Texas 2009 - 81st Regular

Texas House Bill HB2295 Compare Versions

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1	1	By: McClendon, Isett, Flynn, Deshotel, H.B. No. 2295
2	2	Harper-Brown, et al.
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the continuation and functions of the Texas Residential
8	8	Construction Commission; providing penalties.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Chapter 27, Property Code, is amended by adding
11	11	Section 27.0021 to read as follows:
12	12	Sec. 27.0021. TIME FOR CERTAIN OFFERS AND ELECTIONS BY
13	13	BUILDER. In a dispute subject to Subtitle D, Title 16, if a party to
14	14	the dispute is authorized to file an action described by Section
15	15	426.005(a) before a recommendation is issued by a third-party
16	16	inspector, before a ruling on an appeal of a third-party
17	17	inspector's report, or before the expiration of the mediation
18	18	period under Section 428A.004, a builder may make a written offer of
19	19	settlement to the claimant under Sections 27.004(b) and (c) or an
20	20	election to purchase the residence under Section 27.0042 not later
21	21	than the 15th day after the earliest date on which the action may be
22	22	filed under Section 426.005(g) or 428A.004(b).
23	23	SECTION 2. Section 27.003(a), Property Code, is amended to
24	24	read as follows:
25	25	(a) In an action to recover damages or other relief arising
26	26	from a construction defect:
27	27	(1) a contractor is not liable for any percentage of
28	28	damages caused by:
29	29	(A) negligence of a person other than the
30	30	contractor or an agent, employee, or subcontractor of the
31	31	contractor;
32	32	(B) failure of a person other than the contractor
33	33	or an agent, employee, or subcontractor of the contractor to:
34	34	(i) take reasonable action to mitigate the
35	35	damages; or
36	36	(ii) take reasonable action to maintain the
37	37	residence;
38	38	(C) normal wear, tear, or deterioration;
39	39	(D) normal shrinkage due to drying or settlement
40	40	of construction components within the tolerance of building
41	41	standards; or
42	42	(E) the contractor's reliance on written
43	43	information relating to the residence, appurtenance, or real
44	44	property on which the residence and appurtenance are affixed that
45	45	was obtained from official government records, if the written
46	46	information was false or inaccurate and the contractor did not know
47	47	and could not reasonably have known of the falsity or inaccuracy of
48	48	the information; and
49	49	(2) if an assignee of the claimant or a person
50	50	subrogated to the rights of a claimant fails to provide the
51	51	contractor with the written notice and opportunity to inspect and
52	52	offer to repair required by Section 27.004 or fails to request an
53	53	[state-sponsored] inspection [and dispute resolution] under
54	54	Chapter 428, if applicable, before performing repairs, the
55	55	contractor is not liable for the cost of any repairs or any
56	56	percentage of damages caused by repairs made to a construction
57	57	defect at the request of an assignee of the claimant or a person
58	58	subrogated to the rights of a claimant by a person other than the
59	59	contractor or an agent, employee, or subcontractor of the
60	60	contractor.
61	61	SECTION 3. Sections 27.004(b), (c), (d), and (l), Property
62	62	Code, are amended to read as follows:
63	63	(b) Not later than the 15th day after the date of a final,
64	64	unappealable determination of a dispute under Subtitle D, Title 16,
65	65	if applicable, or not later than the 45th day after the date the
66	66	contractor receives the notice under this section, if Subtitle D,
67	67	Title 16, does not apply, the contractor may make a written offer of
68	68	settlement to the claimant. The offer must be sent to the claimant
69	69	at the claimant's last known address or to the claimant's attorney
70	70	by certified mail, return receipt requested. The offer may include
71	71	either an agreement by the contractor to repair or to have repaired
72	72	by an independent contractor partially or totally at the
73	73	contractor's expense or at a reduced rate to the claimant any
74	74	construction defect described in the notice and shall describe in
75	75	reasonable detail the kind of repairs which will be made. The
76	76	repairs shall be made not later than the 45th day after the date the
77	77	contractor receives written notice of acceptance of the settlement
78	78	offer, unless completion is delayed by the claimant or by other
79	79	events beyond the control of the contractor. [If a contractor makes
80	80	a written offer of settlement that the claimant considers to be
81	81	unreasonable:
82	82	[(1) on or before the 25th day after the date the
83	83	claimant receives the offer, the claimant shall advise the
84	84	contractor in writing and in reasonable detail of the reasons why
85	85	the claimant considers the offer unreasonable; and
86	86	[(2) not later than the 10th day after the date the
87	87	contractor receives notice under Subdivision (1), the contractor
88	88	may make a supplemental written offer of settlement to the claimant
89	89	by sending the offer to the claimant or the claimant's attorney.]
90	90	(c) If compliance with Subtitle D, Title 16, or the giving
91	91	of the notice under Subsections (a) and (b) within the period
92	92	prescribed by those subsections is impracticable because of the
93	93	necessity of initiating an action at an earlier date to prevent
94	94	expiration of the statute of limitations or if the complaint is
95	95	asserted as a counterclaim, compliance with Subtitle D, Title 16,
96	96	or the notice is not required. However, the action or counterclaim
97	97	shall specify in reasonable detail each construction defect that is
98	98	the subject of the complaint. If Subtitle D, Title 16, applies to
99	99	the complaint, simultaneously with the filing of an action by a
100	100	claimant, the claimant must submit a request under Section 428.001.
101	101	If Subtitle D, Title 16, does not apply, the inspection provided for
102	102	by Subsection (a) may be made not later than the 75th day after the
103	103	date of service of the suit, request for arbitration, or
104	104	counterclaim on the contractor, and the offer provided for by
105	105	Subsection (b) may be made not later than the 15th day after the
106	106	date the [state-sponsored] inspection [and dispute resolution]
107	107	process under Chapter 428 is completed, if Subtitle D, Title 16,
108	108	applies, or not later than the 60th day after the date of service,
109	109	if Subtitle D, Title 16, does not apply. If, while an action
110	110	subject to this chapter is pending, the statute of limitations for
111	111	the cause of action would have expired and it is determined that the
112	112	provisions of Subsection (a) were not properly followed, the action
113	113	shall be abated to allow compliance with Subsections (a) and (b).
114	114	(d) The court or arbitration tribunal shall abate an action
115	115	governed by this chapter if Subsection (c) does not apply and the
116	116	court or tribunal, after a hearing, finds that the contractor is
117	117	entitled to abatement because the claimant failed to comply with
118	118	the requirements of Subtitle D, Title 16, if applicable or [,]
119	119	failed to provide the notice or failed to give the contractor a
120	120	reasonable opportunity to inspect the property as required by
121	121	Subsection (a)[, or failed to follow the procedures specified by
122	122	Subsection (b)]. An action is automatically abated without the
123	123	order of the court or tribunal beginning on the 11th day after the
124	124	date a motion to abate is filed if the motion:
125	125	(1) is verified and alleges that the person against
126	126	whom the action is pending did not receive the written notice
127	127	required by Subsection (a), the person against whom the action is
128	128	pending was not given a reasonable opportunity to inspect the
129	129	property as required by Subsection (a), or the claimant failed to
130	130	follow the procedures specified by [Subsection (b) or] Subtitle D,
131	131	Title 16; and
132	132	(2) is not controverted by an affidavit filed by the
133	133	claimant before the 11th day after the date on which the motion to
134	134	abate is filed.
135	135	(l) If Subtitle D, Title 16, applies to the claim and the
136	136	contractor's offer of repair is accepted by the claimant, the
137	137	contractor, on completion of the repairs and in accordance with
138	138	Section 428.0041 [at the contractor's expense], shall engage the
139	139	third-party inspector who provided the recommendation regarding
140	140	the construction defect involved in the claim to inspect the
141	141	repairs and determine whether the residence, as repaired, complies
142	142	with the applicable limited statutory warranty and building and
143	143	performance standards adopted by the commission. [The contractor
144	144	is entitled to a reasonable period not to exceed 15 days to address
145	145	minor cosmetic items that are necessary to fully complete the
146	146	repairs.] The determination of the third-party inspector of
147	147	whether the repairs comply with the applicable limited statutory
148	148	warranty and building and performance standards adopted by the
149	149	commission establishes a rebuttable presumption on that issue. A
150	150	party seeking to dispute, vacate, or overcome that presumption must
151	151	establish by clear and convincing evidence that the determination
152	152	is inconsistent with the applicable limited statutory warranty and
153	153	building and performance standards.
154	154	SECTION 4. Section 41.007(a), Property Code, is amended to
155	155	read as follows:
156	156	(a) A contract for improvements to an existing residence
157	157	described by Section 41.001(b)(3) must contain:
158	158	(1) the contractor's license [certificate of
159	159	registration] number from the Texas Residential Construction
160	160	Commission if the contractor is required to be licensed [register]
161	161	as a builder by [with] the commission;
162	162	(2) the address and telephone number at which the
163	163	owner may file a complaint with the Texas Residential Construction
164	164	Commission about the conduct of the contractor if the contractor is
165	165	required to be licensed [register] as a builder by [with] the
166	166	commission; and
167	167	(3) the following warning conspicuously printed,
168	168	stamped, or typed in a size equal to at least 10-point bold type or
169	169	computer equivalent:
170	170	"IMPORTANT NOTICE: You and your contractor are responsible
171	171	for meeting the terms and conditions of this contract. If you sign
172	172	this contract and you fail to meet the terms and conditions of this
173	173	contract, you may lose your legal ownership rights in your
174	174	home. KNOW YOUR RIGHTS AND DUTIES UNDER THE LAW."
175	175	SECTION 5. Chapter 401, Property Code, is amended by adding
176	176	Section 401.0011 to read as follows:
177	177	Sec. 401.0011. PURPOSE; TEXAS RESIDENTIAL CONSTRUCTION
178	178	COMMISSION. (a) The Texas Residential Construction Commission
179	179	oversees persons required to be licensed by the commission to
180	180	ensure that those persons are responsible and accountable to the
181	181	homeowners with whom they contract.
182	182	(b) The commission's mission includes:
183	183	(1) educating builders and homeowners about all
184	184	aspects of the residential construction industry affecting the
185	185	building or remodeling of homes; and
186	186	(2) facilitating resolution of disputes between
187	187	builders and homeowners regarding construction defects through the
188	188	state inspection program and through a voluntary mediation program.
189	189	SECTION 6. Section 401.002, Property Code, is amended by
190	190	amending Subdivisions (3) and (4) and adding Subdivision (11-a) to
191	191	read as follows:
192	192	(3) "Approved architect" means an architect licensed
193	193	by this state and approved by the commission to provide services to
194	194	the commission in connection with the state [state-sponsored]
195	195	inspection program [and dispute resolution process].
196	196	(4) "Approved structural engineer" means a licensed
197	197	professional engineer approved by the commission to provide
198	198	services to the commission in connection with the state
199	199	[state-sponsored] inspection program [and dispute resolution
200	200	process].
201	201	(11-a) "State inspection program" means the program
202	202	administered by the commission under Subtitle D under which homes
203	203	are inspected to determine whether alleged construction defects
204	204	exist and inspectors issue determinations and recommendations
205	205	regarding the alleged defects.
206	206	SECTION 7. Section 401.003, Property Code, is amended by
207	207	amending Subsections (c) and (d) and adding Subsection (e) to read
208	208	as follows:
209	209	(c) The term does not include a [any] person who:
210	210	(1) has been issued a license by this state or an
211	211	agency of this state to practice a trade or profession related to or
212	212	affiliated with residential construction if the work being done by
213	213	the entity or individual to the home is solely for the purpose for
214	214	which the license was issued; [or]
215	215	(2) sells a new home and:
216	216	(A) does not construct or supervise or manage the
217	217	construction of the home; and
218	218	(B) holds a license issued under Chapter 1101,
219	219	Occupations Code, or is exempt from that chapter under Section
220	220	1101.005, Occupations Code;
221	221	(3) guarantees or co-makes a construction loan and is
222	222	not otherwise a builder under Subsection (a); or
223	223	(4) constructs or makes improvements to not more than
224	224	one home in a 12-month period.
225	225	(d) The term does not include a nonprofit business entity
226	226	that is exempt from taxation under Section 501(c)(3), Internal
227	227	Revenue Code, if:
228	228	(1) the construction or supervision or management of
229	229	the construction of the home, material improvement, or improvement
230	230	sold by the nonprofit business entity is performed by a builder
231	231	licensed [registered] under this title;
232	232	(2) the builder contractually agrees to comply with
233	233	the provisions of this title;
234	234	(3) the builder is contractually liable to the
235	235	homeowner for the warranties and building and performance standards
236	236	of this title; and
237	237	(4) the nonprofit business entity does not participate
238	238	directly in the construction of the home, material improvement, or
239	239	improvement.
240	240	(e) The term does not include a federally insured financial
241	241	institution or a subsidiary or affiliate of the institution.
