81R10969 AJA-D

By: Veasey H.B. No. 3871

A BILL TO BE ENTITLED

AN ACT

relating to the operation of the Texas Residential Construction Commission; providing an administrative penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 401.002, Property Code, is amended by adding Subdivision (5-a) to read as follows:

(5-a) "Commissioner" means the residential construction commissioner.

SECTION 2. Subtitle B, Title 16, Property Code, is amended by adding Chapter 405 to read as follows:

CHAPTER 405. RESIDENTIAL CONSTRUCTION COMMISSIONER

Sec. 405.001. EXECUTIVE DIRECTOR AND PRESIDING OFFICER. (a) The residential construction commissioner is a member of the commission who serves as the commission's executive director and as the presiding officer of the commission.

(b) The governor, with the advice and consent of the senate, shall appoint the commissioner.

(c) Except as provided by Section 405.002(1), the governor shall appoint the commissioner without regard to the race, color, disability, sex, religion, age, or national origin of the appointee.

Sec. 405.002. QUALIFICATIONS. The commissioner must:

(1) be at least 30 years of age; and

(2) have resided in the state for at least five years.

Sec. 405.003. COMPENSATION. The commissioner is entitled to compensation as provided by the General Appropriations Act.

Sec. 405.004. CERTAIN BUSINESS INTERESTS AND OTHER RELATIONSHIPS PROHIBITED. (a) A person may not serve as commissioner if, in the 10 years before the date the person would take office, the person was employed by a person engaged in the business of residential construction or real estate sales or by a Texas trade association, as defined by Section 406.004, in the field of residential construction.

(b) The commissioner may not be married to or have been married to an employee of a person engaged in the business of residential construction.

Sec. 405.005. MAY NOT BE PARTY TO CERTAIN SUITS. A person may not serve as commissioner if, at the time the person would take office, the person is or ever has been a party to a lawsuit involving a person engaged in the business of residential construction or real estate sales.

Sec. 405.006. REMOVAL. The commissioner may be removed from office by the senate.

SECTION 3. Sections 406.001(a) and (c), Property Code, are amended to read as follows:

(a) The Texas Residential Construction Commission consists of the commissioner and eight [nine] members appointed by the governor with the advice and consent of the senate as follows:

(1) three [four] members must be builders who each hold a certificate of registration under Chapter 416;

(2) three members must be representatives of the general public;

(3) one member must be a licensed professional engineer who practices in the area of residential construction; and

(4) one member must be either a licensed architect who practices in the area of residential construction or a building inspector who meets the requirements set forth in Chapter 427 and practices in the area of residential construction.

(c) A person may not be a public member of the commission if:

(1) the person or the person's spouse:

(A) [(1)] is a builder registered with the commission, or is otherwise registered, certified, or licensed by a regulatory agency in the field of residential construction;

(B) [(2)] is employed by or participates in the management of a business entity or other organization regulated by or receiving money from the commission;

(C) [(3)] owns or controls, directly or indirectly, more than a 10 percent interest in a business entity or other organization regulated by or receiving money from the commission; or

(D) [(4)] uses or receives a substantial amount of tangible goods, services, or money from the commission other than compensation or reimbursement authorized by law for commission membership, attendance, or expenses;

(2) in the 10 years before the date the person would take office, the person has been employed by a person engaged in the business of residential construction or real estate sales or a Texas trade association in the field of residential construction; or

(3) the person is or ever has been a party to a lawsuit involving a builder or real estate entity.

SECTION 4. Section 406.002(a), Property Code, is amended to read as follows:

(a) Commission members serve staggered six-year terms, with three members' terms expiring February 1 of each odd-numbered year. The terms of [three of] the builder representatives must expire in different odd-numbered years. The term of one of the representatives of the general public must expire in each odd-numbered year.

SECTION 5. Section 406.003, Property Code, is amended to read as follows:

Sec. 406.003. ASSISTANT PRESIDING OFFICER; SECRETARY. [The governor shall designate a member of the commission as the presiding officer of the commission to serve in that capacity at the pleasure of the governor.] At a regular meeting in February of each year, the commission shall elect from its membership an assistant [a vice] presiding officer and a secretary.

