By: Zaffirini, et al. S.B. No. 1036
(In the Senate - Filed January 31, 2025; February 24, 2025,
read first time and referred to Committee on Business & Commerce;
March 31, 2025, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 10, Nays 0; March 31, 2025,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 1036 By: Schwertner
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of residential solar retail
transactions; requiring an occupational registration; authorizing
fees; providing civil and administrative penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 11, Occupations Code, is amended by adding
Chapter 1806 to read as follows:
CHAPTER 1806. RESIDENTIAL SOLAR RETAILERS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1806.001. SHORT TITLE. This chapter may be cited as
the Residential Solar Retailer Regulatory Act.
Sec. 1806.002. GENERAL DEFINITIONS. In this chapter:
(1) "Commission" means the Texas Commission of
Licensing and Regulation.
(2) "Department" means the Texas Department of
Licensing and Regulation.
(3) "Electric cooperative" has the meaning assigned by
Section 11.003, Utilities Code.
(4) "Electrical contractor" means a person licensed as
an electrical contractor under Chapter 1305.
(5) "Executive director" means the executive director
of the department.
(6) "Municipally owned utility" has the meaning
assigned by Section 11.003, Utilities Code.
(7) "Residential solar energy system" means a solar
energy system intended or designed primarily for family, personal,
or household use.
(8) "Residential solar retail" means:
(A) the sale or lease of, or an offer to sell or
lease, a residential solar energy system; or
(B) a transaction involving any combination of
the acts described by Paragraph (A).
(9) "Solar energy system" means a system or
configuration of solar energy devices that collects and uses solar
energy to generate electricity.
(10) "Solar retailer" means a person who is registered
under this chapter as a solar retailer.
(11) "Solar salesperson" means an individual who is
registered under this chapter as a solar salesperson.
Sec. 1806.003. DEFINITION OF CONTROLLING PERSON. (a) In
this section, "business entity" means a corporation, business
trust, estate, trust, partnership, including a limited
partnership, association, or any other legal entity, regardless of
whether the entity is incorporated in this state.
(b) In this chapter, "controlling person" means an
individual who:
(1) has direct or indirect control of at least 25
percent of the voting securities of a business entity;
(2) has the authority to set policy and direct the
management of a business entity;
(3) is the president, the secretary, or a director of a
business entity; or
(4) is a general partner of a partnership, including a
limited partnership.
Sec. 1806.004. LIMITED APPLICABILITY TO ELECTRICAL
CONTRACTORS. (a) If an electrical contractor employs an individual
to engage in residential solar retail on behalf of the electrical
contractor, the electrical contractor is exempt from the
registration and insurance requirements of this chapter applicable
to a solar retailer, except that an agreement in which the
electrical contractor is the seller or lessor is subject to
Sections 1806.155 and 1806.156.
(b) If an individual is employed by an electrical contractor
to engage in residential solar retail on behalf of the electrical
contractor, the individual is exempt from the registration
requirements of this chapter.
Sec. 1806.005. APPLICABILITY. (a) This chapter does not
apply to:
(1) except as provided by Subsection (b), a written
agreement:
(A) entered into in this state for the sale or
lease of a residential solar energy system; and
(B) pertaining to a residential property located
outside this state; or
(2) a solar energy system:
(A) intended:
(i) for temporary or emergency use; or
(ii) to provide power to a single
appliance;
(B) that:
(i) if combined with other systems that
produce electricity, produces in combination with the other systems
a total peak output power of less than one kilowatt; or
(ii) if not combined with other systems
that produce electricity, is designed to produce a peak output
power of less than one kilowatt; or
(C) sold or leased:
(i) for commercial purposes, including a
solar energy system installed on the premises of a nonresidential
property;
(ii) to provide power to a multifamily
dwelling that exceeds four dwelling units or stories;
(iii) before September 1, 2025; or
(iv) in connection with new residential
construction.
(b) This chapter applies to any residential solar retail
occurring in this state in connection with an agreement described
by Subsection (a)(1).
Sec. 1806.006. PREEMPTION. To the extent of any conflict
between this chapter and any of the following laws, this chapter
prevails over:
(1) a municipal ordinance regulating the same conduct
as this chapter; or
(2) Chapter 115 or 601, Business & Commerce Code.
SUBCHAPTER B. POWERS AND DUTIES
Sec. 1806.051. GENERAL POWERS AND DUTIES. (a) The
department shall administer and enforce this chapter.