242	242	SECTION 8. Section 401.005, Property Code, is amended by
243	243	amending Subsection (c) and adding Subsection (d) to read as
244	244	follows:
245	245	(c) Except as provided by Subsection (d), a person [An
246	246	individual] who builds a home, [or] a material improvement to a
247	247	home, or an improvement to the interior of an existing home when the
248	248	cost of the work exceeds $10,000 and sells the home immediately
249	249	following completion of the building or remodeling and does not
250	250	live in the home for at least one year following completion of the
251	251	building or remodeling, is responsible as a builder under the
252	252	warranty obligation created by this title for work completed by the
253	253	person [individual]. Responsibility under this subsection
254	254	requires a person [does not automatically require an individual] to
255	255	obtain a license [register] under Section 416.001.
256	256	(d) Notwithstanding Subsection (c), this title does not
257	257	apply to an individual who:
258	258	(1) improves the individual's homestead by improving
259	259	the interior of an existing home that is the individual's primary
260	260	residence when the cost of the work exceeds $10,000; and
261	261	(2) sells the home and does not live in the home for at
262	262	least one year following the completion of the improvement.
263	263	SECTION 9. Section 401.006, Property Code, is amended to
264	264	read as follows:
265	265	Sec. 401.006. SUNSET PROVISION. (a) The Texas Residential
266	266	Construction Commission is subject to Chapter 325, Government Code
267	267	(Texas Sunset Act). Unless continued in existence as provided by
268	268	that chapter, the commission is abolished and this title expires
269	269	September 1, 2015 [2009].
270	270	(b) The Sunset Advisory Commission shall conduct a
271	271	special-purpose review of the Texas Residential Construction
272	272	Commission as part of the Sunset Advisory Commission's review of
273	273	agencies for the 83rd Legislature. The Sunset Advisory
274	274	Commission's report to the 83rd Legislature regarding the review
275	275	must include an assessment of the Texas Residential Construction
276	276	Commission's compliance with the mandates and requirements
277	277	contained in legislation passed by the 81st and 82nd Legislatures
278	278	and the agency's management practices and enforcement efforts to
279	279	implement those changes to the statutes governing the agency
280	280	enacted by those legislatures. This subsection expires September 1,
281	281	2013.
282	282	SECTION 10. Sections 401.007(a), (b), and (c), Property
283	283	Code, are amended to read as follows:
284	284	(a) The [If the] commission [has reasonable cause to believe
285	285	that a person is violating a statute to which this chapter applies,
286	286	the commission, in addition to any other authorized action,] may
287	287	issue an emergency order, including an emergency order to cease and
288	288	desist, to any person regardless of whether the person is a builder
289	289	licensed under this title [from the violation or an order to take
290	290	affirmative action, or both], to enforce a statute to which this
291	291	chapter applies if the commission determines that an emergency
292	292	exists requiring immediate action to protect the public health and
293	293	safety or if the commission has reasonable cause to believe that a
294	294	person is violating a statute to which this chapter applies. The
295	295	commission may issue the emergency order without notice and hearing
296	296	or with any notice and hearing the commission considers practicable
297	297	under the circumstances [compliance]. A person may appeal the
298	298	order directly to district court in accordance with Chapter 2001,
299	299	Government Code.
300	300	(b) The [Before issuing an order under this section, the]
301	301	commission shall set the time and place and give notice for a
302	302	hearing to affirm, modify, or set aside an emergency order that was
303	303	issued without a hearing [of a hearing before a hearings officer].
304	304	The hearing is governed by Chapter 2001, Government Code. Based on
305	305	the findings of fact, conclusions of law, and recommendations of
306	306	the hearings officer, the commission by order may find whether a
307	307	violation has occurred.
308	308	(c) The commission, after providing notice and an
309	309	opportunity to appear for a hearing, may impose against a person who
310	310	violates an emergency [a cease and desist] order an administrative
311	311	penalty in an amount not to exceed $1,000 for each day of violation.
312	312	In addition to any other remedy provided by law, the attorney
313	313	general or the commission may institute in district court a suit for
314	314	injunctive relief and to collect an administrative penalty. A bond
315	315	is not required of the commission with respect to injunctive relief
316	316	granted under this section. In the action, the court may enter as
317	317	proper an order awarding a preliminary or final injunction.
318	318	SECTION 11. Chapter 401, Property Code, is amended by
319	319	adding Sections 401.008 and 401.009 to read as follows:
320	320	Sec. 401.008. REFERENCES TO REGISTRATION. Unless the
321	321	context clearly indicates otherwise, a reference in this title to a
322	322	registered builder means a licensed builder. A reference in this
323	323	title to a certificate of registration held by a builder under this
324	324	title means a license.
325	325	Sec. 401.009. VENUE FOR ARBITRATION. (a) An arbitration of
326	326	a dispute involving a construction defect shall be conducted in the
327	327	county in which the home alleged to contain the defect is located.
328	328	(b) The requirements of this section may not be waived by
329	329	contract.
330	330	SECTION 12. Sections 406.001(a) and (c), Property Code, are
331	331	amended to read as follows:
332	332	(a) The Texas Residential Construction Commission consists
333	333	of 11 [nine] members appointed by the governor with the advice and
334	334	consent of the senate as follows:
335	335	(1) four members must be builders who each hold a
336	336	license [certificate of registration] under Chapter 416;
337	337	(2) four [three] members must be representatives of
338	338	the general public;
339	339	(3) one member must be a licensed professional
340	340	engineer who practices in the area of residential construction;
341	341	[and]
342	342	(4) one member must be [either] a licensed architect
343	343	who practices in the area of residential construction; and
344	344	(5) one member must be [or] a building inspector who
345	345	meets the requirements set forth in Chapter 427 and practices in the
346	346	area of residential construction.
347	347	(c) A person may not be a public member of the commission if
348	348	the person or the person's spouse:
349	349	(1) is a builder licensed by [registered with] the
350	350	commission, or is otherwise registered, certified, or licensed by a
351	351	regulatory agency in the field of residential construction;
352	352	(2) is employed by or participates in the management
353	353	of a business entity or other organization regulated by or
354	354	receiving money from the commission;
355	355	(3) owns or controls, directly or indirectly, more
356	356	than a 10 percent interest in a business entity or other
357	357	organization regulated by or receiving money from the commission;
358	358	or
359	359	(4) uses or receives a substantial amount of tangible
360	360	goods, services, or money from the commission other than
361	361	compensation or reimbursement authorized by law for commission
362	362	membership, attendance, or expenses.
363	363	SECTION 13. Section 406.002(a), Property Code, is amended
364	364	to read as follows:
365	365	(a) Commission members serve staggered six-year terms, with
366	366	three or four members' terms expiring February 1 of each
367	367	odd-numbered year. The terms of three of the builder
368	368	representatives must expire in different odd-numbered years. The
369	369	terms [term] of three [one] of the representatives of the general
370	370	public must expire in different [each] odd-numbered years [year].
371	371	SECTION 14. Section 408.001, Property Code, is amended to
372	372	read as follows:
373	373	Sec. 408.001. RULES. The commission shall adopt rules as
374	374	necessary for the implementation of this title, including rules:
375	375	(1) governing the state [state-sponsored] inspection
376	376	program [and dispute resolution process], including building and
377	377	performance standards, administrative regulations, and the conduct
378	378	of hearings under Subtitle D;
379	379	(2) establishing limited statutory warranty and
380	380	building and performance standards for residential construction;
381	381	(3) approving third-party warranty companies; and
382	382	(4) approving third-party inspectors.
383	383	SECTION 15. Sections 408.002(c) and (d), Property Code, are
384	384	amended to read as follows:
385	385	(c) The commission may charge a reasonable fee for:
386	386	(1) [a homeowner to submit a request for
387	387	state-sponsored inspection under Subtitle D;
388	388	[(2)] providing public information requested under
389	389	Chapter 552, Government Code, excluding information requested from
390	390	the commission under Section 409.001; or
391	391	(2) [(3)] producing, mailing, and distributing
392	392	special printed materials and publications generated in bulk by the
393	393	commission for use and distribution by builders.
394	394	(d) The commission may not charge [waive or reduce the fee
395	395	for an inspection under Subtitle D for] a homeowner a [who
396	396	demonstrates an inability to pay the] fee in connection with a
397	397	complaint, request, or other proceeding under Chapter 409 or
398	398	Subtitle D.
399	399	SECTION 16. Chapter 408, Property Code, is amended by
400	400	adding Sections 408.006 and 408.007 to read as follows:
401	401	Sec. 408.006. USE OF TECHNOLOGY. The commission shall
402	402	implement a policy requiring the commission to use appropriate
403	403	technological solutions to improve the commission's ability to
404	404	perform its functions. The policy must ensure that the public is
405	405	able to interact with the commission on the Internet.
406	406	Sec. 408.007. NEGOTIATED RULEMAKING AND ALTERNATIVE
407	407	DISPUTE RESOLUTION PROCEDURES. (a) The commission shall develop
408	408	and implement a policy to encourage the use of:
409	409	(1) negotiated rulemaking procedures under Chapter
410	410	2008, Government Code, for the adoption of commission rules; and
411	411	(2) appropriate alternative dispute resolution
412	412	procedures under Chapter 2009, Government Code, to assist in the
413	413	resolution of internal and external disputes under the commission's
414	414	jurisdiction.
415	415	(b) The commission's procedures relating to alternative
416	416	dispute resolution must conform, to the extent possible, to any
417	417	model guidelines issued by the State Office of Administrative
418	418	Hearings for the use of alternative dispute resolution by state
419	419	agencies.
420	420	(c) The commission shall designate a trained person to:
421	421	(1) coordinate the implementation of the policy
422	422	adopted under Subsection (a);
423	423	(2) serve as a resource for any training needed to
424	424	implement the procedures for negotiated rulemaking or alternative
425	425	dispute resolution; and
426	426	(3) collect data concerning the effectiveness of those
427	427	procedures, as implemented by the commission.
428	428	SECTION 17. Section 409.001(a), Property Code, is amended
429	429	to read as follows:
430	430	(a) The commission shall prepare information of public
431	431	interest describing the functions of the commission, the provisions
432	432	of the limited statutory warranty and building and performance
433	433	standards, the state [state-sponsored] inspection program [and
434	434	dispute resolution process], and the procedures by which complaints
435	435	or requests are filed with and resolved by the commission.
436	436	SECTION 18. Section 409.0011(b), Property Code, is amended
437	437	to read as follows:
438	438	(b) The commission shall create and make accessible to the
439	439	public an electronic list and a hard-copy list of builders who:
440	440	(1) are licensed by [registered with] the commission;
441	441	and
442	442	(2) provide in this state building services, including
443	443	accessible floor plans, to persons with mobility-related special
444	444	needs.
445	445	SECTION 19. Section 409.004, Property Code, is amended to
446	446	read as follows:
447	447	Sec. 409.004. DIRECTORY OF BUILDERS AND CERTAIN INFORMATION
448	448	REGARDING BUILDERS. (a) The commission shall make available to the
449	449	public a list of each builder who holds a license [certificate of
450	450	registration] issued under Chapter 416.
451	451	(b) The commission shall post information on the
452	452	commission's Internet website regarding the number of complaints
453	453	the commission receives during a calendar year regarding a builder
454	454	that are justified, expressed as a percentage of the total number of
455	455	homes registered by the builder during the calendar year. A
456	456	complaint is justified if the complaint is closed and the
457	457	commission has taken disciplinary action against the builder. The
458	458	commission shall update annually the information required by this
459	459	subsection.
460	460	SECTION 20. The heading to Subtitle C, Title 16, Property
461	461	Code, is amended to read as follows:
462	462	SUBTITLE C. BUILDER LICENSING [REGISTRATION]
463	463	SECTION 21. The heading to Chapter 416, Property Code, is
464	464	amended to read as follows:
465	465	CHAPTER 416. LICENSE [CERTIFICATE OF REGISTRATION]
466	466	SECTION 22. Section 416.001, Property Code, is amended to
467	467	read as follows:
468	468	Sec. 416.001. LICENSE [REGISTRATION] REQUIRED; RULES;
469	469	OFFENSE. (a) Notwithstanding any other law, a [A] person may not
470	470	engage in business as a builder in this state or act as a builder
471	471	unless the person holds a license [certificate of registration]
472	472	under this chapter.
473	473	(b) The commission shall adopt all rules necessary to
474	474	implement the licensing program under this chapter, including rules
475	475	relating to:
476	476	(1) license eligibility, subject to the requirements
477	477	of this chapter;
478	478	(2) renewal requirements, examination requirements,
479	479	and continuing education requirements for license holders;
480	480	(3) security and insurance requirements;
481	481	(4) disciplinary actions; and
482	482	(5) any other issues as determined necessary by the
483	483	commission.
484	484	(c) A person commits an offense if the person violates
485	485	Subsection (a). An offense under this section is a Class B
486	486	misdemeanor.
487	487	SECTION 23. The heading to Section 416.002, Property Code,
488	488	is amended to read as follows:
489	489	Sec. 416.002. LICENSE APPLICATION [FOR CERTIFICATE].
