TLC: Insurance Code Proposed Chapters

80C146(2) PB

SECTION _____. CONFORMING AMENDMENT. Subtitle B, Title 12, Occupations Code, is amended by adding Chapter 1961 to read as follows:

CHAPTER 1961. FIRE PROTECTION SPRINKLER SYSTEM SERVICE AND INSTALLATION

SUBCHAPTER A. GENERAL PROVISIONS

Revised Law

Sec. 1961.001. DEFINITIONS. In this chapter:

(1) "Commissioner" means the commissioner of insurance.

(2) "Department" means the Texas Department of Insurance.

(3) "Fire protection sprinkler system" means an assembly of underground or overhead piping or conduits that conveys water with or without other agents to dispersal openings or devices to:

(A) extinguish, control, or contain fire; and

(B) provide protection from exposure to fire or the products of combustion.

(4) "Fire protection sprinkler system contractor" means an individual or organization that offers to undertake, represents itself as being able to undertake, or undertakes the plan, sale, installation, maintenance, or servicing of:

(A) a fire protection sprinkler system; or

(B) any part of a fire protection sprinkler system.

(5) "Individual" means a natural person, including an owner, manager, officer, employee, or occupant.

(6) "Installation" means:

(A) the initial placement of equipment; or

(B) the extension, modification, or alteration of equipment after initial placement.

(7) "Insurance agent" means:

(A) an individual, firm, or corporation licensed under:

(i) Subchapter E, Chapter 981, Insurance Code; or

(ii) Subchapters A-E or G, Chapter 4051, Insurance Code; or

(B) an individual authorized to represent an insurance fund or pool created by a municipality, county, or other political subdivision of this state under Chapter 791, Government Code.

(8) "License" means the document issued to a responsible managing employee authorizing the employee to engage in the fire protection sprinkler system business in this state.

(9) "Maintenance" means the maintenance of a fire protection sprinkler system or any part of a fire protection sprinkler system in the condition of repair that provides performance as originally planned.

(10) "Organization" means a corporation, a partnership or other business association, a governmental entity, or any other legal or commercial entity.

(11) "Registration certificate" means the document issued to a fire protection sprinkler system contractor authorizing the contractor to engage in business in this state.

(12) "Responsible managing employee" means an individual designated by a company that plans, sells, installs, maintains, or services fire protection sprinkler systems to ensure that each fire protection sprinkler system, as installed, maintained, or serviced, meets the standards for the system as provided by law.

(13) "Service" means maintenance, repair, or testing. (V.T.I.C. Art. 5.43-3, Secs. 1(1), (2), (5), (6), (7), (8), (9), (10), (11), (12), (13) as added Acts 71st Leg., R.S., Ch. 823; New.)

Source Law

Art. 5.43-3

Sec. 1. In this article:

(1) "Person" means a natural person, including an owner, manager, officer, employee, or occupant.

(2) "Organization" means a corporation, a partnership or other business association, a governmental entity, or any other legal or commercial entity.

(5) "Installation" means the initial placement of equipment or the extension, modification, or alteration of equipment after the initial placement.

(6) "Maintenance" means to maintain in the condition of repair that provides performance as originally planned.

(7) "Service" means to maintain, repair, or test.

(8) "Fire protection sprinkler system contractor" means a person or organization that offers to undertake, represents itself as being able to undertake, or does undertake the plan, sale, installation, maintenance, or servicing of a fire protection sprinkler system or any part of such a system.

(9) "Fire protection sprinkler system" means an assembly of underground or overhead piping or conduits that conveys water with or without other agents to dispersal openings or devices to extinguish, control, or contain fire and to provide protection from exposure to fire or the products of combustion.

(10) "Responsible managing employee" means an individual or individuals who shall be designated by each company that plans, sells, installs, maintains, or services a fire protection sprinkler system to assure that each fire protection sprinkler system as installed, maintained, or serviced meets the standards as provided for by law.

(11) "Certificate of Registration" means the document issued to a fire protection sprinkler system contractor authorizing same to conduct business in this state.

(12) "License" means the document issued to a responsible managing employee authorizing same to engage in the fire protection sprinkler system business in this state.

…

(13) [as added Acts 71st Leg., R.S., Ch. 823] "Insurance agent" means:

(A) a person, firm, or corporation licensed under Article 21.14 or 1.14-2 of this code;

(B) a salaried, state, or special agent; or

(C) a person authorized to represent an insurance fund or pool created by a city, county, or other political subdivision of the state under The Interlocal Cooperation Act (Article 4413(32c), Vernon's Texas Civil Statutes).

Revisor's Note

(1) Section 1(3), V.T.I.C. Article 5.43-3, refers to the "State Board of Insurance." Chapter 685, Acts of the 73rd Legislature, Regular Session, 1993, abolished the State Board of Insurance and transferred its functions to the commissioner of insurance and the Texas Department of Insurance. For purposes of the Insurance Code and other insurance laws, including the law being revised in this chapter, Section 31.001, Insurance Code, defines "commissioner" and "department" as "commissioner of insurance" and "Texas Department of Insurance," respectively. The revised law includes these definitions in this chapter for accuracy and for the convenience of the reader. Throughout this chapter, the revised law substitutes, as appropriate, references to the commissioner or the department for references to the State Board of Insurance. The revised law also omits Section 1(3), V.T.I.C. Article 5.43-3. The omitted law reads:

(3) "Board" means the State Board of Insurance.

(2) Section 1(1), V.T.I.C. Article 5.43-3, defines a "person" as "a natural person, including an owner, manager, officer, employee, or occupant." The revised law substitutes "individual" for the reference to "person" because it is clear from the context that "person" means an individual. The revised law also substitutes "individual" for "person" because the Code Construction Act definition of "person," Section 311.005(2), Government Code, which applies to the Occupations Code, did not apply to V.T.I.C. Article 5.43-3. The use of "individual" avoids confusion with the Code Construction Act definition of "person." Similar changes are made throughout this chapter.

