83R5261 SLB-F
 
  By: Davis S.B. No. 802
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the regulation of foundation repair contractors;
  providing penalties; authorizing fees.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle A, Title 6, Occupations Code, is
  amended by adding Chapter 1003 to read as follows:
  CHAPTER 1003.  FOUNDATION REPAIR CONTRACTORS
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 1003.001.  SHORT TITLE. This chapter may be cited as
  the Foundation Repair Contractors Act.
         Sec. 1003.002.  DEFINITIONS. In this chapter:
               (1)  "Advisory board" means the Foundation Repair
  Advisory Board.
               (2)  "Commission" means the Texas Commission of
  Licensing and Regulation.
               (3)  "Department" means the Texas Department of
  Licensing and Regulation.
               (4)  "Executive director" means the executive director
  of the department.
               (5)  "Foundation" means that portion of the structure
  of a residential property, other than a column, that serves the
  function of:
                     (A)  supporting an overlying structure;
                     (B)  providing a base for an overlying structure;
  or
                     (C)  transmitting loads from an overlying
  structure to the underlying soils.
               (6)  "Foundation repair company" means a person engaged
  in the business of foundation repair contracting.
               (7)  "Foundation repair contracting" means performing
  or offering to perform the design, estimation, installation, or
  construction functions in connection with the repair or maintenance
  of a foundation.
               (8)  "Foundation repair work" means labor or the use of
  materials for the installation or construction functions in
  connection with the repair or maintenance of a foundation.
               (9)  "Laborer" means an individual who, under the
  supervision and direction of a person licensed under this chapter,
  performs nonsupervisory manual labor, including digging holes,
  pouring supports, tunneling, and installing underpinning.
               (10)  "Mobile structure" means:
                     (A)  a manufactured home that complies with the
  construction and safety standards of the United States Department
  of Housing and Urban Development; or
                     (B)  a mobile home, as defined by Section
  1201.003.
               (11)  "Principal" means an individual who:
                     (A)  personally or constructively holds,
  including as the beneficiary of a trust:
                           (i)  at least 10 percent of a corporation's
  outstanding stock; or
                           (ii)  more than $25,000 of the fair market
  value of a business entity;
                     (B)  has the controlling interest in a business
  entity;
                     (C)  has a direct or indirect participating
  interest through shares, stock, or otherwise, regardless of whether
  voting rights are included, of more than 10 percent of the profits,
  proceeds, or capital gains of a business entity;
                     (D)  is a member of the board of directors or other
  governing body of a business entity; or
                     (E)  serves as an elected officer of a business
  entity.
               (12)  "Residential property" means a single-family
  home, duplex, or a townhome not more than three stories in height.
         Sec. 1003.003.  EXEMPTIONS. (a) This chapter does not apply
  to:
               (1)  an individual who performs foundation repair work
  only on a home for which the individual is listed in the records of
  the local appraisal district as the owner, except that the
  individual may not pay compensation to any person for the repair
  other than to purchase materials;
               (2)  an individual licensed as an engineer under
  Chapter 1001;
               (3)  a person who performs foundation repair work only
  on a mobile structure;
               (4)  a person who performs foundation repair work only
  on nonresidential property; or
               (5)  a person who, for compensation:
                     (A)  sells or constructs new residential
  property; or
                     (B)  sells a warranty related to the construction
  of new residential property.
         (b)  A laborer is not required to hold a license under this
  chapter if the laborer is engaged in foundation repair under the
  supervision of a license holder under this chapter.
  SUBCHAPTER B. FOUNDATION REPAIR ADVISORY BOARD
         Sec. 1003.051.  ADVISORY BOARD MEMBERSHIP. (a)  The
  Foundation Repair Advisory Board consists of seven members
  appointed by the presiding officer of the commission, with the
  commission's approval, as follows:
               (1)  one member who is an official of a municipality;
               (2)  one member who is an engineer licensed under
  Chapter 1001;
               (3)  four members who are foundation repair master
  license holders, of whom two must be members of a statewide
  foundation repair organization; and
               (4)  one member who represents the public and is not
  affiliated with any foundation repair company.
