Texas 2009 - 81st Regular

Texas House Bill HB3629 Compare Versions

Only one version of the bill is available at this time.

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1	1	81R11730 UM-D
2	2	By: Smith of Tarrant H.B. No. 3629
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 and the licensing and regulation of certain
9	9	builders.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Title 12, Insurance Code, is amended by adding
12	12	Chapter 3504 and a heading to read as follows:
13	13	CHAPTER 3504. THIRD-PARTY WARRANTY COMPANIES FOR CERTAIN
14	14	RESIDENTIAL CONSTRUCTION
15	15	SECTION 2. Section 430.008, Property Code, is transferred
16	16	to Chapter 3504, Insurance Code, redesignated as Section 3504.001,
17	17	and amended to read as follows:
18	18	Sec. 3504.001 [430.008]. REGULATION AND APPROVAL OF
19	19	THIRD-PARTY WARRANTY COMPANY FOR CERTAIN RESIDENTIAL
20	20	CONSTRUCTION. (a) The department [commission] may approve as a
21	21	third-party warranty company for the purposes of Section 430.009,
22	22	Property Code:
23	23	(1) an entity that has operated warranty programs in
24	24	this state for at least five years;
25	25	(2) a company whose performance is insured by an
26	26	insurance company authorized to engage in the business of insurance
27	27	in this state; or
28	28	(3) an insurance company that insures the warranty
29	29	obligations of a builder under the statutory warranty and building
30	30	and performance standards as provided by Chapter 430, Property
31	31	Code.
32	32	(b) A third-party warranty company must submit to the
33	33	department [commission] an annual application and fee in the form
34	34	and in the amount required by the commissioner [commission] by rule
35	35	before the company may be approved under this section.
36	36	SECTION 3. Section 214.906, Local Government Code, is
37	37	amended to read as follows:
38	38	Sec. 214.906. VERIFICATION OF BUILDER REGISTRATION. A
39	39	municipality may not issue a building permit to a builder, as
40	40	defined by Section 401.003, Property Code, for construction
41	41	described by Section 401.003(a), Property Code, unless the
42	42	municipality has verified that the builder is licensed by
43	43	[registered with] the Texas Residential Construction Commission
44	44	under Chapter 416, Property Code, or is exempt from holding a
45	45	license [registration] under Section 401.005, Property Code.
46	46	SECTION 4. Sections 27.001(4), (5), and (8), Property Code,
47	47	are amended to read as follows:
48	48	(4) "Construction defect" [has the meaning assigned by
49	49	Section 401.004 for an action to which Subtitle D, Title 16, applies
50	50	and for any other action] means a matter concerning the design,
51	51	construction, or repair of a new residence, of an alteration of or
52	52	repair or addition to an existing residence, or of an appurtenance
53	53	to a residence, on which a person has a complaint against a
54	54	contractor. The term may include any physical damage to the
55	55	residence, any appurtenance, or the real property on which the
56	56	residence and appurtenance are affixed proximately caused by a
57	57	construction defect.
58	58	(5) "Contractor":
59	59	(A) means:
60	60	(i) a person [builder, as defined by
61	61	Section 401.003,] contracting with an owner for the construction or
62	62	repair of a new residence, for the repair or alteration of or an
63	63	addition to an existing residence, or for the construction, sale,
64	64	alteration, addition, or repair of an appurtenance to a new or
65	65	existing residence;
66	66	(ii) any person contracting with a
67	67	purchaser for the sale of a new residence constructed by or on
68	68	behalf of that person; or
69	69	(iii) a person contracting with an owner or
70	70	the developer of a condominium for the construction of a new
71	71	residence, for an alteration of or an addition to an existing
72	72	residence, for repair of a new or existing residence, or for the
73	73	construction, sale, alteration, addition, or repair of an
74	74	appurtenance to a new or existing residence; and
75	75	(B) includes:
76	76	(i) an owner, officer, director,
77	77	shareholder, partner, or employee of the contractor; and
78	78	(ii) a risk retention group registered
79	79	under Chapter 2201 [Article 21.54], Insurance Code, that insures
80	80	all or any part of a contractor's liability for the cost to repair a
81	81	residential construction defect.
82	82	(8) "Structural failure" [has the meaning assigned by
83	83	Section 401.002 for an action to which Subtitle D, Title 16, applies
84	84	and for any other action] means actual physical damage to the
85	85	load-bearing portion of a residence caused by a failure of the
86	86	load-bearing portion.
87	87	SECTION 5. Section 27.002(b), Property Code, is amended to
88	88	read as follows:
89	89	(b) To [Except as provided by this subsection, to] the
90	90	extent of conflict between this chapter and any other law,
91	91	including the Deceptive Trade Practices-Consumer Protection Act
92	92	(Subchapter E, Chapter 17, Business & Commerce Code) or a common law
93	93	cause of action, this chapter prevails. [To the extent of conflict
94	94	between this chapter and Title 16, Title 16 prevails.]
95	95	SECTION 6. Section 27.003(a), Property Code, is amended to
96	96	read as follows:
97	97	(a) In an action to recover damages or other relief arising
98	98	from a construction defect:
99	99	(1) a contractor is not liable for any percentage of
100	100	damages caused by:
101	101	(A) negligence of a person other than the
102	102	contractor or an agent, employee, or subcontractor of the
103	103	contractor;
104	104	(B) failure of a person other than the contractor
105	105	or an agent, employee, or subcontractor of the contractor to:
106	106	(i) take reasonable action to mitigate the
107	107	damages; or
108	108	(ii) take reasonable action to maintain the
109	109	residence;
110	110	(C) normal wear, tear, or deterioration;
111	111	(D) normal shrinkage due to drying or settlement
112	112	of construction components within the tolerance of building
113	113	standards; or
114	114	(E) the contractor's reliance on written
115	115	information relating to the residence, appurtenance, or real
116	116	property on which the residence and appurtenance are affixed that
117	117	was obtained from official government records, if the written
118	118	information was false or inaccurate and the contractor did not know
119	119	and could not reasonably have known of the falsity or inaccuracy of
120	120	the information; and
121	121	(2) if an assignee of the claimant or a person
122	122	subrogated to the rights of a claimant fails to provide the
123	123	contractor with the written notice and opportunity to inspect and
124	124	offer to repair required by Section 27.004 [or fails to request
125	125	state-sponsored inspection and dispute resolution under Chapter
126	126	428, if applicable,] before performing repairs, the contractor is
127	127	not liable for the cost of any repairs or any percentage of damages
128	128	caused by repairs made to a construction defect at the request of an
129	129	assignee of the claimant or a person subrogated to the rights of a
130	130	claimant by a person other than the contractor or an agent,
131	131	employee, or subcontractor of the contractor.
132	132	SECTION 7. Sections 27.004(a), (b), (c), and (d), Property
133	133	Code, are amended to read as follows:
134	134	(a) Before [In a claim not subject to Subtitle D, Title 16,
135	135	before] the 60th day preceding the date a claimant seeking from a
136	136	contractor damages or other relief arising from a construction
137	137	defect initiates an action, the claimant shall give written notice
138	138	by certified mail, return receipt requested, to the contractor, at
139	139	the contractor's last known address, specifying in reasonable
140	140	detail the construction defects that are the subject of the
141	141	complaint. On the request of the contractor, the claimant shall
142	142	provide to the contractor any evidence that depicts the nature and
143	143	cause of the defect and the nature and extent of repairs necessary
144	144	to remedy the defect, including expert reports, photographs, and
145	145	videotapes, if that evidence would be discoverable under Rule 192,
146	146	Texas Rules of Civil Procedure. During the 35-day period after the
147	147	date the contractor receives the notice, and on the contractor's
148	148	written request, the contractor shall be given a reasonable
149	149	opportunity to inspect and have inspected the property that is the
150	150	subject of the complaint to determine the nature and cause of the
151	151	defect and the nature and extent of repairs necessary to remedy the
152	152	defect. The contractor may take reasonable steps to document the
153	153	defect. [In a claim subject to Subtitle D, Title 16, a contractor
154	154	is entitled to make an offer of repair in accordance with Subsection
155	155	(b). A claimant is not required to give written notice to a
156	156	contractor under this subsection in a claim subject to Subtitle D,
157	157	Title 16.]
158	158	(b) Not [later than the 15th day after the date of a final,
159	159	unappealable determination of a dispute under Subtitle D, Title 16,
160	160	if applicable, or not] later than the 45th day after the date the
161	161	contractor receives the notice [under this section, if Subtitle D,
162	162	Title 16, does not apply], the contractor may make a written offer
163	163	of settlement to the claimant. The offer must be sent to the
164	164	claimant at the claimant's last known address or to the claimant's
165	165	attorney by certified mail, return receipt requested. The offer
166	166	may include either an agreement by the contractor to repair or to
167	167	have repaired by an independent contractor partially or totally at
168	168	the contractor's expense or at a reduced rate to the claimant any
169	169	construction defect described in the notice and shall describe in
170	170	reasonable detail the kind of repairs which will be made. The
171	171	repairs shall be made not later than the 45th day after the date the
172	172	contractor receives written notice of acceptance of the settlement
173	173	offer, unless completion is delayed by the claimant or by other
174	174	events beyond the control of the contractor. If a contractor makes
175	175	a written offer of settlement that the claimant considers to be
176	176	unreasonable:
177	177	(1) on or before the 25th day after the date the
178	178	claimant receives the offer, the claimant shall advise the
179	179	contractor in writing and in reasonable detail of the reasons why
180	180	the claimant considers the offer unreasonable; and
181	181	(2) not later than the 10th day after the date the
182	182	contractor receives notice under Subdivision (1), the contractor
183	183	may make a supplemental written offer of settlement to the claimant
184	184	by sending the offer to the claimant or the claimant's attorney.
185	185	(c) If [compliance with Subtitle D, Title 16, or] the giving
186	186	of the notice under Subsections (a) and (b) within the period
187	187	prescribed by those subsections is impracticable because of the
188	188	necessity of initiating an action at an earlier date to prevent
189	189	expiration of the statute of limitations or if the complaint is
190	190	asserted as a counterclaim, [compliance with Subtitle D, Title 16,
191	191	or] the notice is not required. However, the action or counterclaim
192	192	shall specify in reasonable detail each construction defect that is
193	193	the subject of the complaint. The [If Subtitle D, Title 16, applies
194	194	to the complaint, simultaneously with the filing of an action by a
195	195	claimant, the claimant must submit a request under Section 428.001.
196	196	If Subtitle D, Title 16, does not apply, the] inspection provided
197	197	for by Subsection (a) may be made not later than the 75th day after
198	198	the date of service of the suit, request for arbitration, or
199	199	counterclaim on the contractor, and the offer provided for by
200	200	Subsection (b) may be made [not later than the 15th day after the
201	201	date the state-sponsored inspection and dispute resolution process
202	202	is completed, if Subtitle D, Title 16, applies, or] not later than
203	203	the 60th day after the date of service [, if Subtitle D, Title 16,
204	204	does not apply]. If, while an action subject to this chapter is
205	205	pending, the statute of limitations for the cause of action would
206	206	have expired and it is determined that the provisions of Subsection
207	207	(a) were not properly followed, the action shall be abated to allow
208	208	compliance with Subsections (a) and (b).
209	209	(d) The court or arbitration tribunal shall abate an action
210	210	governed by this chapter if Subsection (c) does not apply and the
211	211	court or tribunal, after a hearing, finds that the contractor is
212	212	entitled to abatement because the claimant failed to [comply with
213	213	the requirements of Subtitle D, Title 16, if applicable, failed to]
214	214	provide the notice or failed to give the contractor a reasonable
215	215	opportunity to inspect the property as required by Subsection (a),
216	216	or failed to follow the procedures specified by Subsection (b). An
217	217	action is automatically abated without the order of the court or
218	218	tribunal beginning on the 11th day after the date a motion to abate
219	219	is filed if the motion:
220	220	(1) is verified and alleges that the person against
221	221	whom the action is pending did not receive the written notice
222	222	required by Subsection (a), the person against whom the action is
223	223	pending was not given a reasonable opportunity to inspect the
224	224	property as required by Subsection (a), or the claimant failed to
225	225	follow the procedures specified by Subsection (b) [or Subtitle D,
226	226	Title 16]; and
227	227	(2) is not controverted by an affidavit filed by the
228	228	claimant before the 11th day after the date on which the motion to
229	229	abate is filed.
230	230	SECTION 8. Section 27.0042(b), Property Code, is amended to
231	231	read as follows:
232	232	(b) A contractor may not elect to purchase the residence
233	233	under Subsection (a) if [:
234	234	[(1)] the residence is more than five years old at the
235	235	time an action is initiated [; or
236	236	[(2) the contractor makes such an election later than
237	237	the 15th day after the date of a final, unappealable determination
238	238	of a dispute under Subtitle D, Title 16, if applicable].
239	239	SECTION 9. Section 41.007(a), Property Code, is amended to
240	240	read as follows:
241	241	(a) A contract for improvements to an existing residence
242	242	described by Section 41.001(b)(3) must contain:
243	243	(1) the contractor's license [certificate of
244	244	registration] number from the Texas Residential Construction
245	245	Commission if the contractor is required to be licensed [register]
246	246	as a builder by [with] the commission;
247	247	(2) the address and telephone number at which the
248	248	owner may file a complaint with the Texas Residential Construction
249	249	Commission about the conduct of the contractor if the contractor is
250	250	required to be licensed [register] as a builder by [with] the
251	251	commission; and
252	252	(3) the following warning conspicuously printed,
253	253	stamped, or typed in a size equal to at least 10-point bold type or
254	254	computer equivalent:
255	255	"IMPORTANT NOTICE: You and your contractor are responsible
256	256	for meeting the terms and conditions of this contract. If you sign
257	257	this contract and you fail to meet the terms and conditions of this
258	258	contract, you may lose your legal ownership rights in your
259	259	home. KNOW YOUR RIGHTS AND DUTIES UNDER THE LAW."