(3) Section 1(13), V.T.I.C. Article 5.43-3, as added by Chapter 762, Acts of the 71st Legislature, Regular Session, 1989, defines a "registered firm." The revised law omits this definition as unnecessary because the defined term is not used in the source law for this chapter or in the revision of this chapter. The omitted law reads:

(13) "Registered firm" means a firm holding a valid certificate of registration.

(4) Section 1(13)(A), V.T.I.C. Article 5.43-3, as added by Section 7, Chapter 823, Acts of the 71st Legislature, Regular Session, 1989, refers to an insurance agent "licensed under Article 21.14 or 1.14-2 of this code." V.T.I.C Article 21.14 was revised as Subchapters A-E and G, Chapter 4051, Insurance Code, and those portions of V.T.I.C. Article 1.14-2 relating to licensing were revised as Subchapter E, Chapter 981, Insurance Code. The revised law is drafted accordingly.

(5) Section 1(13)(B), V.T.I.C. Article 5.43-3, as added by Section 7, Chapter 823, Acts of the 71st Legislature, Regular Session, 1989, refers to "a salaried, state, or special agent." The revised law omits the reference to "salaried, state, or special agent" because those are obsolete terms for types of property insurance agents that are included in the category of agents licensed under Subchapters A-E and G, Chapter 4051, Insurance Code.

(6) Section 1(13)(C), V.T.I.C. Article 5.43-3, as added by Section 7, Chapter 823, Acts of the 71st Legislature, Regular Session, 1989, refers to "an insurance fund or pool created … under The Interlocal Cooperation Act (Article 4413(32c), Vernon's Texas Civil Statutes)." Article 4413(32c), Vernon's Texas Civil Statutes, was revised as Chapter 791, Government Code. The revised law is drafted accordingly.

(7) Section 1(13), V.T.I.C. Article 5.43-3, as added by Section 17, Chapter 762, Acts of the 71st Legislature, Regular Session, 1989, refers to an entity that holds "a valid certificate of registration." The revised law omits "valid" as unnecessary because the word does not add to the clear meaning of the law. For example, a document purporting to be a certificate of registration is not a certificate of registration if it is invalid.

Revised Law

Sec. 1961.002. APPLICABILITY OF CHAPTER. (a) This chapter does not apply to:

(1) an employee of the United States, this state, or any political subdivision of this state who acts as a fire protection sprinkler system contractor for the employing governmental entity;

(2) the plan, sale, installation, maintenance, or servicing of a fire protection sprinkler system in any property owned by the United States or this state;

(3) an individual or organization acting under court order as authorization;

(4) an individual or organization that sells or supplies products or materials to a registered fire protection sprinkler system contractor;

(5) an installation, maintenance, or service project for which the total contract price for labor, materials, and all other services is less than $100, if:

(A) the project is not a part of a complete or more costly project, whether the complete project is to be undertaken by one or more fire protection sprinkler system contractors; or

(B) the project is not divided into contracts of less than $100 for the purpose of evading this chapter;

(6) an engineer licensed under Chapter 1001 acting solely in the engineer's professional capacity;

(7) a regular employee of a registered fire protection sprinkler system contractor; or

(8) an owner or lessee of property that:

(A) installs a fire protection sprinkler system on the owned or leased property for the owner's or lessee's own use or for family members' use; and

(B) does not offer the property for sale or lease before the first anniversary of the date of installation of the fire protection sprinkler system.

(b) This chapter does not authorize an individual or organization to practice professional engineering other than in compliance with Chapter 1001. (V.T.I.C. Art. 5.43-3, Secs. 2(b), 11.)

Source Law

[Sec. 2]

(b) This article does not apply to:

(1) an employee of the United States, this state, or any political subdivision of this state who acts as a fire protection sprinkler system contractor for the employing governmental entity;

(2) the plan, sale, installation, maintenance, or servicing of a fire protection sprinkler system in any property owned by the United States or this state;

(3) a person or organization acting under court order as authorization;

(4) a person or organization that sells or supplies products or materials to a registered fire protection sprinkler system contractor;

(5) an installation, maintenance, or service project for which the total contract price for labor, materials, and all other services is less than $100, if:

(A) the project is not a part of a complete or more costly project, whether the complete project is to be undertaken by one or more fire protection sprinkler system contractors; or

(B) the project is not divided into contracts of less than $100 for the purpose of evading this article;

(6) a registered professional engineer acting solely in such professional capacity;

(7) a regular employee of a registered fire protection sprinkler system contractor; or

(8) an owner or lessee of property that installs a fire protection sprinkler system on the owned or leased property for its own use or for the use by family members and does not offer such property for sale or lease within one year after installation of a fire protection sprinkler system.

Sec. 11. Nothing in this article shall authorize a person or organization to practice professional engineering except in compliance with The Texas Engineering Practice Act, as amended (Article 3271a, Vernon's Texas Civil Statutes).

Revisor's Note

Section 2(b)(6), V.T.I.C. Article 5.43-3, refers to a "registered professional engineer." The revised law omits the reference to "registered professional engineer" because that is an obsolete term for a professional engineer in this state and substitutes a reference to "an engineer licensed under Chapter 1001" because under Subchapter G, Chapter 1001, Occupations Code, a professional engineer in this state is required to hold a license under that chapter. Section 11, V.T.I.C. Article 5.43-3, refers to the "Texas Engineering Practice Act, as amended (Article 3271a, Vernon's Texas Civil Statutes)." Article 3271a, Vernon's Texas Civil Statutes, was codified in 2001 as Chapter 1001, Occupations Code. The revised law is drafted accordingly.

Revised Law

Sec. 1961.003. EFFECT ON LOCAL REGULATION. (a) This chapter and the rules adopted under this chapter have uniform force and effect throughout this state. A municipality or county may not enact an order, ordinance, or rule requiring a fire protection sprinkler system contractor to obtain a registration certificate from the municipality or county. A municipality or county may not impose on a fire protection sprinkler system contractor qualification or financial responsibility requirements other than proof of a registration certificate.

(b) Notwithstanding any other provision of this chapter, a municipality or county may require a fire protection sprinkler system contractor to obtain a permit and pay a permit fee for the installation of a fire protection sprinkler system and require the installation of a fire protection sprinkler system to conform to the building code or other construction requirements of the municipality or county.

