STAFF EVALUATION

Texas Department

of Labor and Standards

A Staff Report

to the

Sunset Advisory Commission

1988

TEXAS DEPARTMENT OF LABOR AND STANDARDS

August 1988

TABLE OF CONTENTS

Page

Summary of Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Creation and Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Policy-making Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Funding and Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Programs and Functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Agency Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Focus of Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Agency Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Program Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Responsibility for Administration of Labor Laws Should be

Transferred to the Texas Employment Commission . . . . . . . . . . . . . . . 40

Enforcement of the Pay Day Laws Should Be Strengthened 45

The Health Spa Act Should be Modified and Responsibility

for Registration of Health Spas and Membership Camping

Resorts Should be Transferred to the Secretary of State . . . . . . . . . . . 51

Responsibility for Administration of the Tow Truck and

Vehicle Storage Laws Should be Transferred to the

Railroad Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Program Deregulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Professional Wrestling Should be Deregulated . . . . . . . . . . . . . . . . . . . 61

Policy Body Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

A Governing Commission Should be Established . . . . . . . . . . . . . . . . . . 65

The Duties of the Governing Board and the Commissioner

Should be Defined in Statute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

The Composition and Appointment System of the

Department's Advisory Committees Should be Improved . . . . . . . . . 70

The Agency's Duties Should be Revised in Statute to Reflect

its Current Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Overall Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

The Agency's Statutory Fees and Fee-setting Processes

Should be Changed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

The Agency's Range of Administrative Sanctions Should

be Broadened and Should be Centralized in the

General Provisions of the Agency's Act . . . . . . . . . . . . . . . . . . . . . . . . . . 81

The Misdemeanor Classification in the Boiler Act Should be

changed to a Class B Misdemeanor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

Evaluation of Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

The Agency Should Petition HUD to Allow the State

Flexibility in its Exclusive In-Plant Inspection Agency Role . . . . . . . . . 91

The Agency Should Increase Contract Efforts with Municipalities

for the Inspection of Manufactured Housing Installations . . . . . . . . . 95

The Manner of Used Manufactured Home Regulation

Should be Changed and Holders of Liens on Repossessed

Homes Should Not be Required to be Licensed

with the Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

The Forwarding of Payments Through the Agency by IHB

Manufacturers to Third Party Agencies Should be Eliminated 104

Reciprocity With Other States Should be Authorized for

IHB Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

Cooperation with Other State Agencies Is Needed to

Identify Unregistered Boilers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

The Air Conditioning Law Should be Continued and the

Separate Sunset Date Repealed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118

Other Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

Minor Modifications of Agency's Statute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

Across-the-Board Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

Summary of Recommendations

The Office of the Commissioner of Labor and Standards, originally created as

the Bureau of Labor Statistics, was established in 1909 to collect and report work

force data and to administer several newly-created labor laws. Over the years, the

agency has retained jurisdiction over a few labor laws even though the primary

emphasis of the department today has shifted toward business and professional

regulation for the protection of public safety and consumer and industry interests.

Currently, the agency administers 15 active diverse laws.

The Department of Labor and Standards is one of only a few state agencies

that is guided by a governor-appointed commissioner rather than a policy-making

board. In addition, two statutory advisory boards and one policy-making council aid

the commissioner. Funding for fiscal year 1987 totaled $6,318,586, most of which

comes from General Revenue. The majority of expenditures, agency-wide, are

recovered in fees for licenses and other activities paid for by the regulated

industries.

The sunset review of the agency's structure, administration and programs

concluded that Texas needs to have one centralized agency which can easily and

efficiently assume administration for the variety of regulatory laws which cannot be

more appropriately placed elsewhere. Such an "umbrella" structure can provide

benefits to consumers and industries and can result in cost savings for the state.

Overall, the review indicated that the agency has fulfilled the purpose for which it

has been mandated and the benefits of such a "catch-all" agency merit the

continuation of the agency.

However, in the same regard, several programs are recommended for transfer

to other agencies because administration by those agencies was deemed to be more

logical or cost-effective. The cumulative effect of both the recommended program

transfers and the direction in which the agency has evolved is to redefine the

agency's purpose as that of a business and occupational licensing and regulatory

agency. The programs that should remain with the agency fit well within this newly

defined role.

The sunset review also determined that, if the department is continued,

certain changes should be made to improve the efficiency and effectiveness of its

operations. These changes are summarized in the following material.

1

RECOMMENDATIONS

THE AGENCY SHOULD BE CONTINUED FOR A 12-YEAR PERIOD WITH THE FOLLOWING CHANGES:

Program Transfer and Deregulation

Program Transfers

1. Responsibility for administering the Minimum Wage, Child Labor

and Pay Day Laws should be transferred to the Texas Employment

Commission. (Statutory) (p. 40)

Functions related to employment and to worker and workplace safety have been

vested in several state agencies subsequent to the creation of the Texas Department

of Labor and Standards. Two of the three employment laws which remain in TDLS,

minimum wage and child labor, are the counterparts of federal laws under the U.S.

Department of Labor and, as such, require little activity. The third law, pay day, is

not best suited to the evolving role of TDLS. Transfer of all three laws to the TEC

would provide a more logical and easily identifiable point of contact for Texas

employees and employers and would consolidate wage-related laws under one

agency.

2. Enforcement provisions should be strengthened for the Pay Day

laws by allowing the TEC to hold administrative hearings and

assess penalties. (Statutory) {p. 45)

There is not an adequate state, nor an existing federal, enforcement structure for

employees to collect back wages other than prosecution through the courts. This

recommendation would update the penalty structure put in place in 1915 and

would become effective upon transfer to TEC. The TEC's well-established and

extensive investigations and hearings process as well as its computer capability gives

the agency the necessary tools to assume responsibility for the pay day laws.

3. The regulatory scheme for Health Spas and Membership Camping

Resorts should be changed to: