existing license is $25 (current original license and wallet card must be returned). This fee may be waived if the reprint coincides with a renewal or revision, for which required fees are paid.

(e)

Certificate of Registration fee is $25.

§75.90.Sanctions - Administrative Sanctions/Penalties.

If a person violates Texas Revised Civil Statutes Annotated, Article 8861 (Vernon 1997), or a rule , or order of the Executive Director or commission relating to the Act, proceedings may be instituted to impose administrative sanctions and/or recommend administrative penalties in accordance with the Act or Texas Revised Civil Statutes Annotated, Article 9100 (Vernon 1991) and Chapter 60 (1998) of this title (relating to the Texas Department of Licensing and Regulation).

§75.100.Technical Requirements.

(a)

Electrical Connections.

(1)

On new construction of environmental air conditioning, commercial refrigeration, and process cooling or heating systems, licensees shall connect the appliance to the electrical line or disconnect that is provided for that purpose.

(2)

Licensees may replace and reconnect environmental air conditioning, commercial refrigeration, process cooling or heating systems, or component parts of the same or lesser amperage. On replacement environmental air conditioning, commercial refrigeration, process cooling or heating systems where the electrical disconnect has not been installed and is required by the National Electrical Code, the licensee may install a disconnect directly adjacent to or on the replacement system and reconnect the system.

(3)

Control wiring of 50 volts or less may be installed and serviced by a licensee.

(4)

All electrical work shall be performed in accordance with standards at least as strict as that established by the current National Electrical Code.

(b)

Piping.

(1)

Fuel gas piping for new or replaced environmental air conditioning, commercial refrigeration, or process cooling or heating systems may be installed by a licensee. Fuel gas piping by a licensee is limited to the portion of piping between the appliance and the existing piping system, connected at an existing shut-off valve for such use. Existing piping systems, stops, or shut-off valves shall not be altered by a licensee.

(2)

Drain piping associated with environmental air conditioning, commercial refrigeration, or process cooling or heating systems may be installed by a licensee if the connection is on the inlet side of a properly installed trap. Such drain piping shall be installed in accordance with applicable plumbing and building codes.

(3)

Mechanical piping associated with environmental air conditioning, commercial refrigeration, or process cooling or heating systems shall be installed by a licensee.

(c)

Duct cleaning.

(1)

Duct cleaning and air quality testing, including biomedical testing may be performed by an unlicensed person or company if:

(A)

the task is limited to the air distribution system, from the discharge of the unit to the inlet of the unit;

(B)

no cuts are made to ducts or plenums;

(C)

no changes are made to electrical connections;

(D)

the only disassembly of any part of the system is opening or removal of access panels or doors, return air grills, or registers that are removable without cutting or removing any other part of the system; and

(E)

coils are cleaned in place and can be accessed without cutting or disassembly of any part of the system.

(2)

Biomedical testing may be performed by an unlicensed person or company. Biomedical remediation requires a license.

(d)

Process Cooling and Heating.

(1)

Process cooling and heating work does not include cryogenic work.

(2)

Process cooling and heating is limited to work performed on piping and equipment in the primary closed loop portions of processing systems containing a primary process medium. Once a primary closed loop process system has been deactivated and rendered inert, a non-licensed person may perform repairs on piping, heat exchangers, and vessels.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State, on March 24, 1999.

TRD-9901770

Rachelle A. Martin

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: May 9, 1999

For further information, please call: (512) 463-7348