81R6474 PB-D
By: Eiland H.B. No. 1291
A BILL TO BE ENTITLED
AN ACT
relating to regulation of certain disaster remediation
contractors; providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. REGULATION BY TEXAS DEPARTMENT OF INSURANCE
SECTION 1.001. Title 20, Insurance Code, is amended by
adding Chapter 6005 to read as follows:
CHAPTER 6005. REGULATION OF DISASTER REMEDIATION CONTRACTORS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 6005.001. DEFINITIONS. In this chapter:
(1) "Contract holder" means a person who enters into a
contract with a disaster remediation contractor for the performance
of disaster remediation on property owned or leased by the contract
holder.
(2) "Council of governments" means a regional planning
commission or similar regional planning agency created under
Chapter 391, Local Government Code.
(3) "Disaster remediation" means the removal,
cleaning, sanitizing, demolition, reconstruction, or other
treatment of improvements to real property performed because of
damage or destruction to that property caused by a natural
disaster.
(4) "Disaster remediation contractor" means a person
who engages in disaster remediation for compensation.
(5) "Natural disaster" means the occurrence of
widespread or severe damage, injury, or loss of life or property
related to any natural cause, including fire, flood, earthquake,
wind, storm, or wave action, that results in a disaster declaration
by the governor under Chapter 418, Government Code.
(6) "Person" means an individual, corporation, trust,
partnership, association, or other private legal entity.
(7) "Region" has the meaning assigned by Section
391.002, Local Government Code.
[Sections 6005.002-6005.050 reserved for expansion]
SUBCHAPTER B. DEPARTMENT POWERS AND DUTIES
Sec. 6005.051. GENERAL RULES. The commissioner shall adopt
rules as necessary to implement this chapter.
Sec. 6005.052. CODE OF PROFESSIONAL RESPONSIBILITY;
STANDARDS OF CONDUCT. (a) In cooperation with the attorney
general, the commissioner by rule shall adopt a code of
professional responsibility to regulate the conduct of a disaster
remediation contractor who provides services in this state.
(b) The code of professional responsibility must
contain standards of conduct that must be followed by a person
authorized under this chapter to operate as a disaster remediation
contractor in this state in dealing with the public.
Sec. 6005.053. COMPLAINT INVESTIGATIONS. (a) The
department shall establish procedures for receiving a complaint
alleging a violation of the code of professional responsibility
established under Section 6005.052.
(b) The department may investigate a complaint received by
the department under Subsection (a) and may forward results of an
investigation conducted under this subsection to the attorney
general and appropriate law enforcement authorities.
[Sections 6005.054-6005.100 reserved for expansion]
SUBCHAPTER C. REGISTRATION REQUIREMENT
Sec. 6005.101. REGISTRATION REQUIRED. (a) A person may not
engage in disaster remediation for compensation in this state or
act as a disaster remediation contractor in this state unless the
person holds a certificate of registration issued under this
subchapter.
(b) A person may not assume or use the title or designation
"certified disaster remediation contractor" or any other title,
designation, word, letter, abbreviation, sign, card, or device
tending to indicate that the person is registered under this
chapter, including any reference to the Federal Emergency
Management Agency, unless the person holds a certificate of
registration under this chapter or is otherwise determined by the
commissioner to be authorized to use the title or designation.
(c) Each applicant for registration under this chapter must
register, in the manner provided by this chapter, with:
(1) the department; and
(2) the governing body of the council of governments
in each region in which the applicant proposes to provide disaster
remediation services for compensation.
Sec. 6005.102. EXEMPTIONS. (a) A person is not required to
register under this chapter to perform disaster remediation for
compensation if the person:
(1) holds a license, certificate of registration, or
other authority issued by the Texas Department of Licensing and
Regulation, another licensing agency of this state, or a federal
regulatory agency; and
(2) provides disaster remediation services for
compensation solely within the scope of that authority.
(b) A managing agent or employee of a property owner is not
required to be licensed under this chapter to perform disaster
remediation on property owned by the property owner. This
exemption does not apply if the managing agent or employee engages
in the business of performing disaster remediation for the public.
(c) An employee of a certificate holder is not required to
register under this chapter to perform disaster remediation while
supervised by the certificate holder, as provided by rules adopted
under this chapter.