SECTION 6. Section 406.005(c), Property Code, is amended to read as follows:

(c) If the commissioner [executive director] has knowledge that a potential ground for removal of another commission member exists, the commissioner [executive director] shall notify the [presiding officer of the potential ground. The presiding officer shall then notify the] governor and the attorney general that a potential ground for removal exists. If a member of the commission has knowledge that a [the] potential ground for removal of the commissioner exists, the member [involves the presiding officer, the executive director shall notify the next highest ranking officer of the commission, who] shall notify the governor and the attorney general that a potential ground for removal exists.

SECTION 7. Section 407.002, Property Code, is amended to read as follows:

Sec. 407.002. OTHER PERSONNEL. The commissioner [commission] may employ [other] personnel as necessary for the administration of this title.

SECTION 8. Section 407.004, Property Code, is amended to read as follows:

Sec. 407.004. QUALIFICATIONS AND STANDARDS OF CONDUCT INFORMATION. The commissioner [executive director] or the commissioner's [executive director's] designee shall provide to the other members of the commission and to commission employees, as often as necessary, information regarding the requirements for office or employment under this title, including information regarding a person's responsibilities under applicable laws relating to standards of conduct for state officers or employees.

SECTION 9. Section 416.004(a), Property Code, is amended to read as follows:

(a) The commission shall charge and collect:

(1) a filing fee of $750 for an application for an original certificate of registration [that does not exceed $500];

(2) a fee of $500 for renewal of a certificate of registration [that does not exceed $300]; and

(3) a late fee that does not exceed the amount of the fee due if payment of a registration application or renewal fee due under this title is late.

SECTION 10. Section 417.003(a), Property Code, is amended to read as follows:

(a) The commission shall charge and collect:

(1) a filing fee of $100 for an application for certification under this chapter [that does not exceed $100];

(2) a fee of $100 for renewal of a certification under this chapter [that does not exceed $50]; and

(3) a late fee that does not exceed the amount of the fee due if payment of a registration or application fee due under this title is late.

SECTION 11. Subtitle C, Title 16, Property Code, is amended by adding Chapter 421 to read as follows:

CHAPTER 421. RECOVERY FUND

Sec. 421.001. DEFINITION. In this chapter, "fund" means the recovery fund established under this chapter.

Sec. 421.002. RECOVERY FUND. (a) The commission shall maintain a recovery fund to pay for repairs in accordance with Section 421.003 and legal assistance provided under Section 426.009(c).

(b) The commission shall deposit into the fund:

(1) all fines collected by the commission; and

(2) half of the amount of the fees and other non-fine income collected by the agency during a fiscal year that has not been spent by the commission at the end of that fiscal year.

Sec. 421.003. EXPENDITURES FROM FUND. (a) A homeowner who is unable to obtain repair of a construction defect in accordance with a recommendation or appeals ruling issued under Subtitle D or recover damages or obtain other relief for the construction defect provided by law may request that the commission provide or pay for part of the repairs in accordance with this section.

(b) The commission shall adopt rules establishing the items that must be shown in an application for relief under this section to establish the applicant's eligibility for the relief under Subsection (a).

(c) The commission may:

(1) pay from the fund 25 to 50 percent of the estimated cost of the repair, as the commission determines appropriate based on the availability of money in the fund; or

(2) contract with a third-party vendor to make the repairs and pay the vendor from the fund.

(d) A recovery by a homeowner under this section does not limit the homeowner's right to obtain the remainder of the repair costs or any other relief from the builder.

SECTION 12. Section 426.005, Property Code, is amended by amending Subsection (b) and adding Subsection (g) to read as follows:

(b) If the third-party inspector's recommendation or an appeals ruling does not designate a method or manner of repair of a construction defect, an [An] action described by Subsection (a) must be filed:

(1) on or before the expiration of any applicable statute of limitations or by the 45th day after the date the third-party inspector issues the inspector's recommendation, whichever is later; or

(2) if the recommendation is appealed, on or before the expiration of any applicable statute of limitations or by the 45th day after the date the commission issues its ruling on the appeal, whichever is later.