(c) A municipal or county order, ordinance, or rule in effect on September 1, 1983, is not invalidated because of any provision of this chapter. (V.T.I.C. Art. 5.43-3, Sec. 2(a).)

Source Law

Sec. 2. (a) The provisions of this article and the rules and regulations promulgated under this article shall have uniform force and effect throughout the state. A municipality or county may not enact an order, ordinance, rule, or regulation requiring a fire protection sprinkler system contractor to obtain a certificate of registration from the municipality or county. Notwithstanding any other provisions of this Act, a municipality or county may require a fire protection sprinkler system contractor to obtain a permit and pay a fee therefor for the installation of a fire protection sprinkler system and require the installation of such system in conformance with the building code or other construction requirements of the municipality or county, but may not impose qualification or financial responsibility requirements other than proof of a valid certificate of registration. A municipal or county order, ordinance, rule, or regulation that is in effect on the effective date of this article is not invalidated because of any provisions of this article.

Revisor's Note

(1) Section 2(a), V.T.I.C. Article 5.43-3, refers to "rules and regulations" promulgated under Article 5.43-3 and to "an order, ordinance, rule, or regulation" adopted by a municipality or county that requires a contractor to obtain a local registration certificate. These references to "regulations" and a "regulation" are omitted from the revised law because under Section 311.005(5), Government Code (Code Construction Act), a rule is defined to include a regulation. That definition applies to the revised law.

(2) Section 2(a), V.T.I.C. Article 5.43-3, refers to the effective date of the legislation that enacted the article. The effective date of V.T.I.C. Article 5.43-3 was September 1, 1983. The revised law is drafted accordingly.

[Sections 1961.004-1961.050 reserved for expansion]

SUBCHAPTER B. POWERS AND DUTIES OF COMMISSIONER,

DEPARTMENT, AND STATE FIRE MARSHAL

Revised Law

Sec. 1961.051. ADMINISTRATION OF CHAPTER. (a) The department shall administer this chapter.

(b) The commissioner may issue rules necessary to administer this chapter through the state fire marshal. (V.T.I.C. Art. 5.43-3, Sec. 3(a) (part).)

Source Law

Sec. 3. (a) The board shall administer this article and may issue rules necessary to its administration through the State Fire Marshal… .

Revised Law

Sec. 1961.052. ADOPTION OF RULES. (a) In adopting necessary rules, the commissioner may use recognized standards, including standards:

(1) adopted by federal law or regulation;

(2) published by a nationally recognized standards-making organization; or

(3) developed by individual manufacturers.

(b) Under rules adopted under Section 1961.051(b), the department may create a specialized licensing or registration program for fire protection sprinkler system contractors. (V.T.I.C. Art. 5.43-3, Secs. 3(a) (part), (b).)

Source Law

(a) … Under rules adopted under this subsection, the board may create a specialized licensing or registration program for fire protection sprinkler system contractors.

(b) The board, in adopting necessary rules, may utilize recognized standards such as those adopted by a federal law or regulation, those published by nationally recognized standards-making organizations, or those developed by individual manufacturers.

Revised Law

Sec. 1961.053. RULES RESTRICTING ADVERTISING OR COMPETITIVE BIDDING. (a) The commissioner may not adopt rules restricting advertising or competitive bidding by the holder of a license or registration certificate issued under this chapter except to prohibit false, misleading, or deceptive practices.

(b) In the commissioner's rules to prohibit false, misleading, or deceptive practices, the commissioner may not include a rule that:

(1) restricts the use of any medium for advertising;

(2) restricts the use of a license or registration certificate holder's personal appearance or voice in an advertisement;

(3) relates to the size or duration of an advertisement by the license or registration certificate holder; or

(4) restricts the license or registration certificate holder's advertisement under a trade name. (V.T.I.C. Art. 5.43-3, Sec. 7A.)

Source Law

Sec. 7A. (a) The commissioner may not adopt rules restricting competitive bidding or advertising by the holder of a certificate of registration, license, or permit issued under this article except to prohibit false, misleading, or deceptive practices.

(b) In the commissioner's rules to prohibit false, misleading, or deceptive practices, the commissioner may not include a rule that:

(1) restricts the use of any medium for advertising;

(2) restricts the use of a certificate, license, or permit holder's personal appearance or voice in an advertisement;

(3) relates to the size or duration of an advertisement by the certificate, license, or permit holder; or

(4) restricts the certificate, license, or permit holder's advertisement under a trade name.

Revisor's Note

Section 7A, V.T.I.C. Article 5.43-3, refers to "a certificate of registration, license, or permit" issued under the article. Throughout this chapter, the revised law omits the references to permits because the Texas Department of Insurance does not issue permits under V.T.I.C. Article 5.43-3.

Revised Law

Sec. 1961.054. GENERAL POWERS AND DUTIES OF COMMISSIONER, STATE FIRE MARSHAL, AND DEPARTMENT. (a) The commissioner may delegate authority to exercise all or part of the commissioner's functions, powers, and duties under this chapter, including the issuance of licenses and registration certificates, to the state fire marshal. The state fire marshal shall implement the rules adopted by the commissioner for the protection and preservation of life and property in controlling:

(1) the registration of an individual or an organization engaged in the business of planning, selling, installing, maintaining, or servicing fire protection sprinkler systems; and

(2) the requirements for the plan, sale, installation, maintenance, or servicing of fire protection sprinkler systems by:

(A) determining the criteria and qualifications for registration certificate and license holders;

(B) evaluating the qualifications of an applicant for a registration certificate to engage in the business of planning, selling, installing, maintaining, or servicing fire protection sprinkler systems;

(D) issuing registration certificates and licenses to qualified applicants.

(b) The commissioner shall establish a procedure for reporting and processing complaints relating to the business of planning, selling, installing, maintaining, or servicing fire protection sprinkler systems in this state. (V.T.I.C. Art. 5.43-3, Secs. 7(a), (b).)