         (b)  Appointments to the advisory board shall be made without
  regard to the race, color, disability, sex, religion, age, or
  national origin of the appointee.
         (c)  Notwithstanding Subsection (a)(3), the commission may
  appoint a person to the advisory board under that subdivision if the
  person:
               (1)  does not hold a license under this chapter; and
               (2)  meets the qualifications for the license,
  including the requirement that the person pass a criminal
  background check.
         (d)  A member appointed under Subsection (c) must apply for
  and obtain a license not later than the 30th day after the date the
  member is appointed.
         Sec. 1003.052.  ADVISORY BOARD DUTIES. The advisory board
  shall provide advice and recommendations to the department and
  commission on technical matters relevant to the administration and
  enforcement of this chapter, including examination content,
  licensing standards, foundation repair standards, fees, rules, and
  continuing education requirements.
         Sec. 1003.053.  TERMS; VACANCY. (a) Advisory board members
  serve staggered six-year terms. The terms of two or three members
  expire on February 1 of each odd-numbered year.
         (b)  If a vacancy occurs during a member's term, the
  presiding officer of the commission, with the commission's
  approval, shall fill the vacancy for the remainder of the unexpired
  term with an individual having the same qualifications as the
  predecessor.
         (c)  A member may not serve more than two consecutive full
  terms.
         Sec. 1003.054.  PRESIDING OFFICER. (a)  The presiding
  officer of the commission, with the commission's approval, shall
  designate one member of the advisory board to serve as presiding
  officer of the advisory board for a one-year term.
         (b)  The presiding officer of the advisory board may vote on
  any matter before the advisory board.
         Sec. 1003.055.  COMPENSATION; REIMBURSEMENT. An advisory
  board member serves without compensation but may receive
  reimbursement for actual and necessary expenses incurred in
  performing functions as an advisory board member, as provided by
  the General Appropriations Act and the budget of the department.
         Sec. 1003.056.  MEETINGS. The advisory board shall meet at
  least annually and may meet at other times at the call of the
  presiding officer of the commission or the executive director.
  SUBCHAPTER C. POWERS AND DUTIES OF COMMISSION AND DEPARTMENT
         Sec. 1003.101.  RULES. The commission shall adopt rules as
  necessary to implement this chapter, including rules:
               (1)  regarding the requirements to obtain and renew
  each type of license under this chapter;
               (2)  regarding the operation of a foundation repair
  company, including minimum insurance requirements, and the
  performance of foundation repair contracting;
               (3)  governing the use, display, and advertisement of a
  license issued under this chapter;
               (4)  regarding advertising in relation to an offer to
  perform foundation repair work or foundation repair contracting;
  and
               (5)  relating to administrative sanctions that may be
  imposed on a person under this chapter.
         Sec. 1003.102.  CONTRACTS FOR ENFORCEMENT. The department
  may contract with another state agency or political subdivision of
  this state to enforce this chapter and rules adopted under this
  chapter.
         Sec. 1003.103.  PERSONNEL.  The department may employ
  personnel necessary to administer this chapter.
         Sec. 1003.104.  DIRECTORY OF LICENSE HOLDERS. The
  department shall maintain a directory of license holders and make
  the directory available to the public on the Internet.
         Sec. 1003.105.  FEES. The commission shall establish and
  the department shall collect reasonable and necessary fees in
  amounts sufficient to cover the costs of administering this
  chapter.
         Sec. 1003.106.  CRIMINAL HISTORY BACKGROUND CHECK.  The
  department may obtain criminal history record information under
  Subchapter F, Chapter 411, Government Code, for an applicant for or
  holder of a license under this chapter. For purposes of Section
  411.093, Government Code, an applicant for or holder of a license
  under this chapter includes a principal of the applicant or license
  holder.
