H.B. No. 2636

	AN ACT
	relating to the nonsubstantive revision of statutes relating to the
	Texas Department of Insurance, the business of insurance, and
	certain related businesses, to nonsubstantive additions to and
	corrections in the codified Insurance Code, and to conforming the
	provisions of that code that were codified by the 79th Legislature
	to other Acts of that legislature, including conforming amendments,
	repeals, and penalties.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	ARTICLE 1.  REVISION OF THE INSURANCE CODE OF 1951
	PART A.  ADDITIONS AND CONFORMING AMENDMENTS TO TITLE 2,
	INSURANCE CODE
	SECTION 1A.001.  CONFORMING AMENDMENT.  Chapter 30,
	Insurance Code, is amended to read as follows:
	CHAPTER 30.  GENERAL PROVISIONS
	Sec. 30.001.  PURPOSE OF TITLES 2, 3, 4, 5, 6, 7, 8, 9, 10,
	11, 12, 13, [AND] 14, AND 20.  (a)  This title and Titles 3, 4, 5, 6,
	7, 8, 9, 10, 11, 12, 13, [and] 14, and 20 are enacted as a part of the
	state's continuing statutory revision program, begun by the Texas
	Legislative Council in 1963 as directed by the legislature in the
	law codified as Section 323.007, Government Code.  The program
	contemplates a topic-by-topic revision of the state's general and
	permanent statute law without substantive change.
	(b)  Consistent with the objectives of the statutory
	revision program, the purpose of this title and Titles 3, 4, 5, 6,
	7, 8, 9, 10, 11, 12, 13, [and] 14, and 20 is to make the law
	encompassed by the titles more accessible and understandable by:
	(1)  rearranging the statutes into a more logical
	order;
	(2)  employing a format and numbering system designed
	to facilitate citation of the law and to accommodate future
	expansion of the law;
	(3)  eliminating repealed, duplicative,
	unconstitutional, expired, executed, and other ineffective
	provisions; and
	(4)  restating the law in modern American English to
	the greatest extent possible.
	Sec. 30.002.  CONSTRUCTION.  Except as provided by Section
	30.003 and as otherwise expressly provided in this code, Chapter
	311, Government Code (Code Construction Act), applies to the
	construction of each provision in this title and in Titles 3, 4, 5,
	6, 7, 8, 9, 10, 11, 12, 13, [and] 14, and 20.
	Sec. 30.003.  DEFINITION OF PERSON.  The definition of
	"person" assigned by Section 311.005, Government Code, does not
	apply to any provision in this title or in Title 3, 4, 5, 6, 7, 8, 9,
	10, 11, 12, 13, [or] 14, or 20.
	Sec. 30.004.  REFERENCE IN LAW TO STATUTE REVISED BY TITLE 2,
	3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, [OR] 14, OR 20.  A reference in a
	law to a statute or a part of a statute revised by this title or by
	Title 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, [or] 14, or 20 is
	considered to be a reference to the part of this code that revises
	that statute or part of that statute.
	SECTION 1A.002.  ADDITION. Subchapter A, Chapter 32,
	Insurance Code, is amended by adding Sections 32.0015 and 32.004 to
	read as follows:
	Sec. 32.0015.  FILING ARTICLES OF INCORPORATION AND OTHER
	PAPERS; CERTIFIED COPIES. (a)  The department shall file and
	maintain in a department office:
	(1)  all insurance companies' acts or articles of
	incorporation; and
	(2)  any other paper required by law to be filed with
	the department.
	(b)  The department shall provide a certified copy of a
	document described by Subsection (a)(1) or (2) to a party
	interested in the document who:
	(1)  submits an application; and
	(2)  pays the fee prescribed by law. (V.T.I.C. Art.
	1.10, Sec. 2.)
	Sec. 32.004.  PUBLICATION OF RESULTS OF EXAMINATION. The
	department shall publish the results of an examination of a
	company's affairs if the commissioner determines that publication
	is in the public interest.  (V.T.I.C. Art. 1.10, Sec. 6.)
	PART B.  ADDITIONS TO TITLE 3, INSURANCE CODE
	SECTION 1B.001.  ADDITION.  Subtitle B, Title 3, Insurance
	Code, is amended by adding Chapter 228 to read as follows:
	CHAPTER 228.  PREMIUM TAX CREDIT FOR CERTAIN INVESTMENTS
	SUBCHAPTER A.  GENERAL PROVISIONS
	Sec.228.001.GENERAL DEFINITIONS.  In this chapter:
	(1)  "Allocation date" means the date on which
	certified investors are allocated premium tax credits.
	(2)  "Certified capital" means cash invested by a
	certified investor that fully funds the purchase price of an equity
	interest in a certified capital company or a qualified debt
	instrument issued by the company.
	(3)  "Certified capital company" means a partnership,
	corporation, or trust or limited liability company, whether
	organized on a profit or nonprofit basis, that:
	(A)  has as the company's primary business
	activity the investment of cash in qualified businesses; and
	(B)  is certified as meeting the criteria of this
	chapter.
	(4)  "Certified investor" means an insurer or other
	person that has state premium tax liability and that contributes
	certified capital pursuant to a premium tax credit allocation under
	this chapter.
	(5)  "Early stage business" means a business described
	by Section 228.152(a).
	(6)  "Person" means an individual or entity, including
	a corporation, general or limited partnership, or trust or limited
	liability company.
	(7)  "Premium tax credit allocation claim" means a
	claim for allocation of premium tax credits.
	(8)  "Qualified business" means a business described by
	Section 228.201.
	(9)  "Qualified debt instrument" means a debt
	instrument issued by a certified capital company, at par value or a
	premium, that:
	(A)  has an original maturity date that is a date
	on or after the fifth anniversary of the date of issuance;
	(B)  has a repayment schedule that is not faster
	than a level principal amortization over five years; and
	(C)  does not have interest, distribution, or
	payment features that are related to:
	(i)  the profitability of the company; or
	(ii)  the performance of the company's
	investment portfolio.
	(10)  "Qualified investment" means the investment of
	cash by a certified capital company in a qualified business for the
	purchase of any debt, debt participation, equity, or hybrid
	security of any nature or description, including a debt instrument
	or security that has the characteristics of debt but that provides
	for conversion into equity or equity participation instruments such
	as options or warrants.
	(11)  "State premium tax liability" means:
	(A)  any liability incurred by any person under
	Chapter 221, 222, 223, or 224; or
	(B)  if the tax liability imposed under Chapter
	221, 222, 223, or 224 is eliminated or reduced, any tax liability
	imposed on an insurer or other person that had premium tax liability
	under Subchapter A, Chapter 4, or Article 9.59 as those laws existed
	on January 1, 2003.
	(12)  "Strategic investment business" means a business
	described by Section 228.153(a). (V.T.I.C. Art. 4.51, Subdivs.
	(2), (3), (4), (5), (6) (part), (7), (8), (9) (part), (10), (12),
	(13), (15) (part).)
	Sec.228.002.DEFINITION OF AFFILIATE.  In this chapter,
	"affiliate" of another person means:
	(1)  a person that is an affiliate for purposes of
	Section 823.003;
	(2)  a person that directly or indirectly:
	(A)  beneficially owns 10 percent or more of the
	outstanding voting securities or other voting or management
	interests of the other person, whether through rights, options,
	convertible interests, or otherwise; or
	(B)  controls or holds power to vote 10 percent or
	more of the outstanding voting securities or other voting or
	management interests of the other person;
	(3)  a person 10 percent or more of the outstanding
	voting securities or other voting or management interests of which
	are directly or indirectly:
	(A)  beneficially owned by the other person,
	whether through rights, options, convertible interests, or
	otherwise; or
	(B)  controlled or held with power to vote by the
	other person;
	(4)  a partnership in which the other person is a
	general partner;
	(5)  an officer, director, employee, or agent of the
	other person; or
	(6)  an immediate family member of an officer,
	director, employee, or agent described by Subdivision (5).
	(V.T.I.C. Art. 4.51, Subdiv. (1).)
	[Sections 228.003-228.050 reserved for expansion]
	SUBCHAPTER B.  ADMINISTRATION AND PROMOTION
	Sec.228.051.ADMINISTRATION BY COMPTROLLER. The
	comptroller shall administer this chapter. (V.T.I.C. Art. 4.52
	(part).)
	Sec.228.052.RULES; FORMS. The comptroller shall adopt
	rules and forms as necessary to implement this chapter, including
	rules that:
	(1)  establish the application procedures for
	certified capital companies; and
	(2)  facilitate the transfer or assignment of premium
	tax credits by certified investors. (V.T.I.C. Art. 4.52 (part);
	Art. 4.53, Sec. (a); Art. 4.71, Sec. (a) (part).)
	Sec.228.053.REPORT TO LEGISLATURE.  (a)  The comptroller
	shall prepare a biennial report concerning the results of the
	implementation of this chapter.  The report must include:
	(1)  the number of certified capital companies holding
	certified capital;
	(2)  the amount of certified capital invested in each
	certified capital company;
	(3)  the amount of certified capital the certified
	capital company invested in qualified businesses as of January 1,
	2006, and the cumulative total for each subsequent year;
	(4)  the total amount of tax credits granted under this
	chapter for each year that credits have been granted;
	(5)  the performance of each certified capital company
	with respect to renewal and reporting requirements imposed under
	this chapter;
	(6)  with respect to the qualified businesses in which
	certified capital companies have invested:
	(A)  the classification of the qualified
	businesses according to the industrial sector and size of the
	business;
	(B)  the total number of jobs created by the
	investment and the average wages paid for the jobs; and
	(C)  the total number of jobs retained as a result
	of the investment and the average wages paid for the jobs; and
	(7)  the certified capital companies that have been
	decertified or that have failed to renew the certification and the
	reason for any decertification.
	(b)  The comptroller shall file the report with the governor,
	the lieutenant governor, and the speaker of the house of
	representatives not later than December 15 of each even-numbered
	year. (V.T.I.C. Art. 4.73.)
	Sec.228.054.PROMOTION OF PROGRAM.  The Texas Economic
	Development and Tourism Office shall promote the program
	established under this chapter in the Texas Business and Community
	Economic Development Clearinghouse. (V.T.I.C. Art. 4.72.)
	[Sections 228.055-228.100 reserved for expansion]
	SUBCHAPTER C. APPLICATION FOR AND GENERAL OPERATION OF CERTIFIED
	CAPITAL COMPANIES
	Sec.228.101.APPLICATION FOR CERTIFICATION.  (a)  An
	applicant for certification must file the application in the form
	prescribed by the comptroller.  The application must be accompanied
	by a nonrefundable application fee of $7,500.
	(b)  The application must include an audited balance sheet of
	the applicant, with an unqualified opinion from an independent
	certified public accountant, as of a date not more than 35 days
	before the date of the application. (V.T.I.C. Art. 4.53, Sec. (b).)
	Sec.228.102.QUALIFICATION.  To qualify as a certified
	capital company:
	(1)  the applicant must have, at the time of
	application for certification, an equity capitalization of at least
	$500,000 in unencumbered cash or cash equivalents;
	(2)  at least two principals or persons employed to
	manage the funds of the applicant must have at least four years of
	experience in the venture capital industry; and
	(3)  the applicant must satisfy any additional
	requirement imposed by the comptroller by rule. (V.T.I.C. Art.
	4.53, Sec. (c).)
	Sec.228.103.MANAGEMENT BY AND CERTAIN OWNERSHIP INTERESTS OF INSURANCE ENTITIES PROHIBITED
	OF INSURANCE ENTITIES PROHIBITED
	insurers, or other persons who may have state premium tax liability
	or the insurer's or person's affiliates may not directly or
	indirectly:
	(1)  manage a certified capital company;
	(2)  beneficially own, whether through rights,
	options, convertible interests, or otherwise, more than 10 percent
	of the outstanding voting securities of a certified capital
	company; or
	(3)  control the direction of investments for a
	certified capital company.
	(b)  Subsection (a) applies without regard to whether the
	insurer or other person or the affiliate of the insurer or other
	person is authorized by or engages in business in this state.
	(c)  Subsections (a) and (b) do not preclude an insurer,
	certified investor, or any other party from exercising its legal
	rights and remedies, including interim management of a certified
	capital company, if authorized by law, with respect to a certified
	capital company that is in default of the company's statutory or
	contractual obligations to the insurer, certified investor, or
	other party.
	(d)  This chapter does not limit an insurer's ownership of
	nonvoting equity interests in a certified capital company.
	(V.T.I.C. Art. 4.54; Art. 4.56, Sec. (d).)
	Sec.228.104.ACTION ON APPLICATION.  (a)  The comptroller
	shall:
	(1)  review the application, organizational documents,
	and business history of each applicant; and
	(2)  ensure that the applicant satisfies the
	requirements of this chapter.
	(b)  Not later than the 30th day after the date an
	application is filed, the comptroller shall:
	(1)  issue the certification; or
	(2)  refuse to issue the certification and communicate
	in detail to the applicant the grounds for the refusal, including
	suggestions for the removal of those grounds. (V.T.I.C. Art. 4.53,
	Secs. (d), (e).)
	Sec.228.105.CONTINUATION OF CERTIFICATION.  To continue
	to be certified, a certified capital company must make qualified
	investments according to the schedule established by Section
	228.151. (V.T.I.C. Art. 4.56, Sec. (a) (part).)
	Sec.228.106.REPORTS TO COMPTROLLER; AUDITED FINANCIAL STATEMENT
	STATEMENT
	comptroller as soon as practicable after the receipt of certified
	capital:
	(1)  the name of each certified investor from whom the
	certified capital was received, including the certified investor's
	insurance premium tax identification number;
	(2)  the amount of each certified investor's investment
	of certified capital and premium tax credits; and
	(3)  the date on which the certified capital was
	received.
	(b)  Not later than January 31 of each year, each certified
	capital company shall report to the comptroller:
	(1)  the amount of the company's certified capital at
	the end of the preceding year;
	(2)  whether or not the company has invested more than
	15 percent of the company's total certified capital in a single
	business;
	(3)  each qualified investment that the company made
	during the preceding year and, with respect to each qualified
	investment, the number of employees of the qualified business at
	the time the qualified investment was made; and
	(4)  any other information required by the comptroller,
	including any information required by the comptroller to comply
	with Section 228.053.
	(c)  Not later than April 1 of each year, each certified
	capital company shall provide to the comptroller an annual audited
	financial statement that includes the opinion of an independent
	certified public accountant. The audit must address the methods of
	operation and conduct of the business of the company to determine
	whether:
	(1)  the company is complying with this chapter and the
	rules adopted under this chapter;
	(2)  the funds received by the company have been
	invested as required within the time provided by Section 228.151;
	and
	(3)  the company has invested the funds in qualified
	businesses. (V.T.I.C. Art. 4.58.)
	Sec.228.107.RENEWAL FEE; LATE FEE; EXCEPTION.  (a)  Not
	later than January 31 of each year, each certified capital company
	shall pay a nonrefundable renewal fee of $5,000 to the comptroller.
	(b)  If a certified capital company fails to pay the renewal
	fee on or before the date specified by Subsection (a), the company
	must pay, in addition to the renewal fee, a late fee of $5,000 to
	continue the company's certification.
	(c)  Notwithstanding Subsection (a), a renewal fee is not
	required within six months of the date on which a certified capital
	company's initial certification is issued under Section
	228.104(b). (V.T.I.C. Art. 4.59.)
	Sec.228.108.OFFERING MATERIAL USED BY CERTIFIED CAPITAL COMPANY
	COMPANY
	the certified capital company must include the following statement:
	By authorizing the formation of a certified
	capital company, the State of Texas does not endorse
	the quality of management or the potential for
	earnings of the company and is not liable for damages
	or losses to a certified investor in the company. Use
	of the word "certified" in an offering does not
	constitute a recommendation or endorsement of the
	investment by the comptroller of public accounts. If
	applicable provisions of law are violated, the State
	of Texas may require forfeiture of unused premium tax
	credits and repayments of used premium tax credits.
	(V.T.I.C. Art. 4.55.)
	[Sections 228.109-228.150 reserved for expansion]
	SUBCHAPTER D.  INVESTMENT BY CERTIFIED CAPITAL COMPANIES
	Sec.228.151.REQUIRED SCHEDULE OF INVESTMENT.  (a)  Before
	the third anniversary of a certified capital company's allocation
	date, the company must make qualified investments in an amount
	cumulatively equal to at least 30 percent of the company's
	certified capital, subject to Section 228.153(b).
