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A BILL TO BE ENTITLED
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AN ACT
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relating to the licensing and regulation of certain builders. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. The heading to Subtitle C, Title 16, Property |
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Code, is amended to read as follows: |
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SUBTITLE C. BUILDER LICENSING [REGISTRATION] |
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SECTION 2. The heading to Chapter 416, Property Code, is |
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amended to read as follows: |
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CHAPTER 416. LICENSE [CERTIFICATE OF REGISTRATION] |
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SECTION 3. Section 416.001, Property Code, is amended to |
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read as follows: |
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Sec. 416.001. LICENSE [REGISTRATION] REQUIRED; RULES. (a) |
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Notwithstanding any other law, a [A] person may not engage in |
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business as a builder in this state or act as a builder unless the |
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person holds a license [certificate of registration] under this |
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chapter. |
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(b) The commission shall adopt all rules necessary to |
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implement the licensing program under this chapter, including rules |
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relating to: |
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(1) license eligibility; |
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(2) renewal requirements, examination requirements, |
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and continuing education requirements for license holders; |
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(3) security and insurance requirements; |
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(4) disciplinary actions; and |
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(5) any other issues determined necessary by the |
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commission. |
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SECTION 4. The heading to Section 416.002, Property Code, |
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is amended to read as follows: |
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Sec. 416.002. LICENSE APPLICATION [FOR CERTIFICATE]. |
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SECTION 5. Sections 416.002(a) and (e), Property Code, are |
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amended to read as follows: |
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(a) An applicant for an original or renewal license |
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[certificate of registration] must submit an application on a form |
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prescribed by the commission. |
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(e) Based on a commission investigation of an alleged |
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violation of Sections 418.001(a)(14)-(20), the commission may |
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require an applicant for renewal of a license [certificate of
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registration] to disclose to the commission every person with an |
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ownership interest in the applicant's business as a builder. This |
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subsection does not apply to a publicly traded company. |
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SECTION 6. Section 416.004(a), Property Code, is amended to |
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read as follows: |
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(a) The commission shall charge and collect: |
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(1) a filing fee for an application for an original |
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license [certificate of registration] that does not exceed $500; |
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(2) a fee for renewal of a license [certificate of
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registration] that does not exceed $300; and |
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(3) a late fee that does not exceed the amount of the |
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fee due if payment of a license [registration] application or |
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renewal fee due under this title is late. |
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SECTION 7. Chapter 416, Property Code, is amended by adding |
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Section 416.0041 to read as follows: |
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Sec. 416.0041. SECURITY REQUIREMENTS. (a) As a guarantee |
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that a builder will meet the builder's obligations under this |
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subtitle, each licensed builder shall maintain with the commission |
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a bond or other security accepted by the commission. |
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(b) A bond posted as security must: |
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(1) be issued by an insurer authorized to engage in the |
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business of insurance in this state; |
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(2) be continuous; |
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(3) be cancelable by the surety only after at least 90 |
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days' notice to the commission; and |
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(4) recognize that the obligation continues for the |
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terms of the contracts written by the builder while the bond is in |
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force. |
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(c) Any security provided under this section in a form other |
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than a bond must be convertible to cash by the commission for the |
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benefit of persons who contract with the builder in this state, |
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without resort to the courts, if the commission determines that the |
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builder is in default of the builder's financial obligations to |
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those contract holders. Any amount remaining after all contract |
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holders' claims are paid must be returned to the builder not later |
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than the 120th day after the date the last outstanding contract |
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expires. |
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SECTION 8. Section 416.005, Property Code, is amended to |
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read as follows: |
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Sec. 416.005. GENERAL ELIGIBILITY REQUIREMENTS. A person |
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may not receive a license [certificate of registration] under this |
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chapter unless: |
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(1) the person, at the time of the application: |
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(A) is at least 18 years of age; and |
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(B) is a citizen of the United States or a |
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lawfully admitted alien; and |
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(2) the commission is satisfied with the person's |
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honesty, trustworthiness, and integrity based on information |
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supplied or discovered in connection with the person's application. |
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SECTION 9. Section 416.006, Property Code, is amended to |
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read as follows: |
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Sec. 416.006. ADDITIONAL ELIGIBILITY REQUIREMENTS FOR |
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BUSINESS ENTITIES. (a) To be eligible for an original or renewal |
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license [certificate of registration] under this chapter: |
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(1) a corporation must designate one of its officers |
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as its agent for the purposes of this chapter; |
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(2) a limited liability company must designate one of |