  SUBCHAPTER D. LICENSE REQUIREMENTS
         Sec. 1003.151.  LICENSE REQUIRED. (a)  Unless the person
  holds an appropriate license issued under this chapter, a person
  may not:
               (1)  operate a foundation repair company;
               (2)  perform foundation repair work or supervise the
  performance of foundation repair work; or
               (3)  prepare or provide:
                     (A)  cost estimates for foundation repair work,
  including bids or proposals; or
                     (B)  a contract to perform foundation repair work.
         (b)  A person may not offer to perform an activity listed in
  Subsection (a) unless the person holds an appropriate license
  issued under this chapter.
         (c)  A license issued under this chapter is not transferable
  and may be used only by the person, including a single foundation
  repair company, listed on the license.
         Sec. 1003.152.  LICENSE CLASSIFICATIONS. The department
  shall issue foundation repair company, master, and journeyman
  licenses.
         Sec. 1003.153.  FOUNDATION REPAIR COMPANY LICENSE. (a) A
  foundation repair company license entitles the license holder to
  engage in business as a foundation repair company.
         (b)  To be eligible for a foundation repair company license:
               (1)  if the applicant is an individual, the applicant
  must:
                     (A)  submit proof that the applicant owns the
  foundation repair company as a sole proprietor;
                     (B)  be a master license holder or submit proof
  that the applicant will employ at least one master license holder
  full-time;
                     (C)  submit proof that the applicant has
  insurance that meets the requirements of commission rules; and
                     (D)  pass a criminal history background check; or
               (2)  if the applicant is a business entity:
                     (A)  the applicant must identify each principal of
  the applicant, including:
                           (i)  the name and address of each partner, if
  the applicant is a partnership; and
                           (ii)  the name and address of the president,
  secretary, and treasurer, if the applicant is a corporation;
                     (B)  the applicant must submit proof that the
  applicant will employ at least one master license holder full-time;
                     (C)  the applicant must submit proof that the
  applicant has insurance that meets the requirements of commission
  rules; and
                     (D)  each principal of the applicant must pass a
  criminal history background check.
         Sec. 1003.154.  MASTER LICENSE.  (a)  A master license
  entitles the license holder to engage in foundation repair
  contracting.
         (b)  An applicant for a master license under this chapter
  must:
               (1)  be at least 21 years of age;
               (2)  have at least 60 months of documented, practical
  work experience performing foundation repair contracting under the
  supervision of a master license holder during the preceding 10
  years or substantially equivalent experience as determined by the
  department;
               (3)  hold a high school diploma or its equivalent;
               (4)  pass a criminal history background check; and
               (5)  pass an examination administered by the
  department.
         Sec. 1003.155.  JOURNEYMAN LICENSE.  (a)  A journeyman
  license entitles the license holder to engage in foundation repair
  contracting under the supervision of a master license holder.
         (b)  An applicant for a journeyman license under this chapter
  must:
               (1)  be at least 21 years of age;
               (2)  have at least 24 months of documented, practical
  work experience in foundation repair contracting under the
  supervision of a master license holder during the preceding 10
  years or substantially equivalent experience as determined by the
  department;
               (3)  hold a high school diploma or its equivalent;
               (4)  pass a criminal history background check; and
               (5)  pass an examination administered by the
  department.
         Sec. 1003.156.  PRACTICAL EXPERIENCE.  (a)  An applicant who
  holds a degree or diploma or completes a certification program from
  an institution of higher education that is accredited by an
  accrediting agency recognized by the Texas Higher Education
  Coordinating Board, holds a certificate of authority to grant
  degrees issued by the Texas Higher Education Coordinating Board, or
  is similarly authorized to award degrees by an equivalent governing
  body in another state as determined by the executive director may
  substitute:
               (1)  a four-year degree or diploma in engineering for
  24 months of practical experience required under this subchapter;
               (2)  a two-year associate's degree, a two-year diploma,
  or a two-year certification program primarily focused on
  engineering or construction-related work for 12 months of practical
  experience required under this subchapter;
               (3)  a one-year certification program, or a program
  that is not less than two semesters, in engineering or
  construction-related work for six months of practical experience
  required under this subchapter; and
               (4)  a program resulting in another applicable degree,
  diploma, or certificate for an amount of practical experience
  required under this subchapter as determined by the department
  under commission rule.