490	490	SECTION 24. Sections 416.002(a) and (e), Property Code, are
491	491	amended to read as follows:
492	492	(a) An applicant for an original or renewal license
493	493	[certificate of registration] must submit an application on a form
494	494	prescribed by the commission.
495	495	(e) Based on a commission investigation of an alleged
496	496	violation of Sections 418.001(13)-(19) [418.001(a)(14)-(20)], the
497	497	commission may require an applicant for renewal of a license
498	498	[certificate of registration] to disclose to the commission every
499	499	person with an ownership interest in the applicant's business as a
500	500	builder. This subsection does not apply to a publicly traded
501	501	company.
502	502	SECTION 25. Section 416.004(a), Property Code, is amended
503	503	to read as follows:
504	504	(a) The commission shall charge and collect:
505	505	(1) a filing fee for an application for an original
506	506	license [certificate of registration] that does not exceed $500;
507	507	(2) a fee for renewal of a license [certificate of
508	508	registration] that does not exceed $300; and
509	509	(3) a late fee that does not exceed the amount of the
510	510	fee due if payment of a license [registration] application or
511	511	renewal fee due under this title is late.
512	512	SECTION 26. Section 416.005, Property Code, is amended to
513	513	read as follows:
514	514	Sec. 416.005. GENERAL ELIGIBILITY REQUIREMENTS. (a) A
515	515	person may not receive an original license [a certificate of
516	516	registration] under this chapter unless:
517	517	(1) the person, at the time of the application:
518	518	(A) is at least 18 years of age; and
519	519	(B) is a citizen of the United States or a
520	520	lawfully admitted alien; [and]
521	521	(2) the commission is satisfied with the person's
522	522	honesty, trustworthiness, and integrity based on information
523	523	supplied or discovered in connection with the person's application;
524	524	and
525	525	(3) the person complies with Subsection (b).
526	526	(b) To receive an original license, the person must complete
527	527	an eight-hour course, one hour of which must address ethics and two
528	528	hours of which must address:
529	529	(1) limited statutory warranties;
530	530	(2) building and performance standards;
531	531	(3) requirements of the International Residential
532	532	Code as adopted under Section 430.001; and
533	533	(4) other statutes and rules that apply to builders
534	534	under this title.
535	535	SECTION 27. Chapter 416, Property Code, is amended by
536	536	adding Section 416.0051 to read as follows:
537	537	Sec. 416.0051. BOND REQUIREMENT. (a) In addition to the
538	538	requirements for the issuance of an original license under Section
539	539	416.005, before an original license may be issued, the person to
540	540	whom the license is to be issued must file with the commission a
541	541	surety bond approved by the commission that is:
542	542	(1) in the amount of $25,000;
543	543	(2) payable to the commission; and
544	544	(3) for the benefit of a party who suffers damages
545	545	arising from the license holder's violation of this title.
546	546	(b) The security required by this section must be maintained
547	547	by the license holder in the required amount as a condition of
548	548	licensure.
549	549	SECTION 28. Section 416.006, Property Code, is amended to
550	550	read as follows:
551	551	Sec. 416.006. ADDITIONAL ELIGIBILITY REQUIREMENTS FOR
552	552	BUSINESS ENTITIES. (a) To be eligible for an original or renewal
553	553	license [certificate of registration] under this chapter:
554	554	(1) a corporation, other than a nonprofit corporation,
555	555	must designate one of its officers as its agent for the purposes of
556	556	this chapter;
557	557	(2) a limited liability company must designate one of
558	558	its managers as its agent for the purposes of this chapter; [and]
559	559	(3) a partnership, limited partnership, or limited
560	560	liability partnership must designate one of its managing partners
561	561	as its agent for the purposes of this chapter; and
562	562	(4) a nonprofit corporation must designate one of its
563	563	officers or executive-level administrators as its agent for the
564	564	purposes of this chapter.
565	565	(b) A corporation, limited liability company, partnership,
566	566	limited partnership, or limited liability partnership is not
567	567	eligible to hold a license [be registered] under this chapter and
568	568	may not act as a builder unless the entity's designated agent is
569	569	individually licensed [registered] as a builder.
570	570	SECTION 29. Chapter 416, Property Code, is amended by
571	571	adding Section 416.0061 to read as follows:
572	572	Sec. 416.0061. EXAMINATION. (a) Except as otherwise
573	573	provided by this section and effective May 1, 2010, each applicant
574	574	for an original individual license under this chapter must take a
575	575	licensing examination prescribed by the commission. An applicant
576	576	is entitled to take the examination prescribed by the commission
577	577	if:
578	578	(1) the commission determines that the applicant meets
579	579	the qualifications required by this chapter; and
580	580	(2) the applicant pays the fees required by the
581	581	commission.
582	582	(b) Each examination administered under this section must
583	583	be prepared by the commission or by a multistate contractor
584	584	licensing association approved by the commission. The commission
585	585	shall ensure that the examination is administered in various
586	586	locations throughout the state.
587	587	(c) The examination must be designed to determine the
588	588	fitness of the applicant to engage in business as a builder in this
589	589	state.
590	590	(d) A person who, immediately before January 1, 2010, held a
591	591	certificate of registration issued by the commission or who
592	592	immediately before May 1, 2010, held a license issued by the
593	593	commission is eligible for a license without satisfying the
594	594	examination requirement of this section if the commission
595	595	determines that the person's certificate or license was active and
596	596	in good standing. If the person's certificate was not active or was
597	597	not in good standing as of December 31, 2009, or the person's
598	598	license was not active or was not in good standing as of August 31,
599	599	2011, the person is required to satisfy the examination
600	600	requirement. This subsection expires December 31, 2014.
601	601	SECTION 30. Section 416.007, Property Code, is amended to
602	602	read as follows:
603	603	Sec. 416.007. LICENSE ISSUANCE [OF CERTIFICATE]. (a) Not
604	604	later than the 15th day after the date the commission receives an
605	605	application from an applicant who meets the requirements of this
606	606	chapter, the commission shall issue an original or provisional
607	607	license, as appropriate, [a certificate of registration] to the
608	608	applicant. A builder who holds a provisional license may operate as
609	609	a builder under this chapter.
610	610	(b) Except as provided by Section 416.0071, the license [The
611	611	certificate of registration] remains in effect for the period
612	612	prescribed by the commission if the license [certificate] holder
613	613	complies with this chapter and pays the appropriate renewal fees.
614	614	(c) The commission shall issue one license [certificate of
615	615	registration] for each business entity licensed [registered] under
616	616	this chapter.
617	617	SECTION 31. Chapter 416, Property Code, is amended by
618	618	adding Section 416.0071 to read as follows:
619	619	Sec. 416.0071. PROVISIONAL LICENSE. (a) The commission
620	620	may grant a provisional license to an applicant for a license in
621	621	this state who:
622	622	(1) has been licensed or registered in good standing
623	623	to engage in business as a builder for at least two years in another
624	624	jurisdiction that has licensing or registration requirements
625	625	substantially equivalent to the requirements of this title;
626	626	(2) is currently licensed or registered in that
627	627	jurisdiction; and
628	628	(3) has passed a national or other examination
629	629	recognized by the commission.
630	630	(b) The commission shall issue a provisional license to a
631	631	person who satisfies the requirements of Section 416.005(a) but who
632	632	has not completed the course required by Section 416.005(b).
633	633	(c) A provisional license under Subsection (a) is valid for
634	634	six months from the date of issuance.
635	635	(d) A provisional license under Subsection (b) is valid for
636	636	30 days from the date of issuance. The commission shall issue an
637	637	original license to the holder of a provisional license under
638	638	Subsection (b) if the person completes the required course on or
639	639	before the 30th day after the date the provisional license was
640	640	issued.
641	641	SECTION 32. The heading to Section 416.008, Property Code,
642	642	is amended to read as follows:
643	643	Sec. 416.008. DENIAL OF LICENSE [REGISTRATION].
644	644	SECTION 33. Section 416.008(a), Property Code, is amended
645	645	to read as follows:
646	646	(a) If the commission denies an application for an original
647	647	license [certificate of registration] or a renewal application, the
648	648	commission shall give written notice to the applicant not later
649	649	than the 15th day after the date the commission receives the
650	650	application.
651	651	SECTION 34. Section 416.009, Property Code, is amended to
652	652	read as follows:
653	653	Sec. 416.009. LICENSE EXPIRATION [OF CERTIFICATE]. (a)
654	654	The commission may issue or renew a license, other than a
655	655	provisional license, [certificate of registration] for a period
656	656	that does not exceed 24 months.
657	657	(b) The commission by rule may adopt a system under which
658	658	licenses [certificates of registration] expire on several dates
659	659	during the year. The commission shall adjust the date for payment
660	660	of renewal fees accordingly.
661	661	(c) In a year in which the expiration date for a license
662	662	[certificate of registration] is changed, the renewal fee payable
663	663	shall be prorated on a monthly basis so that the license
664	664	[certificate] holder pays only that portion of the fee that is
665	665	allocable to the number of months during which the license
666	666	[certificate of registration] is valid. On renewal of the license
667	667	[certificate of registration] on the new expiration date, the total
668	668	renewal fee is payable.
669	669	SECTION 35. Sections 416.010(a), (b), (c), and (d),
670	670	Property Code, are amended to read as follows:
671	671	(a) A builder shall maintain a fixed office location in this
672	672	state. The address of the builder's principal place of business
673	673	must be designated on the license [certificate of registration].
674	674	(b) Not later than the 30th day after the date a builder
675	675	moves from the address designated on the license [certificate of
676	676	registration], the builder shall submit an application,
677	677	accompanied by the appropriate fee, for a license [certificate of
678	678	registration] that designates the new location of the builder's
679	679	principal place of business. The commission shall issue a license
680	680	[certificate of registration] that designates the new location if
681	681	the new location complies with the requirements of this section.
682	682	(c) If a builder operates under any name other than the name
683	683	that is set forth on the builder's license [certificate of
684	684	registration], the builder shall, within 45 days of operating under
685	685	this other name, disclose this other name to the commission.
686	686	(d) This section does not require a builder to obtain a
687	687	license [certificate of registration] for each sales office.
688	688	SECTION 36. Section 416.011(a), Property Code, is amended
689	689	to read as follows:
690	690	(a) The commission shall establish rules and procedures for
691	691	a program through which a builder can be designated as a "Texas Star
692	692	Builder." A builder's participation in the program is voluntary
693	693	and is not a requirement for the issuance of a license [certificate
694	694	of registration] required under this chapter.
695	695	SECTION 37. Sections 416.012(a), (c), (d), and (e),
696	696	Property Code, are amended to read as follows:
697	697	(a) The commission shall recognize or administer continuing
698	698	education programs for builders licensed [registered] by the
699	699	commission. A licensed [registered] builder must participate in
700	700	the programs to the extent required by this section to maintain the
701	701	builder's license [registration].
702	702	(c) A builder who is licensed with the commission
703	703	[registered before September 1, 2007, and all other builders who
704	704	register for the first time on or after September 1, 2007, and
705	705	satisfy the requirements of Subsection (b),] must complete 16
706	706	[five] hours of continuing education every two [five] years, one
707	707	hour of which must address ethics and may not be completed by
708	708	self-directed study.
709	709	(d) The commission shall permit a licensed [registered]
710	710	builder to receive continuing education credit for educational,
711	711	technical, ethical, or professional management activities related
712	712	to the practice of residential construction, including:
713	713	(1) successfully completing or auditing a course
714	714	sponsored by an institution of higher education;
715	715	(2) successfully completing a course certified by a
716	716	professional or trade organization;
717	717	(3) attending a seminar, tutorial, short course,
718	718	correspondence course, videotaped course, or televised course on
719	719	the practice of residential construction;
720	720	(4) participating in an in-house course sponsored by a
721	721	corporation or other business entity;
722	722	(5) teaching a course described by Subdivisions
723	723	(1)-(4);
724	724	(6) publishing an article, paper, or book on the
725	725	practice of residential construction;
726	726	(7) making or attending a presentation at a meeting of
727	727	a residential or builder association or organization or writing a
728	728	paper presented at the meeting;
729	729	(8) participating in the activities of a residential
730	730	or builder association, including serving on a committee of the
731	731	organization; and
732	732	(9) engaging in self-directed study on the practice of
733	733	residential construction.
734	734	(e) A licensed [registered] builder may not receive more
735	735	than two continuing education credit hours during each two-year
736	736	[five-year] period for engaging in self-directed study.
737	737	SECTION 38. Section 417.003(a), Property Code, is amended
738	738	to read as follows:
739	739	(a) The commission shall charge and collect:
740	740	(1) a filing fee for an application for certification
741	741	under this chapter that does not exceed $100;
742	742	(2) a fee for renewal of a certification under this
743	743	chapter that does not exceed $50; and
744	744	(3) a late fee that does not exceed the amount of the
745	745	fee due if payment of a certification [registration] or application
746	746	fee due under this title is late.
747	747	SECTION 39. Section 418.001, Property Code, is amended to
748	748	read as follows:
749	749	Sec. 418.001. GROUNDS FOR DISCIPLINARY ACTION. A person,
750	750	including a builder or a person who is designated as a builder's
751	751	agent under Section 416.006, or a person who owns or controls a
752	752	majority ownership interest in the builder is subject to
753	753	disciplinary action under this chapter for:
754	754	(1) fraud or deceit in obtaining a license,
755	755	registration, or certification under this subtitle;
756	756	(2) misappropriation or misapplication of trust funds
757	757	in the practice of residential construction, including a violation
758	758	of Chapter 32, Penal Code, or Chapter 162, if found by a final
759	759	nonappealable court judgment;
760	760	(3) naming false consideration in a contract to sell a
761	761	new home or in a construction contract;
762	762	(4) discriminating on the basis of race, color,
763	763	religion, sex, national origin, or ancestry;
764	764	(5) publishing a false or misleading advertisement;
765	765	(6) failure to honor, within a reasonable time, a
766	766	check issued to the commission, or any other instrument of payment,
767	767	including a credit or debit card or electronic funds transfer,
768	768	after the commission has sent by certified mail a request for
769	769	payment to the person's last known business address, according to
770	770	commission records;
771	771	(7) failure to pay an administrative penalty assessed
772	772	by the commission under Chapter 419 or a fee due under Chapter 426;
773	773	(8) failure to pay a final nonappealable court
774	774	judgment arising from a construction defect or other transaction
775	775	between the person and a homeowner;
776	776	(9) failure to register a home as required by Section
777	777	426.003;
778	778	(10) failure to remit the fee for registration of a
779	779	home under Section 426.003;
780	780	(11) [failure to reimburse a homeowner the amount
781	781	ordered by the commission as provided by Section 428.004(d);
782	782	[(12)] engaging in statutory or common-law fraud or
783	783	misappropriation of funds, as determined by the commission after a
784	784	hearing under Section 418.003;
785	785	(12) [(13)] a [repeated] failure to participate in the
786	786	state [state-sponsored] inspection program [and dispute resolution
787	787	process] if required by this title;
788	788	(13) [(14)] failure to obtain a license [register as a
789	789	builder] as required under Chapter 416;
790	790	(14) [(15)] using or attempting to use a license
791	791	[certificate of registration] that has expired or that has been
792	792	revoked;
793	793	(15) [(16)] falsely representing that the person
794	794	holds a license [certificate of registration] issued under Chapter
795	795	416;
796	796	(16) [(17)] acting as a builder using a name other
797	797	than the name or names disclosed to the commission;
798	798	(17) [(18)] aiding, abetting, or conspiring with a
799	799	person who does not hold a license [certificate of registration] to
800	800	evade the provisions of this title or rules adopted under this
801	801	title, if found by a final nonappealable court judgment;
802	802	(18) [(19)] allowing the person's license
803	803	[certificate of registration] to be used by another person;
804	804	(19) [(20)] acting as an agent, partner, or associate
805	805	of a person who does not hold a license [certificate of
806	806	registration] with the intent to evade the provisions of this title
807	807	or rules adopted under this title;
808	808	(20) [(21)] a failure to reasonably perform on an
809	809	accepted offer to repair or a [repeated] failure to make an offer to
810	810	repair based on:
811	811	(A) the recommendation of a third-party
812	812	inspector under Section 428.004; or
813	813	(B) the final holding of an appeal under Chapter
814	814	429;
815	815	(21) [(22)] a [repeated] failure to respond to a
816	816	commission request for information;
817	817	(22) [(23)] a failure to obtain a building permit
818	818	required by a political subdivision before constructing a new home
819	819	or an improvement to an existing home;
820	820	(23) [(24)] abandoning, without justification, any
821	821	home improvement contract or new home construction project engaged
822	822	in or undertaken by the person, if found to have done so by a final,
823	823	nonappealable court judgment;
824	824	(24) [(25)] a [repeated] failure to comply with the
825	825	requirements of Subtitle F; [or]
826	826	(25) [(26)] a failure to comply with the reporting
827	827	requirements of Section 428.006;
828	828	(26) a failure to substantially complete all the
829	829	obligations under an express contract for construction without
830	830	reasonable grounds for the failure, if found to have done so by a
831	831	final, nonappealable court judgment;
832	832	(27) a failure to comply with a commission rule
833	833	related to the duties and obligations of a third-party inspector
834	834	under Chapter 427;
835	835	(28) a failure to use a contract form adopted or
836	836	approved by the commission under Section 420.004; or
837	837	(29) otherwise violating this title or a commission
838	838	rule adopted under this title.
839	839	SECTION 40. Sections 418.002(a) and (c), Property Code, are
840	840	amended to read as follows:
841	841	(a) On a determination that a ground for disciplinary action
842	842	under Section 418.001 exists, the commission may:
843	843	(1) revoke or suspend a license [registration] or
844	844	certification [in the event of repeated prior violations that have
845	845	resulted in disciplinary action];
846	846	(2) probate the suspension of a license [registration]
847	847	or certification;
848	848	(3) formally or informally reprimand a licensed
849	849	[registered] or certified person; [or]
850	850	(4) impose an administrative penalty under Chapter
851	851	419; or
852	852	(5) prohibit a person or entity from acting as a
853	853	builder under this title, from acting as a contractor, as defined by
854	854	Section 27.001, or from owning or operating a company that supplies
855	855	goods or services to a builder or contractor for a period of time
856	856	and under conditions determined by the commission.
857	857	(c) For purposes of Section 418.001(11) [418.001(12)], the
858	858	commission may not conduct a hearing or revoke or suspend a license
859	859	[registration] or certification unless the determination of
860	860	statutory or common-law fraud or misappropriation of funds has been
861	861	made in a final nonappealable judgment by a court.
862	862	SECTION 41. Section 418.004(c), Property Code, is amended
863	863	to read as follows:
864	864	(c) An appeal to a district court of a final decision of the
865	865	commission under this section regarding a revocation or suspension
866	866	of a license [registration] or certification is determined by
867	867	substantial evidence.
868	868	SECTION 42. Section 419.002(c), Property Code, is amended
869	869	to read as follows:
870	870	(c) A violation of Section 418.001(2) or (11) [(12)] is
871	871	punishable by a penalty not to exceed $100,000.
872	872	SECTION 43. Section 419.004, Property Code, is amended to
873	873	read as follows:
874	874	Sec. 419.004. ENFORCEMENT OF PENALTY. If a person does not
875	875	pay an administrative penalty imposed under this chapter and
876	876	enforcement of the penalty is not stayed, the commission may:
877	877	(1) refer the matter to the attorney general for
878	878	collection of the penalty; or
879	879	(2) enforce any part of the order that specifies
880	880	disciplinary action to be taken against the licensed [registered]
881	881	or certified person if the licensed [registered] or certified
882	882	person fails to pay the administrative penalty within the time
883	883	prescribed.
884	884	SECTION 44. The heading to Chapter 420, Property Code, is
885	885	amended to read as follows:
886	886	CHAPTER 420. REGULATION OF BUILDING CONTRACTS AND TRANSFERS OF
887	887	TITLE FROM BUILDER [CONTRACT PROVISIONS]
888	888	SECTION 45. Section 420.001, Property Code, is amended to
889	889	read as follows:
890	890	Sec. 420.001. REQUIRED WRITTEN DISCLOSURE. In a contract
891	891	for the construction of a new home or an improvement to an existing
892	892	home required to be registered under Section 426.003, the contract
893	893	must contain a notice to the consumer in at least 10-point bold type
894	894	or the computer equivalent that gives the telephone number of the
895	895	commission and states:
896	896	STATE LAW REQUIRES THAT A PERSON HOLD A LICENSE [CERTIFICATE
897	897	OF REGISTRATION] FROM THE TEXAS RESIDENTIAL CONSTRUCTION
898	898	COMMISSION IF THE PERSON CONTRACTS TO CONSTRUCT A NEW HOME OR IF THE
899	899	PERSON CONTRACTS TO CONSTRUCT A MATERIAL IMPROVEMENT TO AN EXISTING
900	900	HOME OR CERTAIN IMPROVEMENTS TO THE INTERIOR OF AN EXISTING HOME AND
901	901	THE TOTAL COST OF THE IMPROVEMENT IS $10,000 OR MORE (INCLUDING
902	902	LABOR AND MATERIALS).
903	903	YOU MAY CONTACT THE COMMISSION AT [insert commission's
904	904	telephone number] TO FIND OUT WHETHER THE BUILDER HAS A VALID
905	905	LICENSE [CERTIFICATE OF REGISTRATION]. THE COMMISSION HAS
906	906	INFORMATION AVAILABLE ON THE HISTORY OF BUILDERS, INCLUDING
907	907	SUSPENSIONS, REVOCATIONS, COMPLAINTS, AND RESOLUTION OF
908	908	COMPLAINTS.
909	909	THIS CONTRACT IS SUBJECT TO CHAPTER 426, PROPERTY CODE. THE
910	910	PROVISIONS OF THAT CHAPTER GOVERN THE PROCESS THAT MUST BE FOLLOWED
911	911	IN THE EVENT A DISPUTE ARISES OUT OF AN ALLEGED CONSTRUCTION DEFECT.
912	912	IF YOU HAVE A COMPLAINT CONCERNING A CONSTRUCTION DEFECT YOU MAY
913	913	CONTACT THE COMMISSION AT THE TOLL-FREE TELEPHONE NUMBER TO LEARN
914	914	HOW TO PROCEED UNDER THE STATE [STATE-SPONSORED] INSPECTION PROGRAM
915	915	[AND DISPUTE RESOLUTION PROCESS].
916	916	SECTION 46. Section 420.002, Property Code, is amended to
917	917	read as follows:
918	918	Sec. 420.002. REQUIRED CONTRACT PROVISIONS. In a contract
919	919	for the construction of a new home or an improvement to an existing
920	920	home required to be registered under Section 426.003, the contract
921	921	is not enforceable against a homeowner unless the contract:
922	922	(1) contains the builder's name and license
923	923	[certificate of registration] number; and
924	924	(2) contains the notice required by Section 420.001.
925	925	SECTION 47. Section 420.003, Property Code, is amended to
926	926	read as follows:
927	927	Sec. 420.003. BINDING ARBITRATION CONTRACT PROVISION. (a)
928	928	In a contract for the construction of a new home or the improvement
929	929	of an existing home required to be registered under Section 426.003
930	930	and that contains a provision requiring the parties to submit a
931	931	dispute arising under the contract to binding arbitration, or in
932	932	any agreement related to the contract that requires the parties to
933	933	submit a dispute to arbitration, the provision requiring the
934	934	submission of a dispute to arbitration must be prominently
935	935	displayed in the document and conspicuously printed or typed in a
936	936	size equal to at least 12-point [10-point] bold type or the computer
937	937	equivalent.
938	938	(b) A written arbitration agreement to arbitrate a
939	939	controversy that exists at the time of the agreement that is entered
940	940	into in connection with a contract described by Subsection (a) must
941	941	include a statement, initialed by each party to the agreement,
942	942	stating that the party has chosen to arbitrate a controversy that
943	943	exists at the time of the agreement. A written arbitration
944	944	agreement to arbitrate a controversy that arises between the
945	945	parties after the date of the agreement that is a provision of a
946	946	contract described by Subsection (a), or an agreement entered into
947	947	in connection with the contract, must include a statement,
948	948	initialed by each party to the agreement, stating that the party has
949	949	chosen to arbitrate a controversy that arises between the parties
950	950	after the date of the agreement. A written arbitration agreement
951	951	must also contain a second statement, immediately following the
952	952	other statement required by this subsection, that is conspicuously
953	953	printed or typed in at least 12-point bold-faced type or the
954	954	computer equivalent and initialed by the homeowner that states that
955	955	the homeowner knowingly and voluntarily waives the homeowner's
956	956	right to a trial by jury of all disputes by signing the agreement.
957	957	(c) A contract provision or agreement described by this
958	958	section [Subsection (a)] is not enforceable against the homeowner
959	959	unless the requirements of this section [Subsection (a)] are met.
960	960	SECTION 48 .Chapter 420, Property Code, is amended by
961	961	adding Section 420.004 to read as follows:
962	962	Sec. 420.004. STANDARD CONTRACT FORMS. (a) The commission
963	963	shall adopt rules in the public's best interest that require
964	964	builders to use contract forms prepared with the assistance of the
965	965	Texas Real Estate Broker-Lawyer Committee and adopted by the
966	966	commission for the sale or construction of a new home.
967	967	(b) The commission may not prohibit a builder from using a
968	968	contract form for the sale or construction of a new home that is:
969	969	(1) prepared by the purchaser; or
970	970	(2) prepared by an attorney and required by the
971	971	purchaser.
972	972	(c) A contract form adopted by the commission must comply
973	973	with this chapter, except that the commission may not adopt a
974	974	contract form that includes a provision that requires the parties
975	975	to submit a dispute arising under the contract to binding
976	976	arbitration.
977	977	(d) A builder may use the builder's own contract form if the
978	978	builder has submitted the form to the commission and the commission
979	979	has approved the builder's use of the form. The commission shall
980	980	approve or disapprove a contract form submitted under this
981	981	subsection on or before the 30th day after the date the form is
982	982	submitted.