Source Law

Sec. 7. (a) The board may delegate authority to exercise all or part of its functions, powers, and duties under this article, including the issuance of licenses and certificates of registration, to the State Fire Marshal, who shall implement the rules adopted by the board for the protection and preservation of life and property in controlling:

(1) the registration of a person or an organization engaged in the business of planning, selling, installing, maintaining, or servicing fire protection sprinkler systems; and

(2) the requirements for the plan, sale, installation, maintenance, or servicing of fire protection sprinkler systems by:

(A) determining the criteria and qualifications for certificates of registration holders;

(B) evaluating the qualifications of an applicant for a certificate of registration to engage in the business of planning, selling, installing, maintaining, or servicing fire protection sprinkler systems and issuing certificates to qualified applicants;

(D) conducting examinations and evaluating the qualifications of applicants for licenses and issuing licenses to qualified applicants.

(b) The board shall establish a procedure for reporting and processing complaints relating to the business of planning, selling, installing, maintaining, or servicing fire protection sprinkler systems in Texas.

Revised Law

Sec. 1961.055. FEES. (a) The commissioner shall set the fee for:

(1) a registration certificate application in an amount not to exceed $100;

(2) an initial or renewal registration certificate in an amount not to exceed $1,200; and

(3) an initial or renewal responsible managing employee license fee in an amount not to exceed $200.

(b) Unless the examination for a responsible managing employee license is administered by a testing service, the commissioner shall set a nonrefundable fee for each examination in an amount not to exceed $100.

(1) a duplicate registration certificate or license issued under this chapter; or

(2) any request requiring changes to a registration certificate or license. (V.T.I.C. Art. 5.43-3, Secs. 4(a) (part), (c) (part), (e), (i) (part).)

Source Law

(a) … The application fee for the certificate of registration must be in an amount not to exceed $100, and the fee for issuance of either the initial or the renewal certificate of registration must be in an amount not to exceed $1,200.

(c) … Unless the examination is administered by a testing service, a nonrefundable examination fee must be in an amount not to exceed $100 per examination. The fee for the issuance of either the initial or the renewal responsible managing employee license must be in an amount not to exceed $200.

(e) The fee charged by the board for any request for a duplicate certificate of registration or license or any request requiring change to a certificate of registration or license must be in an amount not to exceed $70.

(i) The board shall, within the limits fixed by this section, prescribe the fees to be charged under this section… .

Revised Law

Sec. 1961.056. DEPOSIT IN OPERATING ACCOUNT. All fees collected under this chapter shall be deposited in the state treasury to the credit of the Texas Department of Insurance operating account for use in administering this chapter. (V.T.I.C. Art. 5.43-3, Sec. 4(i) (part).)

Source Law

(i) … All fees collected under the provisions of this article shall be deposited in the State Treasury to the credit of the State Board of Insurance operating fund for use in carrying out the administration of this article.

Revisor's Note

Section 4(i), V.T.I.C. Article 5.43-3, requires certain money to be deposited "in the State Treasury to the credit of the State Board of Insurance operating fund." Under Chapter 4, Acts of the 72nd Legislature, 1st Called Session, 1991, the Texas Department of Insurance operating fund (the later name of the State Board of Insurance operating fund) was converted to an account in the general revenue fund. The revised law is drafted accordingly.

[Sections 1961.057-1961.100 reserved for expansion]

SUBCHAPTER C. FIRE PROTECTION ADVISORY COUNCIL

Revised Law

Sec. 1961.101. ADVISORY COUNCIL; APPOINTMENT. (a) The commissioner shall appoint the members of the fire protection advisory council, who serve at the pleasure of the commissioner.

(b) The advisory council is composed of seven members as follows:

(1) three members who have been actively engaged in the management of a fire protection sprinkler system business for not less than five years preceding appointment;

(2) one member who represents the engineering section of the department's property and casualty program;

(3) one member who is a volunteer firefighter; and

(4) two members who each represent a different municipal fire department in this state.

(c) The State Firemen's and Fire Marshals' Association of Texas, on the commissioner's request, may recommend a volunteer firefighter for appointment to the advisory council. (V.T.I.C. Art. 5.43-3, Secs. 6(a) (part), (c), (e).)

Source Law

Sec. 6. (a) … The commissioner shall appoint the members of the advisory council, who shall serve at the pleasure of the commissioner.

(1) three individuals who have been actively engaged in the management of a fire protection sprinkler system business for not less than five years preceding their appointment;

(2) one representative of the engineering section of the board's property division;

(3) one volunteer fire fighter; and

(4) one member from each of two fire departments of incorporated cities of this state.

(e) The State Firemen's and Fire Marshals' Association of Texas may, on request by the commissioner, recommend a volunteer fire fighter for appointment to the advisory council.

Revisor's Note

(1) Section 6(a), V.T.I.C. Article 5.43-3, provides that the Fire Protection Advisory Council "is created." The revised law omits as executed the reference to the creation of the advisory council. The omitted law reads:

Sec. 6. (a) The Fire Protection Advisory Council is created. …

(2) Section 6(c)(1), V.T.I.C. Article 5.43-3, refers to certain individuals who are members of the Fire Protection Advisory Council. The revised law omits the reference to individuals as unnecessary because it is clear in the context of the section that only individuals may be members of the advisory council.

(3) Section 6(c)(2), V.T.I.C. Article 5.43-3, refers to the engineering section of "the board's property division." The revised law substitutes a reference to the "department's property and casualty program" because that is the current name of the part of the Texas Department of Insurance that handles property insurance matters.

(4) Section 6(c)(4), V.T.I.C. Article 5.43-3, refers to "fire departments of incorporated cities" of this state. The revised law omits "incorporated" because under the Local Government Code all municipalities must be incorporated. The revised law also refers to a "municipal" fire department rather than to a "city" fire department because "municipality" is the term used in the Local Government Code.

Revised Law

Sec. 1961.102. ADVISORY COUNCIL DUTIES. (a) In addition to other duties delegated by the commissioner, the fire protection advisory council shall:

(1) advise the state fire marshal regarding practices in the fire protection sprinkler system industry and the rules necessary to implement and administer this chapter; and

(2) make recommendations to the state fire marshal regarding forms and procedures for registration certificates and licenses.

