Texas 2009 - 81st Regular

Texas House Bill HB1291 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R6474 PB-D
2	2	By: Eiland H.B. No. 1291
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to regulation of certain disaster remediation
8	8	contractors; providing penalties.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	ARTICLE 1. REGULATION BY TEXAS DEPARTMENT OF INSURANCE
11	11	SECTION 1.001. Title 20, Insurance Code, is amended by
12	12	adding Chapter 6005 to read as follows:
13	13	CHAPTER 6005. REGULATION OF DISASTER REMEDIATION CONTRACTORS
14	14	SUBCHAPTER A. GENERAL PROVISIONS
15	15	Sec. 6005.001. DEFINITIONS. In this chapter:
16	16	(1) "Contract holder" means a person who enters into a
17	17	contract with a disaster remediation contractor for the performance
18	18	of disaster remediation on property owned or leased by the contract
19	19	holder.
20	20	(2) "Council of governments" means a regional planning
21	21	commission or similar regional planning agency created under
22	22	Chapter 391, Local Government Code.
23	23	(3) "Disaster remediation" means the removal,
24	24	cleaning, sanitizing, demolition, reconstruction, or other
25	25	treatment of improvements to real property performed because of
26	26	damage or destruction to that property caused by a natural
27	27	disaster.
28	28	(4) "Disaster remediation contractor" means a person
29	29	who engages in disaster remediation for compensation.
30	30	(5) "Natural disaster" means the occurrence of
31	31	widespread or severe damage, injury, or loss of life or property
32	32	related to any natural cause, including fire, flood, earthquake,
33	33	wind, storm, or wave action, that results in a disaster declaration
34	34	by the governor under Chapter 418, Government Code.
35	35	(6) "Person" means an individual, corporation, trust,
36	36	partnership, association, or other private legal entity.
37	37	(7) "Region" has the meaning assigned by Section
38	38	391.002, Local Government Code.
39	39	[Sections 6005.002-6005.050 reserved for expansion]
40	40	SUBCHAPTER B. DEPARTMENT POWERS AND DUTIES
41	41	Sec. 6005.051. GENERAL RULES. The commissioner shall adopt
42	42	rules as necessary to implement this chapter.
43	43	Sec. 6005.052. CODE OF PROFESSIONAL RESPONSIBILITY;
44	44	STANDARDS OF CONDUCT. (a) In cooperation with the attorney
45	45	general, the commissioner by rule shall adopt a code of
46	46	professional responsibility to regulate the conduct of a disaster
47	47	remediation contractor who provides services in this state.
48	48	(b) The code of professional responsibility must
49	49	contain standards of conduct that must be followed by a person
50	50	authorized under this chapter to operate as a disaster remediation
51	51	contractor in this state in dealing with the public.
52	52	Sec. 6005.053. COMPLAINT INVESTIGATIONS. (a) The
53	53	department shall establish procedures for receiving a complaint
54	54	alleging a violation of the code of professional responsibility
55	55	established under Section 6005.052.
56	56	(b) The department may investigate a complaint received by
57	57	the department under Subsection (a) and may forward results of an
58	58	investigation conducted under this subsection to the attorney
59	59	general and appropriate law enforcement authorities.
60	60	[Sections 6005.054-6005.100 reserved for expansion]
61	61	SUBCHAPTER C. REGISTRATION REQUIREMENT
62	62	Sec. 6005.101. REGISTRATION REQUIRED. (a) A person may not
63	63	engage in disaster remediation for compensation in this state or
64	64	act as a disaster remediation contractor in this state unless the
65	65	person holds a certificate of registration issued under this
66	66	subchapter.
67	67	(b) A person may not assume or use the title or designation
68	68	"certified disaster remediation contractor" or any other title,
69	69	designation, word, letter, abbreviation, sign, card, or device
70	70	tending to indicate that the person is registered under this
71	71	chapter, including any reference to the Federal Emergency
72	72	Management Agency, unless the person holds a certificate of
73	73	registration under this chapter or is otherwise determined by the
74	74	commissioner to be authorized to use the title or designation.
75	75	(c) Each applicant for registration under this chapter must
76	76	register, in the manner provided by this chapter, with:
77	77	(1) the department; and
78	78	(2) the governing body of the council of governments
79	79	in each region in which the applicant proposes to provide disaster
80	80	remediation services for compensation.
