Harrison Bill Repeals Licenses For Linemen, Electricians And Employer Organizations

The text as introduced · 3,776 words

90R2031 RAL-D

By: Harrison
H.B. No. 849

A BILL TO BE ENTITLED

AN ACT

relating to the deregulation of certain activities and occupations.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The following provisions are repealed:

(1) Title 9, Agriculture Code;

(2) Article 42A.511(b), Code of Criminal Procedure;

(3) Sections 91.001(1), (2-a), (4), (8), (8-a), (11),

and (18), Labor Code;

(4) Section 91.002, Labor Code;

(5) Section 91.008, Labor Code;

(6) Subchapter B, Chapter 91, Labor Code;

(7) Section 91.045, Labor Code;

(8) Section 91.048, Labor Code;

(9) Section 91.061, Labor Code;

(10) Chapter 802, Occupations Code;

(11) Sections 1305.002(11-b) and (12), Occupations

Code;

(12) Section 1305.1601, Occupations Code;

(13) Section 1305.1605, Occupations Code; and

(14) Section 1305.162(e), Occupations Code.

SECTION 2. Article 42A.511(a), Code of Criminal Procedure,

is amended to read as follows:

(a) If a judge grants community supervision to a defendant

convicted of an offense under Section 42.09, 42.091, 42.092, or

42.10, Penal Code, the judge may require the defendant to[ :

[ (1) complete an online responsible pet owner course

approved and certified by the Texas Department of Licensing and

Regulation; or

[ (2) ] attend a responsible pet owner course sponsored

by a municipal animal shelter, as defined by Section 823.001,

Health and Safety Code, that:

(1) [ (A) ] receives federal, state, county, or

municipal funds; and

(2) [ (B) ] serves the county in which the court is

located.

SECTION 3. Section 411.093(a), Government Code, is amended

to read as follows:

(a) The Texas Department of Licensing and Regulation is

entitled to obtain criminal history record information as provided

by Subsection (b) that relates to:

(1) an applicant for or the holder of:

(A) a driver education instructor license under

Chapter 1001, Education Code;

(B) a license under Chapter 466;

(C) a license under Chapter 202, Occupations

Code;

(D) a license under Chapter 401, Occupations

Code;

(E) a license under Chapter 402, Occupations

Code;

(F) a license under Chapter 2001, Occupations

Code; or

(G) an instructor license or motorcycle school

license under Chapter 662, Transportation Code; or

(2) [ a person who is:

[ (A) an applicant for or the holder of a license

under Chapter 91, Labor Code; or

[ (B) a controlling person, as defined by Chapter

91, Labor Code, of an entity described by Paragraph (A); or

[ (3) ] a person who:

(A) is an applicant for or the holder of a license

under Chapter 455, Occupations Code; or

(B) has an interest described under Section

455.1525(e), Occupations Code, in an entity described by Paragraph

(A).

SECTION 4. Section 91.001(3), Labor Code, is amended to

read as follows:

(3) "Client" means any person who enters into a

professional employer services agreement with a professional

employer organization [ license holder ].

SECTION 5. Section 91.003, Labor Code, is amended to read as

follows:

Sec. 91.003. INTERAGENCY COOPERATION. (a) Each state

agency that in performing duties under other law affects the

regulation of professional employer services shall cooperate with

[ the department and ] other state agencies as necessary to implement

and enforce this chapter.

(b) In particular, the Texas Workforce Commission, the

division of workers' compensation of the Texas Department of

Insurance, the Department of Assistive and Rehabilitative

Services, and the attorney general's office shall assist in the

implementation of this chapter [ and shall provide information to

the department on request ].

SECTION 6. Sections 91.004(a) and (c), Labor Code, are

amended to read as follows:

(a) This chapter does not exempt a client of a professional

employer organization [ license holder ], or any covered employee,

from any other license requirements imposed under local, state, or

federal law.

(c) A professional employer organization [ license holder ]

is not engaged in the unauthorized practice of an occupation,

trade, or profession that is licensed, certified, or otherwise

regulated by a governmental entity solely by entering into a

professional employer services agreement with a client and covered

employees.

