78R10924 PB-D
By: Ritter, Smith of Harris H.B. No. 986
Substitute the following for H.B. No. 986:
By: Seaman C.S.H.B. No. 986
A BILL TO BE ENTITLED
AN ACT
relating to insurance coverage provided through the Texas Windstorm
Insurance Association.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 3(f), Article 21.49, Insurance Code, is
amended to read as follows:
(f) "Insurable Property" means immovable property at fixed
locations in a catastrophe area or corporeal movable property
located therein (as may be designated in the plan of operation)
which property is determined by the Association, pursuant to the
criteria specified in the plan of operation to be in an insurable
condition against windstorm, hail and/or fire and explosion as
appropriate, as determined by normal underwriting standards;
provided, however, that insofar as windstorm and hail insurance is
concerned, any structure located within a catastrophe area,
commenced on or after the 30th day following the publication of the
plan of operation, not built or continuing in compliance with any
requirements [building specifications] set forth in the plan of
operation shall not be an insurable risk under this Act except as
otherwise provided under this Act. A structure, or an addition
thereto, which is constructed in conformity with plans [and
specifications] that comply with the requirements [specifications]
set forth in the plan of operation at the time construction
commences shall not be declared ineligible for windstorm and hail
insurance as a result of subsequent changes [in the building
specifications] set forth in the plan of operation. When repair of
damage to a structure involves replacement of items covered in
requirements [the building specifications as] set forth in the plan
of operation, such repairs must be completed in a manner to comply
with those requirements [such specifications] for the structure to
continue within the definition of Insurable Property for windstorm
and hail insurance. Nothing in this Act shall preclude special
rating of individual risks as may be provided in the plan of
operation. For purposes of this Act, all structures which are
located within those areas designated as units under the federal
Coastal Barrier Resources Act (Public Law 97-348) and for which
construction has commenced on or after July 1, 1991 shall not be
considered insurable property.
SECTION 2. Section 6A, Article 21.49, Insurance Code, is
amended by amending Subsections (a), (d), (h), (j), and (k) and
adding Subsections (j-1) and (k-1) to read as follows:
(a) Except as otherwise provided by this Subsection, all
structures that are constructed or repaired or to which additions
are made on or after January 1, 1988, to be considered insurable
property for windstorm and hail insurance from the Association,
must be inspected or approved by the Board for compliance with [the
building specifications in] the plan of operation. After January
1, 2004 [2002], for [in] geographic areas specified by the
commissioner, the commissioner by rule shall adopt [may supplement
the building specifications in the plan of operation with the
structural provisions of] the 2003 International Residential Code
for one- and two-family dwellings published by the International
Code Council. For those geographic areas, the commissioner by rule
may adopt a subsequent edition of that code and may adopt any
supplements published by the International Code Council and
amendments to the code. [Roofing materials satisfy the building
specifications in the plan of operation if those materials pass the
UL Standard 997 or a comparable test certified by the Board and are
installed as required by the Board to promote the wind resistance of
the materials.] A structure constructed, repaired, or to which
additions were made before January 1, 1988, that is located in an
area covered at the time by a building code recognized by the
Association shall be considered an insurable property for windstorm
and hail insurance from the Association without compliance with the
inspection or approval requirements of this Section or the plan of
operation. A structure constructed, repaired, or to which
additions were made before January 1, 1988, that is located in an
area not covered by a building code recognized by the Association
shall be considered an insurable property for windstorm and hail
insurance from the Association without compliance with the
inspection or approval requirements of this Section or the plan of
operation if that structure has been previously insured by a
licensed insurance company authorized to do business in this State
and the risk is in essentially the same condition as when previously
insured, except for normal wear and tear, and without any
structural change other than a change made according to code.
Evidence of previous insurance includes a copy of a previous
policy, copies of canceled checks or agent's records that show
payments for previous policies, and a copy of the title to the
structure or mortgage company records that show previous policies.