81	81	Sec. 6005.102. EXEMPTIONS. (a) A person is not required to
82	82	register under this chapter to perform disaster remediation for
83	83	compensation if the person:
84	84	(1) holds a license, certificate of registration, or
85	85	other authority issued by the Texas Department of Licensing and
86	86	Regulation, another licensing agency of this state, or a federal
87	87	regulatory agency; and
88	88	(2) provides disaster remediation services for
89	89	compensation solely within the scope of that authority.
90	90	(b) A managing agent or employee of a property owner is not
91	91	required to be licensed under this chapter to perform disaster
92	92	remediation on property owned by the property owner. This
93	93	exemption does not apply if the managing agent or employee engages
94	94	in the business of performing disaster remediation for the public.
95	95	(c) An employee of a certificate holder is not required to
96	96	register under this chapter to perform disaster remediation while
97	97	supervised by the certificate holder, as provided by rules adopted
98	98	under this chapter.
99	99	[Sections 6005.103-6005.150 reserved for expansion]
100	100	SUBCHAPTER D. DEPARTMENT REGISTRATION PROCEDURES
101	101	Sec. 6005.151. APPLICATION REQUIREMENTS. (a) An applicant
102	102	for a certificate of registration issued by the department under
103	103	this chapter must:
104	104	(1) submit to the department a completed application
105	105	on a form prescribed by the commissioner;
106	106	(2) sign a statement agreeing to comply with the code
107	107	of professional responsibility prescribed by the commissioner;
108	108	(3) provide evidence of the security required under
109	109	this subchapter;
110	110	(4) pay the required fees; and
111	111	(5) provide any other information required by the
112	112	commissioner.
113	113	(b) The department may conduct an examination of any
114	114	criminal conviction of an applicant, including by obtaining any
115	115	criminal history record information permitted by law.
116	116	Sec. 6005.152. RECIPROCAL REGISTRATION. On proper
117	117	application, the department may issue a certificate of registration
118	118	to a person who holds a license, certificate of registration, or
119	119	other authority to perform disaster remediation issued by another
120	120	state that the commissioner determines has requirements that are
121	121	equivalent to those of this state.
122	122	Sec. 6005.153. FEES; SECURITY REQUIREMENTS. (a) The
123	123	commissioner may adopt fees for registration under this subchapter,
124	124	including application fees and renewal fees.
125	125	(b) As a guarantee that a disaster remediation contractor
126	126	will meet the contractor's obligations to contract holders, the
127	127	contractor shall maintain with the department a bond or other
128	128	security accepted by the commissioner.
129	129	(c) A bond posted as security must:
130	130	(1) be issued by an insurer authorized to engage in the
131	131	business of insurance in this state;
132	132	(2) be continuous;
133	133	(3) be cancelable by the surety only after at least 90
134	134	days' notice to the department; and
135	135	(4) recognize that the obligation continues for the
136	136	terms of the contracts written by the disaster remediation
137	137	contractor while the bond is in force.
138	138	(d) Any security provided under this section in a form other
139	139	than a bond must be convertible to cash by the department for the
140	140	benefit of contract holders in this state, without resort to the
141	141	courts, if the commissioner determines that the disaster
142	142	remediation contractor is in default of the contractor's financial
143	143	obligations to contract holders. Any amount remaining after all
144	144	contract holders' claims are paid must be returned to the disaster
145	145	remediation contractor not later than the 120th day after the date
146	146	the last outstanding contract expires.
147	147	Sec. 6005.154. ISSUANCE OF CERTIFICATE; TERM. (a) On
148	148	receipt of the application and required fees, and on satisfaction
149	149	of the security requirement under Section 6005.153, the department
150	150	shall issue a certificate of registration to an applicant under
151	151	this subchapter.
152	152	(b) A certificate of registration expires on the first
153	153	anniversary of the date of issuance and may be renewed annually in
154	154	the manner prescribed by the commissioner. An application for
155	155	renewal must be submitted to the department not later than the 30th
156	156	day before the expiration date of the certificate.
157	157	[Sections 6005.155-6005.200 reserved for expansion]
158	158	SUBCHAPTER E. CONSUMER DISCLOSURE REQUIREMENTS
159	159	Sec. 6005.201. LIST OF SERVICES. (a) A disaster
160	160	remediation contractor shall prepare a comprehensive list that
161	161	describes each service that the contractor offers.
162	162	(b) The contractor shall provide a written copy of the list
163	163	to each prospective contract holder.