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its managers as its agent for the purposes of this chapter; and |
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(3) a partnership, limited partnership, or limited |
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liability partnership must designate one of its managing partners |
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as its agent for the purposes of this chapter. |
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(b) A corporation, limited liability company, partnership, |
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limited partnership, or limited liability partnership is not |
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eligible to hold a license [be registered] under this chapter and |
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may not act as a builder unless the entity's designated agent is |
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individually licensed [registered] as a builder. |
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SECTION 10. Chapter 416, Property Code, is amended by |
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adding Section 416.0061 to read as follows: |
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Sec. 416.0061. EXAMINATION. (a) Except as otherwise |
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provided by this section and effective September 1, 2011, each |
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applicant for an individual license under this chapter must take a |
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licensing examination prescribed by the commission. An applicant |
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is entitled to take the examination prescribed by the commission |
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if: |
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(1) the commission determines that the applicant meets |
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the qualifications required by this chapter; and |
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(2) the applicant pays the fees required by the |
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commission. |
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(b) Each examination administered under this section must |
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be prepared by the commission or by a multistate contractor |
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licensing association approved by the commission. The commission |
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shall ensure that the examination is administered in various |
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locations throughout the state. |
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(c) The examination must be designed to determine the |
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fitness of the applicant to engage in business as a builder in this |
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state. |
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(d) A person who, immediately before September 1, 2009, held |
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a certificate of registration issued by the commission is eligible |
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for a license without satisfying the examination requirement of |
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this section if the commission determines that the person's |
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certificate was active and in good standing. If the person's |
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certificate was not active or was not in good standing as of August |
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31, 2009, the person is required to satisfy the examination |
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requirement. This subsection expires December 31, 2014. |
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SECTION 11. Section 416.007, Property Code, is amended to |
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read as follows: |
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Sec. 416.007. LICENSE ISSUANCE [OF CERTIFICATE]. (a) Not |
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later than the 15th day after the date the commission receives an |
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application from an applicant who meets the requirements of this |
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chapter, the commission shall issue a license [certificate of
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registration] to the applicant. |
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(b) The license [certificate of registration] remains in |
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effect for the period prescribed by the commission if the license |
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[certificate] holder complies with this chapter and pays the |
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appropriate renewal fees. |
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(c) The commission shall issue one license [certificate of
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registration] for each business entity licensed [registered] under |
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this chapter. |
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SECTION 12. Chapter 416, Property Code, is amended by |
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adding Section 416.0071 to read as follows: |
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Sec. 416.0071. PROVISIONAL LICENSE. (a) The commission |
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may grant a provisional license to an applicant for a license in |
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this state who: |
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(1) has been licensed or registered in good standing |
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to engage in business as a builder for at least two years in another |
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jurisdiction that has licensing or registration requirements |
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substantially equivalent to the requirements of this title; |
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(2) is currently licensed or registered in that |
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jurisdiction; and |
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(3) has passed a national or other examination |
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recognized by the commission. |
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(b) A provisional license under this section is valid for |
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six months from the date of issuance. |
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SECTION 13. The heading to Section 416.008, Property Code, |
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is amended to read as follows: |
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Sec. 416.008. DENIAL OF LICENSE [REGISTRATION]. |
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SECTION 14. Section 416.008(a), Property Code, is amended |
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to read as follows: |
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(a) If the commission denies an application for an original |
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license [certificate of registration] or a renewal application, the |
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commission shall give written notice to the applicant not later |
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than the 15th day after the date the commission receives the |
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application. |
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SECTION 15. Section 416.009, Property Code, is amended to |
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read as follows: |
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Sec. 416.009. LICENSE EXPIRATION [OF CERTIFICATE]. (a) |
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The commission may issue or renew a license [certificate of
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registration] for a period that does not exceed 24 months. |
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(b) The commission by rule may adopt a system under which |
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licenses [certificates of registration] expire on several dates |
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during the year. The commission shall adjust the date for payment |
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of renewal fees accordingly. |
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(c) In a year in which the expiration date for a license |
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[certificate of registration] is changed, the renewal fee payable |
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shall be prorated on a monthly basis so that the license |
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[certificate] holder pays only that portion of the fee that is |
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allocable to the number of months during which the license |
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[certificate of registration] is valid. On renewal of the license |
