By: Zaffirini  S.B. No. 1254          (In the Senate - Filed February 13, 2025; February 28, 2025,   read first time and referred to Committee on Business & Commerce;   March 31, 2025, reported adversely, with favorable Committee   Substitute by the following vote:  Yeas 10, Nays 0; March 31, 2025,   sent to printer.)Click here to see the committee vote     COMMITTEE SUBSTITUTE FOR S.B. No. 1254 By:  Zaffirini     A BILL TO BE ENTITLED   AN ACT     relating to the regulation of professional employer organizations.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 91.001(11), Labor Code, is amended to   read as follows:                (11)  "License holder" means a person who holds a   license issued by the department [licensed under this chapter] to   provide professional employer services.          SECTION 2.  The heading to Section 91.016, Labor Code, is   amended to read as follows:          Sec. 91.016.  LICENSE ISSUANCE;  TERM; EFFECT OF   EXPIRATION.          SECTION 3.  Section 91.016, Labor Code, is amended by   amending Subsection (b) and adding Subsection (d) to read as   follows:          (b)  A license issued or renewed by the department under this   chapter is valid for one year from the date of the issuance or   renewal.  The department shall renew a license in accordance with   Subchapter H, Chapter 51, Occupations Code, and the rules adopted   by the department [on receipt of a complete renewal application   form and payment of the license renewal fee].          (d)  Notwithstanding any other law, for purposes of this   chapter, if a license holder fails to timely apply for license   renewal, the license holder's status as employer of a covered   employee continues until the expiration of 18 months after the date   the license expires. If the license holder fails to apply for   license renewal before the expiration of the 18th month after the   license expiration date:                (1)  the license holder's status as employer of a   covered employee terminates; and                (2)  the license holder is subject to disciplinary   action if the license holder engages in or offers professional   employer services at any time while the license is expired.          SECTION 4.  Section 91.020, Labor Code, is amended to read as   follows:          Sec. 91.020.  GROUNDS FOR DISCIPLINARY ACTION. The   department may take disciplinary action against a person under   Subchapter F, Chapter 51, Occupations Code, regardless of whether   the person holds a license under this chapter, [license holder] on   any of the following grounds:                (1)  engaging in professional employer services or   offering to engage in the provision of professional employer   services:                      (A)  without a license; or                       (B)  while the person's license is expired,   suspended, or inactive;                (2)  transferring or attempting to transfer a license   issued under this chapter;                (3)  violating this chapter or any order or rule issued   by the executive director or commission under this chapter;                (4)  failing after the 31st day after the date on which   a felony conviction of a controlling person is final to notify the   department in writing of the conviction;                (5)  failing to cooperate with an investigation,   examination, or audit of the license holder's records conducted by   the license holder's insurance company or the insurance company's   designee, as allowed by the insurance contract or as authorized by   law by the Texas Department of Insurance;                (6)  failing after the 31st day after the effective   date of a change in ownership, principal business address, or the   address of accounts and records to notify the department and the   Texas Department of Insurance of the change;                (7)  failing to correct any tax filings or payment   deficiencies within a reasonable time as determined by the   executive director;                (8)  refusing, after reasonable notice, to meet   reasonable health and safety requirements within the license   holder's control and made known to the license holder by a federal   or state agency;                (9)  being delinquent in the payment of the license   holder's insurance premiums other than those subject to a   legitimate dispute;                (10)  being delinquent in the payment of any employee   benefit plan premiums or contributions other than those subject to   a legitimate dispute;                (11)  knowingly making a material misrepresentation to   an insurance company or to the department or other governmental   agency;                (12)  failing to maintain the working capital required   under Section 91.014; or                (13)  using professional employer services to avert or   avoid an existing collective bargaining agreement.          SECTION 5.  The changes in law made by this Act apply only to   conduct that occurs on or after the effective date of this Act.   Conduct that occurs before that date is governed by the law in   effect on the date the conduct occurred, and the former law is   continued in effect for that purpose.          SECTION 6.  This Act takes effect September 1, 2025.     * * * * *