(b) The commission shall adopt rules necessary to
administer and enforce this chapter, including:
(1) in addition to any practice prohibited or
restricted by this chapter, prohibiting or restricting any specific
unfair, deceptive, or misleading practices related to residential
solar retail and specifying those practices;
(2) requiring a solar retailer or solar salesperson to
provide disclosures or educational materials when selling or
leasing, or offering to sell or lease, a residential solar energy
system and specifying the form and format of those disclosures;
(3) regulating the form and format of an agreement for
the sale or lease of a residential solar energy system;
(4) establishing insurance requirements for solar
retailers; and
(5) establishing continuing education requirements as
a prerequisite to renew a solar salesperson registration under this
chapter.
(c) The commission shall consult the Office of Consumer
Credit Commissioner in adopting rules described by Subsections
(b)(2) and (3) to ensure compliance with federal and state law
governing financial transactions, including the Truth in Lending
Act (15 U.S.C. Section 1601 et seq.).
Sec. 1806.052. FEES. The commission shall establish and
collect reasonable and necessary fees in amounts sufficient to
cover the costs of:
(1) administering this chapter; and
(2) any other activity or function necessary for
effective regulation under this chapter.
Sec. 1806.053. EDUCATIONAL MATERIALS. (a) The Public
Utility Commission of Texas shall develop, in consultation with the
department and the office of the attorney general, educational
materials that inform consumers of the consumers' rights and
remedies related to the purchase or lease of residential solar
energy systems under this chapter and other applicable laws.
(b) The commission by rule may require solar retailers and
solar salespersons when engaging in residential solar retail to
provide solicited persons with the educational materials developed
under this section.
SUBCHAPTER C. REGISTRATION
Sec. 1806.101. REGISTRATION REQUIRED: SOLAR SALESPERSON. A
person may not engage in residential solar retail for compensation
unless the person:
(1) engages in residential solar retail on behalf of a
solar retailer; and
(2) is registered as a solar salesperson under this
chapter.
Sec. 1806.102. REGISTRATION REQUIRED: SOLAR RETAILER. A
person may not employ or otherwise contract for the services of an
individual to engage in residential solar retail on behalf of the
person unless the person is registered as a solar retailer.
Sec. 1806.103. ELIGIBILITY FOR REGISTRATION. (a) To be
eligible for a registration under this chapter, a person must:
(1) submit an application to the department;
(2) pay any required fees; and
(3) meet the eligibility requirements of this chapter
and of rules adopted under this chapter.
(b) To be eligible to register as a solar salesperson, the
applicant must be an individual.
Sec. 1806.104. SOLAR RETAILER APPLICATION. An application
to register as a solar retailer must include:
(1) if the solar retailer is an entity, a list of each
controlling person of the solar retailer;
(2) the name and registration number of each solar
salesperson who engages in residential solar retail on behalf of
the solar retailer; and
(3) evidence satisfactory to the department that the
applicant has insurance meeting the requirements established by
commission rule.
Sec. 1806.105. CRIMINAL HISTORY RECORD INFORMATION CHECK.
The department may conduct a criminal history record information
check of each applicant or, if applicable, any controlling person
of an applicant for a registration under this chapter using
information:
(1) provided by the applicant; and
(2) made available to the department by the Department
of Public Safety and any other criminal justice agency under
Chapter 411, Government Code.
Sec. 1806.106. EXEMPTION FROM CONTINUING EDUCATION.
Notwithstanding Section 51.405 or any other provision of this
chapter, a solar retailer may not be required to complete
continuing education to renew the solar retailer's registration
under this chapter.
SUBCHAPTER D. PRACTICE BY REGISTRANTS
Sec. 1806.151. NOTICE TO DEPARTMENT OF SOLAR SALESPERSONS
AUTHORIZED TO ENGAGE IN RESIDENTIAL SOLAR RETAIL. A solar retailer
shall promptly notify the department in a manner prescribed by the
department of:
(1) each solar salesperson authorized to engage in
residential solar retail on behalf of the solar retailer; and
(2) any change in an authorization described by
Subdivision (1).
Sec. 1806.152. SUPERVISION REQUIRED. (a) A solar retailer
shall provide reasonable supervision to each solar salesperson
authorized to engage in residential solar retail on behalf of the
solar retailer, including making reasonable efforts to correct any
violation of this chapter or a rule adopted under this chapter that
the solar retailer is aware of or of which a reasonable person under
the same circumstances would be aware.
(b) A solar retailer is responsible for any violation
described by Subsection (a) committed by a solar salesperson
authorized to engage in residential solar retail on behalf of the
solar retailer.
Sec. 1806.153. CODE OF CONDUCT; COMPLIANCE WITH OTHER LAW.