(b) The advisory council shall periodically:

(1) review rules implementing this chapter; and

(2) recommend rule changes to the commissioner. (V.T.I.C. Art. 5.43-3, Secs. 6(b), (d).)

Source Law

(b) The advisory council, in addition to other duties delegated by the commissioner, shall:

(1) advise the State Fire Marshal concerning practices in the fire protection sprinkler system industry and the rules necessary to implement and administer this article; and

(2) make recommendations to the State Fire Marshal regarding forms and procedures for certificates of registration and licenses.

(d) The advisory council shall periodically review rules implementing this article and recommend changes in the rules to the commissioner.

[Sections 1961.103-1961.150 reserved for expansion]

SUBCHAPTER D. REGISTRATION AND LICENSE REQUIREMENTS

Revised Law

Sec. 1961.151. FIRE PROTECTION SPRINKLER SYSTEM CONTRACTOR; REGISTRATION CERTIFICATE REQUIRED. (a) Unless the individual or organization holds a registration certificate issued by the department, an individual or organization may not plan, sell, install, maintain, or service a fire protection sprinkler system.

(b) An applicant for a registration certificate must apply to the department on a form prescribed by the commissioner.

(c) An organization that is a partnership or joint venture is not required to register under the name of the organization if each partner or joint venturer holds a registration certificate. (V.T.I.C. Art. 5.43-3, Secs. 4(a) (part), 8 (part).)

Source Law

Sec. 4. (a) A fire protection sprinkler system contractor must apply to the board for a certificate of registration on a form prescribed by the board. If the contractor is a partnership or joint venture, it need not register in its own name if each partner or joint venturer is registered… .

Sec. 8. A person or organization may not:

(1) plan, sell, install, maintain, or service a fire protection sprinkler system without a valid certificate of registration;

…

Revisor's Note

Section 8(1), V.T.I.C. Article 5.43-3, refers to a "valid certificate of registration." The revised law omits "valid" for the reasons stated in Revisor's Note (7) to Section 1961.001.

Revised Law

Sec. 1961.152. REQUIRED INSURANCE COVERAGE FOR REGISTRATION CERTIFICATE. (a) The department may not issue a registration certificate under this chapter unless the applicant files with the department evidence of a general liability insurance policy that includes products and completed operations coverage. The policy must be conditioned to pay on behalf of the insured those amounts that the insured becomes legally obligated to pay as damages because of bodily injury and property damage caused by an occurrence involving the insured or the insured's officer, agent, or employee in the conduct of any activity that requires a registration certificate or license under this chapter.

(b) Unless the commissioner, after notice and an opportunity for a hearing, increases or decreases the limits, the limits of insurance coverage required by Subsection (a) must be at least:

(1) $100,000 combined single limits for bodily injury and property damage for each occurrence; and

(2) $300,000 aggregate for all occurrences for each policy year.

(c) The evidence of insurance required by this section must be in the form of a certificate of insurance executed by an insurer authorized to engage in the business of insurance in this state and countersigned by an insurance agent licensed in this state. A certificate of insurance for surplus lines coverage procured in compliance with Chapter 981, Insurance Code, through a surplus lines agent that is licensed under Subchapter E, Chapter 981, Insurance Code, and resident in this state may be filed with the department as evidence of the coverage required by this section.

(d) An insurance certificate executed and filed with the department under this section remains in force until the insurer has terminated future liability by the notice required by the department.

(e) Failure to maintain the liability insurance required by this section constitutes grounds for the denial, suspension, or revocation, after notice and opportunity for hearing, of a registration certificate issued under this chapter. (V.T.I.C. Art. 5.43-3, Secs. 5, 7(c).)

Source Law

Sec. 5. (a) The board shall not issue a certificate of registration under this article unless the applicant files with the board evidence of a general liability insurance policy that includes products and completed operations coverage. The limits of insurance coverage required by this section shall be in an amount not less than $100,000 combined single limits for bodily injury and property damage for each occurrence and not less than $300,000 aggregate for all occurrences per policy year, unless the board increases or decreases the amounts under Section 7 of this article. The policy shall be conditioned to pay on behalf of the insured those amounts that the insured is legally obligated to pay as damages because of bodily injury and property damage caused by an occurrence involving the insured or the insured's servant, officer, agent, or employee in the conduct of any business registered under this article.

(b) The evidence of general liability insurance required by this section must be in the form of a certificate of insurance executed by an insurer authorized to do business in this state and countersigned by an insurance agent licensed in this state. A certificate of insurance for surplus lines coverage procured in compliance with Article 1.14-2 of this code by a licensed Texas surplus lines agent resident in this state may be filed with the board as evidence of coverage required by this section. Insurance certificates executed and filed with the board under this section remain in force until the insurer has terminated future liability by the notice required by the board.

(c) Failure to maintain liability insurance required under this section constitutes grounds for the denial, suspension, or revocation of a certificate of registration issued under this article after notice and opportunity for hearing.

[Sec. 7]

Revisor's Note

(1) Section 5(a), V.T.I.C. Article 5.43-3, refers to "the insured's servant, officer, agent, or employee." The revised law omits the reference to "servant" because that term is included within the meaning of "employee" or "agent."

(2) Section 5(b), V.T.I.C. Article 5.43-3, refers to a "certificate of insurance for surplus lines coverage procured in compliance with Article 1.14-2 of this code by a licensed Texas surplus lines agent resident in this state." V.T.I.C. Article 1.14-2 was revised as Chapter 981, Insurance Code. The provisions of that article relating to the licensing of surplus lines insurance agents were revised as Subchapter E of that chapter. The revised law is drafted accordingly.

Revised Law

Sec. 1961.153. RESPONSIBLE MANAGING EMPLOYEE: LICENSE REQUIRED. (a) Each fire protection sprinkler system contractor must employ at least one licensed responsible managing employee on a full-time basis.

(b) A responsible managing employee must hold a license issued by the department, conditioned on the successful completion of the license examination and compliance with the requirements of the rules adopted under this chapter.