164	164	Sec. 6005.202. CONTRACT. Before entering into a contract
165	165	for disaster remediation services, a disaster remediation
166	166	contractor must deliver to the prospective contract holder a
167	167	complete written copy of the contract, accompanied by a written
168	168	receipt for any payment made by the contract holder under the
169	169	contract.
170	170	[Sections 6005.203-6005.250 reserved for expansion]
171	171	SUBCHAPTER F. REGISTRATION WITH COUNCIL OF GOVERNMENTS
172	172	Sec. 6005.251. REGISTRATION WITH COUNCIL OF GOVERNMENTS.
173	173	(a) A person required to hold a certificate of registration under
174	174	Section 6005.101 must also register with the governing body of the
175	175	council of governments in each region in which the person proposes
176	176	to provide disaster remediation services.
177	177	(b) Registration under Subsection (a) is subject to Section
178	178	391.0092, Local Government Code.
179	179	[Sections 6005.252-6005.300 reserved for expansion]
180	180	SUBCHAPTER G. ENFORCEMENT; CRIMINAL PENALTY
181	181	Sec. 6005.301. DISCIPLINARY ACTIONS. (a) The commissioner
182	182	may suspend, revoke, or refuse to issue or renew a certificate of
183	183	registration under this chapter if, after notice and hearing, the
184	184	commissioner finds that the applicant or registrant has engaged in
185	185	acts that:
186	186	(1) violate this chapter;
187	187	(2) violate rules or standards adopted under this
188	188	chapter;
189	189	(3) violate Section 391.0092, Local Government Code;
190	190	or
191	191	(4) constitute misrepresentation made in connection
192	192	with disaster remediation services.
193	193	(b) An original or renewal certificate of registration may
194	194	be denied, suspended, or revoked, if, after notice and hearing, the
195	195	commissioner determines from the evidence presented at the hearing
196	196	that this chapter or a rule adopted under this chapter has been
197	197	violated.
198	198	Sec. 6005.302. DISCIPLINARY HEARING. (a) If the
199	199	commissioner proposes to suspend, revoke, or refuse to renew a
200	200	certificate of registration under this chapter, the holder of the
201	201	certificate is entitled to a hearing conducted by the State Office
202	202	of Administrative Hearings.
203	203	(b) Proceedings for a disciplinary action are governed by
204	204	Chapter 2001, Government Code.
205	205	(c) Rules of practice adopted by the commissioner
206	206	applicable to the proceedings for a disciplinary action may not
207	207	conflict with rules adopted by the State Office of Administrative
208	208	Hearings.
209	209	Sec. 6005.303. DECEPTIVE TRADE PRACTICE. (a) This section
210	210	applies to:
211	211	(1) a violation of this chapter;
212	212	(2) a violation of rules or standards adopted under
213	213	this chapter;
214	214	(3) a violation of Section 391.0092, Local Government
215	215	Code; or
216	216	(4) an act that constitutes misrepresentation made in
217	217	connection with disaster remediation services.
218	218	(b) A violation or act described by Subsection (a)
219	219	constitutes a deceptive trade practice under Section 17.46,
220	220	Business & Commerce Code, and is subject to penalties as provided by
221	221	that section.
222	222	Sec. 6005.304. CRIMINAL PENALTY. (a) A person commits an
223	223	offense if the person violates Section 6005.101.
224	224	(b) An offense under this section is a Class B misdemeanor.
225	225	(c) Venue for an offense under this section is in Travis
226	226	County or the county in which the offense is committed.
227	227	ARTICLE 2. REGISTRATION WITH COUNCIL OF GOVERNMENTS
228	228	SECTION 2.001. Section 391.005, Local Government Code, is
229	229	amended by adding Subsection (d) to read as follows:
230	230	(d) A commission may implement a registration program under
231	231	Section 391.0092 and may charge a registration fee set in an amount
232	232	reasonable and necessary to cover the costs of the registration
233	233	program.
234	234	SECTION 2.002. Chapter 391, Local Government Code, is
235	235	amended by adding Section 391.0092 to read as follows:
236	236	Sec. 391.0092. REGISTRATION OF DISASTER REMEDIATION
237	237	CONTRACTORS. (a) In this section, "disaster remediation,"
238	238	"disaster remediation contractor," and "natural disaster" have the
239	239	meanings assigned by Section 6005.001, Insurance Code.