A solar retailer and a solar salesperson shall comply with:
(1) any code of conduct adopted by commission rule
governing solar retailers or solar salespersons, as applicable;
(2) Subchapter E, Chapter 17, Business & Commerce
Code;
(3) Chapter 115, Business & Commerce Code, as if the
solar retailer or solar salesperson, as applicable, were a seller
or lessor under that chapter; and
(4) the Truth in Lending Act (15 U.S.C. Section 1601 et
seq.) and applicable state laws governing financial transactions by
providing any disclosure required by those laws.
Sec. 1806.154. REGISTRATION INFORMATION. (a) On request by
the department or a person to whom a solar retailer or solar
salesperson has offered to sell or lease, or has sold or leased, a
residential solar energy system, the solar retailer or solar
salesperson, as applicable, shall provide the department or person
with the retailer's or salesperson's name and registration number.
(b) A solar retailer shall ensure that each agreement for
the sale or lease of a residential solar energy system by the
retailer includes the name and registration number of the retailer
and the solar salesperson involved in the transaction.
(c) An electrical contractor or individual acting on behalf
of an electrical contractor shall provide the electrical
contractor's name and license number under the same circumstances
as a solar retailer or solar salesperson is required to provide the
retailer's or salesperson's name and number under this section.
Sec. 1806.155. REQUIRED CONTRACT PROVISIONS. (a) If the
sale or lease of a residential solar energy system involves the
installation of the system at a person's residence, the sale or
lease agreement must:
(1) provide that the installation of the residential
solar energy system will be performed by an electrical contractor;
(2) conspicuously state the name and license number of
the electrical contractor who will perform the installation
described by Subdivision (1); and
(3) provide that the solar retailer or electrical
contractor, as applicable, will obtain:
(A) any permit required by a government entity
for the installation described by Subdivision (1);
(B) if Section 39.554 or 39.916, Utilities Code,
applies, the approval by the electric utility serving the person's
residence of the interconnection of the residential solar energy
system; and
(C) if the person is a customer of an electric
cooperative or a municipally owned utility, the cooperative's or
utility's approval of the interconnection of the residential solar
energy system.
(b) The requirement under Subsection (a)(2) may be
satisfied by providing a list of electrical contractors in the
agreement from which one must be selected to perform the
installation described by Subsection (a)(1).
(c) If the sale or lease of a residential solar energy
system involves a third-party lender that is affiliated with or
referred by the solar retailer, the sale or lease agreement must
include a provision requiring the third-party lender to cancel any
accompanying loan made by the third-party lender to the buyer or
lessee on the buyer's or lessee's cancellation of the agreement
under Section 1806.156.
Sec. 1806.156. RIGHT TO CANCEL AGREEMENT. (a) In this
section, "business day" means a calendar day excluding Saturday,
Sunday, or any legal holiday, as that term is defined by Section
662.021, Government Code.
(b) Notwithstanding any other law, a solar retailer shall
allow a buyer or lessee who enters into an agreement to purchase or
lease a residential solar energy system to cancel the agreement
without penalty or further obligation by providing written notice
of the cancellation on or before the fifth business day after the
date on which the agreement was executed by the buyer or lessee.
(c) A solar retailer shall include in an agreement for the
sale or lease of a residential solar energy system the last calendar
date of the cancellation period prescribed by Subsection (b) and
the mailing address or e-mail address for providing the notice of
cancellation.
(d) If the agreement does not contain the address for
cancellation required by Subsection (c), the buyer or lessee may
cancel the agreement during the period described by Subsection (b)
by providing written notice of cancellation to the solar retailer
by any reasonable method.
SUBCHAPTER E. ENFORCEMENT
Sec. 1806.201. PROHIBITED ACTS. A person may not:
(1) intentionally, knowingly, or recklessly make a
false, misleading, or deceptive oral or written statement to
another person when engaging in residential solar retail;
(2) falsely state or imply an affiliation with a
public utility or government agency when engaging in residential
solar retail;
(3) fail to provide the disclosure statements or any
educational materials as required by this chapter, by Chapter 115,
Business & Commerce Code, or by commission rule when engaging in
residential solar retail;
(4) engage in residential solar retail at a residence
in violation of posted signage indicating that soliciting is
prohibited, unless otherwise directed by an occupant of the
residence;
(5) allow the installation of a residential solar
energy system to be performed by a person who is not an electrical
contractor;
(6) make a material misrepresentation in an
application submitted to the department under this chapter or in
any other document submitted to the department under this chapter;
or
(7) violate, attempt to violate, or conspire to
violate this chapter or a rule adopted under this chapter.