(g) If the third-party inspector's recommendation or the appeals ruling designates a method or manner of repair of a construction defect, an action described by Subsection (a) must be filed on or before the expiration of any applicable statute of limitations or not later than the 45th day after the date the commission authorizes the filing of an action under Section 426.009, whichever is later.

SECTION 13. Chapter 426, Property Code, is amended by adding Section 426.009 to read as follows:

Sec. 426.009. REPAIRS REQUIRED; AUTHORIZATION OF ACTION. (a) Not later than the 45th day after the date a third-party inspector's recommendation under Section 428.004 or a ruling on an appeal under Section 429.001 is issued that designates a method or manner of repair of a construction defect, the builder must perform the repair as specified in the recommendation or ruling or pay to the homeowner the estimated cost of the repair.

(b) If the builder does not make a repair or payment required under Subsection (a) in the time prescribed by that subsection, not later than the 91st day after the date the recommendation or ruling was issued, the homeowner may request that the commission authorize the filing of an action against the builder.

(c) The commission shall adopt rules under which a low-income homeowner, as established under criteria adopted by the commission, may qualify for legal assistance from the commission in pursuing an action filed by the homeowner under this section.

(d) A builder who fails to make a repair or payment required under Subsection (a) is subject to disciplinary action and an administrative penalty under Chapters 418 and 419. This subsection does not apply if it is determined in a civil action that the construction defect for which the method or manner of repair was specified does not exist.

SECTION 14. Section 427.001(a), Property Code, is amended to read as follows:

(a) A third-party inspector approved by the commission must:

(1) meet the minimum qualifications prescribed by this section and any other qualifications prescribed by the commission by rule; and

(2) submit an application to the commission annually with an application fee of $100 [in the amount required by the commission by rule].

SECTION 15. Section 430.008(b), Property Code, is amended to read as follows:

(b) A third-party warranty company must submit to the commission an annual application [and fee] in the form [and in the amount] required by the commission by rule and a $500 fee before the company may be approved under this section.

SECTION 16. The following sections of the Property Code are repealed:

(1) Sections 407.001 and 407.003; and

(2) Section 416.004(b).

SECTION 17. (a) As soon as practicable after the first vacancy on the Texas Residential Construction Commission for a builder member occurs on or after the effective date of this Act, the governor shall appoint the residential construction commissioner in accordance with this Act.

(b) Section 416.004(a), Property Code, as amended by this Act, applies only to an original or renewal application for a certificate of registration submitted on or after the effective date of this Act. An application submitted before the effective date of this Act is governed by the law in effect immediately before the effective date of this Act, and that law is continued in effect for that purpose.

(c) Section 417.003(a), Property Code, as amended by this Act, applies only to an original or renewal application for certification as a residential construction arbitrator submitted on or after the effective date of this Act. An application submitted before the effective date of this Act is governed by the law in effect immediately before the effective date of this Act, and that law is continued in effect for that purpose.

(d) Section 421.002(b), Property Code, as added by this Act, applies only to a fine, fee, or other income collected on or after the effective date of this Act. A fine, fee, or other income collected before the effective date of this Act is governed by the law in effect immediately before the effective date of this Act, and that law is continued in effect for that purpose.

(e) Sections 421.003 and 426.009, Property Code, as added by this Act, and Section 426.005, Property Code, as amended by this Act, apply only to a third-party inspector's recommendation or an appeals ruling regarding a request submitted under Section 428.001, Property Code, on or after the effective date of this Act. A recommendation or appeals ruling regarding a request submitted before the effective date of this Act is governed by the law in effect immediately before the effective date of this Act, and that law is continued in effect for that purpose.

(f) Section 427.001(a), Property Code, as amended by this Act, applies only to an application submitted by a third-party inspector on or after the effective date of this Act. An application submitted before the effective date of this Act is governed by the law in effect immediately before the effective date of this Act, and that law is continued in effect for that purpose.

(g) Section 430.008(b), Property Code, as amended by this Act, applies only to an application of a third-party warranty company submitted on or after the effective date of this Act. An application submitted before the effective date of this Act is governed by the law in effect immediately before the effective date of this Act, and that law is continued in effect for that purpose.

SECTION 18. This Act takes effect September 1, 2009.