May 6. 1987 

Eouorable Lloyd Criss 

Chairman 

Committee on Labor and 

Employment Relations 

Texas House of Representatives 

P. 0. Box 2910 

Austin, Texas 70769 

Opinion No. JM-689 

Re: Authority of the State 

Fire Marshal to promulgate 

rules regarding fire protection sprinkler contractors 

Dear Representative CriSS: 

As Chairman of the House Committee on Labor and Employment 

Relations, you ask several questions about article 5.43-3 of the Texas 

Insurance Code. The purpose of article 5.43-3 is to protect the 

public from the installation of unsafe fire protection sprinkler 

systems. The act has three main requirements: first. each fire 

protection sprinkler system contractor must register vith the State 

Board of Insurance; second, each fire protection sprinkler system 

contractor must employ at least one full-time licensed responsible 

managing employee; and finally, each managing employee must obtain a 

license by complying vich requirements Imposed by the State Board of 

Insurance. see 554. 0. You ask whether article 5.43-3 prohibits a 

registered &&actor or licensed individual from subcontracting an 

entire project or part of a project to an unregistered subcontractor. 

or unlicensed individual. You also ask vhether, if article 5.43-3 

does not prohibit this subcontracting. the State Board of Insurance 

.may promulgate rules to prohibit such conduct. 

Article 5.43-3 requires all contractors, whether they are primary 

contractors or subcontractors. for the plan, sale, installation, 

maintenance, or servicing of all or part of a fire protection 

sprinkler system to obtain a certificate of registration from the 

board and to employ at least one full-time, licensed, responsible, 

managing employee. Section 4 of article 5.43-3 requires, in part: 

(a) A fire protection sprinkler system contractor must apply to the board for a certificate 

of registration on a form prescribed by the board. 

If the contractor is a partnership or joint 

venture, it need not register in its own name if 

each partner or joint venturer 1s registered. . . . 

p. 3190 
Honorable Lloyd Crlss - Page 2 (JM-689) 

(b) Each fire protection sprinkler system 

contractor must employ at least oue licensed 

responsible managing employee ou a full-time basis. 

(c) Each responsible managing employee must 

obtain a license issued by the board and conditioned on the successful completion of the 

examination requirement and other requirements 

prescribed by the rules adopted under this 

article. . . . (Emphasis added). 

58. Section l(g) defines a "fire protection sprinkler system 

._ 

See also 

contractor" as 

a person or organization that offers to undertake, 

represents itself as being able to undertake, or 

does undertake the plan. sale, installation, 

maintenance, or servicing of a fire protection 

sprinkler system or any part of such a system. 

(Emphasis added). 

This definition clearly reaches subcontractors. 

Section 2(b) of article 5.43-3 contains several narrow exceptions 

vhich may apply to some subcontractors. Subsection (b) of section 2 

provides, in part, that article 5.43-3 does not apply to: 

(4) a person or organization that sells or 

supplies products or materials to a registered 

fire protection sprinkler system contractor; 

(5) an installation, maintenance, or service 

project for which the total contract price for 

labor, materials, and all other services is less 

than $100, if: 

(A) the project is not a part of a complete 

or more costly project, whether the complete 

project is to be undertaken by one or more fire 

protection sprinkler system contractors; or 

(B) the project is not divided into contracts of less than $lCO for the purpose of 

evading this article; 

. . . . 

(7) a regular employee of a registered fire 

protection sprinkler system contractor. 

p. 3191 
Eouorable Lloyd Criss - Page 3 (m-689) 

These exceptions, however, particularly subsections Z(b)(5)(A) and 

2(b)(5)(B). emphasize that article 5.43-3 was intended to reach 

subcontractors. 

Because you ask whether article 5.43-3 prohibits a registered 

contractor or a licensed individual from subcontractiug with an 

uuregisteredyontractor or ao unlicensed individual, a preliminary 

clarification of article 5.43-3's requirements is necessary. The 

registration and licensing provisions of article 5.43-3 serve 

different purposes. Subsection 2(b)(7) provides that article 5.43-3 

does not apply to "a regular employee of a registered fire protection 

sprinkler system contractor." This exception, however, logically 

applies only while the employee acts as au employee of a registered 

contractor. If a licensed employee acts independently, i.e.. apart 

from his registered contractor employer, and offers to undertake or 

undertakes "the plan, sale, installation, malatenance. or servicing of 

a fire protection sprinkler system or any part of such a system," the 

licensed employee must also obtain a certificate of registration from 

the board. The act’s requirement that a contractor employ a licensed 

managing employee is one of the requirements for obtaining a certificate of registration; it is not a substitute for registration. 

