1.3 TDLR Enforcement, Violations, Administrative Penalties, and Continuing Education

TDLR Enforcement Authority and Complaint Process

The Texas Department of Licensing and Regulation (TDLR) Enforcement Division is empowered to investigate complaints against licensed contractors, certified technicians, registered technicians, and unlicensed individuals operating in Texas. Enforcement actions protect consumers and maintain fair competition by penalizing dishonest practices, mechanical negligence, safety violations, and illegal contracting.

The Complaint Investigation Sequence

1. Complaint Intake: Complaints are submitted in writing by property owners, municipal building inspectors, or competing contractors alleging violations of Texas Occupations Code Chapter 1302 or 16 TAC Chapter 75.
2. Preliminary Review: Enforcement attorneys and investigators evaluate whether TDLR has jurisdiction over the alleged matter.
3. Formal Investigation: If jurisdiction is established, TDLR sends formal notice of the complaint to the respondent. TDLR investigators possess statutory subpoena power to compel production of job contracts, invoices, maintenance logs, employee records, and municipal permit records, and may conduct unannounced field inspections of jobsite installations.
4. Administrative Proceedings:
   • Dismissal: Case dismissed if evidence is insufficient to prove a rule violation.
   • Agreed Order: An informal settlement conference where the respondent agrees to specified administrative penalties, corrective work, or license probation.
   • Contested Hearing before SOAH: If an agreement cannot be reached, the case proceeds to a formal contested hearing before an Administrative Law Judge (ALJ) at the State Office of Administrative Hearings (SOAH). The ALJ issues a Proposal for Decision, which is reviewed by the Executive Director or Commission for final sanctions.

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Administrative Penalties and Disciplinary Sanctions

TDLR possesses broad authority to issue civil administrative penalties and restrict or revoke professional licenses.

Statutory Maximum Administrative Penalty

Under Texas Occupations Code Sec. 51.302, incorporated for this program by 16 TAC Sec. 75.90, TDLR may assess an administrative penalty of up to $5,000 per day per violation. (Sec. 1302.451 is sometimes cited for this, but that section covers emergency cease-and-desist orders and sets no penalty amount; the dollar authority lives in Chapter 51.)

Exam Rule: Each day a violation continues to occur constitutes a separate violation for penalty assessment purposes. For example, if an unlicensed contractor performs unauthorized work over a 10-day period, total potential administrative penalties can reach $50,000 ($5,000 × 10 days).

Statutory Penalty Assessment Factors

When determining the dollar amount of an administrative penalty or selecting license sanctions, TDLR is required by law to evaluate the following statutory criteria:

• Harm Severity: The severity, gravity, and extent of potential or actual harm to public health, safety, or consumer property.
• Economic Harm: The financial impact or property damage suffered by the consumer.
• Violation History: The contractor's history of previous violations or disciplinary actions.
• Deterrence Value: The monetary penalty amount necessary to deter future violations by the respondent and across the broader industry.
• Good Faith: Efforts demonstrated by the licensee to correct the violation or remediate consumer losses.

Disciplinary Sanction Hierarchy

In addition to monetary penalties, TDLR may impose administrative sanctions against a licensee or certificate holder:

• Formal Written Reprimand: Official administrative warning recorded in the licensee's permanent public record.
• License Probation: Allowance of restricted contracting under specified conditions (e.g., mandatory inspections, submitting quarterly job logs, re-examination).
• License Suspension: Temporary prohibition against engaging in ACR contracting for a specified calendar period.
• License Revocation: Permanent cancellation of the contractor license. A person whose license is revoked cannot reapply for a new license for at least one full year from the effective date of revocation.

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Criminal Penalties for Contracting Without a License

In Texas, engaging in air conditioning and refrigeration contracting without holding a valid state contractor license is not merely an administrative infraction—it is a criminal offense.

Class C Misdemeanor

Under Texas Occupations Code Sec. 1302.453, a person commits a criminal offense if the person engages in ACR contracting without holding a license issued under Chapter 1302, or if a contractor knowingly employs an unregistered or uncertified individual to perform contracting work. This offense is classified as a Class C Misdemeanor under the Texas Penal Code.

District Court Injunctions & Emergency Orders

In addition to criminal misdemeanor charges prosecuted in municipal or justice courts, TDLR and the Texas Attorney General may file suit in Travis County District Court or local district courts to obtain civil injunctions and emergency cease-and-desist orders against unlicensed operators. Violating a court injunction carries additional civil contempt fines and potential imprisonment.

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Annual License Renewal and Continuing Education (CE)

To ensure contractors stay current with changing mechanical codes, safety standards, and state regulations, Texas requires annual license renewal and mandatory ongoing education.

Annual License Expiration Cycle

All Texas ACR contractor licenses, technician certifications, and technician registrations expire annually (every 12 months) from the original date of issuance. Contractors must submit their renewal application, pay the annual renewal fee, and verify insurance coverage prior to the expiration date.

Late Renewal Penalties

• 90 Days or Less Late: Renewal fee equals 1-1/2 times the standard renewal fee.
• More Than 90 Days but Less Than 18 Months Late: Renewal fee equals 2 times the standard renewal fee.
• 18 Months to 3 Years Late: The license may still be renewed at 2 times the standard fee, but only with the executive director's approval.
• More Than 3 Years Expired: The license cannot be renewed; the individual must meet current initial licensing requirements, submit a new application, and retake the licensing examination.

These tiers come from Texas Occupations Code Sec. 51.401, TDLR's general enabling statute, which governs late renewal across every TDLR program.

Continuing Education (CE) Requirements

Under 16 TAC §75.25, all licensed contractors must complete 8 hours of TDLR-approved continuing education during each 12-month license period prior to submitting their renewal application.

Mandatory 8-Hour CE Curriculum Breakdown

• 1 Hour: Mandatory instruction on Texas Air Conditioning and Refrigeration Laws and Rules (Occupations Code Chapter 1302 and 16 TAC Chapter 75).
• 7 Hours: Approved instruction on technical mechanical topics, including:
  • International Mechanical Code (IMC), International Fuel Gas Code (IFGC), and International Residential Code (IRC) updates
  • EPA Section 608 regulations, AIM Act transition, and A2L refrigerant safety
  • Electrical safety, controls, and motor diagnostics
  • ACCA Manual J, Manual S, and Manual D load calculation standards
  • Workplace health and safety (OSHA standards, Lockout/Tagout, fall protection)
  • Business practices, contract law, and municipal permitting

CE Compliance Note: CE hours must be provided by a TDLR-approved course provider. Course completion credits are transmitted electronically by the provider directly to TDLR's licensing database. A contractor cannot carry over excess CE hours from one license year to the next.