Sec. 1806.202. DENIAL OR REFUSAL TO RENEW. The executive
director may deny an application to register or refuse to renew a
registration under this chapter if the applicant or, if applicable,
a controlling person of the applicant has:
(1) violated this chapter or a rule or order of the
commission or executive director; or
(2) had suspended or revoked, or has been otherwise
formally disciplined in connection with, any authorization to
practice an occupation or engage in a business that was issued by a
licensing authority in this state or another state.
Sec. 1806.203. ADMINISTRATIVE PENALTY. In imposing an
administrative penalty under Subchapter F, Chapter 51, for a
violation of Section 1806.201, the commission in determining the
appropriate amount of the penalty may consider whether any
individual over the age of 65 at the time of the prohibited conduct
was harmed by the conduct.
Sec. 1806.204. WARNING LETTER. (a) Before imposing an
administrative penalty or sanction against a person under Chapter
51, the executive director may issue a warning letter directing a
person to take corrective action regarding the violation that is
the basis of the penalty or sanction.
(b) In determining whether to issue a warning letter under
Subsection (a), the executive director may consider any history of
violations by the person, including whether the person complied
with previous warning letters, and the person's efforts to correct
the violation and prevent future violations.
(c) A determination to issue a warning letter under this
section is not a contested case under Chapter 2001, Government
Code.
Sec. 1806.205. CEASE AND DESIST ORDER. The executive
director may issue a cease and desist order under Section 51.3513 to
protect public health and safety.
Sec. 1806.206. AMOUNT OF CIVIL PENALTY. (a)
Notwithstanding Section 51.352 and except as provided by Subsection
(b), the amount of a civil penalty imposed under Chapter 51 for a
violation of this chapter or a rule adopted under this chapter may
not exceed:
(1) $2,500 for each violation; or
(2) $50,000 in the aggregate for all violations of a
similar nature.
(b) In a proceeding imposing a civil penalty under Section
51.352 for a violation of this chapter or a rule adopted under this
chapter, if the court finds that an individual over the age of 65 at
the time of the violation was harmed by the violation, the amount of
the civil penalty may not exceed:
(1) $10,000 for each violation; or
(2) $100,000 in the aggregate for all violations of a
similar nature.
Sec. 1806.207. AGREEMENT CANCELLATION AND REFUND. (a)
Subject to Subsection (b), the commission or executive director
may, after notice and a hearing and after finding that a violation
of this chapter or a rule adopted under this chapter has occurred,
order the cancellation of an agreement for the sale or lease of a
residential solar energy system and the refund of any amount paid
under the agreement.
(b) The amount of a refund ordered under this section may
not exceed the amounts paid under the agreement.
(c) This section does not authorize the executive director
or commission to impose or collect penalties, fines, or other
damages, except that a proceeding under this section may be
combined with a proceeding to impose an administrative penalty or
sanction by the department.
(d) A proceeding under this section is a contested case
under Chapter 2001, Government Code.
(e) This section does not prohibit an injured party who was
refunded money under this section from bringing an action in a court
with jurisdiction to collect damages, other than the refunded
money, or obtain equitable relief under other applicable law.
Sec. 1806.208. VIOLATION BY ELECTRICAL CONTRACTOR. An
electrical contractor who violates this chapter or a rule adopted
under this chapter is subject to an administrative penalty or
sanction or any other enforcement provision under Chapter 1305,
Chapter 51, and this chapter.
SECTION 2. Chapter 1806, Occupations Code, as added by this
Act, applies only to a contract entered into on or after the
effective date of this Act. A contract entered into before the
effective date of this Act is governed by the law in effect on the
date the contract was entered into, and that law is continued in
effect for that purpose.
SECTION 3. Not later than June 1, 2026, the Texas Commission
of Licensing and Regulation shall adopt rules necessary to
implement Chapter 1806, Occupations Code, as added by this Act.
SECTION 4. As soon as practicable after the effective date
of this Act, the Texas Department of Licensing and Regulation shall
establish and lead a stakeholder work group to provide advice and
recommendations to the department on regulating activities
governed by Chapter 1806, Occupations Code, as added by this Act.
The department shall establish the size, composition, and scope of
the stakeholder work group.
SECTION 5. (a) Except as otherwise provided by this Act,
this Act takes effect September 1, 2025.
(b) Sections 1806.101 and 1806.102 and Subchapter E,
Chapter 1806, Occupations Code, as added by this Act, take effect
September 1, 2026.
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