	(b)  Before the fifth anniversary of a certified capital
	company's allocation date, the company must make qualified
	investments in an amount cumulatively equal to at least 50 percent
	of the company's certified capital, subject to Sections 228.152(b)
	and 228.153(b). (V.T.I.C. Art. 4.56, Sec. (a) (part).)
	Sec.228.152.INVESTMENT IN EARLY STAGE BUSINESS REQUIRED.
	(a)  In this section, "early stage business" means a qualified
	business that:
	(1)  is involved, at the time of a certified capital
	company's first investment, in activities related to the
	development of initial product or service offerings, such as
	prototype development or establishment of initial production or
	service processes;
	(2)  was initially organized less than two years before
	the date of the certified capital company's first investment; or
	(3)  during the fiscal year immediately preceding the
	year of the certified capital company's first investment had, on a
	consolidated basis with the business's affiliates, gross revenues
	of not more than $2 million as determined in accordance with
	generally accepted accounting principles.
	(b)  A certified capital company must place at least 50
	percent of the amount of qualified investments required by Section
	228.151(b) in early stage businesses. (V.T.I.C. Art. 4.51, Subdiv.
	(6); Art. 4.56, Sec. (b) (part).)
	Sec.228.153.INVESTMENT IN STRATEGIC INVESTMENT BUSINESS REQUIRED
	REQUIRED
	(1)  "Strategic investment area" means an area of this
	state that qualifies as a strategic investment area under
	Subchapter O, Chapter 171, Tax Code, or, after the date that
	subchapter expires, an area that qualified as a strategic
	investment area under that subchapter immediately before that date.
	(2)  "Strategic investment business" means a qualified
	business that:
	(A)  has the business's principal business
	operations located in one or more strategic investment areas; and
	(B)  intends to maintain business operations in
	the strategic investment areas after receipt of the investment by
	the certified capital company.
	(b)  A certified capital company must place at least 30
	percent of the amount of qualified investments required by Sections
	228.151(a) and (b) in a strategic investment business. (V.T.I.C.
	Art. 4.51, Subdivs. (14), (15); Art. 4.56, Sec. (b) (part).)
	Sec.228.154.CERTIFIED CAPITAL NOT INVESTED IN QUALIFIED INVESTMENTS
	INVESTMENTS
	certified capital not invested in qualified investments only in:
	(1)  cash deposited with a federally insured financial
	institution;
	(2)  certificates of deposit in a federally insured
	financial institution;
	(3)  investment securities that are:
	(A)  obligations of the United States or agencies
	or instrumentalities of the United States; or
	(B)  obligations that are guaranteed fully as to
	principal and interest by the United States;
	(4)  debt instruments rated at least "A" or the
	equivalent by a nationally recognized credit rating organization,
	or issued by, or guaranteed with respect to payment by, an entity
	whose unsecured indebtedness is rated at least "A" or the
	equivalent by a nationally recognized credit rating organization,
	and which indebtedness is not subordinated to other unsecured
	indebtedness of the issuer or the guarantor;
	(5)  obligations of this state or a municipality or
	political subdivision of this state; or
	(6)  any other investment approved in advance in
	writing by the comptroller. (V.T.I.C. Art. 4.56, Sec. (h).)
	Sec.228.155.COMPUTATION OF AMOUNT OF INVESTMENTS.  (a)
	The aggregate cumulative amount of all qualified investments made
	by a certified capital company after the company's allocation date
	shall be considered in the computation of the percentage
	requirements under this subchapter.
	(b)  A certified capital company may invest proceeds
	received from a qualified investment in another qualified
	investment, and that investment counts toward any requirement of
	this chapter with respect to investments of certified capital.
	(V.T.I.C. Art. 4.56, Sec. (c).)
	Sec.228.156.LIMIT ON QUALIFIED INVESTMENT. A certified
	capital company may not make a qualified investment at a cost to the
	company that is greater than 15 percent of the company's total
	certified capital at the time of investment. (V.T.I.C. Art. 4.56,
	Sec. (f).)
	Sec.228.157.DISTRIBUTIONS BY CERTIFIED CAPITAL COMPANY.
	(a)  In this section, "qualified distribution" means any
	distribution or payment from certified capital by a certified
	capital company in connection with:
	(1)  the reasonable costs and expenses of forming,
	syndicating, managing, and operating the company, provided that the
	distribution or payment is not made directly or indirectly to a
	certified investor, including:
	(A)  reasonable and necessary fees paid for
	professional services, including legal and accounting services,
	related to the company's formation and operation; and
	(B)  an annual management fee in an amount that
	does not exceed 2.5 percent of the company's certified capital; and
	(2)  a projected increase in federal or state taxes,
	including penalties and interest related to state and federal
	income taxes, of the company's equity owners resulting from the
	earnings or other tax liability of the company to the extent that
	the increase is related to the ownership, management, or operation
	of the company.
	(b)  A certified capital company may make a qualified
	distribution at any time. To make a distribution or payment other
	than a qualified distribution, a company must have made qualified
	investments in an amount cumulatively equal to 100 percent of the
	company's certified capital.
	(c)  If a business in which a qualified investment is made
	relocates the business's principal business operations to another
	state during the term of the certified capital company's investment
	in the business, the cumulative amount of qualified investments
	made by the certified capital company for purposes of satisfying
	the requirements of Subsection (b) only is reduced by the amount of
	the certified capital company's qualified investments in the
	business that has relocated.
	(d)  Subsection (c) does not apply if the business
	demonstrates that the business has returned the business's
	principal business operations to this state not later than the 90th
	day after the date of the relocation. (V.T.I.C. Art. 4.51, Subdiv.
	(11); Art. 4.60, Secs. (a), (c).)
	Sec.228.158.REPAYMENT OF DEBT.  Notwithstanding Section
	228.157(b), a certified capital company may make repayments of
	principal and interest on the company's indebtedness without any
	restriction, including repaying the company's indebtedness on
	which certified investors earned premium tax credits. (V.T.I.C.
	Art. 4.60, Sec. (b).)
	[Sections 228.159-228.200 reserved for expansion]
	SUBCHAPTER E.  QUALIFIED BUSINESS
	Sec.228.201.DEFINITION OF QUALIFIED BUSINESS. (a)  In
	this chapter, "qualified business" means a business that complies
	with this section at the time of a certified capital company's first
	investment in the business.
	(b)  A qualified business must:
	(1)  be headquartered in this state and intend to
	remain in this state after receipt of the certified capital
	company's investment; and
	(2)  have the business's principal business operations
	located in this state and intend to maintain business operations in
	this state after receipt of the certified capital company's
	investment.
	(c)  A qualified business must agree to use the qualified
	investment primarily to:
	(1)  support business operations in this state, other
	than advertising, promotion, and sales operations which may be
	conducted outside of this state; or
	(2)  in the case of a start-up company, establish and
	support business operations in this state, other than advertising,
	promotion, and sales operations which may be conducted outside of
	this state.
	(d)  A qualified business may not have more than 100
	employees and must:
	(1)  employ at least 80 percent of the business's
	employees in this state; or
	(2)  pay 80 percent of the business's payroll to
	employees in this state.
	(e)  A qualified business must be primarily engaged in:
	(1)  manufacturing, processing, or assembling
	products;
	(2)  conducting research and development; or
	(3)  providing services.
	(f)  A qualified business may not be primarily engaged in:
	(1)  retail sales;
	(2)  real estate development;
	(3)  the business of insurance, banking, or lending; or
	(4)  the provision of professional services provided by
	accountants, attorneys, or physicians. (V.T.I.C. Art. 4.51,
	Subdiv. (9).)
	Sec.228.202.RELOCATION OF PRINCIPAL BUSINESS OPERATIONS.
	If, before the 90th day after the date a certified capital company
	makes an investment in a qualified business, the qualified business
	moves the business's principal business operations from this state,
	the investment may not be considered a qualified investment for
	purposes of the percentage requirements under this chapter.
	(V.T.I.C. Art. 4.56, Sec. (g).)
	Sec.228.203.EVALUATION OF BUSINESS BY COMPTROLLER.  (a)  A
	certified capital company may, before making an investment in a
	business, request a written opinion from the comptroller as to
	whether the business in which the company proposes to invest is a
	qualified business, an early stage business, or a strategic
	investment business.
	(b)  Not later than the 15th business day after the date of
	the receipt of a request under Subsection (a), the comptroller
	shall:
	(1)  determine whether the business meets the
	definition of a qualified business, an early stage business, or a
	strategic investment business, as applicable, and notify the
	certified capital company of the determination and provide an
	explanation of the determination; or
	(2)  notify the company that an additional 15 days will
	be needed to review the request and make the determination.
	(c)  If the comptroller fails to notify the certified capital
	company with respect to the proposed investment within the period
	specified by Subsection (b), the business in which the company
	proposes to invest is considered to be a qualified business, an
	early stage business, or a strategic investment business, as
	appropriate. (V.T.I.C. Art. 4.57.)
	Sec.228.204.CONTINUATION OF CLASSIFICATION AS QUALIFIED BUSINESS; FOLLOW-ON INVESTMENTS AUTHORIZED
	BUSINESS; FOLLOW-ON INVESTMENTS AUTHORIZED
	is classified as a qualified business at the time of the first
	investment in the business by a certified capital company:
	(1)  remains classified as a qualified business; and
	(2)  may receive follow-on investments from any
	certified capital company.
	(b)  Except as provided by Subsection (c), a follow-on
	investment made under Subsection (a) is a qualified investment even
	though the business may not meet the definition of a qualified
	business at the time of the follow-on investment.
	(c)  A follow-on investment does not qualify as a qualified
	investment if, at the time of the follow-on investment, the
	qualified business no longer has the business's principal business
	operations in this state. (V.T.I.C. Art. 4.56, Sec. (e).)
	[Sections 228.205-228.250 reserved for expansion]
	SUBCHAPTER F.  PREMIUM TAX CREDIT
	Sec.228.251.PREMIUM TAX CREDIT.  (a)  A certified investor
	who makes an investment of certified capital shall earn in the year
	of investment a vested credit against state premium tax liability
	equal to 100 percent of the certified investor's investment of
	certified capital, subject to the limits imposed by this chapter.
	(b)  Beginning with the tax report due March 1, 2009, for the
	2008 tax year, a certified investor may take up to 25 percent of the
	vested premium tax credit in any taxable year of the certified
	investor.  The credit may not be applied to estimated payments due
	in 2008. (V.T.I.C. Art. 4.65, Sec. (a).)
	Sec.228.252.LIMIT ON PREMIUM TAX CREDIT. (a)  The credit
	to be applied against state premium tax liability of a certified
	investor in any one year may not exceed the state premium tax
	liability of the investor for the taxable year.
	(b)  A certified investor may carry forward any unused credit
	against state premium tax liability indefinitely until the premium
	tax credits are used. (V.T.I.C. Art. 4.65, Sec. (b).)
	Sec.228.253.PREMIUM TAX CREDIT ALLOCATION CLAIM REQUIRED.
	(a)  A certified investor must prepare and execute a premium tax
	credit allocation claim on a form provided by the comptroller.
	(b)  The certified capital company must have filed the claim
	with the comptroller on the date on which the comptroller accepted
	premium tax credit allocation claims on behalf of certified
	investors under the comptroller's rules.
	(c)  The premium tax credit allocation claim form must
	include an affidavit of the certified investor under which the
	certified investor becomes legally bound and irrevocably committed
	to make an investment of certified capital in a certified capital
	company in the amount allocated even if the amount allocated is less
	than the amount of the claim, subject only to the receipt of an
	allocation under Section 228.255.
	(d)  A certified investor may not claim a premium tax credit
	under Section 228.251 for an investment that has not been funded,
	without regard to whether the certified investor has committed to
	fund the investment. (V.T.I.C. Art. 4.66.)
	Sec.228.254.TOTAL LIMIT ON PREMIUM TAX CREDITS.  (a)  The
	total amount of certified capital for which premium tax credits may
	be allowed under this chapter for all years in which premium tax
	credits are allowed is $200 million.
	(b)  The total amount of certified capital for which premium
	tax credits may be allowed for all certified investors under this
	chapter may not exceed the amount that would entitle all certified
	investors in certified capital companies to take total credits of
	$50 million in a year.
	(c)  A certified capital company and the company's
	affiliates may not file premium tax credit allocation claims in
	excess of the maximum amount of certified capital for which premium
	tax credits may be allowed as provided by this section. (V.T.I.C.
	Art. 4.67.)
	Sec.228.255.ALLOCATION OF PREMIUM TAX CREDIT.  (a)  If the
	total premium tax credits claimed by all certified investors
	exceeds the total limits on premium tax credits established by
	Section 228.254(a), the comptroller shall allocate the total amount
	of premium tax credits allowed under this chapter to certified
	investors in certified capital companies on a pro rata basis in
	accordance with this section.
	(b)  The pro rata allocation for each certified investor
	shall be the product of:
	(1)  a fraction, the numerator of which is the amount of
	the premium tax credit allocation claim filed on behalf of the
	investor and the denominator of which is the total amount of all
	premium tax credit allocation claims filed on behalf of all
	certified investors; and
	(2)  the total amount of certified capital for which
	premium tax credits may be allowed under this chapter.
	(c)  The maximum amount of certified capital for which
	premium tax credit allocation may be allowed on behalf of a single
	certified investor and the investor's affiliates, whether by one or
	more certified capital companies, may not exceed the greater of:
	(1)  $10 million; or
	(2)  15 percent of the maximum aggregate amount
	available under Section 228.254(a). (V.T.I.C. Art. 4.68, Secs.
	(a), (b), (e).)
	Sec.228.256.TREATMENT OF CREDITS AND CAPITAL.  In any case
	under this code or another insurance law of this state in which the
	assets of a certified investor are examined or considered, the
	certified capital may be treated as an admitted asset, subject to
	the applicable statutory valuation procedures. (V.T.I.C. Art.
	4.69.)
	Sec.228.257.TRANSFERABILITY OF CREDIT.  (a) A certified
	investor may transfer or assign premium tax credits only in
	compliance with the rules adopted under Section 228.052.
	(b)  The transfer or assignment of a premium tax credit does
	not affect the schedule for taking the premium tax credit under this
	chapter. (V.T.I.C. Art. 4.71, Secs. (a) (part), (b).)
	Sec.228.258.IMPACT OF PREMIUM TAX CREDIT ON INSURANCE RATEMAKING
	RATEMAKING
	amount of premium tax included by the investor in connection with
	ratemaking for an insurance contract written in this state because
	of a reduction in the investor's Texas premium tax derived from
	premium tax credits granted under this chapter. (V.T.I.C. Art.
	4.70.)
	Sec.228.259.RETALIATORY TAX.  A certified investor
	claiming a credit against state premium tax liability earned
	through an investment in a company is not required to pay any
	additional retaliatory tax levied under Chapter 281 as a result of
	claiming that credit. (V.T.I.C. Art. 4.65, Sec. (c) (part).)
	[Sections 228.260-228.300 reserved for expansion]
	SUBCHAPTER G.  ENFORCEMENT
	Sec.228.301.ANNUAL REVIEW BY COMPTROLLER.  (a)  The
	comptroller shall conduct an annual review of each certified
	capital company to:
	(1)  ensure that the company:
	(A)  continues to satisfy the requirements of this
	chapter; and
	(B)  has not made any investment in violation of
	this chapter; and
	(2)  determine the eligibility status of the company's
	qualified investments.
	(b)  Each certified capital company shall pay the cost of the
	annual review according to a reasonable fee schedule adopted by the
	comptroller. (V.T.I.C. Art. 4.61, Secs. (a), (b).)
	Sec.228.302.DECERTIFICATION OF CERTIFIED CAPITAL COMPANY
	COMPANY
	228.107, 228.151, 228.152, 228.153, 228.154, 228.155, 228.156,
	228.202, or 228.204 is grounds for decertification of a certified
	capital company.
	(b)  If the comptroller determines that a certified capital
	company is not in compliance with a law listed in Subsection (a),
	the comptroller shall notify the company's officers in writing that
	the company may be subject to decertification after the 120th day
	after the date the notice is mailed unless the company:
	(1)  corrects the deficiencies; and
	(2)  returns to compliance with the law.
	(c)  The comptroller may decertify a certified capital
	company, after opportunity for hearing, if the comptroller finds
	that the company is not in compliance with a law listed in
	Subsection (a) at the end of the period established by Subsection
	(b).
	(d)  Decertification under this section is effective on
	receipt of notice of decertification by the certified capital
	company.
	(e)  The comptroller shall notify any appropriate state
	agency of a decertification of a certified capital company.
	(V.T.I.C. Art. 4.61, Secs. (c), (d).)
	Sec.228.303.ADMINISTRATIVE PENALTY.  (a)  The comptroller
	may impose an administrative penalty on a certified capital company
	that violates this chapter.