(c) Notwithstanding Subsection (a), an individual or organization with a current certificate of registration may act as a fire protection sprinkler system contractor for 30 days after the death or dissociation of its licensed responsible managing employee or for a longer period approved by the commissioner under the rules adopted under this chapter. (V.T.I.C. Art. 5.43-3, Secs. 4(b), (c) (part), 8 (part).)

Source Law

[Sec. 4]

(b) Each fire protection sprinkler system contractor must employ at least one licensed responsible managing employee on a full-time basis.

(c) Each responsible managing employee must obtain a license issued by the board and conditioned on the successful completion of the examination requirement and other requirements prescribed by the rules adopted under this article… .

Sec. 8. A person or organization may not:

…

(2) act as a fire protection sprinkler system contractor under a certificate of registration without having at least one full-time employee who holds a valid responsible managing employee license; provided, however, that a person or organization with a current certificate of registration may act as a fire protection sprinkler system contractor for 30 days after the death or dissociation of its licensed responsible managing employee or for such longer period as may be approved by the board pursuant to the rules adopted hereunder;

(3) act as a responsible managing employee for a fire protection sprinkler system contractor without a valid license;

…

Revisor's Note

Section 8(3), V.T.I.C. Article 5.43-3, refers to a "valid license." The revised law omits "valid" for the reasons stated in Revisor's Note (7) to Section 1961.001.

Revised Law

Sec. 1961.154. POSTING OF LICENSE OR CERTIFICATE REQUIRED. Each registration certificate and license issued under this chapter must be posted in a conspicuous place in the fire protection sprinkler system contractor's place of business. (V.T.I.C. Art. 5.43-3, Sec. 4(f).)

Source Law

(f) Each certificate of registration and license issued under this article must be posted in a conspicuous place in the fire protection sprinkler system contractor's place of business.

Revised Law

Sec. 1961.155. DISPLAY OF REGISTRATION CERTIFICATE NUMBER ON CERTAIN DOCUMENTS REQUIRED. Each bid, proposal, offer, and installation drawing for a fire protection sprinkler system must prominently display the registration certificate number of the fire protection sprinkler system contractor. (V.T.I.C. Art. 5.43-3, Sec. 4(g).)

Source Law

(g) All bids, proposals, offers, and installation drawings for fire protection sprinkler systems must prominently display the fire protection sprinkler system contractor's certificate of registration number.

Revised Law

Sec. 1961.156. LICENSE EXAMINATION. (a) The state fire marshal shall establish the scope and type of an examination required by this chapter.

(b) The state fire marshal may administer the examination or may enter into an agreement with a testing service.

(c) If a testing service is used, the state fire marshal may contract with the testing service regarding requirements for the examination, including:

(1) examination development;

(2) scheduling;

(3) site arrangements;

(4) grading;

(5) reporting;

(6) analysis; or

(7) other administrative duties.

(d) The state fire marshal may require the testing service to:

(1) correspond directly with an applicant regarding the administration of the examination;

(2) collect a reasonable fee from an applicant for administering the examination; or

(3) administer the examination at a specific location or time.

(e) The state fire marshal shall adopt rules as necessary to implement examination requirements under this chapter. (V.T.I.C. Art. 5.43-3, Secs. 5B(a), (b), (e).)

Source Law

Sec. 5B. (a) The state fire marshal shall establish the scope and type of an examination required by this article. The state fire marshal may administer the examination or may enter into an agreement with a testing service.

(b) The state fire marshal may contract with the testing service regarding requirements for the examination, including examination development, scheduling, site arrangements, grading, reporting, analysis, or other administrative duties. The state fire marshal may require the testing service to:

(1) correspond directly with an applicant regarding the administration of the examination;

(2) collect a reasonable fee from an applicant for administering the examination; or

(3) administer the examination at a specific location or time.

(e) The state fire marshal shall adopt rules as necessary to implement examination requirements under this article.

Revised Law

Sec. 1961.157. EXAMINATION RESULTS. (a) Not later than the 30th day after the date on which an examination is administered under this chapter, the state fire marshal shall send notice to each examinee of the results of the examination.

(b) If an examination is graded or reviewed by a testing service, the state fire marshal shall send notice to each examinee of the results of the examination not later than the 14th day after the date on which the state fire marshal receives the results from the testing service.

(c) If the notice of the examination results will be delayed for more than 90 days after the examination date, the state fire marshal, before the 90th day, shall send notice to the examinee of the reason for the delay.

(d) The state fire marshal may require a testing service to notify an examinee of the results of the examinee's examination.

(e) If requested in writing by an individual who fails the examination administered under this chapter, the state fire marshal shall send to the individual an analysis of the individual's performance on the examination. (V.T.I.C. Art. 5.43-3, Secs. 5B(c), (d).)

Source Law

(c) Not later than the 30th day after the day on which an examination is administered under this article, the state fire marshal shall send notice to each examinee of the results of the examination. If an examination is graded or reviewed by a testing service, the state fire marshal shall send notice to each examinee of the results of the examination within two weeks after the date on which the state fire marshal receives the results from the testing service. If the notice of the examination results will be delayed for longer than 90 days after the examination date, the state fire marshal shall send notice to each examinee of the reason for the delay before the 90th day. If requested in writing by a person who fails the examination administered under this article, the state fire marshal shall send to the person an analysis of the person's performance on the examination.

(d) The state fire marshal may require a testing service to notify a person of the results of the person's examination.

Revised Law

Sec. 1961.158. CONTINUING EDUCATION REQUIREMENTS. (a) The commissioner may adopt procedures for certifying and may certify continuing education programs.

(b) Participation in the continuing education programs is voluntary. (V.T.I.C. Art. 5.43-3, Sec. 5C.)

Source Law

Sec. 5C. The board may adopt procedures for certifying and may certify continuing education programs. Participation in the programs is voluntary.

Revised Law

Sec. 1961.159. RECIPROCAL LICENSE. The department may waive any license requirement for an applicant who holds a license issued by another state that has license requirements substantially equivalent to the license requirements of this state. (V.T.I.C. Art. 5.43-3, Sec. 5D.)