SECTION 7. Section 91.005, Labor Code, is amended to read as

follows:

Sec. 91.005. APPLICATION OF CERTAIN PROCUREMENT LAWS. With

respect to a bid, contract, purchase order, or agreement entered

into with the state or a political subdivision of the state, a

client's status or certification as a small, minority-owned,

disadvantaged, or woman-owned business enterprise or as a

historically underutilized business is not affected because the

client has entered into a professional employer services agreement

with [ a license holder ] or uses the services of a professional

employer organization [ license holder ].

SECTION 8. Section 91.006(a), Labor Code, is amended to

read as follows:

(a) A certificate of insurance coverage or other evidence of

coverage showing that either a professional employer organization

[ license holder ] or a client maintains workers' compensation

insurance coverage constitutes proof of workers' compensation

insurance coverage for the organization [ license holder ] and the

client with respect to all covered employees of the organization

[ license holder ] and the client. The state and a political

subdivision of the state shall accept a certificate of insurance

coverage or other evidence of coverage described by this section as

proof of workers' compensation coverage under Chapter 406.

SECTION 9. Sections 91.031(a) and (b), Labor Code, are

amended to read as follows:

(a) A professional employer organization [ license holder ]

shall establish the terms of a professional employer services

agreement by a written contract between the organization [ license

holder ] and the client.

(b) The professional employer organization [ license holder ]

shall give written notice of the agreement as it affects covered

employees to each covered employee.

SECTION 10. Section 91.032(a), Labor Code, is amended to

read as follows:

(a) A professional employer services agreement between a

professional employer organization [ license holder ] and a client

must provide that the organization [ license holder ]:

(1) shares, as provided by Subsection (b), with the

client the right of direction and control over covered employees;

(2) assumes responsibility for the payment of wages to

the covered employees without regard to payments by the client to

the organization [ license holder ];

(3) assumes responsibility for the payment of payroll

taxes and collection of taxes from payroll on covered employees;

(4) shares, as provided by Subsection (b), with the

client the right to hire, fire, discipline, and reassign the

covered employees; and

(5) shares, as provided by Subsection (b), with the

client the right of direction and control over the adoption of

employment and safety policies and the management of workers'

compensation claims, claim filings, and related procedures.

SECTION 11. The heading to Subchapter D, Chapter 91, Labor

Code, is amended to read as follows:

SUBCHAPTER D. POWERS AND DUTIES OF PROFESSIONAL EMPLOYER

ORGANIZATION [ LICENSE HOLDER ]

SECTION 12. Section 91.041, Labor Code, is amended to read

as follows:

Sec. 91.041. EMPLOYEE BENEFIT PLANS; REQUIRED DISCLOSURE;

OTHER REPORTS. (a) A client and professional employer

organization [ license holder ] are each considered an employer under

the laws of this state for purposes of sponsoring retirement and

welfare benefit plans for covered employees.

(a-1) A professional employer organization [ license holder ]

may sponsor a single welfare benefit plan under which eligible

covered employees of one or more clients may elect to participate.

(a-2) A fully insured welfare benefit plan offered to the

covered employees of a professional employer organization [ license

holder ] and provided by an insurance company authorized to provide

that insurance in this state or a self-funded health benefit plan

sponsored by a professional employer organization [ license holder ]

as provided by Section 91.0411 shall be treated for purposes of

state law as a single employer welfare benefit plan.

(b) With respect to any insurance or benefit plan provided

by a professional employer organization [ license holder ] for the

benefit of its assigned employees, the organization [ a license

holder ] shall disclose the following information to [ the

department, ] each client[ , ] and its covered employees:

(1) the type of coverage;

(2) the identity of each insurer for each type of

coverage;

(3) the amount of benefits provided for each type of

coverage and to whom or in whose behalf benefits are to be paid;

(4) the policy limits on each insurance policy; and

(5) whether the coverage is fully insured, partially

insured, or fully self-funded.

[ (c) The commission by rule may require a license holder to

file other reports that are reasonably necessary for the

implementation of this chapter. ]

SECTION 13. Sections 91.0411(b), (c), (e), and (f), Labor

Code, are amended to read as follows:

(b) A professional employer organization [ license holder ]

may sponsor a benefit plan that is not fully insured if the

organization [ license holder ] meets the requirements of this

section and is approved to sponsor the plan by the commissioner.