983	983	(e) In considering whether to approve a builder's contract
984	984	form under Subsection (d), the commission shall approve the form
985	985	only if the commission determines that the contract form is in the
986	986	public's best interest and consistent with the criteria used by the
987	987	commission to adopt standard forms under Subsection (a).
988	988	SECTION 49. Chapter 420, Property Code, is amended by
989	989	adding Section 420.005 to read as follows:
990	990	Sec. 420.005. FULL DISCLOSURE OF RESALE BY BUILDER. (a)
991	991	Before a contract may be executed or money exchanged between a
992	992	builder and a buyer for purchase of a home that, because of one or
993	993	more construction defects, the builder repurchased from a previous
994	994	buyer from the builder, the builder must provide to the buyer a
995	995	document that fully discloses the nature of and the builder's
996	996	remediation of each of those construction defects.
997	997	(b) In addition to a disclosure of the nature of each
998	998	construction defect and the remediation work performed, the
999	999	disclosure under Subsection (a) must include information relating
1000	1000	to:
1001	1001	(1) any products installed in the home relating to the
1002	1002	remediation;
1003	1003	(2) care and component warranties of those products;
1004	1004	(3) building standards used in performing the
1005	1005	remediation; and
1006	1006	(4) any risks and hazards of the home.
1007	1007	SECTION 50. Chapter 420, Property Code, is amended by
1008	1008	adding Section 420.006 to read as follows:
1009	1009	Sec. 420.006. CONSTRUCTION DOCUMENTS. A builder who
1010	1010	constructs a new home must provide a copy of the plat and the
1011	1011	blueprints used in the construction of the home:
1012	1012	(1) at the time the construction is completed, to the
1013	1013	person who contracted with the builder for the construction of the
1014	1014	home; or
1015	1015	(2) at the time title to the home is transferred by the
1016	1016	builder, to the person who purchases the home from the builder.
1017	1017	SECTION 51. Subtitle C, Title 16, Property Code, is amended
1018	1018	by adding Chapter 421 to read as follows:
1019	1019	CHAPTER 421. HOMEOWNER RECOVERY FUND
1020	1020	Sec. 421.001. DEFINITIONS. In this chapter:
1021	1021	(1) "Fund" means the homeowner recovery fund.
1022	1022	(2) "Fund account" means the account established for
1023	1023	the deposit of money held by the fund.
1024	1024	Sec. 421.002. LEGISLATIVE INTENT. The legislature intends
1025	1025	that the fund serve as a resource of last resort for homeowners who
1026	1026	are unable to collect damages from a builder arising from the
1027	1027	builder's violation of this title or to get a confirmed
1028	1028	construction defect repaired by a builder.
1029	1029	Sec. 421.003. FUND ESTABLISHED. The homeowner recovery
1030	1030	fund is established.
1031	1031	Sec. 421.004. ACCOUNT. (a) The fund account is established
1032	1032	with the Texas Treasury Safekeeping Trust Company in accordance
1033	1033	with procedures adopted by the comptroller. The comptroller shall
1034	1034	account for the deposited money separately from all other money.
1035	1035	(b) The comptroller shall annually transfer to the credit of
1036	1036	the fund account 10 percent of each administrative penalty
1037	1037	collected under Chapter 419.
1038	1038	(c) Notwithstanding Sections 404.071 and 404.106,
1039	1039	Government Code, the pro rata portion of interest earned by the
1040	1040	trust company from money in the fund shall be allocated to the fund.
1041	1041	(d) The commission shall notify the comptroller of the
1042	1042	existence of money to be credited to the fund account under this
1043	1043	section. The commissioner must enter an order to transfer amounts
1044	1044	from the fund account.
1045	1045	(e) The comptroller shall transfer to the credit of the fund
1046	1046	account any money collected by the commission during state fiscal
1047	1047	year 2010 that exceeds the commission's direct and indirect
1048	1048	operating costs. This subsection expires September 1, 2011.
1049	1049	Sec. 421.005. CLAIM FOR PAYMENT FROM ACCOUNT. (a) A
1050	1050	homeowner who participates in the state inspection process in
1051	1051	connection with a request filed under Section 428.001 or engages in
1052	1052	mediation under Section 428A.004 and sustains damages arising from
1053	1053	a builder's violation of this title is entitled to payment from the
1054	1054	fund if the homeowner:
1055	1055	(1) obtains a court judgment against a builder for
1056	1056	damages arising from the violation for which execution is returned
1057	1057	without a satisfaction of the total amount of the judgment and
1058	1058	perfects a judgment lien for the unsatisfied amount;
1059	1059	(2) in a bankruptcy proceeding involving the builder,
1060	1060	proves a claim against the builder for damages arising from the
1061	1061	builder's violation of this title that is disallowed or rendered
1062	1062	uncollectible by an order or other final ruling of the bankruptcy
1063	1063	court; or
1064	1064	(3) proves in accordance with rules adopted by the
1065	1065	commission that:
1066	1066	(A) the homeowner sustained damages arising from
1067	1067	the builder's violation of this title, including court costs and
1068	1068	reasonable attorney's fees, of not more than $10,000;
1069	1069	(B) the builder has not offered to repair or has
1070	1070	failed to repair the construction defect or otherwise resolve the
1071	1071	dispute arising from the construction defect; and
1072	1072	(C) the damages are uncollectible from the
1073	1073	builder without pursuing a civil action against the builder.
1074	1074	(b) After receiving a request for payment from the fund
1075	1075	under Subsection (a)(3), the commission shall hold a hearing to
1076	1076	determine whether the person who makes the request is entitled to
1077	1077	payment and, if so, the amount of the payment to which the person is
1078	1078	entitled.
1079	1079	(c) A person entitled to payment under this section may
1080	1080	collect only the lesser of:
1081	1081	(1) the amount of actual damages awarded or proven
1082	1082	that the person was unable to collect from the builder; or
1083	1083	(2) $175,000.
1084	1084	SECTION 52. The heading to Subtitle D, Title 16, Property
1085	1085	Code, is amended to read as follows:
1086	1086	SUBTITLE D. STATE [STATE-SPONSORED] INSPECTION PROGRAM [AND
1087	1087	DISPUTE RESOLUTION PROCESS]; STATUTORY WARRANTY AND BUILDING AND
1088	1088	PERFORMANCE STANDARDS
1089	1089	SECTION 53. Section 426.003, Property Code, is amended by
1090	1090	amending Subsections (a) and (b) and adding Subsections (e) and (f)
1091	1091	to read as follows:
1092	1092	(a) A builder shall register a new home with the commission
1093	1093	on or before the 15th day of the month following the month in which
1094	1094	the transfer of title from the builder to the homeowner occurs.
1095	1095	[The registration must include the information required by the
1096	1096	commission by rule and be accompanied by the fee required by
1097	1097	Subsection (c).]
1098	1098	(b) A builder who enters a transaction governed by this
1099	1099	title, other than the transfer of title of a new home from the
1100	1100	builder to the seller, shall register the home involved in the
1101	1101	transaction with the commission[. The registration must:
1102	1102	[(1) include the information required by the
1103	1103	commission by rule;
1104	1104	[(2) be accompanied by the fee required by Subsection
1105	1105	(c); and
1106	1106	[(3) be delivered to the commission] not later than
1107	1107	the 15th day after the earlier of:
1108	1108	(1) [(A)] the date of the substantial completion of
1109	1109	the home or other residential construction project;
1110	1110	(2) [(B)] the date the new home is occupied; or
1111	1111	(3) [(C)] the date of issuance of a certificate of
1112	1112	occupancy or a certificate of completion.
1113	1113	(e) A builder who registers a home or a residential
1114	1114	construction project under Subsection (a) or (b) shall:
1115	1115	(1) include the information required by the commission
1116	1116	by rule;
1117	1117	(2) state whether the registration concerns a new
1118	1118	home, a material improvement to an existing home, or an improvement
1119	1119	to the interior of an existing home when the cost of the work
1120	1120	exceeds $10,000; and
1121	1121	(3) pay the fee required by Subsection (c).
1122	1122	(f) Notwithstanding Subsections (a) and (b), a builder is
1123	1123	not required to comply with this subtitle after completing
1124	1124	construction of a partially completed home owned by a mortgagee or a
1125	1125	beneficiary under a deed of trust who acquired the partially
1126	1126	completed home:
1127	1127	(1) at a sale conducted under a power of sale under a
1128	1128	deed of trust or a court-ordered foreclosure; or
1129	1129	(2) by a deed in lieu of foreclosure.
1130	1130	SECTION 54. The heading to Section 426.004, Property Code,
1131	1131	is amended to read as follows:
1132	1132	Sec. 426.004. EXPENSES [FEES].
1133	1133	SECTION 55. Section 426.004(a), Property Code, is amended
1134	1134	to read as follows:
1135	1135	(a) A builder [party] who is involved in a dispute for which
1136	1136	a request is submitted [submits a request] under this subtitle
1137	1137	shall pay any amount required by the commission to offset [cover]
1138	1138	the expense of the third-party inspector.
1139	1139	SECTION 56. Section 426.005, Property Code, is amended by
1140	1140	amending Subsections (b) and (f) and adding Subsections (g), (h),
1141	1141	(i), and (j) to read as follows:
1142	1142	(b) Except as provided by Subsections (g) and (h), an [An]
1143	1143	action described by Subsection (a) must be filed:
1144	1144	(1) on or before the expiration of any applicable
1145	1145	statute of limitations or by the 45th day after the date the
1146	1146	third-party inspector issues the inspector's recommendation,
1147	1147	whichever is later; or
1148	1148	(2) if the recommendation is appealed, on or before
1149	1149	the expiration of any applicable statute of limitations or by the
1150	1150	45th day after the date the commission issues its ruling on the
1151	1151	appeal, whichever is later.
1152	1152	(f) A homeowner is not required to comply with this subtitle
1153	1153	if:
1154	1154	(1) at the time a homeowner and a builder enter into a
1155	1155	contract covered by this title the builder was not licensed
1156	1156	[registered]; or
1157	1157	(2) the license [certificate of registration] of the
1158	1158	builder has been revoked.
1159	1159	(g) Except as provided by Subsection (h), an action
1160	1160	described by Subsection (a) may be initiated by the homeowner or
1161	1161	builder:
1162	1162	(1) for a dispute involving workmanship and materials,
1163	1163	on or after the 76th day after the date the request for a state
1164	1164	inspection is submitted, except as provided by Subdivision (3);
1165	1165	(2) for a dispute involving a structural matter, on or
1166	1166	after the 91st day after the date the request for a state inspection
1167	1167	is submitted, except as provided by Subdivision (3); or
1168	1168	(3) if the third-party inspector's recommendation is
1169	1169	appealed and a ruling on the appeal is not issued in the time
1170	1170	prescribed by Section 429.001, on or after the day after the date
1171	1171	the panel is required to issue the ruling under that section.
1172	1172	(h) If a homeowner or builder causes a delay of more than
1173	1173	five days in the completion of the inspection process under the
1174	1174	state inspection program or any appeal under the program, the time
1175	1175	required under Subsection (g) to initiate an action against the
1176	1176	homeowner or builder who causes the delay is extended by the number
1177	1177	of days of the delay.
1178	1178	(i) An action filed under Subsection (g) must be filed on or
1179	1179	before the later of:
1180	1180	(1) the expiration of the applicable statute of
1181	1181	limitations; or
1182	1182	(2) the 45th day after the first date on which
1183	1183	Subsection (g) authorizes the filing of the action.
1184	1184	(j) Once a final, unappealable recommendation or a ruling on
1185	1185	an appeal of a recommendation is issued under this subtitle, a
1186	1186	homeowner or builder may file an action described by Subsection
1187	1187	(a). A homeowner is not required to delay the filing of an action to
1188	1188	allow the builder an opportunity to make an offer of settlement or
1189	1189	repair under Sections 27.004(b) and (c) or an election to purchase
1190	1190	the residence under Section 27.0042. The filing of an action by the
1191	1191	homeowner does not affect a builder's right to make an offer of
1192	1192	settlement or repair in the time provided by Section 27.004(b) or an
1193	1193	election to purchase the residence in the time provided by Section
1194	1194	27.0042.
1195	1195	SECTION 57. Section 426.006, Property Code, is amended to
1196	1196	read as follows:
1197	1197	Sec. 426.006. TIME FOR REQUESTING INSPECTION [AND DISPUTE
1198	1198	RESOLUTION]. (a) For an alleged defect discovered during an
1199	1199	applicable warranty period, an [the state-sponsored] inspection
1200	1200	through the state inspection program [and dispute resolution
1201	1201	process] must be requested on or before the second anniversary of
1202	1202	the date of discovery of the conditions claimed to be evidence of
1203	1203	the construction defect but not later than the 90th day after the
1204	1204	date the applicable warranty period expires.