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[certificate of registration] on the new expiration date, the total |
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renewal fee is payable. |
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SECTION 16. Sections 416.010(a), (b), (c), and (d), |
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Property Code, are amended to read as follows: |
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(a) A builder shall maintain a fixed office location in this |
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state. The address of the builder's principal place of business |
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must be designated on the license [certificate of registration]. |
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(b) Not later than the 30th day after the date a builder |
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moves from the address designated on the license [certificate of
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registration], the builder shall submit an application, |
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accompanied by the appropriate fee, for a license [certificate of
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registration] that designates the new location of the builder's |
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principal place of business. The commission shall issue a license |
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[certificate of registration] that designates the new location if |
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the new location complies with the requirements of this section. |
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(c) If a builder operates under any name other than the name |
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that is set forth on the builder's license [certificate of
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registration], the builder shall, within 45 days of operating under |
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this other name, disclose this other name to the commission. |
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(d) This section does not require a builder to obtain a |
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license [certificate of registration] for each sales office. |
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SECTION 17. Section 416.011(a), Property Code, is amended |
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to read as follows: |
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(a) The commission shall establish rules and procedures for |
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a program through which a builder can be designated as a "Texas Star |
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Builder." A builder's participation in the program is voluntary |
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and is not a requirement for the issuance of a license [certificate
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of registration] required under this chapter. |
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SECTION 18. Sections 416.012(a), (b), (c), (d), and (e), |
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Property Code, are amended to read as follows: |
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(a) The commission shall recognize or administer continuing |
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education programs for builders licensed [registered] by the |
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commission. A licensed [registered] builder must participate in |
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the programs to the extent required by this section to maintain the |
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builder's license [registration]. |
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(b) A licensed builder [who registers for the first time on
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or after September 1, 2007,] must complete, during the first year |
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the builder is licensed [registered] with the commission, five |
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hours of continuing education, one hour of which must address |
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ethics. |
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(c) A licensed builder who has satisfied [is registered
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before September 1, 2007, and all other builders who register for
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the first time on or after September 1, 2007, and satisfy] the |
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requirements of Subsection (b)[,] must thereafter complete five |
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hours of continuing education every five years, one hour of which |
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must address ethics. |
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(d) The commission shall permit a licensed [registered] |
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builder to receive continuing education credit for educational, |
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technical, ethical, or professional management activities related |
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to the practice of residential construction, including: |
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(1) successfully completing or auditing a course |
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sponsored by an institution of higher education; |
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(2) successfully completing a course certified by a |
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professional or trade organization; |
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(3) attending a seminar, tutorial, short course, |
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correspondence course, videotaped course, or televised course on |
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the practice of residential construction; |
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(4) participating in an in-house course sponsored by a |
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corporation or other business entity; |
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(5) teaching a course described by Subdivisions |
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(1)-(4); |
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(6) publishing an article, paper, or book on the |
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practice of residential construction; |
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(7) making or attending a presentation at a meeting of |
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a residential or builder association or organization or writing a |
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paper presented at the meeting; |
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(8) participating in the activities of a residential |
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or builder association, including serving on a committee of the |
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organization; and |
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(9) engaging in self-directed study on the practice of |
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residential construction. |
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(e) A licensed [registered] builder may not receive more |
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than two continuing education credit hours during each five-year |
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period for engaging in self-directed study. |
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SECTION 19. Chapter 401, Property Code, is amended by |
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adding Section 401.008 to read as follows: |
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Sec. 401.008. REFERENCES TO REGISTRATION. Unless the |
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context clearly indicates otherwise, a reference in this title to a |
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registered builder means a licensed builder. A reference in this |
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title to a certificate of registration held by a builder under this |
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title means a license. |
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SECTION 20. The Texas Residential Construction Commission |
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shall adopt rules as required by Chapter 416, Property Code, as |
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amended by this Act, not later than December 1, 2009. |
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SECTION 21. A person is not required to hold a license under |
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Chapter 416, Property Code, as amended by this Act, until January 1, |
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2010. |
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SECTION 22. Except as otherwise provided by this Act, this |
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Act takes effect September 1, 2009. |