	(b)  The amount of the penalty may not exceed $25,000. Each
	day a violation continues or occurs is a separate violation for the
	purpose of imposing the penalty. The amount of the penalty shall be
	based on:
	(1)  the seriousness of the violation, including the
	nature, circumstances, extent, and gravity of the violation;
	(2)  the economic harm caused by the violation;
	(3)  the history of previous violations;
	(4)  the amount necessary to deter a future violation;
	(5)  efforts to correct the violation; and
	(6)  any other matter that justice may require.
	(c)  A certified capital company assessed a penalty under
	this chapter may request a redetermination as provided by Chapter
	111, Tax Code.
	(d)  The attorney general may sue to collect the penalty.
	(e)  A proceeding to impose the penalty is a contested case
	under Chapter 2001, Government Code. (V.T.I.C. Art. 4.62.)
	[Sections 228.304-228.350 reserved for expansion]
	SUBCHAPTER H.  RECAPTURE AND FORFEITURE OF PREMIUM TAX CREDITS
	Sec.228.351.RECAPTURE AND FORFEITURE OF PREMIUM TAX CREDIT FOLLOWING DECERTIFICATION
	CREDIT FOLLOWING DECERTIFICATION
	certified capital company may, in accordance with this section,
	cause:
	(1)  the recapture of premium tax credits previously
	claimed by the company's certified investors; and
	(2)  the forfeiture of future premium tax credits to be
	claimed by the investors.
	(b)  Decertification of a certified capital company on or
	before the third anniversary of the company's allocation date
	causes the recapture of any premium tax credits previously claimed
	and the forfeiture of any future premium tax credits to be claimed
	by a certified investor with respect to the company.
	(c)  For a certified capital company that meets the
	requirements for continued certification under Section 228.151(a)
	and subsequently fails to meet the requirements for continued
	certification under Subsection (b) of that section:
	(1)  any premium tax credit that has been or will be
	taken by a certified investor on or before the third anniversary of
	the allocation date is not subject to recapture or forfeiture; and
	(2)  any premium tax credit that has been or will be
	taken by a certified investor after the third anniversary of the
	company's allocation date is subject to recapture or forfeiture.
	(d)  For a certified capital company that has met the
	requirements for continued certification under Section 228.151 and
	is subsequently decertified:
	(1)  any premium tax credit that has been or will be
	taken by a certified investor on or before the fifth anniversary of
	the allocation date is not subject to recapture or forfeiture; and
	(2)  any premium tax credit to be taken after the fifth
	anniversary of the allocation date is subject to forfeiture only if
	the company is decertified on or before the fifth anniversary of the
	company's allocation date.
	(e)  For a certified capital company that has invested an
	amount cumulatively equal to 100 percent of the company's certified
	capital in qualified investments, any premium tax credit claimed or
	to be claimed by a certified investor is not subject to recapture or
	forfeiture under this section. (V.T.I.C. Art. 4.63, Sec. (a).)
	Sec.228.352.NOTICE OF RECAPTURE AND FORFEITURE OF PREMIUM TAX CREDIT
	TAX CREDIT
	address of each certified investor whose premium tax credit is
	subject to recapture or forfeiture, using the address shown on the
	investor's last premium tax filing. (V.T.I.C. Art. 4.63, Sec.
	(b).)
	Sec.228.353.INDEMNITY AGREEMENTS AND INSURANCE AUTHORIZED
	AUTHORIZED
	indemnify, or purchase insurance for the benefit of, a certified
	investor for losses resulting from the recapture or forfeiture of
	premium tax credits under Section 228.351.
	(b)  Any guaranty, indemnity, bond, insurance policy, or
	other payment undertaking made under this section may not be
	provided by more than one certified investor of the certified
	capital company or affiliate of the certified investor. (V.T.I.C.
	Art. 4.64.)
	PART C.  ADDITIONS TO TITLE 4, INSURANCE CODE
	SECTION 1C.001.  ADDITION.  Subtitle A, Title 4, Insurance
	Code, is amended by adding Chapter 406 to read as follows:
	CHAPTER 406. SPECIAL DEPOSITS REQUIRED UNDER POTENTIALLY
	HAZARDOUS CONDITIONS
	Sec.406.001.DEFINITION. In this chapter, "insurer"
	includes:
	(1)  a capital stock insurance company;
	(2)  a reciprocal or interinsurance exchange;
	(3)  a Lloyd's plan;
	(4)  a fraternal benefit society;
	(5)  a mutual company, including a mutual assessment
	company;
	(6)  a statewide mutual assessment company;
	(7)  a local mutual aid association;
	(8)  a burial association;
	(9)  a county mutual insurance company;
	(10)  a farm mutual insurance company;
	(11)  a fidelity, guaranty, or surety company;
	(12)  a title insurance company;
	(13)  a stipulated premium company;
	(14)  a group hospital service corporation;
	(15)  a health maintenance organization;
	(16)  a risk retention group; and
	(17)  any other organization or person engaged in the
	business of insurance. (V.T.I.C. Art. 1.33, Sec. 1.)
	Sec.406.002.APPLICABILITY OF CHAPTER. This chapter
	applies to a person or organization engaged in the business of
	insurance without regard to whether the person or organization is
	listed in Section 406.001, unless another statute specifically
	cites this chapter and exempts the person or organization from this
	chapter. (V.T.I.C. Art. 1.33, Sec. 2.)
	Sec.406.003.REQUIRED DEPOSIT: STANDARDS AND CRITERIA.
	The commissioner, in the commissioner's sole discretion, may
	require an insurer to make a deposit under this chapter if the
	commissioner determines that one of the following conditions, if
	not rectified, may potentially be hazardous to the insurer's
	policyholders, enrollees, or creditors, or to the public:
	(1)  the insurer's financial or operating condition,
	reviewed in conjunction with the kinds and nature of risks insured;
	(2)  the insurer's method of operation;
	(3)  the insurer's relationship with affiliates;
	(4)  the nature and amount of the insurer's
	investments;
	(5)  the insurer's contracts that may lead to a
	contingent liability; or
	(6)  the insurer's agreements with respect to guaranty
	and surety. (V.T.I.C. Art. 1.33, Sec. 3.)
	Sec.406.004.REQUIRED DEPOSIT: FORM OF SECURITY. A
	deposit required under Section 406.003 must be made with the
	comptroller and approved by the commissioner. The deposit must be
	made in:
	(1)  cash;
	(2)  securities authorized under this code to be a
	legal investment for the insurer that:
	(A)  are readily marketable over a national
	exchange with a maturity date of not more than one year, are listed
	by the Securities Valuation Office of the National Association of
	Insurance Commissioners, and qualify as admitted assets; or
	(B)  are clean, irrevocable, and unconditional
	letters of credit issued or confirmed by a financial institution
	organized and licensed under the laws of the United States or a
	state of the United States; or
	(3)  another form of security acceptable to the
	commissioner. (V.T.I.C. Art. 1.33, Sec. 4.)
	Sec.406.005.DURATION OF DEPOSIT. Subject to Section
	406.006, the comptroller shall hold a deposit required under this
	chapter until the commissioner issues a written order finding that
	the condition for which the deposit was required no longer exists.
	(V.T.I.C. Art. 1.33, Sec. 5.)
	Sec.406.006.SUBSTITUTION OR WITHDRAWAL OF DEPOSIT. (a)
	An insurer may file a written application with the commissioner
	requesting:
	(1)  withdrawal of all or part of the deposit held by
	the comptroller under this chapter; or
	(2)  substitution of all or part of the deposited
	securities held by the comptroller under this chapter.
	(b)  The application must state the basis for the request to
	withdraw the deposit or to substitute the deposited security.
	(c)  An insurer's application for the substitution of a
	deposited security must provide specific information regarding the
	security to be deposited as a substitute for the security held by
	the comptroller.
	(d)  The commissioner shall issue an order approving or
	denying an application under this section not later than the 30th
	day after the date the department receives the application. If the
	commissioner does not approve or deny the application within that
	period, the application is denied.
	(e)  The commissioner may, in the commissioner's sole
	discretion, approve an application to withdraw a deposit or
	substitute a deposited security if the commissioner determines that
	the withdrawal or substitution will not be hazardous to the
	insurer's policyholders, enrollees, or creditors, or to the public.
	(f)  The comptroller may not release a deposit made under
	this chapter, or any part of the deposit, and may not accept a
	substitute for a deposited security unless the commissioner issues
	an order approving the withdrawal or substitution. (V.T.I.C. Art.
	1.33, Sec. 6.)
	Sec.406.007.APPEAL. An insurer may appeal an action of
	the commissioner under this chapter in accordance with Subchapter
	D, Chapter 36. (V.T.I.C. Art. 1.33, Sec. 7.)
	Sec.406.008.CUMULATIVE OF OTHER DEPOSITS. A deposit
	required to be made under this chapter is in addition to any other
	deposit that the insurer is required or authorized to make under
	this code. (V.T.I.C. Art. 1.33, Sec. 8.)
	PART D.  ADDITIONS TO TITLE 5, INSURANCE CODE
	SECTION 1D.001. ADDITION. Chapter 542, Insurance Code, is
	amended by adding Subchapter C-1 to read as follows:
	SUBCHAPTER C-1. REQUEST FOR CLAIMS INFORMATION BY CERTAIN
	OFFICIALS
	Sec. 542.131.  REQUEST BY CERTAIN OFFICIALS ENGAGED IN
	CRIMINAL INVESTIGATION. (a)  This section applies only to a claim
	for a burglary or robbery loss or a death claim seeking life
	insurance proceeds that is filed with an insurance company on or
	after September 1, 2001.
	(b)  In the course of a criminal investigation and subject to
	Subsection (c), the state fire marshal, the fire marshal of a
	political subdivision of this state, the chief of a fire department
	in this state, a chief of police of a municipality in this state, or
	a sheriff in this state may request in writing that an insurance
	company investigating a claimed burglary or robbery loss or a death
	claim seeking life insurance proceeds release information in the
	company's possession that relates to that claimed loss. The
	company shall release the information to any official authorized to
	request the information under this subsection if the company has
	reason to believe that the insurance claim is false or fraudulent.
	(c)  An official who requests information under this section
	may not request anything other than:
	(1)  an insurance policy relevant to an insurance claim
	under investigation and the application for that policy;
	(2)  policy premium payment records;
	(3)  the history of the insured's previous claims; and
	(4)  material relating to the investigation of the
	insurance claim, including:
	(A)  statements of any person;
	(B)  proof of loss; or
	(C)  other relevant evidence.
	(d)  This section does not authorize a public official or
	agency to adopt or require any form of periodic report by an
	insurance company.
	(e)  In the absence of fraud or malice, an insurance company
	or a person who releases information on behalf of an insurance
	company is not liable for damages in a civil action or subject to
	criminal prosecution for an oral or written statement made, or any
	other action taken, that relates to the information required to be
	released under this section.
	(f)  An official or department employee receiving
	information under this section shall maintain the confidentiality
	of the information until the information is required to be released
	during a criminal or civil proceeding.
	(g)  An insurance company or the company's representative
	may not intentionally refuse to release to an official described by
	Subsection (b) the information required to be released to that
	official under this section. (V.T.I.C. Art. 21.49C.)
	SECTION 1D.002.  ADDITION.  Subtitle C, Title 5, Insurance
	Code, is amended by adding Chapter 560 to read as follows:
	CHAPTER 560.  PROHIBITED RATES
	Sec.560.001.DEFINITION OF INSURER. In this chapter,
	"insurer" means an insurance company, reciprocal or interinsurance
	exchange, mutual insurance company, farm mutual insurance company,
	capital stock insurance company, county mutual insurance company,
	Lloyd's plan, surplus lines insurer, or other legal entity engaged
	in the business of insurance in this state. The term includes:
	(1)  an affiliate described by Section 823.003(a);
	(2)  the Texas Windstorm Insurance Association
	established under Chapter 2210;
	(3)  the FAIR Plan Association established under
	Chapter 2211; and
	(4)  the Texas Automobile Insurance Plan Association
	established under Chapter 2151. (V.T.I.C. Art. 1.02, Sec. (a).)
	Sec.560.002.USE OF CERTAIN RATES PROHIBITED; RATE REQUIREMENTS
	REQUIREMENTS
	chapter.
	(b)  A rate used under this code:
	(1)  must be just, fair, reasonable, and adequate; and
	(2)  may not be:
	(A)  confiscatory;
	(B)  excessive for the risks to which the rate
	applies; or
	(C)  unfairly discriminatory.
	(c)  For purposes of this section, a rate is:
	(1)  inadequate if the rate is insufficient to sustain
	projected losses and expenses to which the rate applies, and
	continued use of the rate:
	(A)  endangers the solvency of an insurer using
	the rate; or
	(B)  has the effect of substantially lessening
	competition or creating a monopoly in any market;
	(2)  excessive if the rate is likely to produce a
	long-term profit that is unreasonably high in relation to the
	insurance coverage provided; or
	(3)  unfairly discriminatory if the rate:
	(A)  is not based on sound actuarial principles;
	(B)  does not bear a reasonable relationship to
	the expected loss and expense experience among risks; or
	(C)  is based wholly or partly on the race, creed,
	color, ethnicity, or national origin of the policyholder or an
	insured. (V.T.I.C. Art. 1.02, Secs. (b), (c).)
	PART E.  ADDITIONS TO TITLE 6, INSURANCE CODE
	SECTION 1E.001. ADDITION. Subtitle H, Title 6, Insurance
	Code, is amended by adding Chapter 963 to read as follows:
	CHAPTER 963.  AUTOMOBILE CLUBS
	Sec.963.001.DEFINITION.  In this chapter, "automobile
	club" has the meaning assigned by Section 722.002, Transportation
	Code. (V.T.I.C. Art. 21.80, Sec. (a) (part).)
	Sec.963.002.PROVISION OF CERTAIN INSURANCE SERVICES BY AUTOMOBILE CLUB
	AUTOMOBILE CLUB
	services only as provided by this chapter.
	(b)  An automobile club may provide accidental injury and
	death benefit insurance coverage to a member through purchase of a
	group policy of insurance issued to the automobile club for the
	benefit of its members. The coverage must be purchased from an
	insurance company authorized to engage in the business of that type
	of coverage in this state. (V.T.I.C. Art. 21.80, Secs. (a) (part),
	(b) (part).)
	Sec.963.003.CERTIFICATE OF PARTICIPATION.  (a)  The
	automobile club shall provide each member covered by insurance
	described by Section 963.002 a certificate of participation.
	(b)  The certificate of participation must state on its face
	in at least 14-point black boldfaced type that the certificate is
	only a certificate of participation in a group accidental injury
	and death policy and is not automobile liability insurance
	coverage.  (V.T.I.C. Art. 21.80, Sec. (b) (part).)
	Sec.963.004.  CERTAIN ACTIVITIES PROHIBITED.  An automobile
	club may endorse insurance products and refer members to agents or
	insurers authorized to provide the insurance products in this
	state. The automobile club or an agent of the automobile club may
	not receive consideration for the referral.  (V.T.I.C. Art. 21.80,
	Sec. (c).)
	Sec.963.005.CERTAIN TRANSPORTATION-RELATED SERVICES.  In
	addition to reimbursement services described by Section
	722.002(2), Transportation Code, an automobile club may contract
	with a member to:
	(1)  reimburse the member for expenses the member
	incurs for towing, emergency road service, and lockout or lost key
	services; and
	(2)  provide immediate destination assistance and trip
	interruption service.  (V.T.I.C. Art. 21.80, Sec. (f) (part).)
	Sec.963.006.APPLICABILITY OF INSURANCE LAWS.  (a)  Except
	as provided by Subsection (b), an automobile club performing
	services permitted by this chapter is not subject to regulation
	under the insurance laws of this state because of the performance of
	those services.
	(b)  An automobile club may sell insurance products to a
	member for a consideration separate from the amount that the member
	pays for membership in the automobile club if the automobile club is
	properly licensed as an agent under the applicable provisions of
	this code.
	(c)  The insurance laws of this state do not apply to
	reimbursement provided under Section 963.005. (V.T.I.C. Art.
	21.80, Secs. (d), (e), (f) (part).)
	PART F.  ADDITIONS TO TITLE 7, INSURANCE CODE
	SECTION 1F.001.  ADDITION.  Subtitle A, Title 7, Insurance
	Code, is amended by adding Chapters 1112 and 1113 to read as
	follows:
	CHAPTER 1112. CERTAIN GUARANTEES IN LIFE INSURANCE POLICIES
	Sec.1112.001.CERTAIN GUARANTEES NOT PROHIBITED. Section
	841.253 does not prohibit the issuance of a life insurance policy
	that guarantees, by coupons or otherwise, definite payments or
	reductions in premiums. (V.T.I.C. Art. 3.11 (part).)
