S.B. No. 1036         AN ACT   relating to the regulation of residential solar retail   transactions; requiring an occupational registration; authorizing   fees; providing civil and administrative penalties.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Title 11, Occupations Code, is amended by adding   Chapter 1806 to read as follows:   CHAPTER 1806.  RESIDENTIAL SOLAR RETAILERS   SUBCHAPTER A.  GENERAL PROVISIONS          Sec. 1806.001.  SHORT TITLE. This chapter may be cited as   the Residential Solar Retailer Regulatory Act.          Sec. 1806.002.  GENERAL DEFINITIONS. In this chapter:                (1)  "Commission" means the Texas Commission of   Licensing and Regulation.                (2)  "Department" means the Texas Department of   Licensing and Regulation.                (3)  "Electric cooperative" has the meaning assigned by   Section 11.003, Utilities Code.                (4)  "Electrical contractor" means a person licensed as   an electrical contractor under Chapter 1305.                (5)  "Executive director" means the executive director   of the department.                (6)  "Municipally owned utility" has the meaning   assigned by Section 11.003, Utilities Code.                (7)  "Residential solar energy system" means a solar   energy system intended or designed primarily for family, personal,   or household use.                (8)  "Residential solar retail" means:                      (A)  the sale or lease of, or an offer to sell or   lease, a residential solar energy system; or                      (B)  a transaction involving any combination of   the acts described by Paragraph (A).                (9)  "Solar energy system" means a system or   configuration of solar energy devices that collects and uses solar   energy to generate electricity.                (10)  "Solar retailer" means a person who is registered   under this chapter as a solar retailer.                (11)  "Solar salesperson" means an individual who is   registered under this chapter as a solar salesperson.          Sec. 1806.003.  DEFINITION OF CONTROLLING PERSON. (a) In   this section, "business entity" means a corporation, business   trust, estate, trust, partnership, including a limited   partnership, association, or any other legal entity, regardless of   whether the entity is incorporated in this state.          (b)  In this chapter, "controlling person" means an   individual who:                (1)  has direct or indirect control of at least 25   percent of the voting securities of a business entity;                (2)  has the authority to set policy and direct the   management of a business entity;                (3)  is the president, the secretary, or a director of a   business entity; or                (4)  is a general partner of a partnership, including a   limited partnership.          Sec. 1806.004.  LIMITED APPLICABILITY TO ELECTRICAL   CONTRACTORS. (a) If an electrical contractor employs an individual   to engage in residential solar retail on behalf of the electrical   contractor, the electrical contractor is exempt from the   registration and insurance requirements of this chapter applicable   to a solar retailer, except that an agreement in which the   electrical contractor is the seller or lessor is subject to   Sections 1806.155 and 1806.156.          (b)  If an individual is employed by an electrical contractor   to engage in residential solar retail on behalf of the electrical   contractor, the individual is exempt from the registration   requirements of this chapter.          Sec. 1806.005.  APPLICABILITY. (a) This chapter does not   apply to:                (1)  except as provided by Subsection (b), a written   agreement:                      (A)  entered into in this state for the sale or   lease of a residential solar energy system; and                      (B)  pertaining to a residential property located   outside this state; or                (2)  a solar energy system:                      (A)  intended:                            (i)  for temporary or emergency use; or                            (ii)  to provide power to a single   appliance;                      (B)  that:                            (i)  if combined with other systems that   produce electricity, produces in combination with the other systems   a total peak output power of less than one kilowatt; or                            (ii)  if not combined with other systems   that produce electricity, is designed to produce a peak output   power of less than one kilowatt; or                      (C)  sold or leased:                            (i)  for commercial purposes, including a   solar energy system installed on the premises of a nonresidential   property;                            (ii)  to provide power to a multifamily   dwelling that exceeds four dwelling units or stories;                            (iii)  before September 1, 2025; or                            (iv)  in connection with new residential   construction.          (b)  This chapter applies to any residential solar retail   occurring in this state in connection with an agreement described   by Subsection (a)(1).          Sec. 1806.006.  PREEMPTION. To the extent of any conflict   between this chapter and any of the following laws, this chapter   prevails over:                (1)  a municipal ordinance regulating the same conduct   as this chapter; or                (2)  Chapter 115 or 601, Business & Commerce Code.   SUBCHAPTER B.  POWERS AND DUTIES          Sec. 1806.051.  GENERAL POWERS AND DUTIES. (a) The   department shall administer and enforce this chapter.          (b)  The commission shall adopt rules necessary to   administer and enforce this chapter, including:                (1)  in addition to any practice prohibited or   restricted by this chapter, prohibiting or restricting any specific   unfair, deceptive, or misleading practices related to residential   solar retail and specifying those practices;                (2)  requiring a solar retailer or solar salesperson to   provide disclosures or educational materials when selling or   leasing, or offering to sell or lease, a residential solar energy   system and specifying the form and format of those disclosures;                (3)  regulating the form and format of an agreement for   the sale or lease of a residential solar energy system;                (4)  establishing insurance requirements for solar   retailers; and                (5)  establishing continuing education requirements as   a prerequisite to renew a solar salesperson registration under this   chapter.          (c)  The commission shall consult the Office of Consumer   Credit Commissioner in adopting rules described by Subsections   (b)(2) and (3) to ensure compliance with federal and state law   governing financial transactions, including the Truth in Lending   Act (15 U.S.C. Section 1601 et seq.).          Sec. 1806.052.  FEES. The commission shall establish and   collect reasonable and necessary fees in amounts sufficient to   cover the costs of:                (1)  administering this chapter; and                (2)  any other activity or function necessary for   effective regulation under this chapter.          Sec. 1806.053.  EDUCATIONAL MATERIALS. (a) The Public   Utility Commission of Texas shall develop, in consultation with the   department and the office of the attorney general, educational   materials that inform consumers of the consumers' rights and   remedies related to the purchase or lease of residential solar   energy systems under this chapter and other applicable laws.          (b)  The commission by rule may require solar retailers and   solar salespersons when engaging in residential solar retail to   provide solicited persons with the educational materials developed   under this section.   SUBCHAPTER C.  REGISTRATION          Sec. 1806.101.  REGISTRATION REQUIRED: SOLAR SALESPERSON.  A   person may not engage in residential solar retail for compensation   unless the person:                (1)  engages in residential solar retail on behalf of a   solar retailer; and                (2)  is registered as a solar salesperson under this   chapter.          Sec. 1806.102.  REGISTRATION REQUIRED: SOLAR RETAILER.  A   person may not employ or otherwise contract for the services of an   individual to engage in residential solar retail on behalf of the   person unless the person is registered as a solar retailer.          Sec. 1806.103.  ELIGIBILITY FOR REGISTRATION. (a) To be   eligible for a registration under this chapter, a person must:                (1)  submit an application to the department;                (2)  pay any required fees; and                (3)  meet the eligibility requirements of this chapter   and of rules adopted under this chapter.          (b)  To be eligible to register as a solar salesperson, the   applicant must be an individual.          Sec. 1806.104.  SOLAR RETAILER APPLICATION. An application   to register as a solar retailer must include:                (1)  if the solar retailer is an entity, a list of each   controlling person of the solar retailer;                (2)  the name and registration number of each solar   salesperson who engages in residential solar retail on behalf of   the solar retailer; and                (3)  evidence satisfactory to the department that the   applicant has insurance meeting the requirements established by   commission rule.          Sec. 1806.105.  CRIMINAL HISTORY RECORD INFORMATION CHECK.   The department may conduct a criminal history record information   check of each applicant or, if applicable, any controlling person   of an applicant for a registration under this chapter using   information:                (1)  provided by the applicant; and                (2)  made available to the department by the Department   of Public Safety and any other criminal justice agency under   Chapter 411, Government Code.          Sec. 1806.106.  EXEMPTION FROM CONTINUING EDUCATION.   Notwithstanding Section 51.405 or any other provision of this   chapter, a solar retailer may not be required to complete   continuing education to renew the solar retailer's registration   under this chapter.   SUBCHAPTER D.  PRACTICE BY REGISTRANTS          Sec. 1806.151.  NOTICE TO DEPARTMENT OF SOLAR SALESPERSONS   AUTHORIZED TO ENGAGE IN RESIDENTIAL SOLAR RETAIL. A solar retailer   shall promptly notify the department in a manner prescribed by the   department of:                (1)  each solar salesperson authorized to engage in   residential solar retail on behalf of the solar retailer; and                (2)  any change in an authorization described by   Subdivision (1).          Sec. 1806.152.  SUPERVISION REQUIRED. (a) A solar retailer   shall provide reasonable supervision to each solar salesperson   authorized to engage in residential solar retail on behalf of the   solar retailer, including making reasonable efforts to correct any   violation of this chapter or a rule adopted under this chapter that   the solar retailer is aware of or of which a reasonable person under   the same circumstances would be aware.          (b)  A solar retailer is responsible for any violation   described by Subsection (a) committed by a solar salesperson   authorized to engage in residential solar retail on behalf of the   solar retailer.          Sec. 1806.153.  CODE OF CONDUCT; COMPLIANCE WITH OTHER LAW.     A solar retailer and a solar salesperson shall comply with:                (1)  any code of conduct adopted by commission rule   governing solar retailers or solar salespersons, as applicable;                (2)  Subchapter E, Chapter 17, Business & Commerce   Code;                (3)  Chapter 115, Business & Commerce Code, as if the   solar retailer or solar salesperson, as applicable, were a seller   or lessor under that chapter; and                (4)  the Truth in Lending Act (15 U.S.C. Section 1601 et   seq.) and applicable state laws governing financial transactions by   providing any disclosure required by those laws.          