260	260	SECTION 10. Chapter 401, Property Code, is amended by
261	261	adding Section 401.0011 to read as follows:
262	262	Sec. 401.0011. PURPOSE; TEXAS RESIDENTIAL CONSTRUCTION
263	263	COMMISSION. (a) The Texas Residential Construction Commission
264	264	oversees builders licensed by the commission to ensure that
265	265	builders are responsible and accountable to the homeowners with
266	266	whom they contract.
267	267	(b) The commission's mission includes ensuring the
268	268	protection of the public by educating builders and homeowners about
269	269	all aspects of the residential construction industry affecting the
270	270	building or remodeling of homes.
271	271	SECTION 11. Section 401.002(6), Property Code, is amended
272	272	to read as follows:
273	273	(6) "Home" means the real property and improvements
274	274	and appurtenances for a single-family or two-family dwelling of up
275	275	to three stories [house or duplex].
276	276	SECTION 12. Sections 401.003(a), (b), and (d), Property
277	277	Code, are amended to read as follows:
278	278	(a) In this title, "builder" means any person who, for a
279	279	fixed price, commission, fee, wage, or other compensation, sells,
280	280	constructs, or supervises or manages the construction of, or
281	281	contracts for the construction of or the supervision or management
282	282	of the construction of:
283	283	(1) a new home;
284	284	(2) a material improvement to a home, including [other
285	285	than] an improvement solely to replace or repair a roof of an
286	286	existing home, the construction of a swimming pool, or the repair of
287	287	the foundation of the home; or
288	288	(3) an improvement to the interior of an existing home
289	289	when the cost of the work exceeds $10,000.
290	290	(b) The term includes:
291	291	(1) an owner, officer, director, shareholder,
292	292	partner, affiliate, subsidiary, or employee of the builder;
293	293	(2) a risk retention group governed by Chapter 2201
294	294	[Article 21.54], Insurance Code, that insures all or any part of a
295	295	builder's liability for the cost to repair a residential
296	296	construction defect; and
297	297	(3) a third-party warranty company governed by Chapter
298	298	3504, Insurance Code, and its administrator.
299	299	(d) The term does not include a nonprofit business entity
300	300	that is exempt from taxation under Section 501(c)(3), Internal
301	301	Revenue Code, if:
302	302	(1) the construction or supervision or management of
303	303	the construction of the home, material improvement, or improvement
304	304	sold by the nonprofit business entity is performed by a builder
305	305	licensed [registered] under this title;
306	306	(2) the builder contractually agrees to comply with
307	307	the provisions of this title;
308	308	(3) the builder is contractually liable to the
309	309	homeowner for the warranties and building and performance standards
310	310	of this title; and
311	311	(4) the nonprofit business entity does not participate
312	312	directly in the construction of the home, material improvement, or
313	313	improvement.
314	314	SECTION 13. Section 401.005(c), Property Code, is amended
315	315	to read as follows:
316	316	(c) An individual who builds a home or a material
317	317	improvement to a home and sells the home immediately following
318	318	completion of the building or remodeling and does not live in the
319	319	home for at least one year following completion of the building or
320	320	remodeling is responsible as a builder under the warranty
321	321	obligation created by this title for work completed by the
322	322	individual. Responsibility under this subsection requires [does
323	323	not automatically require] an individual to obtain a license
324	324	[register] under Section 416.001.
325	325	SECTION 14. Section 401.006, Property Code, is amended to
326	326	read as follows:
327	327	Sec. 401.006. SUNSET PROVISION. The Texas Residential
328	328	Construction Commission is subject to Chapter 325, Government Code
329	329	(Texas Sunset Act). Unless continued in existence as provided by
330	330	that chapter, the commission is abolished and this title expires
331	331	September 1, 2013 [2009].
332	332	SECTION 15. Sections 401.007(a), (b), and (c), Property
333	333	Code, are amended to read as follows:
334	334	(a) The [If the] commission [has reasonable cause to believe
335	335	that a person is violating a statute to which this chapter applies,
336	336	the commission, in addition to any other authorized action,] may
337	337	issue an emergency order, including an emergency order to cease and
338	338	desist, to any person regardless of whether the person is a builder
339	339	licensed under this title [from the violation or an order to take
340	340	affirmative action, or both], to enforce a statute to which this
341	341	chapter applies if the commission determines that an emergency
342	342	exists requiring immediate action to protect the public health and
343	343	safety or if the commission has reasonable cause to believe that a
344	344	person is violating a statute to which this chapter applies. The
345	345	commission may issue the emergency order without notice and hearing
346	346	or with any notice and hearing the commission considers practicable
347	347	under the circumstances [compliance]. A person may appeal the
348	348	order directly to district court in accordance with Chapter 2001,
349	349	Government Code.
350	350	(b) The [Before issuing an order under this section, the]
351	351	commission shall set the time and place and give notice for a
352	352	hearing to affirm, modify, or set aside an emergency order that was
353	353	issued without a hearing [of a hearing before a hearings officer].
354	354	The hearing is governed by Chapter 2001, Government Code. Based on
355	355	the findings of fact, conclusions of law, and recommendations of
356	356	the hearings officer, the commission by order may find whether a
357	357	violation has occurred.
358	358	(c) The commission, after providing notice and an
359	359	opportunity to appear for a hearing, may impose against a person who
360	360	violates an emergency [a cease and desist] order an administrative
361	361	penalty in an amount not to exceed $1,000 for each day of violation.
362	362	In addition to any other remedy provided by law, the attorney
363	363	general or the commission may institute in district court a suit for
364	364	injunctive relief and to collect an administrative penalty. A bond
365	365	is not required of the commission with respect to injunctive relief
366	366	granted under this section. In the action, the court may enter as
367	367	proper an order awarding a preliminary or final injunction.
368	368	SECTION 16. Sections 406.001(a) and (c), Property Code, are
369	369	amended to read as follows:
370	370	(a) The Texas Residential Construction Commission consists
371	371	of 11 [nine] members appointed by the governor with the advice and
372	372	consent of the senate as follows:
373	373	(1) four members must be builders who each hold a
374	374	license [certificate of registration] under Chapter 416;
375	375	(2) four [three] members must be representatives of
376	376	the general public;
377	377	(3) one member must be a licensed professional
378	378	engineer who practices in the area of residential construction;
379	379	[and]
380	380	(4) one member must be [either] a licensed architect
381	381	who practices in the area of residential construction; and
382	382	(5) one member must be [or] a building inspector who
383	383	meets the requirements set forth in Chapter 427 and practices in the
384	384	area of residential construction.
