84R2193 MAW-F
By: Rodriguez of Travis H.B. No. 3148
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of construction contractors; providing
an administrative penalty; requiring an occupational registration;
authorizing a fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 8, Occupations Code, is amended by adding
Chapter 1306 to read as follows:
CHAPTER 1306. CONSTRUCTION CONTRACTORS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1306.001. DEFINITIONS. In this chapter:
(1) "Commission" means the Texas Commission of
Licensing and Regulation.
(2) "Construction" means work related to the erection,
improvement, alteration, repair, renovation, maintenance, or
remodeling of a building, structure, appurtenance, road, highway,
bridge, dam, levee, canal, jetty, or other improvement to or on real
property, including moving, demolishing, dredging, shoring,
drilling, blasting, and excavating real property.
(3) "Construction contractor" means a person who:
(A) contracts to perform construction for
compensation; and
(B) employs one or more employees to perform the
construction.
(4) "Controlling person" means an individual who:
(A) is an owner, officer, or director of a
construction contractor; or
(B) possesses direct or indirect control of 25
percent or more of a construction contractor.
(5) "Department" means the Texas Department of
Licensing and Regulation.
(6) "Employee" has the meaning assigned by Section
61.001, Labor Code.
(7) "Executive director" means the executive director
of the department.
(8) "Independent contractor" means a person who
contracts to perform construction for compensation and who
ordinarily:
(A) acts as the employer of any employee of the
person by paying wages, directing activities, and performing other
similar functions characteristic of an employer-employee
relationship;
(B) is free to determine the manner in which the
construction is performed, including the hours of labor of or
method of payment to any employee;
(C) is required to furnish or to have employees,
if any, furnish necessary tools, supplies, or materials to perform
the construction; and
(D) possesses the skills required for the
specific type of construction.
Sec. 1306.002. EXEMPTIONS. (a) This chapter does not apply
to:
(1) the manufacture, distribution, or sale of a
product, material, or merchandise; or
(2) landscaping services that:
(A) consist only of the maintenance or removal of
existing plants, shrubs, trees, or other vegetation; or
(B) are not provided in connection with other
construction work that the person performing the landscaping
services has also contracted to perform.
(b) A construction contractor who holds a license,
certificate, or registration under Title 6 or this title is not
required to register under this chapter to the extent the
construction services performed by the contractor do not violate
the applicable chapter under which the contractor is licensed,
certified, or registered.
SUBCHAPTER B. POWERS AND DUTIES OF DEPARTMENT AND COMMISSION
Sec. 1306.051. GENERAL POWERS AND DUTIES. The department,
executive director, or commission, as appropriate, may take action
as necessary to administer and enforce this chapter.
Sec. 1306.052. RULES. The commission shall adopt rules as
necessary to administer this chapter.
Sec. 1306.053. CONSTRUCTION CONTRACTOR DATABASE. The
department shall make available on its Internet website a publicly
accessible list of construction contractors who are or have been
registered under this chapter. For each construction contractor,
the list must contain:
(1) a statement indicating whether the contractor is
registered in good standing; and
(2) information regarding whether the contractor's
registration has ever been suspended or revoked.
Sec. 1306.054. ANNUAL REPORT. (a) The department shall
submit a report to the legislature not later than September 30 of
each year regarding the registration and regulation of construction
contractors under this chapter. The report must include the
following information for the preceding fiscal year:
(1) the number of:
(A) individuals misclassified as independent
contractors by construction contractors;
(B) construction contractors assessed
administrative penalties;
(C) construction contractors who are not
registered under this chapter, if required to register;
(D) registrations suspended or revoked under
this chapter; and
(E) new registrations issued under this chapter;
(2) the total amount of administrative penalties
assessed;
(3) the total amount of administrative penalties
collected;
(4) the name of each construction contractor whose
registration was suspended or revoked; and
(5) any additional information the commission
considers necessary.
(b) On request by the department, the Texas Workforce
Commission shall provide information to the department or otherwise
assist the department in preparing the report.
SUBCHAPTER C. REGISTRATION REQUIREMENTS
Sec. 1306.101. REGISTRATION REQUIRED. A person may not act
as or offer to act as a construction contractor unless the person is
registered under this chapter.