	Sec.1112.002.CERTAIN GUARANTEES CONSTITUTE DEFINITE CONTRACT BENEFIT; VALUATION OF BENEFIT
	CONTRACT BENEFIT; VALUATION OF BENEFIT
	Subsection (e), a guarantee described by Section 1112.001 that is
	in a policy or coupon issued after September 5, 1955, shall be
	treated as a definite contract benefit and valued according to this
	section and the reserve requirements of Chapter 425.
	(b)  Except as provided by Subsection (c), for a policy or
	coupon issued before the date determined under Section 1105.002(a)
	or (b), as applicable to the company, a contract benefit described
	by Subsection (a) shall be valued using the reserve valuation net
	premium for the benefits that is a uniform percentage of the gross
	premiums.
	(c)  A policy described by Subsection (b) that contains a
	contract benefit described by Subsection (a) may be valued on a
	basis that provides for not more than one year preliminary term
	insurance.
	(d)  For a policy or coupon issued on or after the date
	determined under Section 1105.002(a) or (b), as applicable to the
	company, a contract benefit described by Subsection (a) shall be
	valued using the commissioners reserve valuation method described
	by Section 425.064.
	(e)  A provision of this section relating to reserves does
	not apply to a policy issued before September 7, 1955. (V.T.I.C.
	Art. 3.11 (part).)
	CHAPTER 1113. MANAGEMENT, CONTROL, AND DISPOSITION OF CERTAIN LIFE
	INSURANCE AND ANNUITY CONTRACTS
	Sec.1113.001.LIFE INSURANCE AND ANNUITY CONTRACTS OF SPOUSE
	SPOUSE
	spouse, has management, control, and disposition of any contract of
	life insurance or annuity issued in the spouse's name or to the
	extent provided by the contract or any assignment of the contract,
	regardless of whether the contract was issued before, on, or after
	January 1, 1968. (V.T.I.C. Art. 3.49-3.)
	PART G.  ADDITIONS TO TITLE 8, INSURANCE CODE
	SECTION 1G.001.  ADDITION.  Subtitle A, Title 8, Insurance
	Code, is amended by adding Chapter 1214 to read as follows:
	CHAPTER 1214. ADVERTISING FOR CERTAIN HEALTH BENEFITS
	Sec.1214.001.APPLICABILITY OF CHAPTER.  This chapter
	applies only to a health benefit plan that provides benefits for
	medical or surgical expenses incurred as a result of a health
	condition, accident, or sickness, including an individual, group,
	blanket, or franchise insurance policy or agreement, a group
	hospital service contract, or an individual or group evidence of
	coverage issued by:
	(1)  an insurance company;
	(2)  a group hospital service corporation operating
	under Chapter 842;
	(3)  a health maintenance organization operating under
	Section 1367.053, Subchapter A, Chapter 1452, Subchapter B, Chapter
	1507, Chapter 222, 251, or 258, as applicable to a health
	maintenance organization, Chapter 843, Chapter 1271, and Chapter
	1272; or
	(4)  an approved nonprofit health corporation holding a
	certificate of authority under Chapter 844.  (V.T.I.C.
	Art. 21.20-2, Sec. 1(a).)
	Sec.1214.002.EXCEPTION.  This chapter does not apply to:
	(1)  a health benefit plan that provides coverage:
	(A)  only for a specified disease;
	(B)  only for accidental death or dismemberment;
	or
	(C)  for wages or payments in lieu of wages for a
	period during which an employee is absent from work because of
	sickness or injury; or
	(2)  a long-term care insurance policy, including a
	nursing home fixed indemnity policy, unless the commissioner
	determines that the policy provides benefits so comprehensive that
	the policy is a health benefit plan as described by Section
	1214.001. (V.T.I.C. Art. 21.20-2, Sec. 1(b).)
	Sec.1214.003.RATE INFORMATION DISCLAIMERS.  (a)  Subject
	to Chapter 541 and Section 543.001, an advertisement for a health
	benefit plan may include rate information without including
	information about each benefit exclusion or limitation if the
	advertisement includes prominent disclaimers clearly indicating
	that:
	(1)  the rates are illustrative;
	(2)  a person should not send money to the health
	benefit plan issuer in response to the advertisement;
	(3)  a person cannot obtain coverage under the plan
	until the person completes an application for coverage; and
	(4)  benefit exclusions or limitations may apply to the
	plan.
	(b)  An advertisement that states a rate must also indicate
	the age, gender, and geographic location on which the rate is based.
	(V.T.I.C. Art. 21.20-2, Sec. 2.)
	SECTION 1G.002.  ADDITION.  Subtitle H, Title 8, Insurance
	Code, is amended by adding Chapter 1550 to read as follows:
	CHAPTER 1550.  CERTAIN REQUIREMENTS FOR INSURERS CONTRACTING WITH
	GOVERNMENTAL ENTITIES
	SUBCHAPTER A. REPORTING REQUIREMENTS
	Sec.1550.001.DEFINITIONS. In this subchapter:
	(1)  "Governmental entity" means:
	(A)  a state agency; or
	(B)  a county, municipality, school district,
	special purpose district, or other subdivision of state government
	that has jurisdiction limited to a geographic portion of the state.
	(2)  "Insurer" means:
	(A)  an insurance company;
	(B)  a health maintenance organization operating
	under Section 1367.053, Subchapter A, Chapter 1452, Subchapter B,
	Chapter 1507, Chapter 222, 251, or 258, as applicable to a health
	maintenance organization, Chapter 843, Chapter 1271, and Chapter
	1272; or
	(C)  an approved nonprofit health corporation
	that holds a certificate of authority issued under Chapter 844.
	(V.T.I.C. Art. 21.49-15, Sec. 1.)
	Sec.1550.002.REPORT REQUIRED. (a) This section applies
	to a contract subject to competitive bidding under which an insurer
	delivers, issues for delivery, or renews a health insurance policy
	or contract or an evidence of coverage.
	(b)  An insurer that enters into a contract described by
	Subsection (a) with a governmental entity shall provide to the
	governmental entity a detailed report that includes:
	(1)  the claims experience of the governmental entity
	during the preceding calendar year; and
	(2)  the dollar amount of each large claim, as defined
	by the governmental entity, paid by the insurer under the contract
	during the preceding calendar year. (V.T.I.C. Art. 21.49-15, Sec.
	2(a).)
	Sec.1550.003.CLAIM INFORMATION. (a) An insurer
	providing claim information to a governmental entity in the report
	under Section 1550.002 shall provide the information in the
	aggregate, without information through which a specific individual
	covered by the health insurance or evidence of coverage may be
	identified.
	(b)  Claim information provided by an insurer to a
	governmental entity in the report under Section 1550.002:
	(1)  may be viewed or used only for contract bidding
	purposes; and
	(2)  is confidential for purposes of Chapter 552,
	Government Code. (V.T.I.C. Art. 21.49-15, Sec. 2(b).)
	[Sections 1550.004-1550.050 reserved for expansion]
	SUBCHAPTER B. CERTAIN CONTRACTS
	WITH MUNICIPALITIES
	Sec.1550.051.DEFINITION OF INSURER. In this subchapter,
	"insurer" means:
	(1)  an insurance company, including a company
	providing stop-loss or excess loss insurance;
	(2)  a health maintenance organization operating under
	Section 1367.053, Subchapter A, Chapter 1452, Subchapter B, Chapter
	1507, Chapter 222, 251, or 258, as applicable to a health
	maintenance organization, Chapter 843, Chapter 1271, and Chapter
	1272;
	(3)  an approved nonprofit health corporation that
	holds a certificate of authority issued under Chapter 844; or
	(4)  a third-party administrator that holds a
	certificate of authority under Chapter 4151. (V.T.I.C. Art.
	21.49-16, Sec. 1(1).)
	Sec.1550.052.BID REQUIREMENTS. (a)  Except as provided by
	Section 1550.054, an insurer that bids on a contract subject to the
	competitive bidding and competitive proposal requirements adopted
	under Section 252.021, Local Government Code, may not submit a bid
	for a contract to provide stop-loss or other insurance coverage
	that is subject to any qualification imposed by the insurer that
	permits the insurer to modify or limit the terms of insurance
	coverage to be provided after the contract has been made.
	(b)  An insurer's bid submitted under Section 252.021, Local
	Government Code, must contain the insurer's entire offer.
	(V.T.I.C. Art. 21.49-16, Sec. 2(a).)
	Sec.1550.053.CERTAIN EXCLUSIONS AND INCREASED DEDUCTIBLES PROHIBITED
	DEDUCTIBLES PROHIBITED
	insurer that provides stop-loss or other insurance coverage for
	health benefits under a contract subject to this subchapter may
	not, based on an individual's prior medical history:
	(1)  exclude from coverage an individual who is
	otherwise eligible for the health benefits coverage; or
	(2)  assign a higher deductible to the individual.
	(V.T.I.C. Art. 21.49-16, Sec. 2(b).)
	Sec.1550.054.EXCEPTION FOR WRITTEN WAIVER. By executing
	a written waiver in favor of the insurer, a municipality as defined
	by Section 1.005, Local Government Code, may waive a requirement of
	Section 1550.052 or 1550.053(2). (V.T.I.C. Art. 21.49-16, Secs.
	1(2), 2(c).)
	SECTION 1G.003.  ADDITION. Subchapter C, Chapter 1579,
	Insurance Code, is amended by adding Sections 1579.106, 1579.107,
	and 1579.108 to read as follows:
	Sec. 1579.106.  PRIOR AUTHORIZATION FOR CERTAIN DRUGS.  (a)
	In this section, "drug formulary" means a list of drugs preferred
	for use and eligible for coverage by a health coverage plan.
	(b)  A health coverage plan provided under this chapter that
	uses a drug formulary in providing a prescription drug benefit must
	require prior authorization for coverage of the following
	categories of prescribed drugs if the specific drug prescribed is
	not included in the formulary:
	(1)  a gastrointestinal drug;
	(2)  a cholesterol-lowering drug;
	(3)  an anti-inflammatory drug;
	(4)  an antihistamine drug; and
	(5)  an antidepressant drug.
	(c)  Every six months the trustee shall submit to the
	comptroller and the Legislative Budget Board a report regarding any
	cost savings achieved in the program through implementation of the
	prior authorization requirement of this section. The report must
	cover the previous six-month period.  (V.T.I.C. Art. 3.50-7A, as
	added Acts 78th Leg., R.S., Ch. 213.)
	Sec.1579.107.DISEASE MANAGEMENT SERVICES. (a)  In this
	section, "disease management services" means services to assist an
	individual manage a disease or other chronic health condition, such
	as heart disease, diabetes, respiratory illness, end-stage renal
	disease, HIV infection, or AIDS, and with respect to which the
	trustee identifies populations requiring disease management.
	(b)  A health coverage plan provided under this chapter must
	provide disease management services or coverage for disease
	management services in the manner required by the trustee,
	including:
	(1)  patient self-management education;
	(2)  provider education;
	(3)  evidence-based models and minimum standards of
	care;
	(4)  standardized protocols and participation
	criteria; and
	(5)  physician-directed or physician-supervised care.
	(V.T.I.C. Art. 3.50-7B.)
	Sec.1579.108.LIMITATIONS. The trustee may not contract
	for or provide a health coverage plan that excludes from
	participation in the network a general hospital that:
	(1)  is located in the geographical service area or
	areas of the health coverage plan that includes a county that:
	(A)  has a population of at least 100,000 and not
	more than 175,000; and
	(B)  is located in the Texas-Louisiana border
	region, as that term is defined in Section 2056.002(e), Government
	Code; and
	(2)  agrees to provide medical and health care services
	under the plan subject to the same terms as other hospital providers
	under the plan. (V.T.I.C. Art. 3.50-7A, Sec. (b), as added Acts
	78th Leg., R.S., Ch. 201.)
	PART H.  ADDITIONS TO TITLE 10, INSURANCE CODE
	SECTION 1H.001.  ADDITION.  Subtitle C, Title 10, Insurance
	Code, is amended by adding Chapter 1953 to read as follows:
	CHAPTER 1953. RATE REGULATION AND RATEMAKING FOR AUTOMOBILE
	INSURANCE
	SUBCHAPTER A.  RATE REGULATION
	Sec.1953.001.EXCLUSION OF CERTAIN TYPES OR CLASSES OF INSURANCE FROM CERTAIN REGULATIONS
	INSURANCE FROM CERTAIN REGULATIONS
	to insurance against liability for damages arising out of the
	ownership, operation, maintenance, or use of a motor vehicle
	described by Article 5.01 or against loss of or damage to a motor
	vehicle described by Article 5.01 that, in the judgment of the
	commissioner, is a type or class of insurance that is also the
	subject of or is more properly regulated under other insurance
	rating laws that cover that type or class of insurance.
	(b)  A type or class of insurance to which this section
	applies is excluded from regulation under this chapter and:
	(1)  Articles 5.01, 5.01B, 5.03, 5.04, 5.04-1, 5.06,
	5.10, and 5.11;
	(2)  Chapters 251 and 254;
	(3)  Subchapters A and B, Chapter 1806; and
	(4)  Chapters 1951 and 1952.
	(c)  If the commissioner finds that a type or class of
	insurance to which this section applies is also the subject of or is
	more properly regulated under other insurance rating laws that
	cover that type or class of insurance, the commissioner shall issue
	an order declaring which other insurance rating laws apply to:
	(1)  the type or class of insurance; and
	(2)  any motor vehicle equipment described by Article
	5.01. (V.T.I.C. Art. 5.02.)
	[Sections 1953.002-1953.050 reserved for expansion]
	SUBCHAPTER B. RATEMAKING
	Sec.1953.051.CERTAIN RATING PLANS PROHIBITED. A rating
	plan regarding the writing of automobile insurance, other than
	insurance written under Chapter 2151, may not:
	(1)  assign a rate consequence to a charge or
	conviction for a violation of Subtitle C, Title 7, Transportation
	Code; or
	(2)  otherwise cause premiums for automobile insurance
	to be increased because of a charge or conviction described by
	Subdivision (1). (V.T.I.C. Art. 5.01-1.)
	Sec.1953.052.PREMIUM SURCHARGE REQUIRED. (a) An insurer
	described by Section 1952.001 shall assess a premium surcharge in
	an amount prescribed by the department against an insured for no
	more than three years immediately following the date the insured is
	convicted of:
	(1)  an offense relating to the operating of a motor
	vehicle while intoxicated in violation of Section 49.04 or 49.07,
	Penal Code; or
	(2)  an offense under Section 49.08, Penal Code.
	(b)  An insurer may apply the premium surcharge described by
	Subsection (a) only to a private passenger automobile policy, as
	defined by the department.
	(c)  If an insured assessed a premium surcharge under
	Subsection (a) is convicted of an offense under one of the statutes
	listed in Subsection (a)(1) or (2) during the period the insured is
	assessed the premium surcharge, the period for which the premium
	surcharge is assessed is increased by three additional consecutive
	years for each conviction. (V.T.I.C. Art. 5.03-1.)
	[Sections 1953.053-1953.100 reserved for expansion]
	SUBCHAPTER C.  LOSS AND EXPENSE EXPERIENCE
	Sec.1953.101.RECORDING AND REPORTING OF LOSS AND EXPENSE EXPERIENCE AND OTHER DATA
	EXPERIENCE AND OTHER DATA
	reasonable rules and statistical plans for the recording and
	reporting of loss experience and other required data by insurers.
	The rules and plans must ensure that each insurer's total loss and
	expense experience is made available at least as frequently as
	annually in the form and with the detail necessary to aid in
	determining whether rates and rating systems in use under the
	following provisions comply with the standards adopted under those
	provisions:
	(1)  this chapter;
	(2)  Articles 5.01, 5.03, and 5.04, if applicable;
	(3)  Subchapters A and B, Chapter 1806; and
	(4)  Chapters 1951 and 1952.
	(b)  In adopting the rules, the commissioner shall adopt
	rules that are as uniform as is practicable to the rules and forms
	of statistical plans used in other states.
	(c)  Each insurer shall use the statistical plans adopted
	under this section to record and report loss experience and other
	required data in accordance with the rules adopted by the
	commissioner.
	(d)  The commissioner may modify statistical plans adopted
	under this section. (V.T.I.C. Art. 5.05, Sec. (a).)
	Sec.1953.102.RULES ALLOWING INTERCHANGE OF LOSS EXPERIENCE INFORMATION
	EXPERIENCE INFORMATION
	rules to allow the interchange of loss experience information as
	necessary for the application of rating plans. (V.T.I.C. Art.
	5.05, Sec. (b).)
	Sec.1953.103.EXCHANGE OF INFORMATION AND EXPERIENCE DATA WITH OTHER STATES
	WITH OTHER STATES
	laws, the department or an insurer may:
	(1)  exchange information and experience data with
	insurance supervisory officials, insurers, and rating
	organizations in other states; and
	(2)  consult and cooperate with the individuals or
	entities described by Subdivision (1) with respect to ratemaking
	and the application of rating systems. (V.T.I.C. Art. 5.05, Sec.
	(c).)
	Sec.1953.104.SWORN STATEMENTS. (a)  The department may
	require a sworn statement from an insurer affected by this
	subchapter that shows:
	(1)  the insurer's experience on any classification or
	classifications of risks; and
	(2)  other information that is necessary or helpful in
	performing duties or exercising authority imposed by law.
	(b)  The department shall prescribe the necessary forms for
	statements and reports required under Subsection (a) with due
	regard for the rules, methods, and forms in use in other states for
	similar purposes so that uniformity of statistics is not disturbed.
	(V.T.I.C. Art. 5.05, Sec. (d).)
	SECTION 1H.002.  ADDITION.  Subtitle D, Title 10, Insurance
	Code, is amended by adding Chapter 2008 to read as follows:
	CHAPTER 2008.  COVERAGE FOR CERTAIN DAMAGE
	TO PROPERTY BUILT WHOLLY OR PARTIALLY OVER WATER
	Sec.2008.001.APPLICABILITY OF CHAPTER. This chapter
	applies only to an insurer described by Section 2251.003(a).
	(V.T.I.C. Art. 5.14, Sec. (a).)
	Sec.2008.002.COVERAGE; LIMITS AND DEDUCTIBLES. (a) An
	insurance policy written by an insurer against loss or damage by
	windstorm, hurricane, or hail may include coverage for:
	(1)  a building or other structure that is built wholly
	or partially over water; and
	(2)  the corporeal movable property contained in a
	building or structure described by Subdivision (1).
	(b)  An insurer that writes coverage described by Subsection
	(a) may impose appropriate limits of coverage and deductibles for
	the coverage. (V.T.I.C. Art. 5.14, Secs. (b), (c).)
	PART I.  ADDITIONS TO TITLE 13, INSURANCE CODE
	SECTION 1I.001.  ADDITION.  Subtitle A, Title 13, Insurance
	Code, is amended by adding Chapter 4007 to read as follows:
	CHAPTER 4007.  NOTICE TO DEPARTMENT BY CERTAIN PROPERTY AND
	CASUALTY INSURANCE COMPANIES REGARDING AGENTS
	Sec.4007.001.APPLICABILITY OF CHAPTER. This chapter
	applies only to an insurance company authorized to engage in the
	business of insurance in this state under:
	(1)  a provision of:
	(A)  Chapter 5, 1805, or 2171; or
	(B)  Subtitle B, C, D, E, F, H, or I, Title 10; or
	(2)  Chapter 861, 862, 883, 911, 912, 941, 942, 984, or
	3503. (V.T.I.C. Art. 21.70, Sec. (a) (part).)
	Sec.4007.002.NOTICE TO DEPARTMENT REQUIRED. (a) On forms
	prescribed by the commissioner, an insurance company shall notify
	the department not later than the 30th day after the date on which:
	(1)  balances due from an insurance agent for more than
	90 days exceed $1 million or 10 percent of the company's
	policyholder surplus computed on December 31 of the preceding year
	or the most recent quarter if a report is specifically required by
	the department;
	(2)  an agent's authority to settle claims for the
	company is withdrawn; or
	(3)  the contract with an agent is canceled or
	terminated.
	(b)  An insurance company may comply with the notification
	requirement of Subsection (a)(1) by submitting a single annual
	report if:
	(1)  the company routinely operates above the limit
	established by Subsection (a)(1); and
	(2)  the commissioner verifies that fact under a
	procedure adopted by the commissioner. (V.T.I.C. Art. 21.70, Secs.
	(a) (part), (b).)
	PART J.  ADDITION OF TITLE 20, INSURANCE CODE
	SECTION 1J.001. TITLE 20.  The Insurance Code is amended by
	adding Title 20 to read as follows:
	TITLE 20.  REGULATION OF OTHER OCCUPATIONS
	CHAPTER 6001. FIRE EXTINGUISHER SERVICE AND INSTALLATION
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec. 6001.001.  PURPOSE
	Sec. 6001.002.  DEFINITIONS
	[Sections 6001.003-6001.050 reserved for expansion]
	SUBCHAPTER B. POWERS AND DUTIES OF COMMISSIONER,
	DEPARTMENT, AND STATE FIRE MARSHAL
	Sec. 6001.051.  ADMINISTRATION OF CHAPTER
	Sec. 6001.052.  ADOPTION OF RULES
	Sec. 6001.053.  RULES RESTRICTING ADVERTISING OR
	COMPETITIVE BIDDING
	Sec. 6001.054.  GENERAL POWERS AND DUTIES OF DEPARTMENT
	Sec. 6001.055.  FEES
	Sec. 6001.056.  DEPOSIT IN OPERATING ACCOUNT
	[Sections 6001.057-6001.100 reserved for expansion]
	SUBCHAPTER C. FIRE EXTINGUISHER ADVISORY COUNCIL
	Sec. 6001.101.  ADVISORY COUNCIL; APPOINTMENT
	Sec. 6001.102.  ADVISORY COUNCIL DUTIES
	[Sections 6001.103-6001.150 reserved for expansion]
	SUBCHAPTER D. REGISTRATION, LICENSE, AND PERMIT REQUIREMENTS
	Sec. 6001.151.  FIRM REGISTRATION CERTIFICATE REQUIRED
	Sec. 6001.152.  BRANCH OFFICE REGISTRATION CERTIFICATE
	REQUIRED
	Sec. 6001.153.  HYDROSTATIC TESTING; REGISTRATION
	CERTIFICATE REQUIRED
	Sec. 6001.154.  REQUIRED INSURANCE COVERAGE FOR
	REGISTRATION CERTIFICATE
	Sec. 6001.155.  EMPLOYEE LICENSE REQUIRED
	Sec. 6001.156.  ACTIVITIES NOT REGULATED BY CHAPTER
	Sec. 6001.157.  LICENSE EXAMINATION
	Sec. 6001.158.  EXAMINATION RESULTS
	Sec. 6001.159.  CONTINUING EDUCATION REQUIREMENTS
	Sec. 6001.160.  RECIPROCAL LICENSE
	Sec. 6001.161.  APPRENTICE PERMIT REQUIRED
	Sec. 6001.162.  NOT TRANSFERABLE
	[Sections 6001.163-6001.200 reserved for expansion]
	SUBCHAPTER E. RENEWAL OF REGISTRATION, LICENSE, OR PERMIT
	Sec. 6001.201.  RENEWAL REQUIRED; FEE
	Sec. 6001.202.  NOTICE OF EXPIRATION
	Sec. 6001.203.  RENEWAL PROCEDURES
	[Sections 6001.204-6001.250 reserved for expansion]
	SUBCHAPTER F. PROHIBITED PRACTICES
	AND DISCIPLINARY PROCEDURES
	Sec. 6001.251.  PROHIBITED PRACTICES
	Sec. 6001.252.  DISCIPLINARY ACTIONS
	Sec. 6001.253.  DISCIPLINARY HEARING
	Sec. 6001.254.  REAPPLICATION REQUIREMENTS
	Sec. 6001.255.  REEXAMINATION AFTER REVOCATION
	[Sections 6001.256-6001.300 reserved for expansion]
	SUBCHAPTER G. CRIMINAL PENALTY
	Sec. 6001.301.  CRIMINAL PENALTY
	CHAPTER 6001. FIRE EXTINGUISHER SERVICE AND INSTALLATION
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec.6001.001.PURPOSE. The purpose of this chapter is to
	safeguard lives and property by:
	(1)  regulating:
	(A)  the leasing, selling, installing, and
	servicing of portable fire extinguishers; and
	(B)  the planning, certifying, installing, and
	servicing of fixed fire extinguisher systems; and
	(2)  prohibiting portable fire extinguishers, fixed
	fire extinguisher systems, or extinguisher equipment that is not
	labeled or listed by a testing laboratory approved by the
	department.  (V.T.I.C. Art. 5.43-1, Sec. 1.)
	Sec.6001.002.DEFINITIONS. In this chapter:
	(1)  "Firm" means an individual, partnership,
	corporation, or association.
	(2)  "Fixed fire extinguisher system" means an assembly
	of piping, conduits, or containers that convey liquid, powder, or
	gases to dispersal openings or devices protecting one or more
	hazards by suppressing or extinguishing fires.
	(3)  "Hydrostatic testing" means pressure testing by
	hydrostatic methods.
	(4)  "Insurance agent" means:
	(A)  an individual, firm, or corporation licensed
	under:
	(i)  Subchapter E, Chapter 981; or
	(ii)  Subchapter A, B, C, D, E, or G, Chapter
	4051; or
	(B)  an individual authorized to represent an
	insurance fund or pool created by a municipality, county, or other
	political subdivision of this state under Chapter 791, Government
	Code.
	(5)  "Portable fire extinguisher" means any device that
	contains liquid, powder, or gases for suppressing or extinguishing
	fires.
	(6)  "Registered firm" means a firm that holds a
	registration certificate.
	(7)  "Service" and "servicing" mean servicing a
	portable fire extinguisher or a fixed fire extinguisher system by
	inspecting, charging, filling, maintaining, recharging, refilling,
	repairing, or testing. (V.T.I.C. Art. 5.43-1, Sec. 3.)
	[Sections 6001.003-6001.050 reserved for expansion]
	SUBCHAPTER B. POWERS AND DUTIES OF COMMISSIONER,
	DEPARTMENT, AND STATE FIRE MARSHAL
	Sec.6001.051.ADMINISTRATION OF CHAPTER. (a)  The
	department shall administer this chapter.
	(b)  The commissioner may issue rules the commissioner
	considers necessary to administer this chapter through the state
	fire marshal. (V.T.I.C. Art. 5.43-1, Sec. 2 (part).)
	Sec.6001.052.ADOPTION OF RULES. (a) In adopting
	necessary rules, the commissioner may use recognized standards,
	including standards:
	(1)  published by the National Fire Protection
	Association;
	(2)  recognized by federal law or regulation;
	(3)  published by any nationally recognized
	standards-making organization; or
	(4)  contained in the manufacturer's installation
	manuals.
	(b)  The commissioner shall adopt and administer rules
	determined essentially necessary for the protection and
	preservation of life and property regarding:
	(1)  registration of firms engaged in the business of:
	(A)  installing or servicing portable fire
	extinguishers or planning, certifying, installing, or servicing
	fixed fire extinguisher systems; or
	(B)  hydrostatic testing of fire extinguisher
	cylinders;
	(2)  the examination and licensing of individuals to:
	(A)  install or service portable fire
	extinguishers; and
	(B)  plan, certify, install, or service fixed fire
	extinguisher systems; and
	(3)  requirements for:
	(A)  installing or servicing portable fire
	extinguishers; and
	(B)  planning, certifying, installing, or
	servicing fixed fire extinguisher systems.
	(c)  The commissioner by rule shall prescribe requirements
	for applications and qualifications for licenses, permits, and
	certificates issued under this chapter. (V.T.I.C. Art. 5.43-1,
	Secs. 2 (part), 7(a), 8 (part).)
	Sec. 6001.053.  RULES RESTRICTING ADVERTISING OR
	COMPETITIVE BIDDING. (a)  The commissioner may not adopt rules
	restricting advertising or competitive bidding by the holder of a
	license, permit, certificate, or approval issued under this chapter
	except to prohibit false, misleading, or deceptive practices.
	(b)  In the commissioner's rules to prohibit false,
	misleading, or deceptive practices, the commissioner may not
	include a rule that:
	(1)  restricts the use of any medium for advertising;
	(2)  restricts the use of a license, permit,
	certificate, or approval holder's personal appearance or voice in
	an advertisement;
	(3)  relates to the size or duration of an
	advertisement by the license, permit, certificate, or approval
	holder; or
	(4)  restricts the license, permit, certificate, or
	approval holder's advertisement under a trade name. (V.T.I.C. Art.
	5.43-1, Sec. 8A.)
	Sec.6001.054.GENERAL POWERS AND DUTIES OF DEPARTMENT.
	(a)  The department shall evaluate the qualifications of a firm:
	(1)  applying for a registration certificate to engage
	in the business of installing or servicing portable fire
	extinguishers or planning, certifying, installing, or servicing
	fixed fire extinguisher systems; or
	(2)  seeking approval as a testing laboratory.
	(b)  The department shall issue:
	(1)  registration certificates for firms that qualify
	under commissioner rules to engage in the business of installing or
	servicing portable fire extinguishers or planning, certifying,
	installing, or servicing fixed fire extinguisher systems; and
	(2)  licenses, apprentice permits, and authorizations
	to perform hydrostatic testing to firms or individuals that
	qualify. (V.T.I.C. Art. 5.43-1, Sec. 8 (part).)
	Sec.6001.055.FEES. (a) The commissioner shall set the
	fee for:
	(1)  an initial firm registration certificate in an
	amount not to exceed $450;
	(2)  the renewal of a firm registration certificate in
	an amount not to exceed $300 annually;
	(3)  an initial branch office registration certificate
	in an amount not to exceed $100;
	(4)  the renewal of a branch office registration
	certificate in an amount not to exceed $100 annually;
	(5)  an initial registration certificate to perform
	hydrostatic testing of fire extinguishers manufactured in
	accordance with the specifications and procedures of the United
	States Department of Transportation in an amount not to exceed
	$250;
	(6)  the renewal of a registration certificate to
	perform hydrostatic testing of fire extinguishers manufactured in
	accordance with the specifications and procedures of the United
	States Department of Transportation in an amount not to exceed $150
	annually;
	(7)  an initial employee license fee in an amount not to
	exceed $70;
	(8)  the annual renewal of an employee license in an
	amount not to exceed $50; and
	(9)  an apprentice permit in an amount not to exceed
	$30.
	(b)  Unless the examination or reexamination for an employee
	license is administered by a testing service, the commissioner
	shall set a nonrefundable fee for:
	(1)  the initial examination in an amount not to exceed
	$30; and
	(2)  each reexamination in an amount not to exceed $20.
	(c)  The commissioner shall set a fee in an amount not to
	exceed $20 for:
	(1)  a duplicate registration certificate, license, or
	apprentice permit issued under this chapter; or
	(2)  any request requiring changes to a registration
	certificate, license, or permit.
	(d)  On a change of ownership of a registered firm, the
	department shall issue a new registration certificate with a new
	number for a fee set by the commissioner in an amount not to exceed
	$450.  On a change of ownership of a branch office, the commissioner
	shall charge a fee in an amount not to exceed $100. (V.T.I.C. Art.
	5.43-1, Secs. 4(a) (part), (b), (c-1), (d) (part), (e) (part),
	(f).)
	Sec.6001.056.DEPOSIT IN OPERATING ACCOUNT. All money
	collected under this chapter, other than penalties and monetary
	forfeitures, shall be paid to the department and deposited in the
	state treasury to the credit of the Texas Department of Insurance
	operating account for use in administering this chapter.  (V.T.I.C.
	Art. 5.43-1, Sec. 11.)
	[Sections 6001.057-6001.100 reserved for expansion]
	SUBCHAPTER C. FIRE EXTINGUISHER ADVISORY COUNCIL
	Sec.6001.101.ADVISORY COUNCIL; APPOINTMENT. (a)  The
	commissioner may delegate the exercise of all or part of the
	commissioner's functions, powers, and duties under this chapter,
	other than the issuance of licenses, certificates, and permits, to
	a fire extinguisher advisory council.
	(b)  The commissioner shall appoint the members of the
	advisory council.  The members of the council must:
	(1)  be experienced and knowledgeable in one or more of
	the following:
	(A)  fire services;
	(B)  fire extinguisher manufacturing;
	(C)  fire insurance inspection or underwriting;
	or
	(D)  fire extinguisher servicing; or
	(2)  be members of a fire protection association or
	industrial safety association. (V.T.I.C. Art. 5.43-1, Secs. 9(a)
	(part), (b).)
	Sec.6001.102.ADVISORY COUNCIL DUTIES. (a) The fire
	extinguisher advisory council shall assist in the formulation and
	review of rules adopted under this chapter.