385	385	(c) A person may not be a public member of the commission if
386	386	the person or the person's spouse:
387	387	(1) is a builder licensed [registered] with the
388	388	commission, or is otherwise registered, certified, or licensed by a
389	389	regulatory agency in the field of residential construction;
390	390	(2) is employed by or participates in the management
391	391	of a business entity or other organization regulated by or
392	392	receiving money from the commission;
393	393	(3) owns or controls, directly or indirectly, more
394	394	than a 10 percent interest in a business entity or other
395	395	organization regulated by or receiving money from the commission;
396	396	or
397	397	(4) uses or receives a substantial amount of tangible
398	398	goods, services, or money from the commission other than
399	399	compensation or reimbursement authorized by law for commission
400	400	membership, attendance, or expenses.
401	401	SECTION 17. Section 406.002(a), Property Code, is amended
402	402	to read as follows:
403	403	(a) Commission members serve staggered six-year terms, with
404	404	three or four members' terms expiring February 1 of each
405	405	odd-numbered year. The terms of three of the builder
406	406	representatives must expire in different odd-numbered years. The
407	407	terms [term] of three [one] of the representatives of the general
408	408	public must expire in different [each] odd-numbered years [year].
409	409	SECTION 18. Section 406.004(b), Property Code, is amended
410	410	to read as follows:
411	411	(b) A person may not be a public member of the commission and
412	412	may not be a commission employee employed in a "bona fide executive,
413	413	administrative, or professional capacity," as that phrase is used
414	414	for purposes of establishing an exemption to the overtime
415	415	provisions of the federal Fair Labor Standards Act of 1938 (29
416	416	U.S.C. Section 201 et seq.) and its subsequent amendments, if:
417	417	(1) the person is an officer, employee, manager, or
418	418	paid consultant of a Texas trade association [or consumer
419	419	association] in the field of residential construction, including
420	420	the business of supplying construction materials, or the field of
421	421	real estate sales, including the issuance of title insurance; or
422	422	(2) the person's spouse is an officer, manager, or paid
423	423	consultant of a Texas trade association or consumer association in
424	424	the field of residential construction, including the business of
425	425	supplying construction materials, or the field of real estate
426	426	sales, including the issuance of title insurance.
427	427	SECTION 19. Section 408.001, Property Code, is amended to
428	428	read as follows:
429	429	Sec. 408.001. RULES. The commission shall adopt rules as
430	430	necessary for the implementation of this title, including rules[:
431	431	[(1) governing the state-sponsored inspection and
432	432	dispute resolution process, including building and performance
433	433	standards, administrative regulations, and the conduct of hearings
434	434	under Subtitle D;
435	435	[(2)] establishing limited statutory warranty and
436	436	building and performance standards for residential construction[;
437	437	[(3) approving third-party warranty companies; and
438	438	[(4) approving third-party inspectors].
439	439	SECTION 20. Section 408.002(c), Property Code, is amended
440	440	to read as follows:
441	441	(c) The commission may charge a reasonable fee for:
442	442	(1) [a homeowner to submit a request for
443	443	state-sponsored inspection under Subtitle D;
444	444	[(2)] providing public information requested under
445	445	Chapter 552, Government Code, excluding information requested from
446	446	the commission under Section 409.001; or
447	447	(2) [(3)] producing, mailing, and distributing
448	448	special printed materials and publications generated in bulk by the
449	449	commission for use and distribution by builders.
450	450	SECTION 21. Section 409.001, Property Code, is amended to
451	451	read as follows:
452	452	Sec. 409.001. PUBLIC INTEREST INFORMATION. (a) The
453	453	commission shall prepare information of public interest describing
454	454	the functions of the commission, the provisions of the limited
455	455	statutory warranty and building and performance standards, [the
456	456	state-sponsored inspection and dispute resolution process,] and
457	457	the procedures by which complaints [or requests] are filed with and
458	458	resolved by the commission.
459	459	(b) The commission shall make the information available to
460	460	the public and appropriate state agencies and shall post the
461	461	information on the commission's website. The commission shall make
462	462	the information available on the commission's website in a format
463	463	that allows builders to download the information and provide it to
464	464	homeowners as required by Subsection (c).
465	465	(c) Within 30 days of registering a home as [the receipt by
466	466	the commission of the registration] required by Section 426.003, a
467	467	builder [the commission] shall provide [mail] a copy of the
468	468	information of public interest described in Subsection (a) to the
469	469	owner of the home as described in the registration.
470	470	(d) The commission shall also prepare and make available on
471	471	the commission's website information regarding the different
472	472	categories and designations of builders in this state as well as
473	473	different options that builders may offer homeowners related to the
474	474	construction or remodeling of a home.
475	475	SECTION 22. Section 409.0011(b), Property Code, is amended
476	476	to read as follows:
477	477	(b) The commission shall create and make accessible to the
478	478	public an electronic list and a hard-copy list of builders who:
479	479	(1) are licensed [registered] with the commission; and
480	480	(2) provide in this state building services, including
481	481	accessible floor plans, to persons with mobility-related special
482	482	needs.
483	483	SECTION 23. Section 409.004, Property Code, is amended to
484	484	read as follows:
485	485	Sec. 409.004. DIRECTORY OF BUILDERS. The commission shall
486	486	make available to the public a list of each builder who holds a
487	487	license [certificate of registration] issued under Chapter 416.
488	488	SECTION 24. The heading to Subtitle C, Title 16, Property
489	489	Code, is amended to read as follows:
490	490	SUBTITLE C. BUILDER LICENSING [REGISTRATION]
491	491	SECTION 25. The heading to Chapter 416, Property Code, is
492	492	amended to read as follows:
493	493	CHAPTER 416. LICENSE [CERTIFICATE OF REGISTRATION]
494	494	SECTION 26. Section 416.001, Property Code, is amended to
495	495	read as follows:
496	496	Sec. 416.001. LICENSE [REGISTRATION] REQUIRED; RULES. (a)
497	497	Notwithstanding any other law, a [A] person may not engage in
498	498	business as a builder in this state or act as a builder unless the
499	499	person holds a license [certificate of registration] under this
500	500	chapter.
501	501	(b) The commission shall adopt all rules necessary to
502	502	implement the licensing program under this chapter, including rules
503	503	relating to:
504	504	(1) license eligibility including the education and
505	505	experience required to obtain a license;
506	506	(2) renewal requirements, examination requirements,
507	507	and continuing education requirements for license holders;
508	508	(3) security and insurance requirements;
509	509	(4) disciplinary actions; and
510	510	(5) any other issues determined necessary by the
511	511	commission.
512	512	SECTION 27. The heading to Section 416.002, Property Code,
513	513	is amended to read as follows:
514	514	Sec. 416.002. LICENSE APPLICATION [FOR CERTIFICATE].
515	515	SECTION 28. Sections 416.002(a) and (e), Property Code, are
516	516	amended to read as follows:
517	517	(a) An applicant for an original or renewal license
518	518	[certificate of registration] must submit an application on a form
519	519	prescribed by the commission.
520	520	(e) Based on a commission investigation of an alleged
521	521	violation of Sections 418.001(a)(12)-(18) [418.001(a)(14)-(20)],
522	522	the commission may require an applicant for renewal of a license
523	523	[certificate of registration] to disclose to the commission every
524	524	person with an ownership interest in the applicant's business as a
525	525	builder. This subsection does not apply to a publicly traded
526	526	company.
527	527	SECTION 29. Section 416.004(a), Property Code, is amended
528	528	to read as follows:
529	529	(a) The commission shall charge and collect:
530	530	(1) a filing fee for an application for an original
531	531	license [certificate of registration] that does not exceed $500;
532	532	(2) a fee for renewal of a license [certificate of
533	533	registration] that does not exceed $300; and
534	534	(3) a late fee that does not exceed the amount of the
535	535	fee due if payment of a license [registration] application or
536	536	renewal fee due under this title is late.
537	537	SECTION 30. Chapter 416, Property Code, is amended by
538	538	adding Section 416.0041 to read as follows:
539	539	Sec. 416.0041. SECURITY REQUIREMENTS. (a) As a guarantee
540	540	that a builder will meet the builder's obligations under this
541	541	subtitle, each licensed builder shall maintain with the commission
542	542	a bond or other security accepted by the commission.
543	543	(b) A bond posted as security must:
544	544	(1) be issued by an insurer authorized to engage in the
545	545	business of insurance in this state;
546	546	(2) be continuous;
547	547	(3) be cancelable by the surety only after at least 90
548	548	days' notice to the commission; and
549	549	(4) recognize that the obligation continues for the
550	550	terms of the contracts written by the builder while the bond is in
551	551	force.
552	552	(c) Any security provided under this section in a form other
553	553	than a bond must be convertible to cash by the commission for the
554	554	benefit of persons who contract with the builder in this state,
555	555	without resort to the courts, if the commission determines that the
556	556	builder is in default of the builder's financial obligations to
557	557	those contract holders. Any amount remaining after all contract
558	558	holders' claims are paid must be returned to the builder not later
559	559	than the 120th day after the date the last outstanding contract
560	560	expires.
561	561	SECTION 31. Section 416.005, Property Code, is amended to
562	562	read as follows:
563	563	Sec. 416.005. GENERAL ELIGIBILITY REQUIREMENTS. A person
564	564	may not receive a license [certificate of registration] under this
565	565	chapter unless:
566	566	(1) the person, at the time of the application:
567	567	(A) is at least 18 years of age; and
568	568	(B) is a citizen of the United States or a
569	569	lawfully admitted alien; and
570	570	(2) the commission is satisfied with the person's
571	571	honesty, trustworthiness, and integrity based on information
572	572	supplied or discovered in connection with the person's application.
573	573	SECTION 32. Section 416.006, Property Code, is amended to
574	574	read as follows:
575	575	Sec. 416.006. ADDITIONAL ELIGIBILITY REQUIREMENTS FOR
576	576	BUSINESS ENTITIES. (a) To be eligible for an original or renewal
577	577	license [certificate of registration] under this chapter:
578	578	(1) a corporation must designate one of its officers
579	579	as its agent for the purposes of this chapter;
580	580	(2) a limited liability company must designate one of
581	581	its managers as its agent for the purposes of this chapter; and
582	582	(3) a partnership, limited partnership, or limited
583	583	liability partnership must designate one of its managing partners
584	584	as its agent for the purposes of this chapter.
585	585	(b) A corporation, limited liability company, partnership,
586	586	limited partnership, or limited liability partnership is not
587	587	eligible to hold a license [be registered] under this chapter and
588	588	may not act as a builder unless the entity's designated agent is
589	589	individually licensed [registered] as a builder.
590	590	SECTION 33. Section 416.007, Property Code, is amended to
591	591	read as follows:
592	592	Sec. 416.007. LICENSE ISSUANCE [OF CERTIFICATE]. (a) Not
593	593	later than the 15th day after the date the commission receives an
594	594	application from an applicant who meets the requirements of this
595	595	chapter, the commission shall issue a license [certificate of
596	596	registration] to the applicant.
597	597	(b) The license [certificate of registration] remains in
598	598	effect for the period prescribed by the commission if the license
599	599	[certificate] holder complies with this chapter and pays the
600	600	appropriate renewal fees.
601	601	(c) The commission shall issue one license [certificate of
602	602	registration] for each business entity licensed [registered] under
603	603	this chapter.
604	604	SECTION 34. The heading to Section 416.008, Property Code,
605	605	is amended to read as follows:
606	606	Sec. 416.008. DENIAL OF LICENSE [REGISTRATION].
607	607	SECTION 35. Section 416.008(a), Property Code, is amended
608	608	to read as follows:
609	609	(a) If the commission denies an application for an original
610	610	license [certificate of registration] or a renewal application, the
611	611	commission shall give written notice to the applicant not later
612	612	than the 15th day after the date the commission receives the
613	613	application.
614	614	SECTION 36. Section 416.009, Property Code, is amended to
615	615	read as follows:
616	616	Sec. 416.009. LICENSE EXPIRATION [OF CERTIFICATE]. (a)
617	617	The commission may issue or renew a license [certificate of
618	618	registration] for a period that does not exceed 24 months.
619	619	(b) The commission by rule may adopt a system under which
620	620	licenses [certificates of registration] expire on several dates
621	621	during the year. The commission shall adjust the date for payment
622	622	of renewal fees accordingly.
623	623	(c) In a year in which the expiration date for a license
624	624	[certificate of registration] is changed, the renewal fee payable
625	625	shall be prorated on a monthly basis so that the license
626	626	[certificate] holder pays only that portion of the fee that is
627	627	allocable to the number of months during which the license
628	628	[certificate of registration] is valid. On renewal of the license
629	629	[certificate of registration] on the new expiration date, the total
630	630	renewal fee is payable.
631	631	SECTION 37. Sections 416.010(a), (b), (c), and (d),
632	632	Property Code, are amended to read as follows:
633	633	(a) A builder shall maintain a fixed office location in this
634	634	state. The address of the builder's principal place of business
635	635	must be designated on the license [certificate of registration].
636	636	(b) Not later than the 30th day after the date a builder
637	637	moves from the address designated on the license [certificate of
638	638	registration], the builder shall submit an application,
639	639	accompanied by the appropriate fee, for a license [certificate of
640	640	registration] that designates the new location of the builder's
641	641	principal place of business. The commission shall issue a license
642	642	[certificate of registration] that designates the new location if
643	643	the new location complies with the requirements of this section.
644	644	(c) If a builder operates under any name other than the name
645	645	that is set forth on the builder's license [certificate of
646	646	registration], the builder shall, within 45 days of operating under
647	647	this other name, disclose this other name to the commission.
648	648	(d) This section does not require a builder to obtain a
649	649	license [certificate of registration] for each sales office.
650	650	SECTION 38. Sections 416.012(a), (b), (c), (d), and (e),
651	651	Property Code, are amended to read as follows:
652	652	(a) The commission shall recognize or administer continuing
653	653	education programs for builders licensed [registered] by the
654	654	commission. A licensed [registered] builder must participate in
655	655	the programs to the extent required by this section to maintain the
656	656	builder's license [registration].
657	657	(b) A licensed builder [who registers for the first time on
658	658	or after September 1, 2007,] must complete, during the first year
659	659	the builder is licensed [registered] with the commission, five
660	660	hours of continuing education, one hour of which must address
661	661	ethics.
662	662	(c) A licensed builder who has satisfied [is registered
663	663	before September 1, 2007, and all other builders who register for
664	664	the first time on or after September 1, 2007, and satisfy] the
665	665	requirements of Subsection (b)[,] must thereafter complete three
666	666	[five] hours of continuing education every two [five] years, one
667	667	hour of which must address ethics.
668	668	(d) The commission shall permit a licensed [registered]
669	669	builder to receive continuing education credit for educational,
670	670	technical, ethical, or professional management activities related
671	671	to the practice of residential construction, including:
672	672	(1) successfully completing or auditing a course
673	673	sponsored by an institution of higher education;
674	674	(2) successfully completing a course certified by a
675	675	professional or trade organization;
676	676	(3) attending a seminar, tutorial, short course,
677	677	correspondence course, videotaped course, or televised course on
678	678	the practice of residential construction;
679	679	(4) participating in an in-house course sponsored by a
680	680	corporation or other business entity;
681	681	(5) teaching a course described by Subdivisions
682	682	(1)-(4);
683	683	(6) publishing an article, paper, or book on the
684	684	practice of residential construction;
685	685	(7) making or attending a presentation at a meeting of
686	686	a residential or builder association or organization or writing a
687	687	paper presented at the meeting;
688	688	(8) participating in the activities of a residential
689	689	or builder association, including serving on a committee of the
690	690	organization; and
691	691	(9) engaging in self-directed study on the practice of
692	692	residential construction.
693	693	(e) A licensed [registered] builder may not receive more
694	694	than one [two] continuing education credit hour [hours] during each
695	695	two-year [five-year] period for engaging in self-directed study.
696	696	SECTION 39. Section 418.001, Property Code, is amended to
697	697	read as follows:
698	698	Sec. 418.001. GROUNDS FOR DISCIPLINARY ACTION. A person,
699	699	including a builder or a person who is designated as a builder's
700	700	agent under Section 416.006, or a person who owns or controls a
701	701	majority ownership interest in the builder is subject to
702	702	disciplinary action under this chapter for:
703	703	(1) fraud or deceit in obtaining a license
704	704	[registration or certification] under this subtitle;
705	705	(2) misappropriation or misapplication of trust funds
706	706	in the practice of residential construction, including a violation
707	707	of Chapter 32, Penal Code, or Chapter 162[, if found by a final
708	708	nonappealable court judgment];
709	709	(3) naming false consideration in a contract to sell a
710	710	new home or in a construction contract;
711	711	(4) discriminating on the basis of race, color,
712	712	religion, sex, national origin, or ancestry;
713	713	(5) publishing a false or misleading advertisement;
714	714	(6) failure to honor, within a reasonable time, a
715	715	check issued to the commission, or any other instrument of payment,
716	716	including a credit or debit card or electronic funds transfer,
717	717	after the commission has sent by certified mail a request for
718	718	payment to the person's last known business address, according to
719	719	commission records;
720	720	(7) failure to pay an administrative penalty assessed
721	721	by the commission under Chapter 419 [or a fee due under Chapter
722	722	426];
723	723	(8) failure to pay a final nonappealable court
724	724	judgment arising from a construction defect or other transaction
725	725	between the person and a homeowner;
726	726	(9) failure to register a home as required by Section
727	727	426.003;
728	728	(10) failure to remit the fee for registration of a
729	729	home under Section 426.003;
730	730	(11) [failure to reimburse a homeowner the amount
731	731	ordered by the commission as provided by Section 428.004(d);
732	732	[(12)] engaging in statutory or common-law fraud or
733	733	misappropriation of funds, as determined by the commission after a
734	734	hearing under Section 418.003;
735	735	[(13) a repeated failure to participate in the
736	736	state-sponsored inspection and dispute resolution process if
737	737	required by this title;]
738	738	(12) [(14)] failure to obtain a license [register as a
739	739	builder] as required under Chapter 416;
740	740	(13) [(15)] using or attempting to use a license
741	741	[certificate of registration] that has expired or that has been
742	742	revoked;
743	743	(14) [(16)] falsely representing that the person
744	744	holds a license [certificate of registration] issued under Chapter
745	745	416;
746	746	(15) [(17)] acting as a builder using a name other
747	747	than the name or names disclosed to the commission;
748	748	(16) [(18)] aiding, abetting, or conspiring with a
749	749	person who does not hold a license [certificate of registration] to
750	750	evade the provisions of this title or rules adopted under this
751	751	title, if found by a final nonappealable court judgment;
752	752	(17) [(19)] allowing the person's license
753	753	[certificate of registration] to be used by another person;
754	754	(18) [(20)] acting as an agent, partner, or associate
755	755	of a person who does not hold a license [certificate of
756	756	registration] with the intent to evade the provisions of this title
757	757	or rules adopted under this title;
758	758	[(21) a failure to reasonably perform on an accepted
759	759	offer to repair or a repeated failure to make an offer to repair
760	760	based on:
761	761	[(A) the recommendation of a third-party
762	762	inspector under Section 428.004; or
763	763	[(B) the final holding of an appeal under Chapter
764	764	429;]
765	765	(19) [(22)] a repeated failure to respond to a
766	766	commission request for information;
767	767	(20) [(23)] a failure to obtain a building permit
768	768	required by a political subdivision before constructing a new home
769	769	or an improvement to an existing home;
770	770	(21) [(24)] abandoning, without justification, any
771	771	home improvement contract or new home construction project engaged
772	772	in or undertaken by the person, if found to have done so by a final,
773	773	nonappealable court judgment;
774	774	(22) making threats, without justification, to a
775	775	homeowner [(25) a repeated failure to comply with the requirements
776	776	of Subtitle F]; or
777	777	(23) [(26)] otherwise violating this title or a
778	778	commission rule adopted under this title.
779	779	SECTION 40. Section 418.002(a), Property Code, is amended
780	780	to read as follows:
781	781	(a) On a determination that a ground for disciplinary action
782	782	under Section 418.001 exists, the commission may:
783	783	(1) revoke or suspend a license [registration or
784	784	certification] in the event of repeated prior violations that have
785	785	resulted in disciplinary action;
786	786	(2) probate the suspension of a license [registration
787	787	or certification];
788	788	(3) formally or informally reprimand a licensed
789	789	[registered or certified] person; or
790	790	(4) impose an administrative penalty under Chapter
791	791	419.
792	792	SECTION 41. Section 418.004(c), Property Code, is amended
793	793	to read as follows:
794	794	(c) An appeal to a district court of a final decision of the
795	795	commission under this section regarding a revocation or suspension
796	796	of a license [registration or certification] is determined by
797	797	substantial evidence.
798	798	SECTION 42. Section 419.002(c), Property Code, is amended
799	799	to read as follows:
800	800	(c) A violation of Section 418.001(2) or (11) [(12)] is
801	801	punishable by a penalty not to exceed $100,000.
802	802	SECTION 43. Section 419.004, Property Code, is amended to
803	803	read as follows:
804	804	Sec. 419.004. ENFORCEMENT OF PENALTY. If a person does not
805	805	pay an administrative penalty imposed under this chapter and
806	806	enforcement of the penalty is not stayed, the commission may:
807	807	(1) refer the matter to the attorney general for
808	808	collection of the penalty; or
809	809	(2) enforce any part of the order that specifies
810	810	disciplinary action to be taken against the licensed [registered or
811	811	certified] person if the licensed [registered or certified] person
812	812	fails to pay the administrative penalty within the time prescribed.
813	813	SECTION 44. Sections 420.001 and 420.002, Property Code,
814	814	are amended to read as follows:
815	815	Sec. 420.001. REQUIRED WRITTEN DISCLOSURE. In a contract
816	816	for the construction of a new home or an improvement to an existing
817	817	home required to be registered under Section 426.003, the contract
818	818	must contain a notice to the consumer in at least 10-point bold type
819	819	or the computer equivalent that gives the telephone number of the
820	820	commission and states:
821	821	STATE LAW REQUIRES THAT A PERSON HOLD A LICENSE ISSUED BY
822	822	[CERTIFICATE OF REGISTRATION FROM] THE TEXAS RESIDENTIAL
823	823	CONSTRUCTION COMMISSION IF THE PERSON CONTRACTS TO CONSTRUCT A NEW
824	824	HOME OR IF THE PERSON CONTRACTS TO CONSTRUCT A MATERIAL IMPROVEMENT
825	825	TO AN EXISTING HOME OR CERTAIN IMPROVEMENTS TO THE INTERIOR OF AN
826	826	EXISTING HOME AND THE TOTAL COST OF THE IMPROVEMENT IS $10,000 OR
827	827	MORE (INCLUDING LABOR AND MATERIALS).
828	828	YOU MAY CONTACT THE COMMISSION AT [insert commission's
829	829	telephone number] TO FIND OUT WHETHER THE BUILDER HAS A VALID
830	830	LICENSE [CERTIFICATE OF REGISTRATION]. THE COMMISSION HAS
831	831	INFORMATION AVAILABLE ON THE HISTORY OF BUILDERS, INCLUDING
832	832	SUSPENSIONS, REVOCATIONS, COMPLAINTS, AND RESOLUTION OF
833	833	COMPLAINTS.
834	834	[THIS CONTRACT IS SUBJECT TO CHAPTER 426, PROPERTY CODE. THE
835	835	PROVISIONS OF THAT CHAPTER GOVERN THE PROCESS THAT MUST BE FOLLOWED
836	836	IN THE EVENT A DISPUTE ARISES OUT OF AN ALLEGED CONSTRUCTION
837	837	DEFECT.] IF YOU HAVE A COMPLAINT CONCERNING A CONSTRUCTION DEFECT
838	838	YOU MAY CONTACT THE COMMISSION AT THE TOLL-FREE TELEPHONE NUMBER
839	839	[TO LEARN HOW TO PROCEED UNDER THE STATE-SPONSORED INSPECTION AND
840	840	DISPUTE RESOLUTION PROCESS].
841	841	Sec. 420.002. REQUIRED CONTRACT PROVISIONS. In a contract
842	842	for the construction of a new home or an improvement to an existing
843	843	home required to be registered under Section 426.003, the contract
844	844	is not enforceable against a homeowner unless the contract:
845	845	(1) contains the builder's name and license
846	846	[certificate of registration] number; and
847	847	(2) contains the notice required by Section 420.001.
848	848	SECTION 45. The heading to Subtitle D, Title 16, Property
849	849	Code, is amended to read as follows:
850	850	SUBTITLE D. [STATE-SPONSORED INSPECTION AND DISPUTE RESOLUTION
851	851	PROCESS;] STATUTORY WARRANTY AND BUILDING AND PERFORMANCE
852	852	STANDARDS
853	853	SECTION 46. Sections 430.001(d) and (e), Property Code, are
854	854	amended to read as follows:
855	855	(d) The International Residential Code for One- and
856	856	Two-Family Dwellings that applies to nonelectrical aspects of
857	857	residential construction for the purposes of the limited statutory
858	858	warranties and building and performance standards adopted under
859	859	this section is:
860	860	(1) for residential construction located in a
861	861	municipality or the extraterritorial jurisdiction of a
862	862	municipality, the version of the International Residential Code
863	863	applicable to nonelectrical aspects of residential construction in
864	864	the municipality under Section 214.212, Local Government Code;
865	865	(2) for residential construction located in an
866	866	unincorporated area not in the extraterritorial jurisdiction of a
867	867	municipality, the version of the International Residential Code
868	868	applicable to nonelectrical aspects of residential construction in
869	869	the municipality that is the county seat of the county in which the
870	870	construction is located; and
871	871	(3) for residential construction located in an
872	872	unincorporated area in a county that does not contain an
873	873	incorporated area, the version of the International Residential
874	874	Code that existed on May 1, 2009 [2001].
875	875	(e) The National Electrical Code for One- and Two-Family
876	876	Dwellings that applies to electrical aspects of residential
877	877	construction for the purposes of this section is:
878	878	(1) for residential construction located in a
879	879	municipality or the extraterritorial jurisdiction of a
880	880	municipality, the version of the National Electrical Code
881	881	applicable to electrical aspects of residential construction in the
882	882	municipality under Section 214.214, Local Government Code;
883	883	(2) for residential construction located in an
884	884	unincorporated area not in the extraterritorial jurisdiction of a
885	885	municipality, the version of the National Electrical Code
886	886	applicable to electrical aspects of residential construction in the
887	887	municipality that is the county seat of the county in which the
888	888	construction is located; and
889	889	(3) for residential construction located in an
890	890	unincorporated area in a county that does not contain an
891	891	incorporated area, the version of the National Electrical Code that
892	892	existed on May 1, 2009 [2001].
893	893	SECTION 47. Section 430.005(b), Property Code, is amended
894	894	to read as follows:
895	895	(b) This section does not exempt a builder in an area
896	896	described by Subsection (a) from the builder licensing and home
897	897	registration requirements imposed by this title, including the
898	898	requirements of Sections 416.001 and 426.003.
899	899	SECTION 48. Sections 430.009(a) and (c), Property Code, are
900	900	amended to read as follows:
901	901	(a) A builder may elect to provide a warranty through a
902	902	third-party warranty company approved under Chapter 3504,
903	903	Insurance Code [by the commission].
904	904	(c) A third-party warranty company approved under Chapter
905	905	3504, Insurance Code, [by the commission] has all of the
906	906	obligations and rights of a builder under this subtitle [regarding
907	907	performance of repairs to remedy construction defects or payment of
908	908	money instead of repair].
909	909	SECTION 49. Section 430.010, Property Code, is amended to
910	910	read as follows:
911	911	Sec. 430.010. MINIMUM STANDARDS FOR DETERMINATION OF
912	912	DEFECT. The commission by rule shall adopt defect inspection
913	913	procedures to be used by a [A] third-party warranty company for the
914	914	purposes of [shall use defect inspection procedures substantially
915	915	similar to the procedures adopted by the commission under] this
916	916	subtitle. A warranty company may adopt warranty standards in
917	917	addition to the standards adopted by the commission. A third-party
918	918	warranty company may not reduce the limited statutory warranty and
919	919	building and performance standards, except that a third-party
920	920	warranty company shall not be required to provide a warranty of
921	921	habitability.
922	922	SECTION 50. The following provisions of the Property Code
923	923	are repealed:
924	924	(1) Sections 27.001(3) and (9);
925	925	(2) Section 27.004(l);
926	926	(3) Sections 401.002(3), (4), (10), (11), (12), and
927	927	(15);
928	928	(4) Section 408.002(d);
929	929	(5) Section 416.011;
930	930	(6) Chapter 417;
931	931	(7) Section 418.002(c);
932	932	(8) Sections 426.001, 426.002, 426.004, 426.005,
933	933	426.006, 426.007, and 426.008;
934	934	(9) Chapters 427, 428, and 429;
935	935	(10) Sections 430.005(c) and 430.011(b);
936	936	(11) Chapter 431; and
937	937	(12) Subtitles E and F, Title 16.
938	938	SECTION 51. (a) Except as provided by this section, the
939	939	changes in law made by this Act to Chapter 27, Property Code, and
940	940	the repeal by this Act of Sections 426.005, 426.007, and 426.008,
941	941	Property Code, apply only to an action commenced on or after the
942	942	effective date of this Act. An action commenced before the
943	943	effective date of this Act or with respect to which a request was
944	944	filed under Section 428.001, Property Code, before the repeal of
945	945	that section by this Act, is governed by the law in effect
946	946	immediately before the effective date of this Act, and that law is
947	947	continued in effect for that purpose.
948	948	(b) The change in law made by this Act to Section
949	949	27.003(a)(2), Property Code, applies only to a repair made on or
950	950	after the effective date of this Act. A repair made before the
951	951	effective date of this Act is subject to the law as it existed
952	952	immediately before the effective date of this Act, and that law is
953	953	continued in effect for that purpose.
954	954	(c) Section 401.003, Property Code, as amended by this Act,
955	955	applies only to activity described by that section, as amended by
956	956	this Act, commenced on or after the effective date of this Act.
957	957	Activity commenced before the effective date of this Act is
958	958	governed by the law in effect immediately before the effective date
959	959	of this Act, and that law is continued in effect for that purpose.
960	960	(d) Section 401.005(c), Property Code, as amended by this
961	961	Act, applies only to a home or material improvement to a home, the
962	962	building or remodeling of which commences on or after the effective
963	963	date of this Act. A home or material improvement to a home
964	964	described by Section 401.005(c), Property Code, as amended by this
965	965	Act, the building or remodeling of which is commenced before the
966	966	effective date of this Act is subject to the warranty obligation
967	967	applicable to the home or material improvement to the home
968	968	immediately before the effective date of this Act.
969	969	(e) Section 401.007, Property Code, as amended by this Act,
970	970	applies only to an order regarding an emergency or a violation of a
971	971	statute to which Chapter 401, Property Code, applies that occurs on
972	972	or after the effective date of this Act. An order regarding an
973	973	emergency or a violation of a statute that occurred before the
974	974	effective date of this Act is governed by the law in effect at the
975	975	time the emergency or violation occurred, and that law is continued
976	976	in effect for that purpose.
977	977	(f) Promptly after this Act takes effect, the governor shall
978	978	appoint the two additional members to the Texas Residential
979	979	Construction Commission as required by Section 406.001, Property
980	980	Code, as amended by this Act. In appointing those members, the
981	981	governor shall appoint one person to a term expiring February 1,
982	982	2011, and one to a term expiring February 1, 2013.
983	983	(g) Section 406.004(b), Property Code, as amended by this
984	984	Act, applies only to a member of the Texas Residential Construction
985	985	Commission appointed or reappointed on or after the effective date
986	986	of this Act. A commission member appointed or reappointed before
987	987	the effective date of this Act is subject to the law as it existed
988	988	immediately before the effective date of this Act, and that law is
989	989	continued in effect for that purpose.
990	990	(h) The Texas Residential Construction Commission shall
991	991	adopt rules as required by Chapter 416, Property Code, as amended by
992	992	this Act, not later than December 1, 2009. A person is not required
993	993	to hold a license under Chapter 416, Property Code, as amended by
994	994	this Act, until January 1, 2010. A person registered as a builder
995	995	under Chapter 416, Property Code, as it existed immediately before
996	996	the effective date of this Act, is not required to comply with an
997	997	examination requirement to obtain a license under Chapter 416, as
998	998	amended by this Act, until September 1, 2014.
999	999	(i) Section 418.001, Property Code, as amended by this Act,
1000	1000	applies only to a ground for disciplinary action that occurs on or
1001	1001	after the effective date of this Act. A ground for disciplinary
1002	1002	action that occurs before the effective date of this Act is governed
1003	1003	by the law in effect at the time the ground for disciplinary action
1004	1004	occurred, and that law is continued in effect for that purpose.
1005	1005	(j) The change in law made by this Act to Section 420.001,
1006	1006	Property Code, applies only to a contract entered into on or after
1007	1007	January 1, 2010. A contract entered into before that date is
1008	1008	governed by the law in effect on the date the contract was entered
1009	1009	into, and the former law is continued in effect for that purpose.
1010	1010	(k) The repeal by this Act of Section 428.005, Property
1011	1011	Code, does not apply to the receipt by a builder of a notice
1012	1012	described by that section before the effective date of this Act.
1013	1013	The receipt by a builder of a notice described by that section
1014	1014	before the effective date of this Act is governed by the law in
1015	1015	effect immediately before that date, and that law is continued in
1016	1016	effect for that purpose.
1017	1017	(l) The repeal by this Act of Section 436.003, Property
1018	1018	Code, applies only to an arbitration initiated on or after the
1019	1019	effective date of this Act. An arbitration initiated before the
1020	1020	effective date of this Act is governed by the law applicable to the
1021	1021	arbitration immediately before the effective date of this Act, and
1022	1022	that law is continued in effect for that purpose.
1023	1023	(m) The repeal by this Act of Chapter 437, Property Code,
1024	1024	applies only to an arbitration award filed on or after the effective
1025	1025	date of this Act. An award filed before the effective date of this
1026	1026	Act is governed by the law in effect immediately before that date,
1027	1027	and that law is continued in effect for that purpose.
1028	1028	(n) The repeal by this Act of Chapter 438, Property Code,
1029	1029	applies only to an arbitration award issued on or after the
1030	1030	effective date of this Act. An award issued before the effective
1031	1031	date of this Act is governed by the law in effect immediately before
1032	1032	that date, and that law is continued in effect for that purpose.
1033	1033	SECTION 52. Except as otherwise provided by this Act, this
1034	1034	Act takes effect September 1, 2009.