Texas HVAC rules and regulations sit in three layers: state licensing through the Texas Department of Licensing and Regulation (TDLR), federal refrigerant and workplace-safety rules from the EPA and OSHA, and local building codes enforced by cities and counties. To install or service air conditioning and refrigeration systems legally, you need the right TDLR license class and endorsement, active liability insurance at the required minimums, EPA Section 608 certification for anyone touching refrigerant, and ongoing continuing education to renew. Missing any of these can bring administrative fines, license revocation, or federal penalties that scale by the day.
TDLR License Classes and How to Qualify
Texas issues two classes of air conditioning and refrigeration contractor license, and the class controls what size equipment you can work on. A Class A license covers systems of any size. A Class B license is capped at cooling systems of 25 tons or less and heating systems of 1.5 million BTUs per hour or less.1Texas Department of Licensing and Regulation. Apply for an Air Conditioning and Refrigeration Contractor License
On top of the class, you pick one or more endorsements defining the type of work: environmental air conditioning (temperature, humidity, and ventilation for human comfort), commercial refrigeration (coolers, freezers, ice machines), or process cooling and heating (temperature control for production equipment).
To qualify, applicants must be at least 18, have 48 months of practical experience under a licensed contractor (some accredited programs reduce this), pass the PSI-administered ACR licensing exam covering trade knowledge and a Texas business-and-law section, and submit fingerprints for a criminal background check.2Texas Department of Licensing and Regulation. Air Conditioning and Refrigeration Contractors Exam Information Offenses involving fraud, theft, or endangerment can affect eligibility.
If you already hold a comparable license in South Carolina or Georgia, Texas has narrow reciprocity paths that can waive the exam. Every other state routes through the standard application.3Texas Department of Licensing and Regulation. Licensing Reciprocity for Air Conditioning and Refrigeration
Working without a license is not a paperwork problem. Texas treats it as a criminal offense carrying potential fines and jail time.
Insurance You Must Carry
The TDLR ties your license to specific commercial general liability minimums, and coverage must stay active for the full license period.4Cornell Law Institute. Texas Code 16 Tex Admin Code 75.40 – Contractor Insurance Requirements
- Class A: at least $300,000 per occurrence (combined property damage and bodily injury), $600,000 aggregate, and $300,000 aggregate for products and completed operations.5Texas Department of Licensing and Regulation. Air Conditioning Certificate of Insurance
- Class B: at least $100,000 per occurrence (combined property damage and bodily injury), $200,000 aggregate, and $100,000 aggregate for products and completed operations.5Texas Department of Licensing and Regulation. Air Conditioning Certificate of Insurance
If coverage lapses or your business affiliation changes, you have 30 days to file an updated certificate with the TDLR. Miss that window and the late filing alone is a $500 to $1,000 violation.6Texas Department of Licensing and Regulation. Air Conditioning and Refrigeration Contractors Penalties and Sanctions
Workers’ Compensation Is Optional, but Skipping It Has a Cost
Texas does not require most private employers to carry workers’ compensation. Going without it, though, strips away the legal defenses employers usually rely on: an injured employee can sue directly, and you cannot argue the employee’s own negligence, a coworker’s fault, or assumption of risk.7Texas Department of Insurance. Workers’ Compensation Insurance Guide Contractors on government projects must carry coverage for employees on that job regardless of what their general policy looks like.
Permits, Inspections, and Local Code
HVAC installations in Texas must comply with the International Mechanical Code as adopted and amended by the state. Industrialized housing and buildings follow the 2021 edition of the IMC with state amendments as of July 2024.8Texas Department of Licensing and Regulation. Industrialized Housing and Buildings – Adoption of New Code Editions Cities and counties layer their own amendments on top, so rules in Houston and Dallas are not identical. Check with the local building authority before starting work.
Most jurisdictions require a mechanical permit before HVAC work begins. Residential replacement permits typically run $50 to $300, and commercial projects priced by valuation can go higher. After work is complete, an inspector verifies ductwork, electrical connections, ventilation, refrigerant lines, and equipment placement. Residential installations draw particular attention to airflow, exhaust routing, and clearances that prevent carbon monoxide buildup.
EPA Section 608 and Refrigerant Rules
Anyone who handles refrigerants must hold EPA Section 608 certification. The EPA issues four types by equipment:9US EPA. Section 608 Technician Certification Requirements
- Type I: small appliances such as window units and household refrigerators.