	(b)  The advisory council shall periodically:
	(1)  review rules implementing this chapter; and
	(2)  recommend rule changes to the commissioner.
	(V.T.I.C. Art. 5.43-1, Sec. 9(a) (part).)
	[Sections 6001.103-6001.150 reserved for expansion]
	SUBCHAPTER D. REGISTRATION, LICENSE, AND PERMIT REQUIREMENTS
	Sec.6001.151.FIRM REGISTRATION CERTIFICATE REQUIRED.
	Unless the firm holds a registration certificate issued by the
	department, a firm may not engage in the business of:
	(1)  installing or servicing portable fire
	extinguishers; or
	(2)  planning, certifying, installing, or servicing
	fixed fire extinguisher systems. (V.T.I.C. Art. 5.43-1, Sec. 4(a)
	(part).)
	Sec. 6001.152.  BRANCH OFFICE REGISTRATION CERTIFICATE
	REQUIRED.  (a)  Each separate office location of a firm holding a
	registration certificate, other than the location identified on the
	firm's certificate, must have a branch office registration
	certificate issued by the department.
	(b)  Before issuing a branch office registration
	certificate, the department must determine that the branch office
	location is part of a registered firm. (V.T.I.C. Art. 5.43-1, Sec.
	4(a) (part).)
	Sec. 6001.153.  HYDROSTATIC TESTING; REGISTRATION
	CERTIFICATE REQUIRED. (a)  A firm may not perform hydrostatic
	testing of fire extinguishers manufactured in accordance with the
	specifications and procedures of the United States Department of
	Transportation unless the firm:
	(1)  complies with the procedures specified by that
	department for compressed gas cylinders; and
	(2)  holds a registration certificate issued by the
	state fire marshal authorizing hydrostatic testing.
	(b)  The license of an individual qualified to do work
	described by Subsection (a) must indicate the authority of the
	individual to perform that work.
	(c)  Hydrostatic testing of fire extinguishers that is not
	performed under the specifications of the United States Department
	of Transportation must be performed in the manner recommended by
	the National Fire Protection Association.  (V.T.I.C. Art. 5.43-1,
	Sec. 4(e) (part).)
	Sec. 6001.154.  REQUIRED INSURANCE COVERAGE FOR
	REGISTRATION CERTIFICATE. (a)  The department may not issue a
	registration certificate under this chapter unless the applicant
	files with the department evidence of a general liability insurance
	policy that includes products and completed operations coverage.
	The policy must be conditioned to pay on behalf of the insured those
	amounts that the insured becomes legally obligated to pay as
	damages because of bodily injury and property damage caused by an
	occurrence involving the insured or the insured's officer, agent,
	or employee in the conduct of any activity that requires a
	registration certificate or license under this chapter.
	(b)  Unless the commissioner, after notice and an
	opportunity for a hearing, increases or decreases the limits, the
	limits of insurance coverage required by Subsection (a) must be at
	least:
	(1)  $100,000 combined single limits for bodily injury
	and property damage for each occurrence; and
	(2)  $300,000 aggregate for all occurrences for each
	policy year.
	(c)  The evidence of insurance required by this section must
	be in the form of a certificate of insurance executed by an insurer
	authorized to engage in the business of insurance in this state and
	countersigned by an insurance agent licensed in this state. A
	certificate of insurance for surplus lines coverage procured in
	compliance with Chapter 981 through a surplus lines agent that is
	licensed under Subchapter E, Chapter 981, and resident in this
	state may be filed with the department as evidence of the coverage
	required by this section.
	(d)  An insurance certificate executed and filed with the
	department under this section remains in force until the insurer
	has terminated future liability by the notice required by the
	department.
	(e)  Failure to maintain the liability insurance required by
	this section constitutes grounds for the denial, suspension, or
	revocation, after notice and opportunity for hearing, of a
	registration certificate issued under this chapter. (V.T.I.C. Art.
	5.43-1, Secs. 4A, 8 (part).)
	Sec.6001.155.EMPLOYEE LICENSE REQUIRED. (a) Except as
	provided by Section 6001.156, an individual, other than an
	apprentice, must hold a license issued by the department before:
	(1)  installing or servicing portable fire
	extinguishers;
	(2)  installing, servicing, or certifying
	preengineered fixed fire extinguisher systems; or
	(3)  planning, supervising, servicing, or certifying
	the installation of fixed fire extinguisher systems other than
	preengineered systems.
	(b)  An individual who holds a license to install or service
	portable fire extinguishers or install and service fixed fire
	extinguisher systems must be an employee or agent of a registered
	firm. (V.T.I.C. Art. 5.43-1, Secs. 4(c), 5(c).)
	Sec.6001.156.ACTIVITIES NOT REGULATED BY CHAPTER. (a)
	The licensing provisions of this chapter do not apply to:
	(1)  the filling or charging of a portable fire
	extinguisher by the manufacturer before initial sale of the fire
	extinguisher;
	(2)  the servicing by a firm of the firm's portable fire
	extinguishers or fixed systems by the firm's personnel who are
	specially trained for that servicing;
	(3)  the installation of portable fire extinguishers in
	a building by the building owner, the owner's managing agent, or an
	employee of the building owner or the owner's managing agent;
	(4)  the installation or servicing of water sprinkler
	systems installed in compliance with the National Fire Protection
	Association's Standards for the Installation of Sprinkler Systems;
	(5)  a firm that is engaged in the retail or wholesale
	sale of portable fire extinguishers that carry an approval label or
	listing of a testing laboratory approved by the department, but
	that is not engaged in the installation or servicing of those
	extinguishers;
	(6)  a fire department that services portable fire
	extinguishers as a public service without charge, if the members of
	the fire department are trained in the proper servicing of the fire
	extinguishers;
	(7)  a firm that is a party to a contract under which:
	(A)  the installation of portable fire
	extinguishers or a fixed fire extinguisher system is performed
	under the direct supervision of and certified by a firm
	appropriately registered to install and certify portable
	extinguishers or fixed systems; and
	(B)  the registered firm assumes full
	responsibility for the installation; or
	(8)  an engineer licensed under Chapter 1001,
	Occupations Code, while acting solely in the engineer's
	professional capacity.
	(b)  Except as provided by Subsection (a), only the holder of
	a license or an apprentice permit issued under this chapter may:
	(1)  install or service portable fire extinguishers; or
	(2)  install and maintain fixed fire extinguisher
	systems. (V.T.I.C. Art. 5.43-1, Secs. 5(b), 6.)
	Sec.6001.157.LICENSE EXAMINATION. (a) The state fire
	marshal shall:
	(1)  establish the scope and type of an examination
	required by this chapter; and
	(2)  examine each applicant for a license under this
	chapter.
	(b)  The state fire marshal may administer the examination or
	may enter into an agreement with a testing service.
	(c)  If a testing service is used, the state fire marshal may
	contract with the testing service regarding requirements for the
	examination, including:
	(1)  examination development;
	(2)  scheduling;
	(3)  site arrangements;
	(4)  grading;
	(5)  reporting;
	(6)  analysis; or
	(7)  other administrative duties.
	(d)  The state fire marshal may require the testing service
	to:
	(1)  correspond directly with a license applicant
	regarding the administration of the examination;
	(2)  collect a reasonable fee from an applicant for
	administering the examination; or
	(3)  administer the examination at a specific location
	or time.
	(e)  The state fire marshal shall adopt rules as necessary to
	implement examination requirements under this chapter.  (V.T.I.C.
	Art. 5.43-1, Secs. 7(e), (f), (j), 8 (part).)
	Sec.6001.158.EXAMINATION RESULTS.  (a)  Not later than
	the 30th day after the date on which a licensing examination is
	administered under this chapter, the state fire marshal shall send
	notice to each examinee of the results of the examination.
	(b)  If an examination is conducted, graded, or reviewed by a
	testing service, the state fire marshal shall send notice to the
	examinees of the results of the examination not later than the 14th
	day after the date on which the state fire marshal receives the
	results from the testing service.
	(c)  If the notice of the examination results will be delayed
	for more than 90 days after the examination date, the state fire
	marshal, before the 90th day, shall send notice to the examinee of
	the reason for the delay.
	(d)  The state fire marshal may require a testing service to
	notify an examinee of the results of the examinee's examination
	under Subsections (a) and (b).
	(e)  If requested in writing by an individual who fails the
	licensing examination administered under this chapter, the state
	fire marshal shall send to the individual an analysis of the
	individual's performance on the examination.  (V.T.I.C. Art.
	5.43-1, Secs. 7(g), (g-1).)
	Sec.6001.159.CONTINUING EDUCATION REQUIREMENTS. (a) The
	commissioner may adopt procedures for certifying and may certify
	continuing education programs for individuals licensed under this
	chapter.
	(b)  Participation in the continuing education programs is
	voluntary. (V.T.I.C. Art. 5.43-1, Sec. 7(h).)
	Sec.6001.160.RECIPROCAL LICENSE. The department may waive
	any license requirement for an applicant who holds a license issued
	by another state that has license requirements substantially
	equivalent to the license requirements of this state. (V.T.I.C.
	Art. 5.43-1, Sec. 7(i).)
	Sec.6001.161.APPRENTICE PERMIT REQUIRED. (a)  An
	individual may not install or service portable fire extinguishers
	or fixed fire extinguisher systems as an apprentice unless the
	individual holds an apprentice permit issued by the department.
	(b)  An apprentice may perform a service described by
	Subsection (a) only under the direct supervision of an individual
	who holds a license issued under this chapter and who works for the
	same firm as the apprentice.  (V.T.I.C. Art. 5.43-1, Secs. 4(d)
	(part), 5(b) (part).)
	Sec.6001.162.NOT TRANSFERABLE. A registration
	certificate, license, or permit issued under this chapter is not
	transferable. (V.T.I.C. Art. 5.43-1, Sec. 5(d).)
	[Sections 6001.163-6001.200 reserved for expansion]
	SUBCHAPTER E. RENEWAL OF REGISTRATION, LICENSE, OR PERMIT
	Sec.6001.201.RENEWAL REQUIRED; FEE. (a) A renewal of a
	registration certificate or license issued under this chapter is
	valid for a period of two years. The license or registration fee
	for each year of the two-year period is payable on renewal.
	(b)  An apprentice permit expires on the first anniversary of
	the date of issuance.
	(c)  The commissioner by rule may adopt a system under which
	registration certificates, licenses, and permits expire on various
	dates during the year. For the year in which an expiration date of a
	registration certificate, license, or permit is less than one year
	from its issuance or anniversary date, the fee shall be prorated on
	a monthly basis so that each holder of a registration certificate,
	license, or permit pays only that portion of the renewal fee that is
	allocable to the number of months during which the registration
	certificate, license, or permit is valid. On each subsequent
	renewal, the total renewal fee is payable. (V.T.I.C. Art. 5.43-1,
	Secs. 4(d) (part), 7A(a), (c).)
	Sec.6001.202.NOTICE OF EXPIRATION. At least 30 days
	before the expiration date of a registration certificate or
	license, the state fire marshal shall send written notice of the
	impending expiration to the holder of the registration certificate
	or license at the holder's last known address. (V.T.I.C. Art.
	5.43-1, Sec. 7A(b) (part).)
	Sec.6001.203.RENEWAL PROCEDURES. (a)  The holder of an
	unexpired registration certificate or license may renew the
	certificate or license by paying the required renewal fee to the
	department before the expiration date of the certificate or
	license.
	(b)  A firm or individual whose registration certificate or
	license has been expired for 90 days or less may renew the
	certificate or license by paying to the department:
	(1)  the required renewal fee; and
	(2)  a fee equal to one-half of the initial fee for the
	certificate or license.
	(c)  A firm or individual whose registration certificate or
	license has been expired for more than 90 days but less than two
	years may renew the certificate or license by paying to the
	department:
	(1)  all unpaid renewal fees; and
	(2)  a fee that is equal to the initial fee for the
	certificate or license.
	(d)  A firm or individual whose registration certificate or
	license has been expired for two years or longer may not renew the
	certificate or license. The firm or individual may obtain a new
	registration certificate or license by complying with the
	requirements and procedures for obtaining an initial registration
	certificate or license.
	(e)  This section may not be construed to prevent the
	department from denying or refusing to renew a license under
	applicable law or commissioner rules. (V.T.I.C. Art. 5.43-1, Sec.
	7A(b) (part).)
	[Sections 6001.204-6001.250 reserved for expansion]
	SUBCHAPTER F. PROHIBITED PRACTICES
	AND DISCIPLINARY PROCEDURES
	Sec.6001.251.PROHIBITED PRACTICES. (a)  An individual or
	firm may not:
	(1)  engage in the business of installing or servicing
	portable fire extinguishers without holding a registration
	certificate;
	(2)  engage in the business of planning, certifying,
	installing, or servicing fixed fire extinguisher systems without
	holding a registration certificate;
	(3)  install, service, or certify the servicing of
	portable fire extinguishers or plan, certify, service, or install
	fixed fire extinguisher systems without holding a license;
	(4)  perform hydrostatic testing of fire extinguisher
	cylinders manufactured in accordance with the specifications and
	requirements of the United States Department of Transportation
	without holding a hydrostatic testing registration certificate;
	(5)  obtain or attempt to obtain a registration
	certificate or license by fraudulent representation;
	(6)  install or service portable fire extinguishers or
	plan, certify, service, or install fixed fire extinguisher systems
	in violation of this chapter or the rules adopted and administered
	under this chapter;
	(7)  except as provided by Subsection (b), install,
	service, or hydrostatically test a fire extinguisher that does not
	have the proper identifying labels;
	(8)  sell, install, service, or recharge a carbon
	tetrachloride fire extinguisher; or
	(9)  except as provided by Subsection (b), lease, sell,
	service, or install a portable fire extinguisher, a fixed fire
	extinguisher system, or extinguisher equipment unless it carries an
	approval label or listing label issued by a testing laboratory
	approved by the department.
	(b)  The commissioner by rule shall permit an individual or
	firm to service a portable fire extinguisher regardless of whether
	the extinguisher carries a label described by Subsection (a).
	(V.T.I.C. Art. 5.43-1, Secs. 5(a), (e), 10.)
	Sec.6001.252.DISCIPLINARY ACTIONS. (a)  The state fire
	marshal may suspend, revoke, or refuse to issue or renew a
	registration certificate, license, or permit if, after notice and
	hearing, the state fire marshal finds that the applicant,
	registrant, license holder, or permit holder has engaged in acts
	that:
	(1)  violate this chapter;
	(2)  violate rules or standards adopted under this
	chapter; or
	(3)  constitute misrepresentation made in connection
	with:
	(A)  the sale of products; or
	(B)  services rendered.
	(b)  Subject to Section 6001.253, the commissioner may
	suspend, revoke, or refuse to issue or renew a certificate,
	license, permit, or approval.  (V.T.I.C. Art. 5.43-1, Secs. 7(b),
	12(a).)
	Sec.6001.253.DISCIPLINARY HEARING. (a) If the state fire
	marshal proposes to suspend, revoke, or refuse to renew a license,
	permit, certificate, or approval issued under this chapter, the
	holder of the license, permit, certificate, or approval is entitled
	to a hearing conducted by the State Office of Administrative
	Hearings.
	(b)  Proceedings for a disciplinary action are governed by
	Chapter 2001, Government Code.
	(c)  Rules of practice adopted by the commissioner
	applicable to the proceedings for a disciplinary action may not
	conflict with rules adopted by the State Office of Administrative
	Hearings. (V.T.I.C. Art. 5.43-1, Sec. 13.)
	Sec.6001.254.REAPPLICATION REQUIREMENTS. (a)  An
	applicant or holder of a registration certificate, license, or
	permit whose certificate, license, or permit has been refused or
	revoked under this chapter, other than for failure to pass a
	required written examination, may not file another application for
	a registration certificate, license, or permit before the first
	anniversary of the effective date of the refusal or revocation.
	(b)  After the first anniversary of the effective date of the
	refusal or revocation, the applicant may:
	(1)  reapply; and
	(2)  in a public hearing, show good cause why the
	issuance of the registration certificate, license, or permit is not
	against the public safety and welfare. (V.T.I.C. Art. 5.43-1, Sec.
	7(c).)
	Sec.6001.255.REEXAMINATION AFTER REVOCATION.  An
	individual whose license to service portable fire extinguishers or
	to install or service fixed fire extinguisher systems has been
	revoked must retake and pass the required written examination
	before a new license may be issued.  (V.T.I.C. Art. 5.43-1, Sec.
	7(d).)