Source Law

Sec. 5D. The board may waive any license requirement for an applicant with a valid license from another state having license requirements substantially equivalent to those of this state.

Revisor's Note

Section 5D, V.T.I.C. Article 5.43-3, refers to "a valid license." The revised law omits "valid" for the reasons stated in Revisor's Note (7) to Section 1961.001.

Revised Law

Sec. 1961.160. NOT TRANSFERABLE. A registration certificate or license issued under this chapter is not transferable. (V.T.I.C. Art. 5.43-3, Sec. 4(h).)

Source Law

(h) A certificate of registration or license issued under this article is not transferable.

[Sections 1961.161-1961.200 reserved for expansion]

SUBCHAPTER E. RENEWAL OF REGISTRATION CERTIFICATE OR LICENSE

Revised Law

Sec. 1961.201. RENEWAL REQUIRED; FEE. (a) A renewal of a registration certificate or license issued under this chapter expires on the second anniversary of the date of issuance. The license or registration fee for each year of the two-year period is payable on renewal.

(b) The commissioner by rule may adopt a system under which registration certificates and licenses expire on various dates during the year. For the year in which an expiration date of a registration certificate or license is less than one year from its issuance or anniversary date, the fee shall be prorated on a monthly basis so that each holder of a registration certificate or license pays only that portion of the renewal fee that is allocable to the number of months during which the registration certificate or license is valid. On renewal on the new expiration date, the total renewal fee is payable. (V.T.I.C. Art. 5.43-3, Secs. 5A(a), (c).)

Source Law

Sec. 5A. (a) Each renewal of a license or certificate of registration issued under this article is valid for a period of two years. The license or registration fee for each year of the two-year period is payable on renewal.

(c) The board by rule may adopt a system under which licenses and registrations expire on various dates during the year. For the year in which the license or registration expiration date is less than one year from its issuance or anniversary date, the fee shall be prorated on a monthly basis so that each licensee or registrant shall pay only that portion of the fee that is allocable to the number of months during which the license or registration is valid. On each subsequent renewal, the total renewal fee is payable.

Revisor's Note

Section 4(d), V.T.I.C. Article 5.43-3, provides that a registration certificate and a license are valid for one year from the date of issuance and are renewable annually, and further provides that "initial" certificates and licenses may be issued for periods of less than one year. Section 4(d) was enacted as part of V.T.I.C. Article 5.43-3 when that article was added to the Insurance Code of 1951 by Chapter 113, Acts of the 68th Legislature, Regular Session, 1983. The revised law omits the part of Section 4(d) referring to annual renewals as impliedly repealed by the amendment of Section 5A(a), V.T.I.C. Article 5.43-3, by Chapter 762, Acts of the 71st Legislature, Regular Session, 1989, which provides that registration certificates and licenses are valid for two years. The revised law omits the part of Section 4(d) referring to "initial" certificates and licenses as executed. The omitted law reads:

(d) A certificate of registration and a license are valid for a period of one year from the date of issue and are renewable annually on payment of the annual fee; provided, however, that the initial certificates of registration or licenses issued on or after September 1, 1983, may be issued for periods of less than one year and the annual fee shall be prorated proportionally.

Revised Law

Sec. 1961.202. NOTICE OF EXPIRATION. At least 30 days before the expiration date of a registration certificate or license, the department shall send written notice of the impending expiration to the holder of the registration certificate or license at the holder's last known address. (V.T.I.C. Art. 5.43-3, Sec. 5A(b) (part).)

Source Law

(b) … At least 30 days before the expiration of a license or registration, the board shall send written notice of the impending license or registration expiration to the licensee or registrant at his or its last known address… .

Revised Law

Sec. 1961.203. RENEWAL PROCEDURES. (a) The holder of an unexpired registration certificate or license may renew the certificate or license by paying the required renewal fee to the department before the expiration date of the certificate or license.

(b) An individual or organization whose registration certificate or license has been expired for 90 days or less may renew the certificate or license by paying to the department:

(1) the required renewal fee; and

(2) a fee equal to one-half of the original fee for the certificate or license.

(c) An individual or organization whose registration certificate or license has been expired for more than 90 days but less than two years may renew the certificate or license by paying to the department:

(1) all unpaid renewal fees; and

(2) a fee that is equal to the original fee for the certificate or license.

(d) An individual or organization whose registration certificate or license has been expired for two years or longer may not renew the certificate or license. The individual or organization may obtain a new registration certificate or license by complying with the requirements and procedures for obtaining an original registration certificate or license.

(e) This section may not be construed to prevent the department from denying or refusing to renew a license under applicable law or commissioner rules. (V.T.I.C. Art. 5.43-3, Sec. 5A(b) (part).)

Source Law

(b) An unexpired license or registration may be renewed by paying the required renewal fee to the board before the expiration date of the license or registration. If a license or registration has been expired for not longer than 90 days, the license or registration may be renewed by paying to the board the required renewal fee and a fee that is one-half of the original fee for the license or registration. If a license or registration has been expired for longer than 90 days but less than two years, the license or registration may be renewed by paying to the board all unpaid renewal fees and a fee that is equal to the original fee for the license or registration. If a license or registration has been expired for two years or longer, the license or registration may not be renewed. A new license or registration may be obtained by complying with the requirements and procedures for obtaining an initial license or registration… . This section may not be construed to prevent the board from denying or refusing to renew a license under applicable law or rules of the board.

[Sections 1961.204-1961.250 reserved for expansion]

SUBCHAPTER F. PROHIBITED PRACTICES

AND DISCIPLINARY PROCEDURES

Revised Law

Sec. 1961.251. PROHIBITED PRACTICES. An individual or organization may not:

(1) obtain or attempt to obtain a registration certificate or license by fraudulent representation; or

(2) plan, sell, install, maintain, or service a fire protection sprinkler system in violation of this chapter or the rules adopted under this chapter. (V.T.I.C. Art. 5.43-3, Sec. 8 (part).)

Source Law

Sec. 8. A person or organization may not:

…

(4) obtain or attempt to obtain a certificate of registration or license by fraudulent representation; or

(5) plan, sell, install, maintain, or service a fire protection sprinkler system in violation of this article or the rules adopted under this article.