After January 1, 2004 [2002], a person must submit a notice of a [an
application for] windstorm inspection to the unit responsible for
certification of windstorm inspections [inspection] at the
department before beginning to construct, alter, remodel, enlarge,
or repair a structure. [Failure to submit a timely application may
result in a certificate of compliance not being issued unless plans
and calculations, testing information, manufacturer's installation
instructions, or any other documentation required by the
commissioner is submitted to the unit responsible for windstorm
inspection at the department as may be requested in order to fulfill
the requirements of this section. The Board may appoint or employ
qualified inspectors as defined in this Section to perform any
inspections required by this Section.]
(d) A windstorm inspection may only be performed by a
qualified inspector. For purposes of this article, a "qualified
inspector" includes:
(1) a person determined by the Board to be qualified to
perform building inspections because of training or experience;
(2) a licensed professional engineer meeting the
requirements of the rules adopted by the commissioner for
appointment to conduct windstorm inspections; and
(3) an inspector who is certified by the International
Code Council, the Building Officials and Code Administrators
International, Inc., the International Conference of Building
Officials, or the Southern Building Code Congress International,
Inc., who has certifications as a buildings inspector and coastal
construction inspector, and who also complies with other
requirements specified by rule by the commissioner. A qualified
inspector must be approved and appointed or employed by the
department [Board] to perform building inspections. The department
[Board] may charge a reasonable fee [not to exceed $200] for the
filing of applications and determining the qualifications of
persons for appointment as qualified inspectors.
(h) The department [Board] may charge a reasonable fee to
cover the cost of making building requirements [specifications] and
inspection standards available to the public.
(j) After notice and hearing, the department [Board] may
cancel or revoke an appointment [or authorization] made[, issued,
or existing] under this Section if the holder [or possessor] of the
appointment [or authorization] is found to be in violation of, or to
have failed to comply with, specific provisions of this Section or
any rule or regulation of the commissioner [Board] made under this
Section. In lieu of cancellation or revocation, the commissioner
[Board] may order one or more of the following sanctions, if the
commissioner [it] determines from the facts that it would be fair,
reasonable, or equitable:
(1) suspending the [authorization or] appointment for
a specific period, not to exceed one year;
(2) an order directing the holder [or possessor] of
the [authorization or] appointment to cease and desist from the
specified activity determined to be in violation of specific
provisions of this Section or rules and regulations of the
commissioner [Board] made pursuant to this Section or from failing
to comply with those provisions of this Section or the rules and
regulations promulgated under this Section; or
(3) if the appointed person [authorized or appointed]
is found by the commissioner [Board] to have knowingly, wilfully,
fraudulently, or with gross negligence signed or caused to be
prepared an inspection report that contains a false, fictitious, or
fraudulent statement or entry, directing the appointed person
[holder or possessor of the authorization or appointment] to remit
within a specified time, not to exceed 60 days, a specified monetary
forfeiture not to exceed $5,000 for the violation or failure to
comply.
(j-1) If an appointed person is an engineer licensed by the
Texas Board of Professional Engineers who is found by the
department to have knowingly, wilfully, fraudulently, or with gross
negligence signed or caused to be prepared an inspection report
that contains a false or fraudulent statement or entry, the
commissioner may take action against the appointed person in the
manner provided by Subsection (j) of this Section, but may not levy
any monetary fine against an appointed person who is a licensed
engineer.
(k) A monetary forfeiture paid as a result of an order
issued under Subsection (j)(3) of this Section shall be deposited
to the credit of the general revenue fund. If it is found after
hearing that any appointed person [holder or possessor] has failed
to comply with an order issued under Subsection (j) of this Section,
the department [Board] shall, unless the [its] order is lawfully
stayed, cancel the [authorization or] appointment of the person
[holder or possessor]. The department [Board] may informally
dispose of any matter under Subsection (j) of this Section by
consent order or default.