Sec. 1806.154.  REGISTRATION INFORMATION. (a) On request by   the department or a person to whom a solar retailer or solar   salesperson has offered to sell or lease, or has sold or leased, a   residential solar energy system, the solar retailer or solar   salesperson, as applicable, shall provide the department or person   with the retailer's or salesperson's name and registration number.          (b)  A solar retailer shall ensure that each agreement for   the sale or lease of a residential solar energy system by the   retailer includes the name and registration number of the retailer   and the solar salesperson involved in the transaction.          (c)  An electrical contractor or individual acting on behalf   of an electrical contractor shall provide the electrical   contractor's name and license number under the same circumstances   as a solar retailer or solar salesperson is required to provide the   retailer's or salesperson's name and number under this section.          Sec. 1806.155.  REQUIRED CONTRACT PROVISIONS. (a) If the   sale or lease of a residential solar energy system involves the   installation of the system at a person's residence, the sale or   lease agreement must:                (1)  provide that the installation of the residential   solar energy system will be performed by an electrical contractor;                (2)  conspicuously state the name and license number of   the electrical contractor who will perform the installation   described by Subdivision (1); and                (3)  provide that the solar retailer or electrical   contractor, as applicable, will obtain:                      (A)  any permit required by a government entity   for the installation described by Subdivision (1);                      (B)  if Section 39.554 or 39.916, Utilities Code,   applies, the approval by the electric utility serving the person's   residence of the interconnection of the residential solar energy   system; and                      (C)  if the person is a customer of an electric   cooperative or a municipally owned utility, the cooperative's or   utility's approval of the interconnection of the residential solar   energy system.          (b)  The requirement under Subsection (a)(2) may be   satisfied by providing a list of electrical contractors in the   agreement from which one must be selected to perform the   installation described by Subsection (a)(1).          (c)  If the sale or lease of a residential solar energy   system involves a third-party lender that is affiliated with or   referred by the solar retailer, the sale or lease agreement must   include a provision requiring the third-party lender to cancel any   accompanying loan made by the third-party lender to the buyer or   lessee on the buyer's or lessee's cancellation of the agreement   under Section 1806.156.          Sec. 1806.156.  RIGHT TO CANCEL AGREEMENT. (a) In this   section, "business day" means a calendar day excluding Saturday,   Sunday, or any legal holiday, as that term is defined by Section   662.021, Government Code.          (b)  Notwithstanding any other law, a solar retailer shall   allow a buyer or lessee who enters into an agreement to purchase or   lease a residential solar energy system to cancel the agreement   without penalty or further obligation by providing written notice   of the cancellation on or before the fifth business day after the   date on which the agreement was executed by the buyer or lessee.          (c)  A solar retailer shall include in an agreement for the   sale or lease of a residential solar energy system the last calendar   date of the cancellation period prescribed by Subsection (b) and   the mailing address or e-mail address for providing the notice of   cancellation.          (d)  If the agreement does not contain the address for   cancellation required by Subsection (c), the buyer or lessee may   cancel the agreement during the period described by Subsection (b)   by providing written notice of cancellation to the solar retailer   by any reasonable method.   SUBCHAPTER E.  ENFORCEMENT          Sec. 1806.201.  PROHIBITED ACTS. A person may not:                (1)  intentionally, knowingly, or recklessly make a   false, misleading, or deceptive oral or written statement to   another person when engaging in residential solar retail;                (2)  falsely state or imply an affiliation with a   public utility or government agency when engaging in residential   solar retail;                (3)  fail to provide the disclosure statements or any   educational materials as required by this chapter, by Chapter 115,   Business & Commerce Code, or by commission rule when engaging in   residential solar retail;                (4)  engage in residential solar retail at a residence   in violation of posted signage indicating that soliciting is   prohibited, unless otherwise directed by an occupant of the   residence;                (5)  allow the installation of a residential solar   energy system to be performed by a person who is not an electrical   contractor;                (6)  make a material misrepresentation in an   application submitted to the department under this chapter or in   any other document submitted to the department under this chapter;   or                (7)  violate, attempt to violate, or conspire to   violate this chapter or a rule adopted under this chapter.          Sec. 1806.202.  