Proposed Repeal of Existing Administrative Rules

Chapter 64. Temporary Common Worker Employers

Proposal Filed: September 21, 2017 – Published in the Texas Register:  October 6, 2017

Deadline for Public Comment: November 6, 2017

The Texas Department of Licensing and Regulation (Department) proposes the repeal of existing rules at 16 Texas Administrative Code (TAC), Chapter 64 §§64.1, 64.10, 64.20, 64.70, 64.72, and 64.80, regarding the Temporary Common Worker Employers Program.

Justification and Explanation of the Rules

This proposal repeals the existing rules of the Texas Commission of Licensing and Regulation (Commission), the Department’s governing body, regarding the licensing and regulation of temporary common worker employers by the Department. The existing rules under 16 TAC Chapter 64 implemented Texas Labor Code, Chapter 92.

The repeal of the existing rules is necessary to implement Senate Bill (S.B.) 2065, 85th Legislature, Regular Session, 2017. This bill, in part, repealed the state licensing requirements for temporary common worker employers under Texas Labor Code, Chapter 92, Temporary Common Worker Employers.  S.B. 2065 preserved the provisions in Chapter 92 regarding the standards of conduct and practice for temporary common worker employers and the provision allowing municipalities over 1 million people to impose stricter standards of conduct and practice.  As amended by S.B. 2065, unless prohibited by a governmental subdivision, a temporary common worker employer is authorized to operate in the state if it meets the requirements of Chapter 92.  A governmental subdivision may enforce Chapter 92 within the boundaries of the governmental subdivision.  These statutory changes were effective September 1, 2017. 

This proposal repeals the existing rules for the Temporary Common Worker Employers Program under 16 TAC Chapter 64 §§64.1, 64.10, 64.20, 64.70, 64.72, and 64.80.  As of September 1, 2017, the Department no longer licenses or regulates temporary common worker employers.

Fiscal Impact on State and Local Government

Brian E. Francis, Executive Director, has determined that for each year of the first five years the proposed repeal of the rules is in effect, there will be a reduction in costs to the State.  While S.B. 2065 repealed the state licensing requirements under Texas Labor Code, Chapter 92, the rules under 16 TAC Chapter 64 implemented the Temporary Common Worker Employers Program.  There will be a reduction in costs to the State in the amount of $3,700 each year for the first five years due to the Department no longer needing to pay full time employees (FTEs) to administer and enforce the program.  No FTEs worked on this program on a full-time basis, so there is no loss of FTEs.

In addition, Mr. Francis has determined that for each year of the first five years the proposed repeal of the rules is in effect, there will be a loss of revenue to the State.  While S.B. 2065 repealed the state licensing requirements under Texas Labor Code, Chapter 92, the rules under 16 TAC Chapter 64 set out the specific fee amounts that were paid to the Department.  Temporary common worker employers paid $30 in license application fees and $30 in annual license renewal fees.  Elimination of the application and annual renewal fees will result in a loss of revenue to the State in the amount of $3,700 each year for the first five years.

Mr. Francis has determined that for each year of the first five years the proposed repeal of the rules is in effect, enforcing or administering the proposed repeal of the rules does not have foreseeable implications relating to costs or revenues of local governments.  Local governments may have cost or revenue implications based on changes to the statute as amended by S.B 2065; however, any cost or revenue implications are not a result of the proposed repeal of the rules. 

Local Employment Impact Statement

Mr. Francis has determined that the proposed repeal of the rules may affect the local economy, so the agency has prepared the following local employment impact statement, as required under Government Code §2001.022. 

S.B. 2065 repealed the state licensing requirements for temporary common worker employers under Texas Labor Code, Chapter 92.  The proposed repeal of the rules eliminates the initial and renewal license applications and fees and other licensing requirements.  The proposed repeal of the rules does not eliminate or restrict the actual business of any temporary common worker employers.  These employers will continue to operate as before but without the need for a state license and without some licensing and operating costs associated with the rules.  These savings could potentially result in a lowering of prices for the hiring of common workers, which could potentially result in more common workers being hired for each year of the first five years the proposed repeal is in effect.  There is no data, however, to support these potential affects on the local economy and on local employment since is unknown what each temporary common worker employer may or may not do. 

Texas Labor Code, Chapter 92 authorizes municipalities that have populations greater than one million to impose stricter standards of conduct and practice than those set out under the statute.  Currently, there are three municipalities with over one million people.  If these three municipalities choose to impose stricter standards, it could possibly impact local employment in those municipalities.  This potential impact, however, would be a result of the statute as amended by S.B. 2065, not by the proposed repeal of the rules. 

