| (a) A sole proprietor, partnership, corporation, or
other legal entity engaged in the fitting and dispensing of hearing
instruments must file with the department financial security in a
form provided by subsection (c), in the amount of $10,000 and conditioned
on the promise to pay all:
(1) taxes and contributions due to the state and political
subdivisions of the state by the sole proprietor, partnership, corporation,
or other legal entity; and
(2) judgments that the sole proprietor, partnership,
corporation, or other legal entity may be required to pay for negligently
or improperly dispensed hearing instruments or for breaching a contract
relating to the dispensing of hearing instruments.
(b) The financial security covers the actions, conduct,
or liability of the sole proprietor, partnership, corporation, or
other legal entity and the license holders employed by that entity
as prescribed under Occupations Code §402.405 and §112.61.
(c) A sole proprietor, partnership, corporation, or
other legal entity must file with the department one of the following
acceptable forms of financial security in the amount required in subsection
(a):
(1) a surety bond issued by an authorized entity;
(2) a deposit of cash;
(3) a certificate of deposit that is issued by a qualified
financial institution, assigned to the executive director, and for
the benefit of the department; or
(4) an original letter of credit acceptable to the
department that:
(A) is irrevocable;
(B) is issued by a qualified financial institution
which is financially responsible in the amount of the letter of credit;
(C) does not require examination of the performance
of the underlying transaction between the department and the license
holder;
(D) is payable to the department on demand or within
a reasonably brief period of time after presentation of all required
documents; and
(E) does not include any condition that makes payment
to the department contingent upon the consent of or other action by
the license holder or other party.
(d) A sole proprietor, partnership, corporation, or
other legal entity must file the financial security with the department
at the following times and in the manner prescribed in the following
sections:
(1) for an employee's initial license application as
prescribed under §112.30 or §112.33;
(2) for an employee's first license renewal on or after
September 1, 2020, as prescribed under §112.32; and
(3) for a new employee who provides notice of change
in employment as prescribed under §112.91.
(e) The financial security must be received on or before
the date of issuance of the employee's license.
(f) A person to whom the Act does not apply pursuant
to Texas Occupations Code §402.003 is not required to file financial
security under this section.
(g) Financial security required under this section
remains in effect until canceled by action of the surety, the principal,
or the department. Notice of cancellation must be provided to the
department no later than thirty (30) days prior to cancellation.
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