240	240	(b) The governing body of each commission located in a
241	241	region subject to a natural disaster shall, not later than the 15th
242	242	day after the date of the disaster declaration, establish a
243	243	registry for disaster remediation contractors who propose to
244	244	provide disaster remediation services in the region.
245	245	(c) Each disaster remediation contractor who provides
246	246	disaster remediation services in the region shall register with the
247	247	commission in the manner prescribed by the governing body of the
248	248	commission.
249	249	(d) A disaster remediation contractor who violates
250	250	Subsection (c) commits a deceptive trade practice under Section
251	251	17.46, Business & Commerce Code.
252	252	ARTICLE 3. DECEPTIVE TRADE PRACTICE
253	253	SECTION 3.001. Section 17.46(b), Business & Commerce Code,
254	254	is amended to read as follows:
255	255	(b) Except as provided in Subsection (d) of this section,
256	256	the term "false, misleading, or deceptive acts or practices"
257	257	includes, but is not limited to, the following acts:
258	258	(1) passing off goods or services as those of another;
259	259	(2) causing confusion or misunderstanding as to the
260	260	source, sponsorship, approval, or certification of goods or
261	261	services;
262	262	(3) causing confusion or misunderstanding as to
263	263	affiliation, connection, or association with, or certification by,
264	264	another;
265	265	(4) using deceptive representations or designations
266	266	of geographic origin in connection with goods or services;
267	267	(5) representing that goods or services have
268	268	sponsorship, approval, characteristics, ingredients, uses,
269	269	benefits, or quantities which they do not have or that a person has
270	270	a sponsorship, approval, status, affiliation, or connection which
271	271	he does not;
272	272	(6) representing that goods are original or new if
273	273	they are deteriorated, reconditioned, reclaimed, used, or
274	274	secondhand;
275	275	(7) representing that goods or services are of a
276	276	particular standard, quality, or grade, or that goods are of a
277	277	particular style or model, if they are of another;
278	278	(8) disparaging the goods, services, or business of
279	279	another by false or misleading representation of facts;
280	280	(9) advertising goods or services with intent not to
281	281	sell them as advertised;
282	282	(10) advertising goods or services with intent not to
283	283	supply a reasonable expectable public demand, unless the
284	284	advertisements disclosed a limitation of quantity;
285	285	(11) making false or misleading statements of fact
286	286	concerning the reasons for, existence of, or amount of price
287	287	reductions;
288	288	(12) representing that an agreement confers or
289	289	involves rights, remedies, or obligations which it does not have or
290	290	involve, or which are prohibited by law;
291	291	(13) knowingly making false or misleading statements
292	292	of fact concerning the need for parts, replacement, or repair
293	293	service;
294	294	(14) misrepresenting the authority of a salesman,
295	295	representative or agent to negotiate the final terms of a consumer
296	296	transaction;
297	297	(15) basing a charge for the repair of any item in
298	298	whole or in part on a guaranty or warranty instead of on the value of
299	299	the actual repairs made or work to be performed on the item without
300	300	stating separately the charges for the work and the charge for the
301	301	warranty or guaranty, if any;
302	302	(16) disconnecting, turning back, or resetting the
303	303	odometer of any motor vehicle so as to reduce the number of miles
304	304	indicated on the odometer gauge;
305	305	(17) advertising of any sale by fraudulently
306	306	representing that a person is going out of business;
307	307	(18) advertising, selling, or distributing a card
308	308	which purports to be a prescription drug identification card issued
309	309	under Section 4151.152, Insurance Code, in accordance with rules
310	310	adopted by the commissioner of insurance, which offers a discount
311	311	on the purchase of health care goods or services from a third party
312	312	provider, and which is not evidence of insurance coverage, unless:
313	313	(A) the discount is authorized under an agreement
314	314	between the seller of the card and the provider of those goods and
315	315	services or the discount or card is offered to members of the
316	316	seller;
317	317	(B) the seller does not represent that the card
318	318	provides insurance coverage of any kind; and
319	319	(C) the discount is not false, misleading, or
320	320	deceptive;
321	321	(19) using or employing a chain referral sales plan in
322	322	connection with the sale or offer to sell of goods, merchandise, or
323	323	anything of value, which uses the sales technique, plan,
324	324	arrangement, or agreement in which the buyer or prospective buyer