[Sections 6005.103-6005.150 reserved for expansion]
SUBCHAPTER D. DEPARTMENT REGISTRATION PROCEDURES
Sec. 6005.151. APPLICATION REQUIREMENTS. (a) An applicant
for a certificate of registration issued by the department under
this chapter must:
(1) submit to the department a completed application
on a form prescribed by the commissioner;
(2) sign a statement agreeing to comply with the code
of professional responsibility prescribed by the commissioner;
(3) provide evidence of the security required under
this subchapter;
(4) pay the required fees; and
(5) provide any other information required by the
commissioner.
(b) The department may conduct an examination of any
criminal conviction of an applicant, including by obtaining any
criminal history record information permitted by law.
Sec. 6005.152. RECIPROCAL REGISTRATION. On proper
application, the department may issue a certificate of registration
to a person who holds a license, certificate of registration, or
other authority to perform disaster remediation issued by another
state that the commissioner determines has requirements that are
equivalent to those of this state.
Sec. 6005.153. FEES; SECURITY REQUIREMENTS. (a) The
commissioner may adopt fees for registration under this subchapter,
including application fees and renewal fees.
(b) As a guarantee that a disaster remediation contractor
will meet the contractor's obligations to contract holders, the
contractor shall maintain with the department a bond or other
security accepted by the commissioner.
(c) A bond posted as security must:
(1) be issued by an insurer authorized to engage in the
business of insurance in this state;
(2) be continuous;
(3) be cancelable by the surety only after at least 90
days' notice to the department; and
(4) recognize that the obligation continues for the
terms of the contracts written by the disaster remediation
contractor while the bond is in force.
(d) Any security provided under this section in a form other
than a bond must be convertible to cash by the department for the
benefit of contract holders in this state, without resort to the
courts, if the commissioner determines that the disaster
remediation contractor is in default of the contractor's financial
obligations to contract holders. Any amount remaining after all
contract holders' claims are paid must be returned to the disaster
remediation contractor not later than the 120th day after the date
the last outstanding contract expires.
Sec. 6005.154. ISSUANCE OF CERTIFICATE; TERM. (a) On
receipt of the application and required fees, and on satisfaction
of the security requirement under Section 6005.153, the department
shall issue a certificate of registration to an applicant under
this subchapter.
(b) A certificate of registration expires on the first
anniversary of the date of issuance and may be renewed annually in
the manner prescribed by the commissioner. An application for
renewal must be submitted to the department not later than the 30th
day before the expiration date of the certificate.
[Sections 6005.155-6005.200 reserved for expansion]
SUBCHAPTER E. CONSUMER DISCLOSURE REQUIREMENTS
Sec. 6005.201. LIST OF SERVICES. (a) A disaster
remediation contractor shall prepare a comprehensive list that
describes each service that the contractor offers.
(b) The contractor shall provide a written copy of the list
to each prospective contract holder.
Sec. 6005.202. CONTRACT. Before entering into a contract
for disaster remediation services, a disaster remediation
contractor must deliver to the prospective contract holder a
complete written copy of the contract, accompanied by a written
receipt for any payment made by the contract holder under the
contract.
[Sections 6005.203-6005.250 reserved for expansion]
SUBCHAPTER F. REGISTRATION WITH COUNCIL OF GOVERNMENTS
Sec. 6005.251. REGISTRATION WITH COUNCIL OF GOVERNMENTS.
(a) A person required to hold a certificate of registration under
Section 6005.101 must also register with the governing body of the
council of governments in each region in which the person proposes
to provide disaster remediation services.
(b) Registration under Subsection (a) is subject to Section
391.0092, Local Government Code.
[Sections 6005.252-6005.300 reserved for expansion]
SUBCHAPTER G. ENFORCEMENT; CRIMINAL PENALTY
Sec. 6005.301. DISCIPLINARY ACTIONS. (a) The commissioner
may suspend, revoke, or refuse to issue or renew a certificate of
registration under this chapter if, after notice and hearing, the
commissioner finds that the applicant or registrant has engaged in
acts that:
(1) violate this chapter;
(2) violate rules or standards adopted under this
chapter;
(3) violate Section 391.0092, Local Government Code;
or
(4) constitute misrepresentation made in connection
with disaster remediation services.
(b) An original or renewal certificate of registration may
be denied, suspended, or revoked, if, after notice and hearing, the
commissioner determines from the evidence presented at the hearing
that this chapter or a rule adopted under this chapter has been
violated.