	[Sections 6001.256-6001.300 reserved for expansion]
	SUBCHAPTER G. CRIMINAL PENALTY
	Sec.6001.301.CRIMINAL PENALTY. (a) A person commits an
	offense if the person knowingly violates Section 6001.251(a).
	(b)  An offense under this section is a Class B misdemeanor.
	(c)  Venue for an offense under this section is in Travis
	County or the county in which the offense is committed. (V.T.I.C.
	Art. 5.43-1, Secs. 12(b), (c); New.)
	CHAPTER 6002.  FIRE DETECTION AND ALARM DEVICE INSTALLATION
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec. 6002.001.  PURPOSE
	Sec. 6002.002.  DEFINITIONS
	Sec. 6002.003.  EFFECT ON LOCAL REGULATION
	Sec. 6002.004.  PROVISION OF CERTAIN SERVICES BY
	POLITICAL SUBDIVISION
	[Sections 6002.005-6002.050 reserved for expansion]
	SUBCHAPTER B. POWERS AND DUTIES OF COMMISSIONER, DEPARTMENT,
	AND STATE FIRE MARSHAL
	Sec. 6002.051.  ADMINISTRATION OF CHAPTER; RULES
	Sec. 6002.052.  ADOPTION OF RULES; STANDARDS
	Sec. 6002.053.  RULES RESTRICTING ADVERTISING OR
	COMPETITIVE BIDDING
	Sec. 6002.054.  FEES
	Sec. 6002.055.  DEPOSIT IN OPERATING ACCOUNT
	[Sections 6002.056-6002.100 reserved for expansion]
	SUBCHAPTER C. FIRE DETECTION AND ALARM DEVICES ADVISORY COUNCIL
	Sec. 6002.101.  ADVISORY COUNCIL; APPOINTMENT
	Sec. 6002.102.  ADVISORY COUNCIL DUTIES
	[Sections 6002.103-6002.150 reserved for expansion]
	SUBCHAPTER D. REGISTRATION, LICENSE, AND APPROVAL REQUIREMENTS
	Sec. 6002.151.  FIRM REGISTRATION CERTIFICATE REQUIRED;
	LIMITED CERTIFICATE
	Sec. 6002.152.  BRANCH OFFICE REGISTRATION CERTIFICATE
	REQUIRED
	Sec. 6002.153.  REQUIRED INSURANCE COVERAGE FOR
	REGISTRATION CERTIFICATE
	Sec. 6002.154.  FIRE ALARM TECHNICIAN, RESIDENTIAL FIRE
	ALARM SUPERINTENDENT, AND FIRE ALARM
	PLANNING SUPERINTENDENT
	Sec. 6002.155.  ACTIVITIES NOT REGULATED BY CHAPTER
	Sec. 6002.156.  LICENSE EXAMINATION
	Sec. 6002.157.  EXAMINATION RESULTS
	Sec. 6002.158.  TRAINING SCHOOLS AND INSTRUCTORS;
	APPROVAL
	Sec. 6002.159.  CONTINUING EDUCATION PROGRAMS
	Sec. 6002.160.  RECIPROCAL LICENSE
	Sec. 6002.161.  NOT TRANSFERABLE
	[Sections 6002.162-6002.200 reserved for expansion]
	SUBCHAPTER E. RENEWAL OF REGISTRATION CERTIFICATE OR LICENSE
	Sec. 6002.201.  RENEWAL REQUIRED; FEE
	Sec. 6002.202.  NOTICE OF EXPIRATION
	Sec. 6002.203.  RENEWAL PROCEDURES
	Sec. 6002.204.  RENEWAL OF CERTAIN LICENSES
	[Sections 6002.205-6002.250 reserved for expansion]
	SUBCHAPTER F. SELLING OR LEASING OF FIRE ALARM
	OR FIRE DETECTION DEVICES
	Sec. 6002.251.  REQUIRED LABEL; EXCEPTIONS
	Sec. 6002.252.  REQUIRED PURCHASE AND INSTALLATION
	INFORMATION
	Sec. 6002.253.  TRAINING AND SUPERVISION OF CERTAIN
	EXEMPT EMPLOYEES
	[Sections 6002.254-6002.300 reserved for expansion]
	SUBCHAPTER G. PROHIBITED PRACTICES AND DISCIPLINARY PROCEDURES
	Sec. 6002.301.  PROHIBITED PRACTICES
	Sec. 6002.302.  DISCIPLINARY ACTIONS
	Sec. 6002.303.  DISCIPLINARY HEARING
	Sec. 6002.304.  REAPPLICATION REQUIREMENTS
	[Sections 6002.305-6002.350 reserved for expansion]
	SUBCHAPTER H.  CRIMINAL PENALTY
	Sec. 6002.351.  CRIMINAL PENALTY
	CHAPTER 6002.  FIRE DETECTION AND ALARM DEVICE INSTALLATION
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec.6002.001.PURPOSE. The purpose of this chapter is to
	safeguard lives and property by:
	(1)  regulating the planning, certifying, leasing,
	selling, servicing, installing, monitoring, and maintaining of
	fire detection and fire alarm devices and systems; and
	(2)  except as provided by rules adopted under Section
	6002.051 or 6002.052, prohibiting fire detection and fire alarm
	devices, equipment, and systems not labeled or listed by a
	nationally recognized testing laboratory.  (V.T.I.C. Art. 5.43-2,
	Sec. 1.)
	Sec.6002.002.DEFINITIONS. Except as otherwise provided
	by this chapter, in this chapter:
	(1)  "Fire alarm device" means any device capable,
	through audible or visible means, of warning that fire or
	combustion has occurred or is occurring.
	(2)  "Fire alarm planning superintendent" means a
	licensed individual designated by a registered firm to:
	(A)  plan a fire alarm or detection system that
	conforms to applicable adopted National Fire Protection
	Association standards or other adopted standards; and
	(B)  certify that each fire alarm or detection
	system as planned meets the standards as provided by law.
	(3)  "Fire alarm technician" means a licensed
	individual designated by a registered firm to:
	(A)  inspect and certify that each fire alarm or
	detection system as installed meets the standards provided by law;
	or
	(B)  perform or directly supervise the servicing
	or maintaining of a previously installed fire alarm device or
	system and certify that service or maintenance.
	(4)  "Fire detection device" means any arrangement of
	materials, the sole function of which is to indicate the existence
	of fire, smoke, or combustion in its incipient stages.
	(5)  "Individual" means a natural person, including an
	owner, manager, officer, employee, occupant, or other individual.
	(6)  "Installation" means:
	(A)  the initial placement of equipment; or
	(B)  the extension, modification, or alteration
	of equipment already in place.
	(7)  "Insurance agent" means:
	(A)  an individual, firm, or corporation licensed
	under:
	(i)  Subchapter E, Chapter 981; or
	(ii)  Subchapter A, B, C, D, E, or G, Chapter
	4051; or
	(B)  an individual authorized to represent an
	insurance fund or pool created by a municipality, county, or other
	political subdivision of this state under Chapter 791, Government
	Code.
	(8)  "Maintenance" means the maintenance of a fire
	alarm device or a fire detection device in a condition of repair
	that provides performance as originally designed or intended.
	(9)  "Monitoring" means the receipt of fire alarm and
	supervisory signals and the retransmission or communication of
	those signals to a fire service communications center in this state
	or serving property in this state.
	(10)  "Organization" means a corporation, a government
	or a governmental subdivision or agency, a business trust, an
	estate, a trust, a partnership, a firm or association, two or more
	individuals with a joint or common interest, or any other legal or
	commercial entity.
	(11)  "Registered firm" means an individual or
	organization that holds a registration certificate.
	(12)  "Residential fire alarm superintendent" means a
	licensed individual designated by a registered firm to:
	(A)  plan a residential single-family or
	two-family fire alarm or detection system that conforms to
	applicable adopted National Fire Protection Association standards
	or other adopted standards; and
	(B)  certify that each fire alarm or detection
	system as planned meets the standards as provided by law.
	(13)  "Sale" means the sale or offer for sale, lease, or
	rent of any merchandise, equipment, or service at wholesale or
	retail, to the public or any individual, for an agreed sum of money
	or other consideration.
	(14)  "Service" or "servicing" means inspection,
	maintenance, repair, or testing of a fire alarm device or a fire
	detection device. (V.T.I.C. Art. 5.43-2, Secs. 2(1), (2), (5),
	(6), (7), (8), (9), (10), (11), (12) (part), (13) (part), (14),
	(15), (16) (part).)
	Sec.6002.003.EFFECT ON LOCAL REGULATION. (a) This
	chapter and the rules adopted under this chapter have uniform force
	and effect throughout this state. A municipality or county may not
	enact an ordinance or rule inconsistent with this chapter or rules
	adopted under this chapter. An inconsistent ordinance or rule is
	void and has no effect.
	(b)  Notwithstanding Subsection (a), a municipality or
	county may:
	(1)  mandate that a fire alarm or detection system be
	installed in certain facilities, if the installation conforms to
	applicable state law;
	(2)  require a better type of alarm or detection system
	or otherwise safer condition than the minimum required by state
	law; and
	(3)  require regular inspections by local officials of
	smoke detectors in dwelling units, as that term is defined by
	Section 92.251, Property Code, and require the smoke detectors to
	be operational at the time of inspection.
	(c)  A municipality, county, or other political subdivision
	of this state may not require, as a condition of engaging in
	business or performing any activity authorized under this chapter,
	that a registered firm, a license holder, or an employee of a
	license holder:
	(1)  obtain a registration, franchise, or license from
	the political subdivision;
	(2)  pay any fee or franchise tax to the political
	subdivision; or
	(3)  post a bond.
	(d)  Notwithstanding any other provision of this section or
	Section 6002.155, a municipality or county may require a registered
	firm to obtain a permit and pay a permit fee for the installation of
	a fire alarm or fire detection device or system and require that the
	installation of such a system be in conformance with the building
	code or other construction requirements of the municipality or
	county and state law.
	(e)  Notwithstanding Subsection (d), a municipality or
	county may not impose qualification or financial responsibility
	requirements other than proof of a registration certificate.
	(V.T.I.C. Art. 5.43-2, Secs. 3(a), (c).)
	Sec. 6002.004.  PROVISION OF CERTAIN SERVICES BY POLITICAL
	SUBDIVISION. (a) In this section, "monitoring" means the receipt
	of fire alarm or supervisory signals or retransmission or
	communication of those signals to a fire service communications
	center that is located in this state or serves property in this
	state.
	(b)  Except as provided by Subsection (c), a political
	subdivision may not offer residential alarm system sales, service,
	installation, or monitoring unless the political subdivision has
	been providing monitoring services to residences within the
	boundaries of the political subdivision as of September 1, 1999.
	Any fee charged by the political subdivision under this subsection
	may not exceed the cost of the monitoring.
	(c)  A political subdivision may:
	(1)  offer service, installation, or monitoring for
	property owned by the political subdivision or another political
	subdivision;
	(2)  allow for the response to an alarm or detection
	device by:
	(A)  a law enforcement agency or fire department;
	or
	(B)  a law enforcement officer or firefighter
	acting in an official capacity; or
	(3)  offer monitoring to a financial institution, as
	defined by Section 59.301, Finance Code, that requests, in writing,
	that the political subdivision provide monitoring service to the
	financial institution.
	(d)  Subsection (b) does not apply to a political
	subdivision:
	(1)  in a county with a population of less than 80,000;
	or
	(2)  in which monitoring is not otherwise provided or
	available.
	(e)  This section is not intended to require a political
	subdivision to hold a license under this chapter. (V.T.I.C. Art.
	5.43-2, Secs. 7(b), (c), (d), (e).)
	[Sections 6002.005-6002.050 reserved for expansion]
	SUBCHAPTER B. POWERS AND DUTIES OF COMMISSIONER, DEPARTMENT,
	AND STATE FIRE MARSHAL
	Sec.6002.051.ADMINISTRATION OF CHAPTER; RULES. (a)  The
	department shall administer this chapter.
	(b)  The commissioner may adopt rules as necessary to
	administer this chapter, including rules the commissioner
	considers necessary to administer this chapter through the state
	fire marshal. (V.T.I.C. Art. 5.43-2, Secs. 4 (part), 6(a) (part).)
	Sec.6002.052.ADOPTION OF RULES; STANDARDS. (a) In
	adopting necessary rules, the commissioner may use:
	(1)  recognized standards, such as, but not limited to:
	(A)  standards of the National Fire Protection
	Association;
	(B)  standards recognized by federal law or
	regulation; or
	(C)  standards published by a nationally
	recognized standards-making organization;
	(2)  the National Electrical Code; or
	(3)  information provided by individual manufacturers.
	(b)  Under rules adopted under Section 6002.051, the
	department may create specialized licenses or registration
	certificates for an organization or individual engaged in the
	business of planning, certifying, leasing, selling, servicing,
	installing, monitoring, or maintaining fire alarm or fire detection
	devices or systems. The rules must establish appropriate training
	and qualification standards for each kind of license and
	certificate.
	(c)  The commissioner shall also adopt standards applicable
	to fire alarm devices, equipment, or systems regulated under this
	chapter. In adopting standards under this subsection, the
	commissioner may allow the operation of a fire alarm monitoring
	station that relies on fire alarm devices or equipment approved or
	listed by a nationally recognized testing laboratory without regard
	to whether the monitoring station is approved or listed by a
	nationally recognized testing laboratory if the operator of the
	station demonstrates that the station operating standards are
	substantially equivalent to those required to be approved or
	listed. (V.T.I.C. Art. 5.43-2, Secs. 4 (part), 6(a) (part), (b).)
	Sec. 6002.053.  RULES RESTRICTING ADVERTISING OR
	COMPETITIVE BIDDING. (a)  The commissioner may not adopt rules
	restricting advertising or competitive bidding by the holder of a
	license or registration certificate issued under this chapter
	except to prohibit false, misleading, or deceptive practices.
	(b)  In the commissioner's rules to prohibit false,
	misleading, or deceptive practices, the commissioner may not
	include a rule that:
	(1)  restricts the use of any medium for advertising;
	(2)  restricts the use of a license or registration
	certificate holder's personal appearance or voice in an
	advertisement;
	(3)  relates to the size or duration of an
	advertisement by the license or registration certificate holder; or
	(4)  restricts the license or registration certificate
	holder's advertisement under a trade name. (V.T.I.C. Art. 5.43-2,
	Sec. 6A.)
	Sec.6002.054.FEES. (a) The commissioner shall set the
	fee for:
	(1)  an initial registration certificate in an amount
	not to exceed $500;
	(2)  the renewal of a registration certificate for each
	year in an amount not to exceed $500;
	(3)  the renewal of a registration certificate for an
	individual or organization engaged in the business of planning,
	certifying, leasing, selling, servicing, installing, monitoring,
	or maintaining exclusively single station devices in an amount not
	to exceed $250 annually;
	(4)  an initial branch office registration certificate
	in an amount not to exceed $150;
	(5)  the renewal of a branch office registration
	certificate for each year in an amount not to exceed $150;
	(6)  an initial or renewal training school approval in
	an amount not to exceed $500 annually;
	(7)  an initial or renewal of a training school
	instructor approval in an amount not to exceed $50 annually;
	(8)  an initial license in an amount not to exceed $120;
	and
	(9)  the renewal of a license for each year in an amount
	not to exceed $100.
	(b)  Unless the examination or reexamination for a license is
	administered by a testing service, the commissioner shall set a
	nonrefundable fee for:
	(1)  the initial examination in an amount not to exceed
	$30; and
	(2)  each reexamination in an amount not to exceed $20.
	(c)  The commissioner shall set a fee in an amount not to
	exceed $20 for:
	(1)  a duplicate registration certificate or license
	issued under this chapter; and
	(2)  any request requiring changes to a registration
	certificate or license. (V.T.I.C. Art. 5.43-2, Secs. 5(a) (part),
	(b) (part), (c) (part), (d), (i), 5D(b) (part), (c) (part).)
	Sec.6002.055.DEPOSIT IN OPERATING ACCOUNT. The fees
	collected under this chapter shall be deposited in the state
	treasury to the credit of the Texas Department of Insurance
	operating account.  (V.T.I.C. Art. 5.43-2, Sec. 8.)
	[Sections 6002.056-6002.100 reserved for expansion]
	SUBCHAPTER C. FIRE DETECTION AND ALARM DEVICES ADVISORY COUNCIL
	Sec.6002.101.ADVISORY COUNCIL; APPOINTMENT. The
	commissioner shall appoint an advisory council consisting of seven
	individuals as follows:
	(1)  three individuals who are employed by a registered
	firm in the fire protection industry and who have at least three
	years' experience in the sale, installation, maintenance, or
	manufacture of fire alarm or fire detection devices;
	(2)  two individuals who:
	(A)  are experienced in the engineering of fire
	prevention services; or
	(B)  are members of a fire protection association;
	(3)  one individual who is an experienced fire
	prevention officer employed by a municipality or county; and
	(4)  one individual who:
	(A)  is employed by a registered firm; and
	(B)  has at least three years' experience in the
	operation of a central fire alarm monitoring station.  (V.T.I.C.