(c) The commissioner may, on notice and opportunity for all

interested persons to be heard, adopt rules and issue orders

reasonably necessary to augment and implement the regulation of

benefit plans sponsored by a professional employer organization

[ license holder ] that are not fully insured. The commissioner may

not adopt a rule that requires clients or covered employees to be

members of an association or group in the same trade or industry in

order to be covered by a [ license holder-sponsored ] benefit plan

that is not fully insured. The rules must include all requirements

that must be met by the organization [ license holder ] and the plan,

including:

(1) initial and final approval requirements;

(2) authority to prescribe forms and items to be

submitted to the commissioner by the organization [ license holder ];

(3) a fidelity bond;

(4) use of an independent actuary;

(5) use of a third-party administrator;

(6) authority for the commissioner to examine an

application or a plan;

(7) the minimum number of clients and covered

employees covered by the plan;

(8) standards for those natural persons managing the

plan;

(9) the minimum amount of gross contributions;

(10) the minimum amount of written commitment, binder,

or policy for stop-loss insurance;

(11) the minimum amount of reserves; and

(12) a fee in an amount reasonable and necessary to

defray the costs of administering this section to be deposited to

the credit of the operating fund of the Texas Department of

Insurance.

(e) Each professional employer organization [ license

holder ] under this section shall appoint the commissioner as its

resident agent for purposes of service of process. The fee for that

service is $50, payable at the time of appointment.

(f) The commissioner may examine the affairs of any plan and

shall have access to the records of the plan. The commissioner may

examine under oath a manager or employee of the professional

employer organization [ license holder ] in connection with the plan.

SECTION 14. Sections 91.042(a), (a-1), (b), (c), (d), (e),

(g), (h), and (i), Labor Code, are amended to read as follows:

(a) A professional employer organization [ license holder ]

or client may elect to obtain workers' compensation insurance

coverage for covered employees through an insurance company as

defined under Section 401.011(28) or through self-insurance as

provided under Chapter 407.

(a-1) The client and the professional employer organization

shall specify in the professional employer services agreement

whether the parties have elected to obtain workers' compensation

insurance coverage for the covered employees and shall specify

which party must maintain coverage. If the organization [ license

holder ] maintains workers' compensation insurance coverage for the

client, an individual who is an executive employee, as described by

Section 406.097, of the client is eligible to be treated as an

executive employee for premium calculation and classification

purposes. A copy of the professional employer services agreement

must be provided to the Texas Department of Insurance on request.

Information obtained by the Texas Department of Insurance under

this section is confidential and not subject to disclosure under

Chapter 552, Government Code.

(b) If a professional employer organization [ license

holder ] maintains workers' compensation insurance coverage for

covered employees, the organization [ license holder ] shall pay

workers' compensation insurance premiums for the covered employees

based on the experience rating of the client for the first two years

the covered employees are covered under the [ professional employer ]

organization's policy and as further provided by rule by the Texas

Department of Insurance.

(c) For workers' compensation insurance purposes, a

professional employer organization [ license holder ] and the

organization's [ license holder's ] client shall be coemployers. If

either a professional employer organization [ license holder ] or a

client elects to obtain workers' compensation insurance coverage

for covered employees, the client and the organization [ license

holder ] are subject to Sections 406.005, 406.034, 408.001, and

411.032.

(d) If a professional employer organization [ license

holder ] or a client does not elect to obtain workers' compensation

insurance coverage for covered employees, both the organization

[ license holder ] and the client are subject to Sections 406.004,

406.005, 406.033, and 411.032.

(e) After the expiration of the two-year period under

Subsection (b), if the client elects to obtain workers'

compensation insurance coverage for covered employees through

coverage maintained by the client, or if the professional employer

services agreement is terminated and the client elects to maintain,

through coverage maintained by the client or through coverage

maintained by a successor professional employer organization,

workers' compensation insurance coverage for employees previously

covered by the former professional employer organization's policy,

the premium for the workers' compensation insurance coverage for

the client shall be based on the lower of:

(1) the experience modifier of the client before being

covered under the professional employer organization's coverage;

or

(2) the experience modifier of the former professional

employer organization [ license holder ] at the time the client's

coverage under the professional employer organization's coverage

is terminated.