Cousequently, this opinion addresses your questions in the context of 

registered and unregistered contractors. 

As indicated, subcontractors fall within the definition of 

persons or organizations that must obtain certificates of registration. The more difficult question is whether article 5.43-3 prohibits 

the actual act of subcontracting as well. You ask whether article 

5.43-3 prohibits registered contractors from subcontracting with a 

person or organization who has oat complied with the act. If it does 

not prohibit such subcontracting, you ask 'whether the board may 

promulgate rules prohibiting such conduct. 

Section 8 provides that a person or organization may not: 

(1) plan, sell, install, maintain. or service 

a fire protection sprinkler system without a valid 

certificate of registration; 

(2) act as a fire protection sprinkler system 

contractor under a certificate of registration 

without having at least oae full-time employee who 

holds a valid responsible sianaging employee 

license . . . ; 

(3) act as a responsible managing employee for 

a fire protection sprinkler system contractor 

without a valid license: 

p. 3192 
Eonorable Lloyd Criss - Page 4 (JM-689) 

(4) obtain or attempt co obtain a certificate 

of registration or license by fraudulent representation; or 

(5) plan. sell. install. maintain, or service 

a fire protection sprinkler systesl in violation Of 

this article or the rules adopted under this 

article. 

Although this section applies to subcontractors, it does not expressly 

make the act of subcontracting a prohibited act. 

Section 10 of article 5.43-3 provides that a person commits a 

criminal offense if the person knowingly or intentionally violates 

section 0 of article 5.43-3. Although section 8. in conjunction with 

section 10, does not directly make the act of subcontracting a 

criminal offense, general provisions of the Texas Penal Code may apply 

to the act of subcontracting with a person or organization that 

violates section 0 of article 5.43-3. Chapter 7 of the Penal Code 

imposes criminal responsibility for the conduct of another under 

certain circumstances. For example, section 7.02 of the code 

provides, in part: 

(a) A person is criminally responsible for an 

offense committed by the conduct of another if: 

(1) acting with the kind of culpability 

required for the offense, he causes or aids an 

innocent or nonresponsible person to engage in 

conduct prohibited by the definition of the 

offense; 

(2) acting with intent to promote or assist 

the commission of the offense, he solicits, 

encourages, directs, aids, or attempts to aid 

the other person to commit the offense; or 

(3) having a legal duty to prevent commission of the offense and acting with intent to 

promote or assist its commission. he fails to 

make a rrasonable effort to prevent commission 

of the offense. (Emphasis added). 

See also 57.01. General provisions of the Penal Code, such as section 

.7.02, apply to offenses defined outside the code unless the statute 

defining the offense provides otherwise. See Penal Code 91.03; 

Roneycutt v. State, 627 S.W.2d 417 (Tex. Crim.Fp. 1981). 

Consequently, sections 8 and 10 of article 5.43-3 could be 

applied in conjunction with section 7.02 of the Penal Code to 

contractors who knowingly or intentionally contract with a 

p. 3193 
. 

Bonorable Lloyd Criss - Page 5 (JM-689) 

subcontractor who violates section 8 of article 5.43-3. Of course, 

section 7.02, which makes an accused vicariously responsible for 

assisting another to commit an offense, requires proof of conduct 

constituting an offense plus an intentional act by the accused to 

oromote or assist such conduct. See general* Ho~neEutt v. State. 

&; Herring v. State, 633 S.W.: !d 905 (Tex. App. - Dallas 1982). 

aff'd, 659 S.W.2d 391 (Tex. Grim. App. 1983). Proof of the elements 

ofcriminal offense depends 011 the facts in each individual case. 