1205	1205	(b) If the alleged defect would violate the statutory
1206	1206	warranty of habitability and was not discoverable by a reasonable,
1207	1207	prudent inspection or examination of the home or improvement within
1208	1208	the applicable warranty period, the [state-sponsored] inspection
1209	1209	[and dispute resolution process] must be requested:
1210	1210	(1) on or before the second anniversary of the date of
1211	1211	discovery of the conditions claimed to be evidence of the
1212	1212	construction defect; and
1213	1213	(2) not later than the 10th anniversary of the date of
1214	1214	the initial transfer of title from the builder to the initial owner
1215	1215	of the home or improvement that is the subject of the dispute or, if
1216	1216	there is not a closing, the date on which the contract for
1217	1217	construction of the improvement is entered into.
1218	1218	SECTION 58. Section 426.007, Property Code, is amended to
1219	1219	read as follows:
1220	1220	Sec. 426.007. ADMISSIBILITY OF CERTAIN EVIDENCE. A person
1221	1221	who submits a request for [state-sponsored] inspection under
1222	1222	Section 428.001 [and dispute resolution] or responds to a request
1223	1223	made under that section [Chapter 428] must disclose in the request
1224	1224	or response the name of any expert who, before the request is
1225	1225	submitted, inspected the home on behalf of the requestor or
1226	1226	respondent in connection with the construction defect alleged in
1227	1227	the request or response. If an expert's name is known to the
1228	1228	requestor or respondent at the time of the request or response and
1229	1229	is not disclosed as required by this section, the requestor or
1230	1230	respondent may not designate the person as an expert or use
1231	1231	materials prepared by that person in:
1232	1232	(1) the [state-sponsored] inspection [and dispute
1233	1233	resolution] process arising out of the request; or
1234	1234	(2) any action arising out of the construction defect
1235	1235	that is the subject of the request or response.
1236	1236	SECTION 59. Sections 427.001(c), (c-1), and (d), Property
1237	1237	Code, are amended to read as follows:
1238	1238	(c) A third-party inspector who inspects an issue involving
1239	1239	a structural matter [or involving workmanship, materials, and a
1240	1240	structural matter] must:
1241	1241	(1) be an approved structural engineer or approved
1242	1242	architect; and
1243	1243	(2) have a minimum of five years' experience in
1244	1244	residential construction.
1245	1245	(c-1) For an inspection request with an issue [A third-party
1246	1246	inspector who inspects an issue] involving a structural matter and
1247	1247	an unrelated issue involving workmanship and materials matters, the
1248	1248	commission must assign a third-party inspector who meets [must
1249	1249	meet] the requirements of Subsections (b) and (c) or assign two
1250	1250	third-party inspectors, one who meets the requirements of
1251	1251	Subsection (b) and one who meets the requirements of Subsection
1252	1252	(c), to work in conjunction with one another to inspect the alleged
1253	1253	defects.
1254	1254	(d) Each third-party inspector must receive, in accordance
1255	1255	with commission rules:
1256	1256	(1) initial training regarding the state
1257	1257	[state-sponsored] inspection program [and dispute resolution
1258	1258	process] and this subtitle; and
1259	1259	(2) annual continuing education in the inspector's
1260	1260	area of practice.
1261	1261	SECTION 60. Section 427.002(a), Property Code, is amended
1262	1262	to read as follows:
1263	1263	(a) The commission shall employ state inspectors to:
1264	1264	(1) review on an appeals panel the recommendations of
1265	1265	third-party inspectors;
1266	1266	(2) provide consultation to third-party inspectors;
1267	1267	and
1268	1268	(3) administer the state [state-sponsored] inspection
1269	1269	program [and dispute resolution process].
1270	1270	SECTION 61. The heading to Chapter 428, Property Code, is
1271	1271	amended to read as follows:
1272	1272	CHAPTER 428. STATE [STATE-SPONSORED] INSPECTION PROGRAM [AND
1273	1273	DISPUTE RESOLUTION PROCESS]
1274	1274	SECTION 62. Sections 428.001(a) and (b), Property Code, are
1275	1275	amended to read as follows:
1276	1276	(a) If a dispute between a homeowner and a builder arises
1277	1277	out of an alleged construction defect, the homeowner or the builder
1278	1278	may submit to the commission a written request for
1279	1279	[state-sponsored] inspection under this subtitle [and dispute
1280	1280	resolution]. If the builder files a request under this section, the
1281	1281	homeowner may submit a request for mediation as provided by Section
1282	1282	428A.004.
1283	1283	(b) The request must:
1284	1284	(1) specify in reasonable detail each alleged
1285	1285	construction defect that is a subject of the request;
1286	1286	(2) state the amount of any known out-of-pocket
1287	1287	expenses and engineering or consulting fees incurred by the
1288	1288	homeowner in connection with each alleged construction defect;
1289	1289	(3) include any evidence that depicts the nature and
1290	1290	cause of each alleged construction defect and the nature and extent
1291	1291	of repairs necessary to remedy the construction defect, including,
1292	1292	if available, expert reports, photographs, and videotapes, if that
1293	1293	evidence would be discoverable under Rule 192, Texas Rules of Civil
1294	1294	Procedure;
1295	1295	(4) be accompanied by the fees required under Section
1296	1296	426.004, if applicable; and
1297	1297	(5) state the name of any person who has, on behalf of
1298	1298	the requestor, inspected the home in connection with an alleged
1299	1299	construction defect.
1300	1300	SECTION 63. Chapter 428, Property Code, is amended by
1301	1301	adding Section 428.0011 to read as follows:
1302	1302	Sec. 428.0011. PROCESSING AND PRIORITIZING OF REQUESTS.
1303	1303	(a) The commission shall adopt rules for processing requests under
1304	1304	this chapter that include guidelines for prioritizing the handling
1305	1305	of the requests and allocating agency staff and other resources in
1306	1306	the most efficient manner to address the requests.
1307	1307	(b) In adopting rules under this section, the commission
1308	1308	shall consider:
1309	1309	(1) appropriate ways to expedite inspections under the
1310	1310	state inspection program under emergency circumstances, including
1311	1311	cases involving issues of habitability;
1312	1312	(2) appropriate handling of complex case material and
1313	1313	whether different handling is appropriate for requests involving a
1314	1314	structural defect and requests involving workmanship and
1315	1315	materials; and
1316	1316	(3) the most efficient ways to use agency staff.
1317	1317	SECTION 64. Section 428.002(a), Property Code, is amended
1318	1318	to read as follows:
1319	1319	(a) At [In addition to the right of inspection provided by
1320	1320	Section 428.001(c), at] any time before the conclusion of the
1321	1321	[state-sponsored] inspection [and dispute resolution] process
1322	1322	under this subtitle and on the builder's written request, the
1323	1323	builder shall be given reasonable opportunity to inspect the home
1324	1324	that is the subject of the request or have the home inspected to
1325	1325	determine the nature and cause of the construction defect and the
1326	1326	nature and extent of repairs necessary to remedy the construction
1327	1327	defect.
1328	1328	SECTION 65. Section 428.003, Property Code, is amended to
1329	1329	read as follows:
1330	1330	Sec. 428.003. INSPECTION BY THIRD-PARTY INSPECTOR;
1331	1331	ADMINISTRATIVE PENALTY. (a) On or before the 10th [30th] day after
1332	1332	the date the commission receives a request, the commission shall
1333	1333	appoint the next available third-party inspector from the
1334	1334	applicable lists of third-party inspectors maintained by the
1335	1335	commission under Subsection (d) [(c)]. If, in accordance with
1336	1336	guidelines adopted under Section 428.0011, the executive director
1337	1337	determines the circumstances involved in a request constitute an
1338	1338	emergency, the executive director may assign a state inspector or
1339	1339	other commission employee that the executive director determines is
1340	1340	qualified to conduct the inspection and issue a recommendation in
1341	1341	accordance with the requirements for inspections and
1342	1342	recommendations by a third-party inspector.
1343	1343	(b) The commission shall establish rules and regulations
1344	1344	that require [allow the homeowner and the builder to each have the
1345	1345	right to strike the appointment of] a third-party inspector to
1346	1346	decline an appointment and disclose to the commission that a
1347	1347	conflict of interest exists if the third-party inspector:
1348	1348	(1) is employed by or participates in the management
1349	1349	of a business entity or other organization owned by or receiving
1350	1350	money from the interested homeowner or builder;
1351	1351	(2) owns or controls, directly or indirectly, more
1352	1352	than a 10 percent interest in a business entity or other
1353	1353	organization owned by or receiving money from the interested
1354	1354	homeowner or builder; or
1355	1355	(3) uses or receives a substantial amount of goods,
1356	1356	services, or money from the interested homeowner or builder [one
1357	1357	time for each request submitted].
1358	1358	(c) The commission may impose an administrative penalty on
1359	1359	or remove from the list of available third-party inspectors a
1360	1360	third-party inspector who knowingly fails to decline an appointment
1361	1361	and disclose a conflict of interest in accordance with Subsection
1362	1362	(b).
1363	1363	(d) The commission shall adopt rules that allow for the
1364	1364	commission to maintain a list of available third-party inspectors
1365	1365	for the various regions of the state, as required to satisfy the
1366	1366	provisions of this title.
1367	1367	SECTION 66. Section 428.004, Property Code, is amended by
1368	1368	amending Subsections (b) and (c) and adding Subsections (g), (h),
1369	1369	and (i) to read as follows:
1370	1370	(b) If the dispute involves a structural matter in the home,
1371	1371	the commission shall appoint a [an approved engineer to be the]
1372	1372	third-party inspector qualified under Section 427.001 to inspect
1373	1373	for structural defects. The third-party inspector shall inspect
1374	1374	the home not later than the 30th day after the date the request is
1375	1375	submitted and issue a recommendation not later than the 45th [60th]
1376	1376	day after the date the third-party inspector receives the
1377	1377	assignment from the commission, unless additional time is requested
1378	1378	by the third-party inspector or a party to the dispute. The
1379	1379	commission shall adopt rules governing the extension of time under
1380	1380	this subsection.
1381	1381	(c) The third-party inspector's recommendation must[:
1382	1382	[(1) address only the construction defect, based on
1383	1383	the applicable warranty and building and performance standards; and
1384	1384	[(2)] designate a method or manner of repair, if any.
1385	1385	At the option of the third-party inspector, the recommendation may
1386	1386	identify any construction defects discovered by the third-party
1387	1387	inspector that are not included in the request for inspection that
1388	1388	involve a violation of any applicable building and performance
1389	1389	standard that if left unrepaired may threaten the health or safety
1390	1390	of the occupants of the home or that involve a violation of a
1391	1391	building code applicable to the construction. A third-party
1392	1392	inspector has no duty to inspect the home for construction defects
1393	1393	that are not included in the request for inspection.
1394	1394	(g) A final report made available to the public on the
1395	1395	commission's Internet website may not include the name of the
1396	1396	homeowner and must indicate whether the builder offered to make
1397	1397	repairs as recommended by the final report or otherwise resolved
1398	1398	the dispute with the homeowner.
1399	1399	(h) A final report made available to the public on the
1400	1400	commission's Internet website may not include the name or street
1401	1401	address of the homeowner and must indicate:
1402	1402	(1) whether the builder has resolved the dispute with
1403	1403	the homeowner by:
1404	1404	(A) making repairs substantially equivalent to
1405	1405	those required by the findings of the final report confirming the
1406	1406	defect, as confirmed by the homeowner and a third-party inspector
1407	1407	who has inspected the repairs; or
1408	1408	(B) has otherwise resolved the dispute with the
1409	1409	homeowner; or
1410	1410	(2) whether the builder has not resolved the dispute
1411	1411	with the homeowner. If the builder has not resolved the dispute
1412	1412	with the homeowner, the report shall indicate whether the builder
1413	1413	offered to make repairs as recommended by the final report.
1414	1414	(i) All final reports and all information contained therein
1415	1415	are public records.
1416	1416	SECTION 67. Chapter 428, Property Code, is amended by
1417	1417	adding Sections 428.0041 and 428.006 to read as follows:
1418	1418	Sec. 428.0041. INSPECTION OF CONSTRUCTION DEFECT OR REPAIR;
1419	1419	TIME FOR COMPLETION OF CERTAIN REPAIRS. (a) A builder who, for the
1420	1420	purposes of Section 27.004(l) or otherwise, completes repairs of a
1421	1421	construction defect shall, at the builder's expense, engage an
1422	1422	inspector to inspect the repairs and determine whether the home, as
1423	1423	repaired, complies with the applicable limited statutory warranty
1424	1424	and building and performance standards adopted by the commission.
1425	1425	The builder shall engage the third-party inspector who issued a
1426	1426	recommendation regarding the construction defect to perform the
1427	1427	inspection unless otherwise provided by commission rules adopted
1428	1428	under this section.
1429	1429	(b) An inspection of repairs under Subsection (a), other
1430	1430	than minor cosmetic repairs described by Subsection (c), must be
1431	1431	completed not later than:
1432	1432	(1) the 30th day after the date the repairs are
1433	1433	completed for a dispute involving workmanship and materials; and
1434	1434	(2) the 45th day after the date the repairs are
1435	1435	completed for a dispute that involves a structural matter.
