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.