The Texas Department of Licensing and Regulation adopts 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. Sections 75.1, 75.10, 75.20, 75.21, 75.70 and 75.90 are adopted with changes to the proposed text as published in the April 9, 1999 issue of the Texas Register (24 TexReg 2820) and §§75.22-75.26, 75.30, 75.40, 75.65, 75.80 and 75.100 are adopted without changes and will not be republished.

The new rules replace existing rules which are simultaneously repealed. The new sections rearrange, consolidate, and revise existing language for clarification and delete several items already stated in the Department's enabling statute, Texas Revised Civil Statutes Annotated, Article 9100 (Vernon 1991).

The 76th Legislature enacted HB3155 which made non-substantive changes to Article 9100 and codified the article into the Occupations Code. These changes are reflected in §§75.1 and 75.90.

In §75.10. Definitions new definitions were added for "Full time employee" to clarify how much time a licensee must devote to his assigned company; for "Licensee" to clarify to whom the rules apply; and for "Repair work" to clarify the definition in the statute. We received one comment on §75.10(1) "Advertising or Advertisement" pointing out that the definition could be misunderstood. We have added the words "in directories" to the definition. We also received one comment on §75.10(18) "Proper installation" stating that the International Fuel Gas Code is separate from the International Mechanical Code and should be included, as current rules include the Standard Gas Code. We have added the International Fuel Gas Code to the definition. All other changes are non-substantive and do not change the meaning of the definition.

In §75.20. Licensing Requirements-Application and Experience Requirements a new provision is added which serves notice that obtaining a license by fraud or misrepresentation is grounds for a sanction or penalty. Also, the number of classroom hours equivalent to a semester hour was changed from 45 to 40, as this is more accurate. We received one comment on the change in wording concerning the equivalence between semester hours and classroom hours for purposes of satisfying the experience requirement. The commentor stated that the difference between semester hours granted by colleges and universities and classroom hours granted by trade schools is not clear to everyone reading the rules. Wording has been added to illustrate the differences. All other changes are for clarification.

In §75.21. Licensing Requirements-Examinations the time period within which an applicant must take an exam that was either cancelled or rescheduled has been deleted, so that the only time period the applicant must meet is the two year window to pass the exam from the date of notice of eligibility. This will streamline the examination process for the Department as well as for applicants. The description of the information to be provided to applicants as an analysis of failed exams has been deleted, as this type of analysis is available to the public under the Public Information Act. The subparagraph describing the basis for reciprocal agreements was deleted because it is unnecessary since all such agreements are negotiated with other states. We received one comment regarding §75.21(f) pointing out that inclusion of a statement concerning reciprocal agreements with other states in a subsection about language translation costs was confusing. The statement concerning reciprocal agreements was included in error and is being removed. 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 which 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 the mechanical integrity of their work regardless of a contract with builders or home warranty companies. Other changes in this section are for clarification.

The changes in §75.23. Licensing Requirements-Temporary Licenses are for simplification and clarification.

In §75.24. Licensing Requirements-Renewal the date for timely license renewal is changed from the date of receipt by the Department to the postmark date, which eliminates penalizing the licensee for slow or undelivered mail. The requirement to send renewal requests at least thirty days prior to the license expiration date has been deleted because there is no administrative violation for mailing a renewal less than 30 days before a license expires. If a licensee does not timely renew his license, he may not legally perform air conditioning and refrigeration work until the expired license is renewed. Other changes in this section are for clarification.

The changes in §75.25. Licensing Requirements-Reissuance eliminate restatement of the requirements stated elsewhere.

Section 75.26. Certificates of Registration adds sentence which states that a Certificate of Registration does not authorize the holder to perform air conditioning and refrigeration work not covered by the appropriate exemption in the Act. This sentence clarifies that Certificate of Registration holders may not legally perform air conditioning work on equipment not owned by their employer. The section is also amended by adding an exemption for purchasing equipment containing less than one-half of an ounce of refrigerant, because such a purchase is not within the intent of the Act. Other changes are for clarification.

Section 75.30. Exemptions has been restated for clarity and an exemption has been added for persons who perform air conditioning contracting on unducted fireplace stoves, as those 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.