(g) On the written request of a client, a professional

employer organization [ license holder ] that elects to provide

workers' compensation insurance for covered employees shall

provide to the client a list of:

(1) claims associated with that client made against

the organization's [ license holder's ] workers' compensation policy;

and

(2) payments made and reserves established on each

claim.

(h) The professional employer organization [ license holder ]

shall provide the information described by Subsection (g) in

writing from the organization's [ license holder's ] own records, if

the organization [ license holder ] is a qualified self-insurer, or

from information the organization [ license holder ] received from

the organization's [ license holder's ] workers' compensation

insurance provider following the organization's [ license holder's ]

request under Section 2051.151, Insurance Code, not later than the

60th day after the date the organization [ license holder ] receives

the client's written request. For purposes of this subsection,

information is considered to be provided to the client on the date

the information is:

(1) received by the United States Postal Service; or

(2) personally delivered to the client.

(i) A professional employer organization [ license holder ]

that fails to comply with Subsection (g) or (h) commits a Class D

administrative violation as provided by Section 415.011.

SECTION 15. Section 91.044, Labor Code, is amended to read

as follows:

Sec. 91.044. UNEMPLOYMENT TAXES; PAYROLL. (a) A

professional employer organization [ license holder ] is the

employer of a covered employee for purposes of Subtitle A, Title 4,

and, except for wages subject to Section 91.032(c), for purposes of

Chapter 61.

(a-1) A professional employer organization [ license holder ]

may, in a calendar year during which an employee becomes a covered

employee of the organization [ license holder ], apply toward the

maximum amount of taxable wages established in Section 201.082(1)

any wages paid to the employee in that calendar year by:

(1) the client; or

(2) another professional employer organization

[ license holder ] under a prior professional employer services

agreement with that client.

(a-2) In addition to any other reports required to be filed

by law, a professional employer organization [ license holder ] shall

report quarterly to the Texas Workforce Commission on a form

prescribed by the Texas Workforce Commission the name, address,

telephone number, federal income tax identification number, and

classification code according to the North American Industry

Classification System of each client.

(b) For purposes of Subtitle A, Title 4, in the event of the

termination of a contract between a professional employer

organization [ license holder ] and a client or the failure by a

professional employer organization to submit reports or make tax

payments as required by that subtitle, the contracting client shall

be treated as a new employer without a previous experience record

unless that client is otherwise eligible for an experience rating.

SECTION 16. Section 91.046, Labor Code, is amended to read

as follows:

Sec. 91.046. CONTRACTUAL DUTIES. Each professional

employer organization [ license holder ] is responsible for the

organization's [ license holder's ] contractual duties and

responsibilities to manage, maintain, collect, and make timely

payments for:

(1) insurance premiums;

(2) benefit and welfare plans;

(3) other employee withholding; and

(4) any other expressed responsibility within the

scope of the professional employer services agreement for

fulfilling the duties imposed under this section and Sections

91.032 and [ , ] 91.047[ , and 91.048 ].

SECTION 17. Section 91.047, Labor Code, is amended to read

as follows:

Sec. 91.047. COMPLIANCE WITH OTHER LAWS. Each professional

employer organization [ license holder ] shall comply with all

appropriate state and federal laws relating to reporting,

sponsoring, filing, and maintaining benefit and welfare plans.

SECTION 18. Section 91.049, Labor Code, is amended to read

as follows:

Sec. 91.049. AGENT FOR SERVICE OF PROCESS. Each

professional employer organization [ license holder ] shall maintain

a registered agent for the service of process in this state.

SECTION 19. The heading to Subchapter E, Chapter 91, Labor

Code, is amended to read as follows:

SUBCHAPTER E. [ PROHIBITED ACTS; ] ENFORCEMENT

SECTION 20. Section 91.062(a), Labor Code, is amended to

read as follows:

(a) A state agency with duties related to the regulation of

professional employer services [ The executive director ] may notify

the attorney general of a violation of this chapter. The attorney

general may apply to a district court in Travis County for

permission to file for quo warranto relief, injunctive relief, or

both.