- Type II: high-pressure and very high-pressure systems, covering most residential and commercial air conditioning.
- Type III: low-pressure equipment, typically large commercial chillers.
- Universal: all equipment types.
Most contractors working on split systems and package units need at least Type II. Universal removes any ambiguity.
Leak Repair Triggers
The EPA requires corrective action when a system holding 50 or more pounds of refrigerant leaks above a set annual rate. For comfort cooling equipment, the trigger is a 10% annual leak rate. Commercial refrigeration equipment in grocery stores, restaurants, and cold storage triggers at 20%.10US EPA. Stationary Refrigeration Leak Repair Requirements Topping off refrigerant instead of repairing a leak past those thresholds is a fast path to federal enforcement.
Recordkeeping
Owners and operators of equipment holding 50 or more pounds of refrigerant must keep servicing records showing the date and type of service and the amount added.11eCFR. 40 CFR 82.166 – Reporting and Recordkeeping Requirements for Leak Repair Technicians disposing of appliances containing between 5 and 50 pounds of refrigerant, a category that includes most residential split systems, must document the location and date of recovery, refrigerant type, monthly totals recovered, and amounts sent for reclamation.12US EPA. Recordkeeping and Reporting Requirements for Stationary Refrigeration
Continuing Education for Renewal
Every license renewal requires eight hours of continuing education, with at least one hour dedicated to Texas state law and rules governing licensed contractors.13Texas Department of Licensing and Regulation. Continuing Education for Air Conditioning and Refrigeration The remaining hours cover safety, code updates, and technical topics through TDLR-approved providers, and both in-person and online courses count.
Providers report your hours to the TDLR, not you. Even so, keep completion certificates for at least a year. If hours do not appear in the system when you go to renew, proving you took the course falls on you, and an expired license means no legal work until reinstatement.
OSHA on the Jobsite
HVAC work happens on rooftops, in mechanical rooms, and around high-voltage electrical systems, and OSHA standards apply throughout. Portable ladders used to reach a roof must extend at least three feet above the landing surface and sit at roughly a 4-to-1 base ratio. Any ladder with broken rungs, cracked rails, or corroded hardware must be tagged out and pulled from service.14Occupational Safety and Health Administration. Ladders
Before servicing electrical components, lockout/tagout requires you to de-energize and lock out the system: shut down using normal controls, isolate every energy source, apply your lock, then verify the equipment will not restart. The verification step is the one technicians tend to skip, and it is the one that prevents electrocution.15Occupational Safety and Health Administration. Typical Minimal Lockout Procedure OSHA penalties are separate from anything the TDLR imposes.
Reporting Changes to the TDLR
Any change to your business structure, company name, address, phone number, or business affiliation must be reported to the TDLR within 30 days. The same 30-day window applies if a licensed employee leaves your company.6Texas Department of Licensing and Regulation. Air Conditioning and Refrigeration Contractors Penalties and Sanctions Each missed notification is a separate violation carrying a $500 to $1,000 penalty.
Keep service agreements, permits, and invoices for every job. Those are the documents you produce if the TDLR audits you or a customer files a complaint. If you have employees, the Fair Labor Standards Act separately requires payroll records showing hours per day and week, pay rates, overtime premiums, and deductions for at least three years.16eCFR. Part 516 – Records to Be Kept by Employers
Penalties for Getting It Wrong
The TDLR investigates complaints, audits contractors, and publishes disciplinary actions in a public database.
State
Administrative violations, including late insurance filings, unreported address changes, and failure to report that a licensed employee left, start at $500 to $1,000 per violation.6Texas Department of Licensing and Regulation. Air Conditioning and Refrigeration Contractors Penalties and Sanctions Fraudulent business practices or work that endangers public safety can lead to license suspension or permanent revocation. Unlicensed HVAC work is a criminal offense.
Federal
Clean Air Act civil penalties for refrigerant venting and handling violations can reach $124,426 per day per violation as of the 2025 inflation adjustment.17eCFR. 40 CFR 19.4 – Statutory Civil Monetary Penalties, as Adjusted for Inflation, and Tables Those penalties apply to venting refrigerant, failing to recover it properly, or not keeping the required servicing and disposal records. The EPA does not need to show intent.