Revised Law

Sec. 1961.252. DISCIPLINARY ACTIONS. The state fire marshal may suspend, revoke, or refuse to issue or renew a registration certificate or license if, after notice and hearing, the state fire marshal finds that the applicant, registrant, or license holder has engaged in acts that:

(1) violate this chapter;

(2) violate rules or standards adopted under this chapter; or

(3) constitute misrepresentation made in connection with the sale of products or of services rendered. (V.T.I.C. Art. 5.43-3, Sec. 9(a).)

Source Law

Sec. 9. (a) The State Fire Marshal may refuse to issue or renew or may suspend or revoke a certificate of registration, license, or permit if, after notice and hearing, he finds that the applicant, registrant, licensee, or permit holder has engaged in acts:

(1) that violate this article;

(2) that violate rules or standards adopted pursuant to this article; or

(3) constituting misrepresentation made in connection with the sale of products or services rendered.

Revised Law

Sec. 1961.253. DISCIPLINARY HEARING. (a) If the state fire marshal proposes to suspend, revoke, or refuse to renew a license or registration certificate issued under this chapter, the holder of the license or certificate is entitled to a hearing conducted by the State Office of Administrative Hearings.

(b) 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. (V.T.I.C. Art. 5.43-3, Sec. 9A (part).)

Source Law

Sec. 9A. If the State Fire Marshal proposes to suspend, revoke, or refuse to renew a certificate of registration, license, or permit of a person, the person is entitled to a hearing conducted by the State Office of Administrative Hearings… . 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.

Revised Law

Sec. 1961.254. APPLICABILITY OF ADMINISTRATIVE PROCEDURE ACT. Proceedings for the denial, suspension, or revocation of a registration certificate or license, appeals from those proceedings, and any other proceedings for a disciplinary action are governed by Chapter 2001, Government Code. (V.T.I.C. Art. 5.43-3, Secs. 9(b), 9A (part).)

Source Law

[Sec. 9]

(b) Proceedings for the denial, suspension, or revocation of a certificate of registration or license and appeals from those proceedings are governed by the Administrative Procedure and Texas Register Act, as amended (Article 6252-13a, Vernon's Texas Civil Statutes).

Sec. 9A. … Proceedings for a disciplinary action are governed by the administrative procedure law, Chapter 2001, Government Code.

Revisor's Note

Section 9(b), V.T.I.C. Article 5.43-3, refers to "the Administrative Procedure and Texas Register Act, as amended (Article 6252-13a, Vernon's Texas Civil Statutes)." The administrative procedure sections of that statute were codified in 1993 as Chapter 2001, Government Code. The revised law omits the reference to "as amended" as unnecessary because under Section 311.027, Government Code (Code Construction Act), unless expressly provided otherwise, a reference to a statute applies to all reenactments, revisions, or amendments of the statute. That section applies to the revised law. The revised law is drafted accordingly.

Revised Law

Sec. 1961.255. REAPPLICATION REQUIREMENTS. (a) An applicant or holder of a registration certificate or license whose certificate or license has been denied, refused, or revoked under this chapter, other than for failure to pass a required written examination, may not file another application for a registration certificate or license before:

(1) the first anniversary of the effective date of the denial, refusal, or revocation; or

(2) if judicial review of the denial, refusal, or revocation is sought, before the first anniversary of the date of the final court order or decree affirming the action.

(b) The commissioner may deny an application described by Subsection (a) unless the applicant shows good cause why the denial, refusal, or revocation of the registration certificate or license should not be considered a bar to the issuance of a new registration certificate or license. (V.T.I.C. Art. 5.43-3, Sec. 9(c).)

Source Law

(c) No applicant, certificate of registration holder, or licensee whose certificate of registration or license has been denied, refused, or revoked hereunder (except for the failure to pass a required written examination) shall be entitled to file another application for a certificate of registration or license in the fire protection sprinkler system business in this state within one year from the effective date of such denial, refusal, or revocation or, if judicial review of such denial, refusal, or revocation is sought, within one year from the date of final court order or decree affirming such action. Such application, when filed after one year, may be denied unless the applicant shows good cause why the denial, refusal, or revocation of the certificate of registration or license shall not be deemed a bar to the issuance of a new certificate of registration or license.

[Sections 1961.256-1961.300 reserved for expansion]

SUBCHAPTER G. CRIMINAL PENALTY

Revised Law

Sec. 1961.301. CRIMINAL PENALTY. (a) Section 311.005(2), Government Code, does not apply to this section.

(b) A person commits an offense if the person knowingly violates Section 1961.151(a), 1961.153(a) or (b), or 1961.251.

(d) Venue for an offense under this section is in Travis County or the county in which the offense is committed. (V.T.I.C. Art. 5.43-3, Sec. 10; New.)

Source Law

Sec. 10. (a) A person commits an offense if the person knowingly or intentionally violates Section 8 of this article.

(b) An offense under this section is a Class B misdemeanor.

Revisor's Note

(1) Section 10(a), V.T.I.C. Article 5.43-3, states that a "person" commits an offense if the person engages in certain behavior. While the revised law substitutes "individual" for "person" in several instances throughout this chapter for the reasons stated in Revisor's Note (2) to Section 1961.001, it is not clear whether the legislature intended criminal liability to be extended to an entity as described by Subchapter B, Chapter 7, Penal Code, particularly since the Code Construction Act definition of "person," Section 311.005(2), Government Code, does not apply to the law revised in this chapter. For that reason, the revised law retains the term "person" in this section and adds a provision stating that the Code Construction Act definition of "person" does not apply to this section.

(2) Section 10(a), V.T.I.C. Article 5.43-3, refers to a person who "knowingly or intentionally" engages in certain conduct. Under Section 6.02, Penal Code, applicable to the revised law through Section 1.03, Penal Code, culpable mental states are classified according to relative degree of culpability from highest to lowest, and proof of a higher degree of culpability than that charged constitutes proof of the culpability charged. Because an intentional mental state is classified as a more culpable mental state than a knowing mental state, the revised law omits "intentionally" as unnecessary.


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