DENIAL OR REFUSAL TO RENEW. The executive   director may deny an application to register or refuse to renew a   registration under this chapter if the applicant or, if applicable,   a controlling person of the applicant has:                (1)  violated this chapter or a rule or order of the   commission or executive director; or                (2)  had suspended or revoked, or has been otherwise   formally disciplined in connection with, any authorization to   practice an occupation or engage in a business that was issued by a   licensing authority in this state or another state.          Sec. 1806.203.  ADMINISTRATIVE PENALTY. In imposing an   administrative penalty under Subchapter F, Chapter 51, for a   violation of Section 1806.201, the commission in determining the   appropriate amount of the penalty may consider whether any   individual over the age of 65 at the time of the prohibited conduct   was harmed by the conduct.          Sec. 1806.204.  WARNING LETTER. (a) Before imposing an   administrative penalty or sanction against a person under Chapter   51, the executive director may issue a warning letter directing a   person to take corrective action regarding the violation that is   the basis of the penalty or sanction.          (b)  In determining whether to issue a warning letter under   Subsection (a), the executive director may consider any history of   violations by the person, including whether the person complied   with previous warning letters, and the person's efforts to correct   the violation and prevent future violations.          (c)  A determination to issue a warning letter under this   section is not a contested case under Chapter 2001, Government   Code.          Sec. 1806.205.  CEASE AND DESIST ORDER. The executive   director may issue a cease and desist order under Section 51.3513 to   protect public health and safety.          Sec. 1806.206.  AMOUNT OF CIVIL PENALTY. (a)   Notwithstanding Section 51.352 and except as provided by Subsection   (b), the amount of a civil penalty imposed under Chapter 51 for a   violation of this chapter or a rule adopted under this chapter may   not exceed:                (1)  $2,500 for each violation; or                (2)  $50,000 in the aggregate for all violations of a   similar nature.          (b)  In a proceeding imposing a civil penalty under Section   51.352 for a violation of this chapter or a rule adopted under this   chapter, if the court finds that an individual over the age of 65 at   the time of the violation was harmed by the violation, the amount of   the civil penalty may not exceed:                (1)  $10,000 for each violation; or                (2)  $100,000 in the aggregate for all violations of a   similar nature.          Sec. 1806.207.  AGREEMENT CANCELLATION AND REFUND. (a)   Subject to Subsection (b), the commission or executive director   may, after notice and a hearing and after finding that a violation   of this chapter or a rule adopted under this chapter has occurred,   order the cancellation of an agreement for the sale or lease of a   residential solar energy system and the refund of any amount paid   under the agreement.          (b)  The amount of a refund ordered under this section may   not exceed the amounts paid under the agreement.          (c)  This section does not authorize the executive director   or commission to impose or collect penalties, fines, or other   damages, except that a proceeding under this section may be   combined with a proceeding to impose an administrative penalty or   sanction by the department.          (d)  A proceeding under this section is a contested case   under Chapter 2001, Government Code.          (e)  This section does not prohibit an injured party who was   refunded money under this section from bringing an action in a court   with jurisdiction to collect damages, other than the refunded   money, or obtain equitable relief under other applicable law.          Sec. 1806.208.  VIOLATION BY ELECTRICAL CONTRACTOR. An   electrical contractor who violates this chapter or a rule adopted   under this chapter is subject to an administrative penalty or   sanction or any other enforcement provision under Chapter 1305,   Chapter 51, and this chapter.          SECTION 2.  Chapter 1806, Occupations Code, as added by this   Act, applies only to a contract entered into on or after the   effective date of this Act.  A contract entered into before the   effective date of this Act is governed by the law in effect on the   date the contract was entered into, and that law is continued in   effect for that purpose.          SECTION 3.  Not later than June 1, 2026, the Texas Commission   of Licensing and Regulation shall adopt rules necessary to   implement Chapter 1806, Occupations Code, as added by this Act.          SECTION 4.  As soon as practicable after the effective date   of this Act, the Texas Department of Licensing and Regulation shall   establish and lead a stakeholder work group to provide advice and   recommendations to the department on regulating activities   governed by Chapter 1806, Occupations Code, as added by this Act.     The department shall establish the size, composition, and scope of   the stakeholder work group.          SECTION 5.  (a)  Except as otherwise provided by this Act,   this Act takes effect September 1, 2025.          (b)  Sections 1806.101 and 1806.102 and Subchapter E,   Chapter 1806, Occupations Code, as added by this Act, take effect   September 1, 2026.               ______________________________ ______________________________      President of the Senate Speaker of the House                 I hereby certify that S.B. No. 1036 passed the Senate on   April 7, 2025, by the following vote:  Yeas 22, Nays 8.       ______________________________   Secretary of the Senate                I hereby certify that S.B. No. 1036 passed the House on   May 23, 2025, by the following vote:  Yeas 94, Nays 37, two   present not voting.       ______________________________   Chief Clerk of the House            Approved:     ______________________________                Date       ______________________________              Governor