Section 75.40. Insurance Requirement has been restated to eliminate a listing of the required items on a certificate of insurance, since a completed Department form is required for licensure and the items are listed on the form. The Department received a comment against the deletion of the requirement to show deductibles, exclusions, and policy amounts from the rules, and in favor of eliminating the requirement that the policy amount be reinstated in the event of a large claim against the policy both from the rules and from the Department form. The Department does not agree with the comment against the deletions. Since the Department's form requires the listing of deductibles and exclusions, and these are part of the coverage offered in the policy, the statement is being eliminated from the rules as proposed. We also received comments on the minimum coverage amounts and minimum deductible amounts. These amounts were not changed in the rule proposal; the Department is reserving consideration of these comments so that advice may be received from the Air Conditioning and Refrigeration Contractors Advisory Board and other interested parties. Other changes are for clarification.

Section 75.60. Responsibilities of the Department concerning exam administration has been deleted because some of the subject matter is sufficiently covered in the statute and forms and procedures handle the remainder items.

The changes in §75.65. Advisory Board are for clarification.

Section 75.70. Responsibilities of the Licensee has been amended by adding a provision that prohibits subcontracting the design of a system to an unlicensed entity because the design of a system commits the licensee to installing equipment that may not be appropriate for the space for which it is designed. We received a comment on the addition of subsection (c) concerning the subcontracting of design work to an unlicensed person or firm which questioned whether manufacturer representatives or supply house personnel would be considered subcontractors since many routinely offer free design services to licensees. The Department believes that they are acting as consultants, not subcontractors.

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 subsection in §75.70 regarding advertising has been amended to exempt advertisements by manufacturers and distributors endorsing contractors in telephone directories and to require that advertising in electronic media contain the license number. Manufacturer and distributor advertisements need not show the license number because they are primarily intended to advertise the manufacturer's products, not installations. The Department believes electronic media advertising should follow the same rules for public information on licensing as other media.

The Department received a comment stating that §75.70(d) was ambiguous and difficult to understand. The Department does not agree, but is making a minor adjustment to the wording. Section 75.70(j) which requires contractors to show their company name and license number on a sign at job sites that are not identified by a marked vehicle was proposed to be deleted because it was considered unnecessarily restrictive. The Department received a comment on the proposed deletion of §75.70(j) in that the rule serves to identify the responsible person when an unlicensed subcontractor is present at the site. The Department agrees and is reinstating the provision for a sign or a temporary sign on a vehicle when the person at the location is an unlicensed subcontractor.

The Department received a comment against requiring a notification in the licensee's place of business if consumers must visit the place of business for service or products. The party commenting has retail locations where equipment is displayed as well as service locations that might be visited by consumers, and the party believes the new rule is unduly burdensome on large corporations. The Department agrees that locations functioning only as retail outlets need not post the notice; also the requirement to post the notice in any location where a consumer "must" visit the location for service will be changed to "may". All other changes in §75.70 are for clarification and simplification.

In §75.80. Fees application fees are not refundable because the processing time is the same, regardless of whether or not the applicant takes an examination. The fee for a lost, revised, or duplicate wallet card has been raised to $25, the same cost as replacing a license. The fee for rescheduling an exam has been raised to $30 to cover processing costs. Other changes in this section are for clarification.

Section 75.90. Sanctions-Administrative Sanctions/Penalties has been restated for greater accuracy.

The rule in §75.100. Technical Requirements concerning requirements of The Texas Boiler Law, Health and Safety Code, §755 has been deleted because the Boiler Law speaks for itself and the rule is redundant. 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. The changes to the subsection of §75.100 relating to duct cleaning are for the purpose of clarification.

The Department received comments for and against the new rules as well as comments clarifying information and wording from Sears, Roebuck and Co., Hooper & Hines Insurance, Foodservice Equipment Distributors Association, Metro-Tech Service Company, Allan Vorda & Associates, and Department staff.

The Department held a public hearing on May 14, 1999 and received comments from several individuals representing Arnold Refrigeration Inc. and Southern Building Code Congress International. All comments were considered in reviewing and revising the new rules for adoption. No comments were received regarding the adoption of the repeal.

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

The repealed and new rules will increase program integrity.