         (b)  Each of the following qualifies as practical experience
  required under this subchapter:
               (1)  verified military service in which the person was
  trained in or performed related engineering or
  construction-related work as part of the person's military
  occupational specialty; and
               (2)  experience performing engineering or construction
  work related to foundation repair while employed by a governmental
  entity.
         (c)  An applicant who has substantially equivalent
  experience obtained in another state and who held a similar license
  in that state may receive credit for the experience as determined by
  the department under commission rule.
         Sec. 1003.157.  APPLICATION. (a) An applicant for a license
  must submit an application on the form prescribed by the executive
  director.
         (b)  The application must specify the class of license for
  which the applicant is applying and include the required fees.
         (c)  The application for a master or journeyman license must
  include a statement containing evidence satisfactory to the
  department of the applicant's required practical experience.
         (d)  The applicant must submit any other information
  required by the executive director or by commission rule.
         (e)  The department may deny an application for a license or
  for the renewal of a license if the applicant has previously had a
  license under this chapter revoked or if the applicant has violated
  an order of the commission or the executive director, including an
  order imposing sanctions or an administrative penalty.
         Sec. 1003.158.  EXAMINATIONS. (a) The executive director
  shall prescribe a separate examination for each class of license
  under this chapter, except that an examination is not required for a
  foundation repair company license.
         (b)  The executive director shall prescribe the method and
  content of an examination required under this chapter and may
  approve and accept results of an examination administered by
  another organization.
         Sec. 1003.159.  ISSUANCE AND TERM OF LICENSE. (a) The
  department shall issue a license to an applicant who meets the
  requirements of this chapter and rules adopted under this chapter.
         (b)  A license issued under this chapter is valid for one
  year and expires on the first anniversary of the date the license is
  issued.
         Sec. 1003.160.  RENEWAL OF LICENSE. (a)  To renew a license,
  the license holder must:
               (1)  submit a renewal application in the form
  prescribed by the executive director;
               (2)  pay the required fee; and
               (3)  show evidence of having completed the continuing
  education requirements established under Section 1003.161, if
  applicable.
         (b)  In addition to the requirements of Subsection (a), an
  applicant to renew a foundation repair company license must also
  meet the requirements of Section 1003.153(b).
         (c)  In addition to the requirements of Subsection (a), an
  applicant to renew a master or journeyman license must pass a
  criminal history background check.
         Sec. 1003.161.  CONTINUING EDUCATION.  (a)  The commission
  by rule shall recognize, prepare, or administer continuing
  education programs for license holders. Each master license holder
  and journeyman license holder must complete a continuing education
  program before the license holder may renew the license holder's
  master license or journeyman license.
         (b)  A person recognized by the commission to offer a
  continuing education program must:
               (1)  register with the department; and
               (2)  comply with rules adopted by the commission
  relating to continuing education.
  SUBCHAPTER E.  PRACTICE BY LICENSE HOLDERS
         Sec. 1003.201.  DELEGATION; SUPERVISION OF LABORERS. (a)  A
  person holding a master or journeyman license may delegate to a
  laborer under the license holder's supervision any foundation
  repair work that does not require a license under this chapter.
         (b)  A master license holder is responsible for foundation
  repair work performed by a journeyman or by a laborer under the
  supervision of the master license holder.
         (c)  A journeyman license holder is responsible for
  foundation repair work performed by a laborer under the supervision
  of the journeyman license holder.
         (d)  The department may determine whether a specific act
  constitutes foundation repair work under this chapter.
         (e)  A person who does not hold an appropriate license under
  this chapter may not supervise a person who holds a license under
  this chapter in performing foundation repair contracting or
  foundation repair work.
         Sec. 1003.202.  PRACTICE; FOUNDATION REPAIR COMPANY. (a)  A
  foundation repair company must be a sole proprietorship owned by a
  master license holder or employ at least one master license holder
  full-time who is designated as the company's master license holder.