(k-1) The commissioner shall notify the Texas Board of
Professional Engineers of each order issued by the commissioner
against an appointed person who is an engineer licensed by the Texas
Board of Professional Engineers, including an order suspending,
canceling, or revoking the appointment of that person.
SECTION 3. Sections 6C(b), (f), (g), (h), (k), (l), and (m),
Article 21.49, Insurance Code, are amended to read as follows:
(b) The Windstorm Building Code Advisory Committee on
Specifications and Maintenance is established as an advisory
committee to the commissioner to advise and make recommendations to
the commissioner on building requirements [specifications] and
maintenance in the plan of operation.
(f) The advisory committee shall analyze and make
recommendations for changes regarding procedures described under
Section 5(d) of this article that are [building specifications]
adopted by the commissioner in the plan of operation. In making
recommendations, the advisory committee shall [consider
technological developments in building products and windstorm
research and shall] seek to balance the concerns of all affected
parties, including consumers, builders, and the Association.
(g) Each proposal for a change in an applicable procedure
[building specification] must be submitted to the commissioner.
Each proposal must be submitted separately in writing and must
contain:
(1) the name, mailing address, and telephone number of
the proponent, or, if the proponent is a group or organization, the
name of the group or organization and the mailing address and
telephone number of the group or organization;
(2) a citation of any applicable statute or rule [the
building code section regarding that specification, as published in
the latest edition of that code];
(3) the text of the proposed change, with deletions
from current [code] language struck through with a single line and
new language underlined; and
(4) a statement of the purpose of the proposed change,
with supporting written or printed information.
(h) The commissioner by rule shall adopt a form to be used by
a person in presenting a proposal for a change in an applicable
procedure [building specification] to the commissioner.
(k) At an advisory committee meeting, any interested person
may present the person's views on a proposal for a change in an
applicable procedure [building specification] that is included on
the advisory committee's published agenda. The advisory committee
shall consider each comment presented in its action on the
disposition of each proposal.
(l) After consideration of a proposal for a change in an
applicable procedure [building specification], the advisory
committee by vote shall:
(1) recommend adoption of the proposal as initially
submitted;
(2) recommend adoption of the proposal with
modifications;
(3) recommend rejection of the proposal; or
(4) suspend consideration of the proposal and request
additional evaluation and study of the proposal.
(m) The advisory committee shall submit its recommendation
on each proposal to the commissioner. The commissioner shall
notify the advisory committee of the acceptance or rejection of
each recommendation not later than the 30th day after the date of
receipt by the commissioner. Acceptance of a recommendation by the
commissioner means that the commissioner will consider adoption of
that recommendation at a rulemaking hearing. Before adopting a
recommendation, the commissioner must determine that the proposal,
if adopted, will not weaken the integrity or diminish the
effectiveness of a procedure [building specification]. [The
commissioner by rule may adopt a recommendation of the advisory
committee by amending the plan of operation and, in amending the
plan, may adopt a specification by reference.]
SECTION 4. Article 21.49, Insurance Code, is amended by
adding Section 6D to read as follows:
Sec. 6D. APPOINTMENT OF ENGINEERS; RULES. (a) The
commissioner, on the request of an engineer licensed by the Texas
Board of Professional Engineers, shall appoint the engineer under
this article not later than the 10th day after the date of the
engineer's delivery to the commissioner of information
demonstrating that the engineer is qualified to perform windstorm
inspections under this article.
(b) The commissioner shall adopt rules to determine the
information the commissioner will consider in appointing engineers
under Subsection (a) of this section.
SECTION 5. Sections 6A(c) and (e), Article 21.49, Insurance
Code, are repealed.
SECTION 6. Article 21.49, Insurance Code, as amended by
this Act, applies only to a policy of windstorm or hail insurance
that is delivered, issued for delivery, or renewed after January 1,
2004. A policy that is delivered, issued for delivery, or renewed
on or before January 1, 2004, is governed by the law as it existed
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
SECTION 7. This Act takes effect September 1, 2003.