	Art. 5.43-2, Sec. 6(d).)
	Sec.6002.102.ADVISORY COUNCIL DUTIES. The advisory
	council shall periodically:
	(1)  review rules implementing this chapter; and
	(2)  recommend rule changes to the commissioner.
	(V.T.I.C. Art. 5.43-2, Sec. 6(c).)
	[Sections 6002.103-6002.150 reserved for expansion]
	SUBCHAPTER D. REGISTRATION, LICENSE, AND APPROVAL REQUIREMENTS
	Sec. 6002.151.  FIRM REGISTRATION CERTIFICATE REQUIRED;
	LIMITED CERTIFICATE.  (a)  An individual or organization may not
	engage in the business of planning, certifying, leasing, selling,
	installing, servicing, monitoring, or maintaining fire alarm or
	fire detection devices or systems unless the individual or
	organization holds a registration certificate issued by the
	department.
	(b)  The department may issue a limited registration
	certificate to an individual or organization whose business is
	restricted to monitoring.
	(c)  Applications for registration certificates and
	qualifications for those certificates are subject to rules adopted
	by the commissioner.  (V.T.I.C. Art. 5.43-2, Secs. 5(a) (part),
	7(a) (part), 10(a) (part).)
	Sec. 6002.152.  BRANCH OFFICE REGISTRATION CERTIFICATE
	REQUIRED.  (a)  Except as provided by Subsection (c), each separate
	office location of a registered firm, other than the location
	identified on the firm's registration certificate, must have a
	branch office registration certificate issued by the department.
	(b)  Before issuing a branch office registration
	certificate, the department must determine that the branch office
	location is part of a registered firm.
	(c)  A registered firm that is engaged in the business of
	planning, certifying, leasing, selling, servicing, installing,
	monitoring, or maintaining exclusively single station devices is
	not required to apply for or obtain a branch office registration
	certificate for a separate office or location of the firm.
	(V.T.I.C. Art. 5.43-2, Sec. 5(b) (part).)
	Sec. 6002.153.  REQUIRED INSURANCE COVERAGE FOR
	REGISTRATION CERTIFICATE. (a)  The department may not issue a
	registration certificate under this chapter unless the applicant
	files with the department evidence of a general liability insurance
	policy that includes products and completed operations coverage.
	The policy must be conditioned to pay on behalf of the insured those
	amounts that the insured becomes legally obligated to pay as
	damages because of bodily injury and property damage caused by an
	occurrence involving the insured or the insured's officer, agent,
	or employee in the conduct of any business that requires a
	registration certificate or license under this chapter.
	(b)  Unless the commissioner increases or decreases the
	limits under rules adopted under Section 6002.051(b), the limits of
	insurance coverage required by Subsection (a) must be at least:
	(1)  $100,000 combined single limits for bodily injury
	and property damage for each occurrence; and
	(2)  $300,000 aggregate for all occurrences for each
	policy year.
	(c)  The evidence of insurance required by this section must
	be in the form of a certificate of insurance executed by an insurer
	authorized to engage in the business of insurance in this state and
	countersigned by an insurance agent licensed in this state. A
	certificate of insurance for surplus lines coverage procured in
	compliance with Chapter 981 through a surplus lines agent that is
	licensed under Subchapter E, Chapter 981, and resident in this
	state may be filed with the department as evidence of the coverage
	required by this section.
	(d)  An insurance certificate executed and filed with the
	department under this section remains in force until the insurer
	has terminated future liability by the notice required by the
	department.
	(e)  Failure to maintain the liability insurance required by
	this section constitutes grounds for the denial, suspension, or
	revocation, after notice and opportunity for hearing, of a
	registration certificate issued under this chapter.
	(f)  For an individual or organization licensed to install or
	service burglar alarms under Chapter 1702, Occupations Code,
	compliance with the insurance requirements of that chapter
	constitutes compliance with the insurance requirements of this
	section if the insurance held by the individual or organization
	complies with the requirements of this section in amounts and types
	of coverage.
	(g)  This section does not affect the rights of the insured
	to negotiate or contract for limitations of liability with a third
	party, including a customer of the insured.  (V.T.I.C. Art. 5.43-2,
	Secs. 5B(a), (b), (c), (d), (e), (g).)
	Sec. 6002.154.  FIRE ALARM TECHNICIAN, RESIDENTIAL FIRE
	ALARM SUPERINTENDENT, AND FIRE ALARM PLANNING SUPERINTENDENT. (a)
	Each registered firm, including a firm engaged in the business of
	planning, certifying, leasing, selling, servicing, installing,
	monitoring, or maintaining exclusively single station devices,
	must employ at least one employee who is a fire alarm technician,
	residential fire alarm superintendent, or fire alarm planning
	superintendent.
	(b)  A fire alarm technician, residential fire alarm
	superintendent, or fire alarm planning superintendent must hold a
	license issued by the department, conditioned on the successful
	completion of a written license examination.
	(c)  To engage in the activity for which the license is
	granted, an individual licensed under this chapter must be an
	employee or agent of an individual or entity that holds a
	registration certificate.
	(d)  A fire alarm technician may perform or supervise
	monitoring. A fire alarm planning superintendent may act as a fire
	alarm technician or a residential fire alarm superintendent. A
	residential fire alarm superintendent may act as a fire alarm
	technician.
	(e)  Applications for licenses and qualifications for those
	licenses are subject to rules adopted by the commissioner.
	(V.T.I.C. Art. 5.43-2, Secs. 2(12) (part), (13) (part), (16)
	(part), 5(a) (part), (c) (part), (f), 5D(a) (part), 10(a) (part).)
	Sec.6002.155.ACTIVITIES NOT REGULATED BY CHAPTER.  The
	licensing provisions of this chapter do not apply to:
	(1)  an individual or organization in the business of
	building construction that installs electrical wiring and devices
	that may include, in part, the installation of a fire alarm or
	detection system if:
	(A)  the individual or organization is a party to
	a contract that provides that:
	(i)  the installation will be performed
	under the direct supervision of and certified by a licensed
	employee or agent of a firm registered to install and certify such
	an alarm or detection device; and
	(ii)  the registered firm assumes full
	responsibility for the installation of the alarm or detection
	device; and
	(B)  the individual or organization does not plan,
	certify, lease, sell, service, or maintain fire alarms or detection
	devices or systems;
	(2)  an individual or organization that:
	(A)  owns and installs a fire detection or fire
	alarm device on the individual's or organization's own property; or
	(B)  if the individual or organization does not
	charge for the device or its installation, installs the device for
	the protection of the individual's or organization's personal
	property located on another's property and does not install the
	device as a normal business practice on the property of another;
	(3)  an individual who holds a license or other
	authority issued by a municipality to practice as an electrician
	and who installs fire or smoke detection and alarm devices only in a
	single family or multifamily residence if:
	(A)  the devices installed are:
	(i)  single station detectors; or
	(ii)  multiple station detectors capable of
	being connected in a manner that actuation of one detector causes
	all integral or separate alarms to operate if the detectors are not
	connected to a control panel or to an outside alarm, do not transmit
	a signal off the premises, and do not use more than 120 volts; and
	(B)  all installations comply with the adopted
	edition of Household Fire Warning Equipment, National Fire
	Protection Association Standard No. 74;
	(4)  an individual or organization that:
	(A)  sells fire detection or fire alarm devices
	exclusively over-the-counter or by mail order; and
	(B)  does not plan, certify, install, service, or
	maintain the devices;
	(5)  a law enforcement agency or fire department or a
	law enforcement officer or firefighter acting in an official
	capacity that responds to a fire alarm or detection device;
	(6)  an engineer licensed under Chapter 1001,
	Occupations Code, acting solely in the engineer's professional
	capacity;
	(7)  an individual or organization that provides and
	installs at no charge to the property owners or residents a
	battery-powered smoke detector in a single-family or two-family
	residence if:
	(A)  the smoke detector bears a label of listing
	or approval by a testing laboratory approved by the department;
	(B)  the installation complies with the adopted
	edition of National Fire Protection Association Standard No. 74;
	(C)  the installers are knowledgeable in fire
	protection and the proper use of smoke detectors; and
	(D)  the detector is a single station installation
	and not a part of or connected to any other detection device or
	system;
	(8)  a regular employee of a registered firm who is
	under the direct supervision of a license holder;
	(9)  a building owner, the owner's managing agent, or an
	employee of the owner or agent who installs battery-operated single
	station smoke detectors or monitor fire alarm or fire detection
	devices or systems in the owner's building, and in which the
	monitoring:
	(A)  is performed at the owner's property at no
	charge to the occupants of the building;
	(B)  complies with applicable standards of the
	National Fire Protection Association as may be adopted by rule
	under this chapter; and
	(C)  uses equipment approved by a testing
	laboratory approved by the department for fire alarm monitoring;
	(10)  an individual employed by a registered firm that
	sells and installs a smoke or heat detector in a single-family or
	two-family residence if:
	(A)  the detector bears a label of listing or
	approval by a testing laboratory approved by the department;
	(B)  the installation complies with the adopted
	edition of National Fire Protection Association Standard No. 74;
	(C)  the installers are knowledgeable in fire
	protection and the proper use and placement of detectors; and
	(D)  the detector is a single station installation
	and not a part of or connected to any other detection device or
	system; or
	(11)  an individual or organization licensed to install
	or service burglar alarms under Chapter 1702, Occupations Code,
	that provides and installs in a single-family or two-family
	residence a combination keypad that includes a panic button to
	initiate a fire alarm signal if the fire alarm signal:
	(A)  is monitored by a fire alarm firm registered
	under this chapter; and
	(B)  is not initiated by a fire or smoke detection
	device. (V.T.I.C. Art. 5.43-2, Sec. 3(b).)
	Sec.6002.156.LICENSE EXAMINATION. (a) The state fire
	marshal shall establish the scope and type of an examination
	required by this chapter.  The examination must cover this chapter
	and commissioner rules and include specific testing of all license
	categories.
	(b)  The state fire marshal may administer the examination or
	may enter into an agreement with a testing service.
	(c)  If a testing service is used, the state fire marshal may
	contract with the testing service regarding requirements for the
	examination, including:
	(1)  examination development;
	(2)  scheduling;
	(3)  site arrangements;
	(4)  grading;
	(5)  reporting;
	(6)  analysis; or
	(7)  other administrative duties.
	(d)  The state fire marshal may require the testing service
	to:
	(1)  correspond directly with an applicant regarding
	the administration of the examination;
	(2)  collect a reasonable fee from an applicant for
	administering the examination; or
	(3)  administer the examination at a specific location
	or time.
	(e)  Approval for a testing service is valid for one year.
	(f)  The state fire marshal shall adopt rules as necessary to
	implement examination requirements under this chapter.  (V.T.I.C.
	Art. 5.43-2, Secs. 5D(a) (part), (b) (part), (f), (g), (h).)
	Sec.6002.157.EXAMINATION RESULTS.  (a)  Not later than the
	30th day after the date on which an examination is administered
	under this chapter, the state fire marshal shall send notice to each
	examinee of the results of the examination.
	(b)  If an examination is conducted, graded, or reviewed by a
	testing service, the state fire marshal shall send notice to each
	examinee of the results of the examination within two weeks after
	the date on which the state fire marshal receives the results from
	the testing service.
	(c)  If the notice of the examination results will be delayed
	for more than 90 days after the examination date, the state fire
	marshal shall send notice to the examinee of the reason for the
	delay before the 90th day.
	(d)  The state fire marshal may require a testing service to
	notify an examinee of the results of the examinee's examination
	under this section.
	(e)  If requested in writing by an individual who fails the
	examination administered under this chapter, the state fire marshal
	shall send to the individual an analysis of the individual's
	performance on the examination.  (V.T.I.C. Art. 5.43-2, Secs. 5D(a)
	(part), (a-1).)
	Sec.6002.158.TRAINING SCHOOLS AND INSTRUCTORS; APPROVAL.
	(a)  An applicant for approval as a training school must submit an
	application to the state fire marshal, accompanied by the
	applicant's complete course or testing curriculum. A registered
	firm, or an affiliate of a registered firm, is not eligible for
	approval as a training school.
	(b)  The state fire marshal shall review the materials
	submitted for course approval and shall approve or deny approval in
	a letter provided not later than the 60th day after the date of
	receipt of the application. A denial of approval must disclose
	specific reasons for the denial. An applicant whose approval is
	denied may reapply at any time.
	(c)  Training school instructors must be approved by the
	state fire marshal. To be eligible for approval, an instructor must
	hold a fire alarm planning superintendent license and have at least
	three years of experience in fire alarm installation, service, or
	monitoring.
	(d)  Approval for a training school or instructor is valid
	for one year.
	(e)  The curriculum for a fire alarm technician course or a
	residential fire alarm superintendent course must consist of 16
	hours of classroom instruction for each license category.
	(f)  After approval, each training school must annually
	conduct, within 125 miles of each county with a population greater
	than 500,000, at least two classes that are open to the public.
	(V.T.I.C. Art. 5.43-2, Secs. 5D(b) (part), (c) (part), (d), (e);
	New.)
	Sec.6002.159.CONTINUING EDUCATION PROGRAMS. (a) The
	commissioner may adopt procedures for certifying and may certify
	continuing education programs.
	(b)  Participation in the continuing education programs is
	voluntary. (V.T.I.C. Art. 5.43-2, Sec. 5E.)
	Sec.6002.160.RECIPROCAL LICENSE.  The department may
	waive any license requirement for an applicant who holds a license
	issued by another state that has license requirements substantially
	equivalent to the license requirements of this state. (V.T.I.C.
	Art. 5.43-2, Sec. 5F.)
	Sec.6002.161.NOT TRANSFERABLE. A registration
	certificate or license issued under this chapter is not
	transferable. (V.T.I.C. Art. 5.43-2, Sec. 5(h).)
	[Sections 6002.162-6002.200 reserved for expansion]
	SUBCHAPTER E. RENEWAL OF REGISTRATION CERTIFICATE OR LICENSE
	Sec.6002.201.RENEWAL REQUIRED; FEE. (a) A renewal of a
	registration certificate or license issued under this chapter is
	valid for a period of two years. The license or registration
	renewal fee for each year of the two-year period is payable on
	renewal.
	(b)  The commissioner by rule may adopt a system under which
	registration certificates and licenses expire on various dates
	during the year. For the year in which an expiration date of a
	registration certificate or license is less than one year from its
	issuance or anniversary date, the fee shall be prorated on a monthly
	basis so that each holder of a registration certificate or license
	pays only that portion of the renewal fee that is allocable to the
	number of months during which the registration certificate or
	license is valid. The total renewal fee is payable on renewal on
	the new expiration date. (V.T.I.C. Art. 5.43-2, Secs. 5A, 5C(b).)
	Sec.6002.202.NOTICE OF EXPIRATION. At least 30 days
	before the expiration date of a registration certificate or
	license, the state fire marshal shall send written notice of the
	impending expiration to the holder of the registration certificate
	or license at the holder's last known address. (V.T.I.C. Art.
	5.43-2, Sec. 5C(a) (part).)
	Sec.6002.203.RENEWAL PROCEDURES. (a)  The holder of an
	unexpired registration certificate or license may renew the
	certificate or license by paying the required renewal fee to the
	department before the expiration date of the certificate or
	license.
	(b)  An individual or organization whose registration
	certificate or license has been expired for 90 days or less may
	renew the certificate or license by paying to the department:
	(1)  the required renewal fee; and
	(2)  a fee that does not exceed one-fourth of the
	initial fee for the certificate or license.
	(c)  An individual or organization whose registration
	certificate or license has been expired for more than 90 days but
	less than two years may renew the certificate or license by paying
	to the department:
	(1)  all unpaid renewal fees; and
	(2)  a fee that does not exceed the initial fee for the
	certificate or license.
	(d)  An individual or organization whose registration
	certificate or license has been expired for two years or longer may
	not renew the certificate or license. The individual or
	organization may obtain a new registration certificate or license
	by complying with the requirements and procedures for obtaining an
	initial registration certificate or license.
	(e)  This section may not be construed to prevent the
	department from denying or refusing to renew a license under
	applicable law or commissioner rules.
	(f)  A license or registration certificate issued under this
	chapter expires at midnight on the date printed on the license or