In addition, Texas Labor Code, Chapter 92 provides that unless prohibited by a governmental subdivision, a temporary common worker employer is authorized to operate in the state if it meets the statutory requirements.  If a governmental subdivision chooses to prohibit a temporary common worker employer from operating within the boundaries of the governmental subdivision, it could possibly impact local employment in that governmental subdivision.  This potential impact, however, would be a result of the statute as amended by S.B. 2065, not by the proposed repeal of the rules.

Public Benefits

Mr. Francis also has determined that for each year of the first five-year period the proposed repeal of the rules is in effect, the public benefit will be elimination of obsolete rules.  The rules under 16 TAC Chapter 64 implemented the state licensing requirements under Texas Labor Code, Chapter 92. The state licensing requirements were repealed by S.B. 2065. In addition, the repeal of the state licensing requirements under Chapter 92 and the associated rules eliminate the cost of a state regulatory program with a small license population, zero to little enforcement activity, and minimal risk of consumer harm.  There will be less of a tax burden on taxpayers.  Companies will no longer be required to submit initial or renewal license applications and fees or meet other rule requirements that had associated costs.  There will be less of a regulatory burden on the businesses in this industry. While there is no supporting data and it is unknown what temporary common worker employers may or may not do, the proposed repeal of the rules and the reduction in regulatory burdens may potentially enable a reduction in prices for users of common workers, potentially enable the employment of more common workers, and potentially allow local employers to complete additional work. Finally, there are still protections for common workers in the statute. Temporary common worker employers still have to meet standards of conduct and practice requirements under Chapter 92, and municipalities over 1 million people may impose stricter standards of conduct and practice. In addition, a governmental subdivision may enforce Chapter 92 within the boundaries of the governmental subdivision.

Probable Economic Costs to Persons Required to Comply With Proposal

Mr. Francis has determined that for each year of the first five-year period the proposed repeal of the rules is in effect, there will be a reduction in costs to persons who are required to comply with the proposed repeal of the rules.  Temporary common worker employers will no longer have to pay $30 in license application fees or $30 in annual license renewal fees.  The elimination of the application and annual renewal fees will be a reduction in costs in the amount of $3,700 each year for the first five years.  In addition, there may be a decrease in costs from the elimination of rules that impose certain requirements on licensees, such as vehicle, insurance, and waiting room requirements.  The Department is not able to estimate what specific cost-savings, if any, temporary common worker employers may receive as a result of the repeal of these rules.

Economic Impact Statement and Regulatory Flexibility Analysis – Fiscal Impact on Small Businesses, Micro-Businesses, and Rural Communities 

There will be no adverse effect on small businesses, micro-businesses, or rural communities as a result of the proposed repeal of the rules. 

Since the agency has determined that the proposed repeal of the rules will have no adverse economic effect on small businesses, micro-businesses, or rural communities, preparation of an Economic Impact Statement and a Regulatory Flexibility Analysis, as detailed under Texas Government Code §2006.002, are not required.

One-for-One Requirement for Rules with a Fiscal Impact

Under Government Code §2001.0045, a state agency may not adopt a proposed rule if the fiscal note states that the rule imposes a cost on regulated persons, including another state agency, a special district, or a local government, unless the state agency: (a) repeals a rule that imposes a total cost on regulated persons that is equal to or greater than the total cost imposed on regulated persons by the proposed rule; or (b) amends a rule to decrease the total cost imposed on regulated persons by an amount that is equal to or greater than the cost imposed on the persons by the proposed rule.  There are exceptions for certain types of rules under §2001.0045(c).

The proposed repeal of the rules does not have a fiscal note that imposes a cost on regulated persons, including another state agency, a special district, or a local government. In addition, the repeal is necessary to implement legislation, which is an exception under §2001.0045(c). Therefore, the agency is not required to take any further action under Government Code §2001.0045.

Public Comments

Comments on the proposal may be submitted to Pauline Easley, Legal Assistant, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711, or facsimile (512) 475-3032, or electronically: erule.comments@tdlr.texas.gov. The deadline for comments is 30 days after publication in the Texas Register.

Statutory Authority 

The repeal of the existing rules is proposed under Texas Occupations Code, Chapter 51, which authorizes the Commission, the Department’s governing body, to adopt rules as necessary to implement this chapter and any other law establishing a program regulated by the Department.

The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapter 51 and Texas Labor Code, Chapter 92.  No other statutes, articles, or codes are affected by the proposal.

[§64.1. Authority]

[§64.10. Definitions]

[§64.20. Licensing Requirements General]

[§64.70. Duties of a License Holder]

[§64.72 Licensee Labor Hall Responsibilities]

[§64.80. Fees]

Review by Agency Counsel

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be a valid exercise of the agency’s legal authority.

Filed with the Office of the Secretary of State, on September 21, 2017.

Brian E. Francis
Executive Director
Texas Department of Licensing and Regulation