325	325	is offered the opportunity to purchase merchandise or goods and in
326	326	connection with the purchase receives the seller's promise or
327	327	representation that the buyer shall have the right to receive
328	328	compensation or consideration in any form for furnishing to the
329	329	seller the names of other prospective buyers if receipt of the
330	330	compensation or consideration is contingent upon the occurrence of
331	331	an event subsequent to the time the buyer purchases the merchandise
332	332	or goods;
333	333	(20) representing that a guarantee or warranty confers
334	334	or involves rights or remedies which it does not have or involve,
335	335	provided, however, that nothing in this subchapter shall be
336	336	construed to expand the implied warranty of merchantability as
337	337	defined in Sections 2.314 through 2.318 and Sections 2A.212 through
338	338	2A.216 to involve obligations in excess of those which are
339	339	appropriate to the goods;
340	340	(21) promoting a pyramid promotional scheme, as
341	341	defined by Section 17.461;
342	342	(22) representing that work or services have been
343	343	performed on, or parts replaced in, goods when the work or services
344	344	were not performed or the parts replaced;
345	345	(23) filing suit founded upon a written contractual
346	346	obligation of and signed by the defendant to pay money arising out
347	347	of or based on a consumer transaction for goods, services, loans, or
348	348	extensions of credit intended primarily for personal, family,
349	349	household, or agricultural use in any county other than in the
350	350	county in which the defendant resides at the time of the
351	351	commencement of the action or in the county in which the defendant
352	352	in fact signed the contract; provided, however, that a violation of
353	353	this subsection shall not occur where it is shown by the person
354	354	filing such suit he neither knew or had reason to know that the
355	355	county in which such suit was filed was neither the county in which
356	356	the defendant resides at the commencement of the suit nor the county
357	357	in which the defendant in fact signed the contract;
358	358	(24) failing to disclose information concerning goods
359	359	or services which was known at the time of the transaction if such
360	360	failure to disclose such information was intended to induce the
361	361	consumer into a transaction into which the consumer would not have
362	362	entered had the information been disclosed;
363	363	(25) using the term "corporation," "incorporated," or
364	364	an abbreviation of either of those terms in the name of a business
365	365	entity that is not incorporated under the laws of this state or
366	366	another jurisdiction;
367	367	(26) selling, offering to sell, or illegally promoting
368	368	an annuity contract under Chapter 22, Acts of the 57th Legislature,
369	369	3rd Called Session, 1962 (Article 6228a-5, Vernon's Texas Civil
370	370	Statutes), with the intent that the annuity contract will be the
371	371	subject of a salary reduction agreement, as defined by that Act, if
372	372	the annuity contract is not an eligible qualified investment under
373	373	that Act or is not registered with the Teacher Retirement System of
374	374	Texas as required by Section 8A of that Act; or
375	375	(27) taking advantage of a disaster declared by the
376	376	governor under Chapter 418, Government Code, by:
377	377	(A) selling or leasing fuel, food, medicine, or
378	378	another necessity at an exorbitant or excessive price; [or]
379	379	(B) demanding an exorbitant or excessive price in
380	380	connection with the sale or lease of fuel, food, medicine, or
381	381	another necessity; or
382	382	(C) providing services as a disaster remediation
383	383	contractor for compensation in violation of Chapter 6005, Insurance
384	384	Code, or Section 391.0092, Local Government Code.
385	385	ARTICLE 4. TRANSITION; EFFECTIVE DATE
386	386	SECTION 4.001. The commissioner of insurance shall adopt
387	387	rules and prescribe standards as required by Subchapter B, Chapter
388	388	6005, Insurance Code, as added by this Act, not later than December
389	389	1, 2009.
390	390	SECTION 4.002. A person is not required to register under
391	391	Chapter 6005, Insurance Code, as added by this Act, or Section
392	392	391.0092, Local Government Code, as added by this Act, until
393	393	January 1, 2010.
394	394	SECTION 4.003. The following laws take effect January 1,
395	395	2010:
396	396	(1) Section 6005.101, Insurance Code, as added by this
397	397	Act;
398	398	(2) Subchapter G, Chapter 6005, Insurance Code, as
399	399	added by this Act;
400	400	(3) Section 391.0092, Local Government Code, as added
401	401	by this Act; and
402	402	(4) Section 17.46(b), Business & Commerce Code, as
403	403	amended by this Act.
404	404	SECTION 4.004. Except as otherwise provided by this Act,
405	405	this Act takes effect September 1, 2009.