1436	1436	(c) The builder is entitled to a reasonable period not to
1437	1437	exceed 15 days to address minor cosmetic items that are necessary to
1438	1438	fully complete the repairs.
1439	1439	(d) The commission may for good cause require that:
1440	1440	(1) an alleged construction defect that has been
1441	1441	inspected by a third-party inspector be inspected again by another
1442	1442	third-party inspector or a state inspector or other commission
1443	1443	employee; or
1444	1444	(2) a builder's repair of a construction defect be
1445	1445	inspected by a third-party inspector or a state inspector or other
1446	1446	commission employee, regardless of whether the repair is inspected
1447	1447	for the purposes of Subsection (a) by the third-party inspector who
1448	1448	issued a recommendation regarding the construction defect or by a
1449	1449	state inspector.
1450	1450	(e) The commission may charge the builder a fee for an
1451	1451	inspection conducted under Subsection (d).
1452	1452	(f) A homeowner may refuse an inspection under this section.
1453	1453	Sec. 428.006. BUILDER REPORTING REQUIRED. (a) A builder
1454	1454	involved in the inspection process or mediation under this subtitle
1455	1455	shall file with the commission, on a form prescribed by the
1456	1456	commission, information relating to any activity related to the
1457	1457	dispute, including a settlement, repair effort, mediation,
1458	1458	arbitration, or litigation, that occurs after:
1459	1459	(1) a third-party inspector's report issued under this
1460	1460	chapter becomes final and nonappealable; or
1461	1461	(2) mediation is requested under Section 428A.004.
1462	1462	(b) A builder shall file a form not later than the 21st day
1463	1463	after the report becomes final and nonappealable or the builder
1464	1464	receives a request for mediation under Section 428A.004.
1465	1465	(c) In addition to any other information the commission
1466	1466	determines is appropriate to request, the form prescribed under
1467	1467	this section must request the following information:
1468	1468	(1) the name of the builder;
1469	1469	(2) the name and address of the homeowner and the
1470	1470	property involved in the inspection process or mediation;
1471	1471	(3) any inspection or other request number assigned by
1472	1472	the commission;
1473	1473	(4) whether any repairs or other types of compensation
1474	1474	were offered by the builder to the homeowner for any construction
1475	1475	defects affirmed by a final, nonappealable report;
1476	1476	(5) if repairs were offered by the builder:
1477	1477	(A) whether any alleged defects affirmed by a
1478	1478	final, nonappealable report were excluded from the offer of repair;
1479	1479	and
1480	1480	(B) whether the homeowner accepted any or all of
1481	1481	the repairs offered;
1482	1482	(6) if repairs were offered and accepted:
1483	1483	(A) whether the repairs were made; and
1484	1484	(B) whether the repairs resulted in the
1485	1485	satisfaction of all issues between the parties as a result of the
1486	1486	residential construction project;
1487	1487	(7) if repairs were made, whether the builder engaged
1488	1488	the services of the third-party inspector who performed the
1489	1489	inspection under this subtitle to inspect the repairs;
1490	1490	(8) if repairs were not offered or an offer for repair
1491	1491	was not accepted, whether either of the parties pursued any further
1492	1492	legal proceedings related to the dispute between the parties;
1493	1493	(9) if either party has pursued further legal
1494	1494	proceedings, whether the parties are in mediation or involved in
1495	1495	arbitration or a civil lawsuit; and
1496	1496	(10) if the parties are involved in an arbitration
1497	1497	proceeding, whether the arbitration is required as a provision of a
1498	1498	contract between the parties.
1499	1499	(d) If the parties have not resolved their dispute at the
1500	1500	time the builder files the initial form under Subsection (b), the
1501	1501	builder must update the status of the information requested or
1502	1502	provided on the form not later than the 21st day after the
1503	1503	occurrence of one of the following events:
1504	1504	(1) repairs offered by the builder are accepted and
1505	1505	performed and, once performed, reinspected in accordance with
1506	1506	Sections 27.004(l) and 428.0041 and accepted by the homeowner as
1507	1507	resolving all issues in the dispute;
1508	1508	(2) any legal proceedings described by Subsection
1509	1509	(c)(9) are final;
1510	1510	(3) the builder repurchases the home under Section
1511	1511	27.0042; or
1512	1512	(4) any other resolution of the dispute between the
1513	1513	parties is finalized.
1514	1514	(e) A builder's failure to comply with this section or to
1515	1515	complete the required form honestly is grounds for denial of the
1516	1516	builder's license renewal application under Chapter 416.
1517	1517	SECTION 68. Subtitle D, Title 16, Property Code, is amended
1518	1518	by adding Chapter 428A to read as follows:
1519	1519	CHAPTER 428A. OFFICE OF OMBUDSMAN; VOLUNTARY MEDIATION
1520	1520	Sec. 428A.001. OFFICE OF OMBUDSMAN. The office of the
1521	1521	ombudsman is established at the commission to assist the
1522	1522	commission, builders, and homeowners following the completion of
1523	1523	the state inspection process and to engage in other activities as
1524	1524	provided by this chapter.
1525	1525	Sec. 428A.002. QUALIFICATIONS. The commission shall hire a
1526	1526	licensed attorney to act as ombudsman.
1527	1527	Sec. 428A.003. POWERS AND DUTIES. (a) The ombudsman shall:
1528	1528	(1) provide information and, subject to Subsection
1529	1529	(b), advice to homeowners and builders engaged in defect repairs
1530	1530	after the completion of the state inspection process to assist them
1531	1531	in understanding the post-inspection process;
1532	1532	(2) assist homeowners and builders in locating
1533	1533	mediation services, if requested, for the purposes of Section
1534	1534	428A.004; and
1535	1535	(3) submit comments to the commission on rules and
1536	1536	other policy changes being considered by the commission.
1537	1537	(b) The ombudsman may not provide legal advice to homeowners
1538	1538	and builders.
1539	1539	(c) The ombudsman shall report directly to the commission.
1540	1540	Sec. 428A.004. VOLUNTARY MEDIATION. (a) The commission by
1541	1541	rule shall establish procedures for a builder and homeowner to
1542	1542	engage in a third-party mediation, as described by Section 154.023,
1543	1543	Civil Practice and Remedies Code, performed by a third-party
1544	1544	mediator not employed by the commission, of a dispute involving a
1545	1545	construction defect as an alternative to the inspection process
1546	1546	under this subtitle, if the homeowner, before the expiration of the
1547	1547	time to submit a request for inspection under Section 426.006, and
1548	1548	before a third-party inspection has been performed, submits a
1549	1549	statement to the commission and the builder, in the form prescribed
1550	1550	by the commission, that the homeowner is requesting mediation as an
1551	1551	alternative to the state inspection process. If a homeowner
1552	1552	requests mediation under this section, a builder is required to
1553	1553	participate in mediation in good faith, as determined by the
1554	1554	mediator. The mediation must be completed on or before the
1555	1555	expiration of the mediation period prescribed by Subsection (c)
1556	1556	and, unless otherwise agreed by the parties, be conducted in the
1557	1557	county in which the home is located.
1558	1558	(b) Notwithstanding any other law, if the homeowner
1559	1559	requests mediation under this section, an action described by
1560	1560	Section 426.005(a):
1561	1561	(1) may not be filed before the expiration of the
1562	1562	mediation period unless an agreement is executed as a result of the
1563	1563	mediation that is breached before the end of the mediation period;
1564	1564	and
1565	1565	(2) must be filed on or before the later of:
1566	1566	(A) the expiration of any applicable statute of
1567	1567	limitations; or
1568	1568	(B) the 45th day after the earlier of:
1569	1569	(i) the expiration of the mediation period;
1570	1570	or
1571	1571	(ii) the execution of an agreement as a
1572	1572	result of the mediation.
1573	1573	(c) For the purposes of this section, the mediation period
1574	1574	expires on the 90th day after the date the homeowner submits a
1575	1575	statement of intent to engage in mediation under this section. A
1576	1576	homeowner or builder may, in accordance with Subsection (b), file
1577	1577	an action described by Section 426.005(a) if no agreement is
1578	1578	reached before the expiration of the mediation period.
1579	1579	(d) A builder's failure to comply with an agreement executed
1580	1580	by the parties as a result of a mediation under this section is
1581	1581	grounds for disciplinary action under Chapter 418, including the
1582	1582	imposition of an administrative penalty under Chapter 419.
1583	1583	(e) The parties to a mediation under this section shall
1584	1584	split the fees of the third-party mediator equally.
1585	1585	(f) For purposes of Chapter 27, good faith participation in
1586	1586	mediation under this section, as determined by the mediator, for
1587	1587	the mediation period established by this section constitutes a
1588	1588	final, nonappealable determination under this subtitle and
1589	1589	completion of the state inspection process, and a written agreement
1590	1590	to mediate submitted by the parties under this section constitutes
1591	1591	a request under Section 428.001. For the purposes of Section
1592	1592	27.004(l), if the builder makes a repair pursuant to an offer under
1593	1593	Section 27.004(b), the builder may engage any third-party inspector
1594	1594	to inspect the repair and determine whether the residence, as
1595	1595	repaired, complies with the applicable limited statutory warranty
1596	1596	and building and performance standards.
1597	1597	SECTION 69. Sections 430.001(b), (d), and (e), Property
1598	1598	Code, are amended to read as follows:
1599	1599	(b) The warranty periods shall be:
1600	1600	(1) two years [one year] for workmanship and
1601	1601	materials;
1602	1602	(2) two years for plumbing, electrical, heating, and
1603	1603	air-conditioning delivery systems; and
1604	1604	(3) 10 years for major structural components of the
1605	1605	home.
1606	1606	(d) The International Residential Code for One- and
1607	1607	Two-Family Dwellings that applies to nonelectrical aspects of
1608	1608	residential construction for the purposes of the limited statutory
1609	1609	warranties and building and performance standards adopted under
1610	1610	this section is:
1611	1611	(1) for residential construction located in a
1612	1612	municipality or the extraterritorial jurisdiction of a
1613	1613	municipality, the version of the International Residential Code
1614	1614	applicable to nonelectrical aspects of residential construction in
1615	1615	the municipality under Section 214.212, Local Government Code; and
1616	1616	(2) for residential construction located in an
1617	1617	unincorporated area not in the extraterritorial jurisdiction of a
1618	1618	municipality, the version of the International Residential Code
1619	1619	adopted by the commission by rule [applicable to nonelectrical
1620	1620	aspects of residential construction in the municipality that is the
1621	1621	county seat of the county in which the construction is located; and
1622	1622	[(3) for residential construction located in an
1623	1623	unincorporated area in a county that does not contain an
1624	1624	incorporated area, the version of the International Residential
1625	1625	Code that existed on May 1, 2001].
1626	1626	(e) The National Electrical Code for One- and Two-Family
1627	1627	Dwellings that applies to electrical aspects of residential
1628	1628	construction for the purposes of this section is:
1629	1629	(1) for residential construction located in a
1630	1630	municipality or the extraterritorial jurisdiction of a
1631	1631	municipality, the version of the National Electrical Code
1632	1632	applicable to electrical aspects of residential construction in the
1633	1633	municipality under Section 214.214, Local Government Code; and
1634	1634	(2) for residential construction located in an
1635	1635	unincorporated area not in the extraterritorial jurisdiction of a
1636	1636	municipality, the version of the National Electrical Code adopted
1637	1637	by the commission by rule [applicable to electrical aspects of
1638	1638	residential construction in the municipality that is the county
1639	1639	seat of the county in which the construction is located; and
1640	1640	[(3) for residential construction located in an
1641	1641	unincorporated area in a county that does not contain an
1642	1642	incorporated area, the version of the National Electrical Code that
1643	1643	existed on May 1, 2001].
1644	1644	SECTION 70. Section 430.001, Property Code, is amended by
1645	1645	adding Subsection (b-1) to read as follows:
1646	1646	(b-1) A builder shall assign to the homeowner, without
1647	1647	recourse, the manufacturer's warranty for all manufactured
1648	1648	products that are covered by a manufacturer's warranty. Any rights
1649	1649	that inure to the homeowner provided under a manufacturer's
1650	1650	warranty are the obligation of the manufacturer. The builder does
1651	1651	not assume any of the obligations of the manufacturer resulting
1652	1652	from a manufacturer's warranty, but shall coordinate with the
1653	1653	manufacturer, suppliers, or agents to achieve compliance with the
1654	1654	performance standard. If the manufacturer does not comply with the
1655	1655	manufacturer's warranty within a reasonable period of time, the
1656	1656	builder shall make the affected condition comply with the
1657	1657	performance standard and shall be subrogated to the homeowner's
1658	1658	claims against the manufacturer.
1659	1659	SECTION 71. Sections 430.005(b) and (c), Property Code, are
1660	1660	amended to read as follows:
1661	1661	(b) This section does not exempt a builder in an area
1662	1662	described by Subsection (a) from the builder licensing and home
1663	1663	registration requirements imposed by this title, including the
1664	1664	requirements of Sections 416.001 and 426.003.