SECTION 21. Section 415.011, Labor Code, is amended to read

as follows:

Sec. 415.011. NOTICE OF PROFESSIONAL EMPLOYER ORGANIZATION

WORKERS' COMPENSATION CLAIM AND PAYMENT INFORMATION;

ADMINISTRATIVE VIOLATION. (a) In this section, "professional

employer organization" [ "license holder" ] has the meaning assigned

by Section 91.001.

(a-1) Except as provided by Subsection (c), a professional

employer organization [ license holder ] commits a violation if the

organization [ license holder ] fails to provide the information

required by Sections 91.042(g) and (h).

(b) A violation under Subsection (a-1) [ (a) ] is an

administrative violation.

(c) A professional employer organization [ license holder ]

does not commit an administrative violation under this section if

the organization [ license holder ] requested the information

required by Sections 91.042(g) and (h) from the organization's

[ license holder's ] workers' compensation insurance provider and the

provider does not provide the information to the organization

[ license holder ] within the required time. A professional employer

organization [ license holder ] shall notify the Texas Department of

Insurance of a provider's failure to comply with the requirements

of Section 2051.151, Insurance Code.

SECTION 22. Section 1305.102(a), Occupations Code, is

amended to read as follows:

(a) The commission shall adopt rules for the licensing of

electricians, sign electricians, electrical sign contractors,

electrical contractors, [ journeyman industrial electricians,

journeyman linemen, ] residential appliance installers, and

residential appliance installation contractors as prescribed by

this chapter.

SECTION 23. Section 151.3503(a), Tax Code, is amended to

read as follows:

(a) The following are exempted from the taxes imposed by

this chapter:

(1) a service performed by an employee for the

employee's employer in the regular course of business, within the

scope of the employee's duties, and for which the employee is paid

regular wages or salary;

(2) a service performed by an employee of a temporary

employment service for a host employer to supplement the host

employer's existing work force on a temporary basis, if:

(A) the service is normally performed by the host

employer's own employees;

(B) the host employer provides all supplies and

equipment necessary to perform the service, other than personal

protective equipment provided by the temporary employment service

pursuant to a federal law or regulation;

(C) the host employer does not rent, lease,

purchase, or otherwise acquire for use the supplies and equipment

described by Paragraph (B), other than the personal protective

equipment described by that paragraph, from the temporary

employment service or an entity that is a member of an affiliated

group of which the temporary employment service is also a member;

and

(D) the host employer has the sole right to

supervise, direct, and control the work performed by the employee

of the temporary employment service as necessary to conduct the

host employer's business or to comply with any licensing,

statutory, or regulatory requirement applicable to the host

employer; or

(3) a service performed by covered employees of a

professional employer organization[ , either licensed under Chapter

91, Labor Code, or exempt from the licensing requirements of that

chapter, ] for a client under a written contract that provides for

shared employment responsibilities between the professional

employer organization and the client for the covered employees,

most of whom must have been previously employed by the client.

SECTION 24. Section 151.3503(c), Tax Code, is amended by

adding Subdivision (2-a) to read as follows:

(2-a) "Professional employer organization" has the

meaning assigned by Section 91.001, Labor Code.

SECTION 25. Article 42A.511, Code of Criminal Procedure, as

amended by this Act, applies to a defendant placed on community

supervision on or after the effective date of this Act, regardless

of whether the offense for which the defendant was placed on

community supervision was committed before, on, or after the

effective date of this Act.

SECTION 26. On the effective date of this Act, a pending

regulatory action, including a complaint investigation,

disciplinary action, or administrative penalty proceeding, of the

Texas Department of Licensing and Regulation with respect to a

license, permit, or certification issued under a law repealed by

this Act, is terminated.

SECTION 27. On the effective date of this Act, a license,

permit, or certification issued under a law repealed by this Act

expires.

SECTION 28. This Act takes effect September 1, 2027.