         (b)  Not later than the 30th day after the date a master
  license holder required by Subsection (a) leaves the employment of
  a foundation repair company, the company shall submit to the
  department satisfactory evidence of a replacement master license
  holder.
         (c)  A foundation repair company license holder that does not
  meet the requirements of Subsection (a) at the time foundation
  repair contracting services are performed may not collect a fee or
  otherwise enforce a contract for those services.
         (d)  A master license holder designated under Subsection (a)
  is responsible for the foundation repair company's compliance with
  this chapter and rules adopted under this chapter.
         (e)  A master license holder may not be designated under
  Subsection (a) for more than one foundation repair company at any
  time.
         Sec. 1003.203.  PROHIBITED PRACTICES. (a) A license holder
  may not perform or offer or attempt to perform an act, service, or
  function that is:
               (1)  defined as the practice of engineering under
  Chapter 1001, unless the individual holds a license under that
  chapter;
               (2)  defined as the practice of architecture under
  Chapter 1051, unless the individual holds a license under that
  chapter;
               (3)  regulated under Chapter 113, Natural Resources
  Code, unless the individual holds a license or is exempt by rule
  under that chapter; or
               (4)  defined as plumbing under Chapter 1301, unless the
  individual holds a license under that chapter.
         (b)  A license holder may not:
               (1)  fail to provide services for which payment has
  been made;
               (2)  fail to honor the terms of a contract in the
  absence of a good faith dispute;
               (3)  knowingly misrepresent a necessary service,
  service to be provided, or service that has been provided;
               (4)  make a fraudulent promise to induce an individual
  to contract for a service; or
               (5)  perform foundation repair work that requires a
  permit from a political subdivision without first obtaining the
  required permit.
         (c)  A person licensed under this chapter may not use the
  services of or assist a person to perform foundation repair
  contracting or foundation repair work if the other person is
  required to hold a license under this chapter and does not hold the
  appropriate license.
  SUBCHAPTER F. LOCAL REGULATION
         Sec. 1003.251.  DEFINITIONS. In this subchapter:
               (1)  "Local political subdivision" means a county or
  municipality in which a person seeks to perform foundation repair
  work or foundation repair contracting.
               (2)  "Local regulation" means an order adopted by a
  county commissioners court or an ordinance or other regulation
  adopted by a municipality.
         Sec. 1003.252.  APPLICATION OF LOCAL ORDINANCE. This
  chapter does not affect a person's obligation to comply with a local
  regulation establishing a permit, inspection, or approval process
  in connection with foundation repair work.
         Sec. 1003.253.  LOCAL STANDARDS. (a)  The standard for the
  practice of foundation repair work or foundation repair contracting
  in a local political subdivision is the standard established by
  local regulation if the standard is not less stringent than the
  standard imposed by this chapter.
         (b)  A person who holds a license issued under this chapter
  is not required to hold a license issued by a local political
  subdivision or take an examination required by a local regulation
  to engage in foundation repair work or foundation repair
  contracting.
         Sec. 1003.254.  NOTICE TO LOCAL POLITICAL SUBDIVISION. (a)
  A person who obtains a foundation repair company license shall
  provide notice to a local political subdivision if required to
  perform work in the local political subdivision.
         (b)  The notice must be in a form required by the local
  political subdivision.
         (c)  A local political subdivision may charge a fee to a
  person who provides notice required by this section. The fee must
  be in an amount reasonable and necessary to administer the local
  political subdivision's regulation of foundation repair
  contracting under this subchapter.
  SUBCHAPTER G.  ENFORCEMENT
         Sec. 1003.301.  ADMINISTRATIVE PENALTY. The commission may
  impose an administrative penalty on a person under Subchapter F,
  Chapter 51, regardless of whether the person holds a license under
  this chapter.
         Sec. 1003.302.  SANCTIONS. The department may impose
  sanctions as provided by Section 51.353.