1665	1665	(c) An allegation of a postconstruction defect in a
1666	1666	construction project in an area described by Subsection (a) is
1667	1667	subject to the state [state-sponsored] inspection program [and
1668	1668	dispute resolution process] described by this subtitle.
1669	1669	SECTION 72. Chapter 430, Property Code, is amended by
1670	1670	adding Sections 430.012 and 430.013 to read as follows:
1671	1671	Sec. 430.012. HOMEOWNER INFORMATION PAMPHLET. (a) The
1672	1672	commission shall produce a homeowner information pamphlet to
1673	1673	provide homeowners with basic information about the commission and
1674	1674	the state inspection program.
1675	1675	(b) The pamphlet must include information describing:
1676	1676	(1) the commission's jurisdiction;
1677	1677	(2) the state inspection program;
1678	1678	(3) statutory warranties;
1679	1679	(4) building and performance standards; and
1680	1680	(5) how the items listed in Subdivisions (1) through
1681	1681	(4) apply to a new or newly remodeled home.
1682	1682	(c) The commission shall make the pamphlet available
1683	1683	through the commission's Internet website and in a hard-copy
1684	1684	format.
1685	1685	(d) An escrow officer, as defined by Section 2501.003,
1686	1686	Insurance Code, or an attorney performing closing services in which
1687	1687	title insurance is not obtained, at a closing in which title to a
1688	1688	new home is transferred shall provide the pamphlet produced by the
1689	1689	commission under Subsection (a) to the person purchasing the new
1690	1690	home.
1691	1691	(e) The commission shall provide the pamphlet to a homeowner
1692	1692	after registration of the home under Section 426.003(b).
1693	1693	Sec. 430.013. WARRANTIES AND PERFORMANCE STANDARDS
1694	1694	ADVISORY COMMITTEE. (a) The commission shall appoint a Warranties
1695	1695	and Performance Standards Advisory Committee.
1696	1696	(b) The committee may:
1697	1697	(1) regularly review and evaluate the residential
1698	1698	construction performance standards adopted by the commission;
1699	1699	(2) review and evaluate proposed changes to the
1700	1700	performance standards made either by the public or internally by
1701	1701	the commission; and
1702	1702	(3) make recommendations to the commission.
1703	1703	(c) The commission by rule shall establish:
1704	1704	(1) the number of committee members;
1705	1705	(2) qualifications for appointment to the committee;
1706	1706	(3) the terms of service of committee members; and
1707	1707	(4) the duties and operating procedures of the
1708	1708	committee.
1709	1709	(d) A member of the committee serves at the will of the
1710	1710	commission.
1711	1711	(e) A member is not entitled to compensation for service on
1712	1712	the committee but is entitled to reimbursement for reasonable
1713	1713	travel expenses the member incurs in performing committee duties.
1714	1714	SECTION 73. Section 446.004, Property Code, is amended to
1715	1715	read as follows:
1716	1716	Sec. 446.004. FEE INSPECTOR. A fee inspector must be either
1717	1717	a licensed engineer, a registered architect, a professional
1718	1718	inspector licensed by the Texas Real Estate Commission, a plumbing
1719	1719	inspector employed by a municipality and licensed by the Texas
1720	1720	State Board of Plumbing Examiners, a building inspector employed by
1721	1721	a political subdivision, or a third-party inspector qualified under
1722	1722	Section 427.001(b). A builder may use the same or a different fee
1723	1723	inspector for inspections required under this chapter.
1724	1724	SECTION 74. Section 59.011(a), Finance Code, is amended to
1725	1725	read as follows:
1726	1726	(a) For purposes of Chapter 27, Property Code, and Title 16,
1727	1727	Property Code, a federally insured financial institution, or a
1728	1728	subsidiary or affiliate of the institution, regulated under this
1729	1729	code is not a builder.
1730	1730	SECTION 75. The following provisions of the Property Code
1731	1731	are repealed:
1732	1732	(1) Section 5.016, as added by Chapter 843, Acts of the
1733	1733	80th Legislature, Regular Session, 2007;
1734	1734	(2) Section 401.002(12);
1735	1735	(3) Section 416.012(b);
1736	1736	(4) Section 418.002(d);
1737	1737	(5) Sections 426.004(b) and (c);
1738	1738	(6) Section 428.001(c); and
1739	1739	(7) Sections 428.004(d) and (e).
1740	1740	SECTION 76. The Sunset Advisory Commission's report to the
1741	1741	84th Legislature shall evaluate:
1742	1742	(1) the Texas Residential Construction Commission's
1743	1743	overall performance; and
1744	1744	(2) the ability of the Texas Residential Construction
1745	1745	Commission to implement the changes in law made by this Act and
1746	1746	management actions recommended by the 81st Legislature.
1747	1747	SECTION 77. Promptly after this Act takes effect, the
1748	1748	governor shall appoint the two additional members to the Texas
1749	1749	Residential Construction Commission as required by Section
1750	1750	406.001, Property Code, as amended by this Act. In appointing those
1751	1751	members, the governor shall appoint one person to a term expiring
1752	1752	February 1, 2011, and one to a term expiring February 1, 2013.
1753	1753	SECTION 78. The Texas Residential Construction Commission
1754	1754	shall adopt rules as required by Chapter 416, Property Code, as
1755	1755	amended by this Act, not later than December 1, 2009. A person is
1756	1756	not required to hold a license under Section 401.005(c) or Chapter
1757	1757	416, Property Code, as amended by this Act, until January 1, 2010.
1758	1758	SECTION 79. Not later than December 1, 2009, the Texas
1759	1759	Residential Construction Commission shall adopt rules and
1760	1760	prescribe forms under Sections 428.0011 and 428.006, Property Code,
1761	1761	as added by this Act.
1762	1762	SECTION 80. Not later than December 1, 2009, the Texas
1763	1763	Residential Construction Commission shall hire an ombudsman as
1764	1764	provided by Chapter 428A, Property Code, as added by this Act.
1765	1765	SECTION 81. Not later than December 1, 2009, the Texas
1766	1766	Residential Construction Commission shall adopt statutory
1767	1767	warranties and building and performance standards under Section
1768	1768	430.001, Property Code, as amended by this Act. Except as provided
1769	1769	by this section, the warranties and building and performance
1770	1770	standards adopted by the commission under this section apply only
1771	1771	to residential construction commenced on or after January 1, 2010.
1772	1772	Residential construction commenced before January 1, 2010, or
1773	1773	commenced on or after January 1, 2010, under a contract entered into
1774	1774	before that date, is governed by the statutory warranties and
1775	1775	building and performance standards applicable to the construction
1776	1776	immediately before the adoption of the statutory warranties and
1777	1777	building and performance standards under this section.
1778	1778	SECTION 82. (a) The terms of the current members of the
1779	1779	Warranties and Performance Standards Advisory Committee expire on
1780	1780	the date on which the new Warranties and Performance Standards
1781	1781	Advisory Committee is appointed under Section 430.013, Property
1782	1782	Code, as added by this Act.
1783	1783	(b) The changes in law made by Section 430.013, Property
1784	1784	Code, as added by this Act, to the compensation of the members of
1785	1785	the Warranties and Performance Standards Advisory Committee apply
1786	1786	only to members appointed on or after the effective date of this
1787	1787	Act.
1788	1788	SECTION 83. (a) Section 401.005, Property Code, as amended
1789	1789	by this Act, applies only to a home, material improvement to a home,
1790	1790	or improvement to the interior of a home, the building or remodeling
1791	1791	of which commences on or after the effective date of this Act. A
1792	1792	home, material improvement to a home, or improvement to the
1793	1793	interior of a home described by Section 401.005, Property Code, as
1794	1794	amended by this Act, the building or remodeling of which is
1795	1795	commenced before the effective date of this Act is subject to the
1796	1796	warranty obligation applicable to the home, material improvement to
1797	1797	the home, or improvement to the interior of the home immediately
1798	1798	before the effective date of this Act.
1799	1799	(b) Section 401.007, Property Code, as amended by this Act,
1800	1800	applies only to an order regarding an emergency or a violation of a
1801	1801	statute to which Chapter 401, Property Code, applies that occurs on
1802	1802	or after the effective date of this Act. An order regarding an
1803	1803	emergency or a violation of a statute that occurred before the
1804	1804	effective date of this Act is governed by the law in effect at the
1805	1805	time the emergency or violation occurred, and that law is continued
1806	1806	in effect for that purpose.
1807	1807	(c) Section 416.001, Property Code, as amended by this Act,
1808	1808	applies only to an offense committed on or after the effective date
1809	1809	of this Act. An offense committed before the effective date of this
1810	1810	Act is governed by the law in effect at the time the offense was
1811	1811	committed, and the former law is continued in effect for that
1812	1812	purpose. For the purposes of this section, an offense was committed
1813	1813	before the effective date of this Act if any element of the offense
1814	1814	occurred before that date.
1815	1815	(d) Section 416.005, Property Code, as amended by this Act,
1816	1816	applies only to a person licensed by the Texas Residential
1817	1817	Construction Commission as a builder for the first time on or after
1818	1818	January 1, 2010. A person registered with the commission as a
1819	1819	builder before January 1, 2010, is governed by the law in effect at
1820	1820	the time the person registered, and that law is continued in effect
1821	1821	for that purpose.
1822	1822	(e) Section 416.006(a), Property Code, as amended by this
1823	1823	Act, applies only to a license issued for the first time on or after
1824	1824	January 1, 2010. A certificate of registration issued before
1825	1825	January 1, 2010, is governed by the law in effect immediately before
1826	1826	the effective date of this Act, and that law is continued in effect
1827	1827	for that purpose.
1828	1828	(f) Sections 416.012(c) and (e), Property Code, as amended
1829	1829	by this Act, and the repeal by this Act of Section 416.012(b),
1830	1830	Property Code, apply only to a renewal of a license by a builder on
1831	1831	or after September 1, 2011. The renewal of a license by a builder
1832	1832	before September 1, 2011, is governed by the law in effect
1833	1833	immediately before the effective date of this Act, and that law is
1834	1834	continued in effect for that purpose.
1835	1835	(g) Sections 418.001 and 418.002, Property Code, as amended
1836	1836	by this Act, apply only to a ground for disciplinary action that
1837	1837	occurs on or after the effective date of this Act. A ground for
1838	1838	disciplinary action that occurs before the effective date of this
1839	1839	Act is governed by the law in effect at the time the ground for
1840	1840	disciplinary action occurred, and that law is continued in effect
1841	1841	for that purpose.
1842	1842	(h) Section 420.006, Property Code, as added by this Act,
1843	1843	applies only to a contract entered into or a transfer of title made
1844	1844	on or after the effective date of this Act. A contract entered into
1845	1845	or a transfer of title made before the effective date of this Act is
1846	1846	governed by the law in effect immediately before the effective date
1847	1847	of this Act, and that law is continued in effect for that purpose.
1848	1848	(i) Section 426.003, Property Code, as amended by this Act,
1849	1849	applies only to a registration of a home that occurs on or after the
1850	1850	effective date of this Act. A registration of a home that occurs
1851	1851	before the effective date of this Act is governed by the law in
1852	1852	effect immediately before the effective date of this Act, and that
1853	1853	law is continued in effect for that purpose.
1854	1854	(j) Sections 408.002, 426.004, 426.005, 428.002, 428.003,
1855	1855	and 428.004, Property Code, as amended by this Act, apply only to a
1856	1856	request for a state inspection filed on or after the effective date
1857	1857	of this Act. A request filed before the effective date of this Act
1858	1858	is governed by the law in effect immediately before the effective
1859	1859	date of this Act, and that law is continued in effect for that
1860	1860	purpose.
1861	1861	(k) Section 27.004(l), Property Code, as amended by this
1862	1862	Act, and Section 428.0041(a), Property Code, as added by this Act,
1863	1863	apply only to inspection of a repair completed by a builder on or
1864	1864	after the effective date of this Act. Inspection of a repair
1865	1865	completed by a builder before the effective date of this Act is
1866	1866	governed by the law in effect immediately before the effective date
1867	1867	of this Act, and that law is continued in effect for that purpose.
1868	1868	SECTION 84 .The Texas Residential Construction Commission
1869	1869	shall adopt contract forms as required by Section 420.004, Property
1870	1870	Code, as added by this Act, not later than January 1, 2010. A
1871	1871	builder is not required to use a form adopted under Section 420.004,
1872	1872	Property Code, as added by this Act, before the 91st day after the
1873	1873	date on which the forms are adopted under that section.
1874	1874	SECTION 85. Section 420.005, Property Code, as added by
1875	1875	this Act, applies only to a contract executed by a builder and a
1876	1876	buyer as described by Section 420.005, Property Code, as added by
1877	1877	this Act, on or after the effective date of this Act. A contract
1878	1878	executed before the effective date of this Act is covered by the law
1879	1879	in effect when the contract was executed, and the former law is
1880	1880	continued in effect for that purpose.
1881	1881	SECTION 86. This Act takes effect September 1, 2009.