Sec. 1306.102. APPLICATION; APPLICATION FEE. (a) An
applicant for registration must:
(1) apply to the department on a form prescribed by the
executive director and under rules adopted by the commission; and
(2) submit with the application a nonrefundable
application fee in an amount set by the commission.
(b) The commission by rule shall specify the information
that must be included on an application submitted to the
department. The rules must require that an application include the
following information for an applicant, including each controlling
person of an applicant:
(1) full legal name;
(2) business address and telephone number;
(3) tax identification number;
(4) number of employees of the applicant, if any; and
(5) if applicable:
(A) federal employer identification number;
(B) employer identification number issued to the
applicant by the Texas Workforce Commission for purposes of
unemployment compensation; and
(C) evidence that the applicant has obtained
workers' compensation insurance.
Sec. 1306.103. TERM OF REGISTRATION. A registration under
this chapter is valid for one year.
Sec. 1306.104. CHANGE IN INFORMATION. A registration
holder shall notify the department in the manner prescribed by the
department not later than the 15th day after the date of any change
that occurs in the information submitted in the application.
Sec. 1306.105. CONFIDENTIALITY. (a) Except as provided by
Subsection (b) and Section 1306.053, information submitted to the
department in an application under Section 1306.102 is confidential
and not subject to disclosure under Chapter 552, Government Code.
(b) The department shall release to the Texas Workforce
Commission information regarding an applicant for or holder of a
registration, including information regarding disciplinary action
taken against a registration holder.
SUBCHAPTER D. PENALTIES AND OTHER ENFORCEMENT PROVISIONS
Sec. 1306.151. NOTICE TO DEPARTMENT. The Texas Workforce
Commission shall notify the department if the Texas Workforce
Commission has knowledge that a person required to register under
this chapter is not registered or is otherwise violating this
chapter.
Sec. 1306.152. GROUNDS FOR LICENSE DENIAL AND DISCIPLINARY
ACTION. (a) The commission or executive director may refuse to
issue or renew a registration, revoke or suspend a registration,
place on probation a person whose registration has been suspended,
or reprimand a registration holder who violates this chapter, a
rule adopted under this chapter, or an order of the commission or
executive director.
(b) The commission or executive director shall suspend a
registration for not less than six months if the registration
holder has been:
(1) assessed a penalty under Section 214.008, Labor
Code; or
(2) convicted of an offense under:
(A) Section 61.019, Labor Code; or
(B) Section 31.04, Penal Code, if the offense
involved the theft of a service that was rendered by an employee of
the registration holder.
(c) The commission or executive director shall revoke a
registration if the registration holder is:
(1) assessed a penalty under Section 214.008, Labor
Code, before the fifth anniversary of the date of a prior penalty
assessed under that section; or
(2) convicted of an offense described by Subsection
(b)(2) before the fifth anniversary of the date of a prior
conviction for an offense described by that subsection.
Sec. 1306.153. ELIGIBILITY OF PERSON WHOSE REGISTRATION
HAS BEEN REVOKED. A person whose registration has been revoked by
order of the commission or executive director is not eligible to
submit a new application for registration until the first
anniversary of the date of the revocation.
Sec. 1306.154. PROHIBITED ACTS. A construction contractor
may not:
(1) require an individual through coercion,
misrepresentation, or fraudulent means to:
(A) perform services as an independent
contractor; or
(B) form a business entity;
(2) knowingly misclassify an employee as an
independent contractor; or
(3) knowingly contract with or pay a person for
construction services if the person is required to register under
this chapter and is not registered.
Sec. 1306.155. ADMINISTRATIVE PENALTY. The commission or
executive director may impose an administrative penalty on a person
under Subchapter F, Chapter 51, if the person is required to
register under this chapter and fails to register on or before the
30th day after the date of receiving notice from the department that
the person is required to register. The amount of the
administrative penalty may not exceed $1,000.
SECTION 2. Not later than December 1, 2015, the Texas
Commission of Licensing and Regulation, the Texas Department of
Licensing and Regulation, and the executive director of the Texas
Department of Licensing and Regulation, as appropriate, shall adopt
rules and forms necessary to implement Chapter 1306, Occupations
Code, as added by this Act.
SECTION 3. (a) Except as provided by Subsection (b) of this
section, this Act takes effect September 1, 2015.
(b) Section 1306.101, Occupations Code, and Subchapter D,
Chapter 1306, Occupations Code, as added by this Act, take effect
January 1, 2016.