Pou also ask whether the State Board of Insurance may promulgate 

rules pursuant to section 3 of article 5.43-3 to prohibit registered 

coutractors from subcontracting with persons or organizations which 

are themselves in violation of article 5.43-3. Section 3(a) of 

article 5.43-3 provides that "[tlhe board shall administer this 

article and may issue rules necessary to its administration through 

the State Fire Marshal." Administrative agencies may exercise only 

those powers granted by law, together with those powers necessarily 

implied from an authority conferred or duty imposed by statute. City 

of Sherman v. Public Utility Commission of Texas. 643 S.W.2d 681, 686 

(Tex. 1983). A licensing agency for a lawful business or profession 

cannot enforce standards which are inconsistent with those of rhe 

controlling statute. Bloom v. Texas State Board of Examiners of 

Psychologists, 492 S.W.2d 460 (Tex. 1973). As indicated, article 

5.43-3 does not expressly prohibit a registered contractor from 

subcontracting with a subcontractor that is in violation of article 

5.43-3. Consequently, the dispositive issues are whether such rulemaking authority may be "necessarily implied" from article 5.43-3 or 

whether such rulemaking authority Is inconsistent with article 5.43-3. 

Section 4 of article 5.43-3 contains three basic requirements: 

first, each fire protection sprinkler system contractor must register 

with the board; second, each contractor must employ at least one 

full-time licensed responsible managing employee: and finally, each 

managing employee must obtain a license through the board. Section a 

prohibits acts which violate these basic requirements. Section 3 

grants the board rulemaking authority to administer these requirements. Additionally, section 7(a) authorizes the board to delegate 

certain of its functions, powers, and duties to the State Fire 

Harshal. If the board can prohibit a person or organization from 

planning, selling, installing, maintaining. or servicing a fire 

protection sprinkler system without complying with certain requirements , it would be anomalous to determine that the board cannot 

prohibit a registered contractor from knowingly assisting or promoting 

a violation of the act's requiremenrs by another person or organization. Article 5.43-3 requires registered contractors to assume 

certain responsibilities for safe fire protection sprinkler systems. 

See 15 (bond and insurance are requisites for certificate of registration) , The act also requires contractors to employ at least one 

full-time licensed responsible managing employee. The obvious purpose 

for this requirement is co have a licensed employee responsible for 

actually managing or supervising the work performed. Additionally, 

p. 3194 
Honorable Lloyd Criss - Page 6 (JM-689) 

section 4(h) provides that "[a] certificate of registration or license 

issued under this article is not transferable." If registered 

contractors were free to subcontract all or part of a project to a 

person or organization that did not comply with these requirements. 

the requirements would be meaningless. 

Consequently, article 5.43-3 contains the nscessary authority for 

the board to promulgate rules forbidding registered contractors from 

subcontracting with persons or organizations that are in violation of 

article 5.43-3. This does not, however, mean the board may designate 

the act of subcontracting as a prohibited act under section 0 for 

purposes of criminal liability under section 10. Although rules 

validly adopted pursuant to a statute may in some instances designate 

certain conduct as a criminal offense, see Penal Code Sl.O3(a). 

article 5.43-3 does not authorize the boardto create new criminal 

offenses. Oo the other hand, this does not leave the board without 

enforcement power. Subsection (a) of section 9 provides: 

[Vliolation of this article or a rule adopted 

under this article is a ground for the denial, 

suspension, or revocation of a certificate of 

registration or a license issued under this 

article. (Emphasis added). 

Rules of the board say only be adopted according to legally applicable procedural requirements. See generally V.T.C.S. art. 6252-13s 

(Administrative Procedure and Texas Register Act). 

SUMMARY 

Article 5.43-3 of the Texas Insurance Code 

requires contractors, whether primary contractors 

or subcontractors, for the plan, sale, installation, maintenance, or servicing of all or part of a 

fire protection sprinkler system to obtain a 

certificate of registration from the State Board of 

Insurance. Additionally, article 5.43-3 authorizes 

the board to promulgate rules forbidding registered 

contractors from subcontracting with persons or 

organizations that are in violation of article 

5.43-3. 

Very truly yours, J-/h a 

JIM MATTOX 

Attorney General of Texas 

JACK MGRTOWRR 

First Assistant Attorney General 

p. 3195 
Honorable Lloyd Criss - Page 7 (JU-689) 

MARY KELLER 

Executive Assistant Attorney General 

JUDGE ZOLLIE STEAKLEY 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Jennifer Riggs 

Assistant Attorney General 

p. 3196