Sec. 6005.302. DISCIPLINARY HEARING. (a) If the
commissioner proposes to suspend, revoke, or refuse to renew a
certificate of registration under this chapter, the holder of the
certificate 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.
Sec. 6005.303. DECEPTIVE TRADE PRACTICE. (a) This section
applies to:
(1) a violation of this chapter;
(2) a violation of rules or standards adopted under
this chapter;
(3) a violation of Section 391.0092, Local Government
Code; or
(4) an act that constitutes misrepresentation made in
connection with disaster remediation services.
(b) A violation or act described by Subsection (a)
constitutes a deceptive trade practice under Section 17.46,
Business & Commerce Code, and is subject to penalties as provided by
that section.
Sec. 6005.304. CRIMINAL PENALTY. (a) A person commits an
offense if the person violates Section 6005.101.
(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.
ARTICLE 2. REGISTRATION WITH COUNCIL OF GOVERNMENTS
SECTION 2.001. Section 391.005, Local Government Code, is
amended by adding Subsection (d) to read as follows:
(d) A commission may implement a registration program under
Section 391.0092 and may charge a registration fee set in an amount
reasonable and necessary to cover the costs of the registration
program.
SECTION 2.002. Chapter 391, Local Government Code, is
amended by adding Section 391.0092 to read as follows:
Sec. 391.0092. REGISTRATION OF DISASTER REMEDIATION
CONTRACTORS. (a) In this section, "disaster remediation,"
"disaster remediation contractor," and "natural disaster" have the
meanings assigned by Section 6005.001, Insurance Code.
(b) The governing body of each commission located in a
region subject to a natural disaster shall, not later than the 15th
day after the date of the disaster declaration, establish a
registry for disaster remediation contractors who propose to
provide disaster remediation services in the region.
(c) Each disaster remediation contractor who provides
disaster remediation services in the region shall register with the
commission in the manner prescribed by the governing body of the
commission.
(d) A disaster remediation contractor who violates
Subsection (c) commits a deceptive trade practice under Section
17.46, Business & Commerce Code.
ARTICLE 3. DECEPTIVE TRADE PRACTICE
SECTION 3.001. Section 17.46(b), Business & Commerce Code,
is amended to read as follows:
(b) Except as provided in Subsection (d) of this section,
the term "false, misleading, or deceptive acts or practices"
includes, but is not limited to, the following acts:
(1) passing off goods or services as those of another;
(2) causing confusion or misunderstanding as to the
source, sponsorship, approval, or certification of goods or
services;
(3) causing confusion or misunderstanding as to
affiliation, connection, or association with, or certification by,
another;
(4) using deceptive representations or designations
of geographic origin in connection with goods or services;
(5) representing that goods or services have
sponsorship, approval, characteristics, ingredients, uses,
benefits, or quantities which they do not have or that a person has
a sponsorship, approval, status, affiliation, or connection which
he does not;
(6) representing that goods are original or new if
they are deteriorated, reconditioned, reclaimed, used, or
secondhand;
(7) representing that goods or services are of a
particular standard, quality, or grade, or that goods are of a
particular style or model, if they are of another;
(8) disparaging the goods, services, or business of
another by false or misleading representation of facts;
(9) advertising goods or services with intent not to
sell them as advertised;
(10) advertising goods or services with intent not to
supply a reasonable expectable public demand, unless the
advertisements disclosed a limitation of quantity;
(11) making false or misleading statements of fact
concerning the reasons for, existence of, or amount of price
reductions;
(12) representing that an agreement confers or
involves rights, remedies, or obligations which it does not have or
involve, or which are prohibited by law;
(13) knowingly making false or misleading statements
of fact concerning the need for parts, replacement, or repair
service;
(14) misrepresenting the authority of a salesman,
representative or agent to negotiate the final terms of a consumer
transaction;
(15) basing a charge for the repair of any item in
whole or in part on a guaranty or warranty instead of on the value of
the actual repairs made or work to be performed on the item without
stating separately the charges for the work and the charge for the
warranty or guaranty, if any;
(16) disconnecting, turning back, or resetting the
odometer of any motor vehicle so as to reduce the number of miles
indicated on the odometer gauge;
(17) advertising of any sale by fraudulently
representing that a person is going out of business;
(18) advertising, selling, or distributing a card
which purports to be a prescription drug identification card issued
under Section 4151.152, Insurance Code, in accordance with rules
adopted by the commissioner of insurance, which offers a discount
on the purchase of health care goods or services from a third party
provider, and which is not evidence of insurance coverage, unless:
(A) the discount is authorized under an agreement
between the seller of the card and the provider of those goods and
services or the discount or card is offered to members of the
seller;
(B) the seller does not represent that the card
provides insurance coverage of any kind; and
(C) the discount is not false, misleading, or
deceptive;
(19) using or employing a chain referral sales plan in
connection with the sale or offer to sell of goods, merchandise, or
anything of value, which uses the sales technique, plan,
arrangement, or agreement in which the buyer or prospective buyer
is offered the opportunity to purchase merchandise or goods and in
connection with the purchase receives the seller's promise or
representation that the buyer shall have the right to receive
compensation or consideration in any form for furnishing to the
seller the names of other prospective buyers if receipt of the
compensation or consideration is contingent upon the occurrence of
an event subsequent to the time the buyer purchases the merchandise
or goods;
(20) representing that a guarantee or warranty confers
or involves rights or remedies which it does not have or involve,
provided, however, that nothing in this subchapter shall be
construed to expand the implied warranty of merchantability as
defined in Sections 2.314 through 2.318 and Sections 2A.212 through
2A.216 to involve obligations in excess of those which are
appropriate to the goods;
(21) promoting a pyramid promotional scheme, as
defined by Section 17.461;
(22) representing that work or services have been
performed on, or parts replaced in, goods when the work or services
were not performed or the parts replaced;
(23) filing suit founded upon a written contractual
obligation of and signed by the defendant to pay money arising out
of or based on a consumer transaction for goods, services, loans, or
extensions of credit intended primarily for personal, family,
household, or agricultural use in any county other than in the
county in which the defendant resides at the time of the
commencement of the action or in the county in which the defendant
in fact signed the contract; provided, however, that a violation of
this subsection shall not occur where it is shown by the person
filing such suit he neither knew or had reason to know that the
county in which such suit was filed was neither the county in which
the defendant resides at the commencement of the suit nor the county
in which the defendant in fact signed the contract;
(24) failing to disclose information concerning goods
or services which was known at the time of the transaction if such
failure to disclose such information was intended to induce the
consumer into a transaction into which the consumer would not have
entered had the information been disclosed;
(25) using the term "corporation," "incorporated," or
an abbreviation of either of those terms in the name of a business
entity that is not incorporated under the laws of this state or
another jurisdiction;
(26) selling, offering to sell, or illegally promoting
an annuity contract under Chapter 22, Acts of the 57th Legislature,
3rd Called Session, 1962 (Article 6228a-5, Vernon's Texas Civil
Statutes), with the intent that the annuity contract will be the
subject of a salary reduction agreement, as defined by that Act, if
the annuity contract is not an eligible qualified investment under
that Act or is not registered with the Teacher Retirement System of
Texas as required by Section 8A of that Act; or
(27) taking advantage of a disaster declared by the
governor under Chapter 418, Government Code, by:
(A) selling or leasing fuel, food, medicine, or
another necessity at an exorbitant or excessive price; [or]
(B) demanding an exorbitant or excessive price in
connection with the sale or lease of fuel, food, medicine, or
another necessity; or
(C) providing services as a disaster remediation
contractor for compensation in violation of Chapter 6005, Insurance
Code, or Section 391.0092, Local Government Code.
ARTICLE 4. TRANSITION; EFFECTIVE DATE
SECTION 4.001. The commissioner of insurance shall adopt
rules and prescribe standards as required by Subchapter B, Chapter
6005, Insurance Code, as added by this Act, not later than December
1, 2009.
SECTION 4.002. A person is not required to register under
Chapter 6005, Insurance Code, as added by this Act, or Section
391.0092, Local Government Code, as added by this Act, until
January 1, 2010.
SECTION 4.003. The following laws take effect January 1,
2010:
(1) Section 6005.101, Insurance Code, as added by this
Act;
(2) Subchapter G, Chapter 6005, Insurance Code, as
added by this Act;
(3) Section 391.0092, Local Government Code, as added
by this Act; and
(4) Section 17.46(b), Business & Commerce Code, as
amended by this Act.
SECTION 4.004. Except as otherwise provided by this Act,
this Act takes effect September 1, 2009.