         Sec. 1003.303.  CRIMINAL PENALTY; LICENSING. (a)  A person
  commits an offense if the person:
               (1)  violates the licensing requirements of this
  chapter;
               (2)  employs an individual who does not hold the
  appropriate license required by this chapter, other than a laborer;
  or
               (3)  submits to the department a false document
  relating to work experience, certification, or training in
  connection with an application for a license under this chapter.
         (b)  An offense under this section is a Class C misdemeanor.
  SUBCHAPTER H.  INITIAL LICENSING
         Sec. 1003.351.  In this subchapter:
               (1)  "Manager" means a person employed by a foundation
  repair company or similar entity, regardless of whether that
  company or entity holds a license under this chapter, to direct and
  perform foundation repair work, including foundation installation
  and lifting.
               (2)  "Salesperson" means a person who engages in the
  design or selection of methods used to repair or maintain a
  foundation, including estimation of the cost of labor and
  materials.
         Sec. 1003.352.  WAIVER OF EXAMINATION REQUIREMENT. (a)  The
  department shall waive the examination requirement under Section
  1003.154(b) for a master license for an applicant who meets the
  requirements of this subchapter.
         (b)  The department shall waive the examination requirement
  under Section 1003.155(b) for a journeyman license for an applicant
  who meets the requirements of this subchapter.
         Sec. 1003.353.  INITIAL LICENSING.  (a)  The department
  shall issue a master license to a qualified applicant who:
               (1)  submits an application not later than September 1,
  2014; and
               (2)  has been an owner or manager of a foundation repair
  company or similar entity for at least 60 months, regardless of
  whether that company or entity holds a license under this chapter.
         (b)  The department shall issue a journeyman license to a
  qualified applicant who:
               (1)  submits an application not later than September 1,
  2014; and
               (2)  has worked for a foundation repair company or
  similar entity as a salesperson, estimator, foreman, or manager for
  at least 24 months, regardless of whether that company or entity
  holds a license under this chapter.
         Sec. 1003.354.  RENEWAL OF LICENSE. To qualify to renew an
  initial license issued under this subchapter, the license holder
  must comply with the requirements of Section 1003.160.
         Sec. 1003.355.  EXPIRATION OF SUBCHAPTER.  This subchapter
  expires October 1, 2014.
         SECTION 2.  (a)  Notwithstanding the requirement of Section
  1003.051(a)(3), Occupations Code, as added by this Act, the Texas
  Commission of Licensing and Regulation shall appoint persons who
  meet the practical experience requirement for an initial master
  license to serve as initial members of the Foundation Repair
  Advisory Board as soon as practicable after the effective date of
  this Act.
         (b)  The Texas Commission of Licensing and Regulation shall
  determine with respect to the members of the Foundation Repair
  Advisory Board appointed under Chapter 1003, Occupations Code, as
  added by this Act, which terms of two members expire February 1,
  2015, which terms of two members expire February 1, 2017, and which
  terms of three members expire February 1, 2019.
         (c)  The changes in law made by Section 1003.202(c),
  Occupations Code, as added by this Act, apply only to a contract for
  foundation repair entered into or renewed on or after September 1,
  2014. A contract for foundation repair entered into or renewed
  before September 1, 2014, is governed by the law as it existed on
  the date the contract was entered into, and the former law is
  continued in effect for that purpose.
         SECTION 3.  (a)  The Texas Commission of Licensing and
  Regulation shall adopt rules to implement Chapter 1003, Occupations
  Code, as added by this Act, not later than February 1, 2014.
         (b)  Not later than March 1, 2014, the Texas Commission of
  Licensing and Regulation shall begin accepting applications for and
  issuing licenses under Chapter 1003, Occupations Code, as added by
  this Act.
         (c)  A person is not required to obtain a license to engage in
  foundation repair contracting or foundation repair work under
  Chapter 1003, Occupations Code, as added by this Act, before
  September 1, 2014.
         SECTION 4.  (a)  Except as provided by Subsection (b) of this
  section, this Act takes effect September 1, 2013.
         (b)  Section 1003.151 and Subchapter G, Chapter 1003,
  Occupations Code, as added by this Act, take effect September 1,
  2014.