By: Smith (Senate Sponsor - Eltife) H.B. No. 2439
(In the Senate - Received from the House April 20, 2015;
May 4, 2015, read first time and referred to Committee on Business
and Commerce; May 22, 2015, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 9, Nays 0;
May 22, 2015, sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR H.B. No. 2439 By: Watson
A BILL TO BE ENTITLED
AN ACT
relating to inspections and other activities conducted by engineers
in connection with the issuance of certain windstorm and hail
insurance; authorizing a fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Section 2210.251, Insurance Code,
is amended to read as follows:
Sec. 2210.251. PLAN OF OPERATION COMPLIANCE [INSPECTION]
REQUIREMENTS.
SECTION 2. Sections 2210.251(a), (f), and (g), Insurance
Code, are amended to read as follows:
(a) Except as provided by this section, to be considered
insurable property eligible for windstorm and hail insurance
coverage from the association, a structure that is constructed,
altered, remodeled, enlarged, or repaired or to which additions are
made on or after January 1, 1988, must comply [be inspected or
approved by the department for compliance] with the plan of
operation.
(f) Notwithstanding any other provision of this subchapter
[section], insurance coverage for a residential structure may be
issued or renewed through the association subject to the inspection
requirements imposed under Section 2210.258, if applicable. This
subsection expires December 31, 2015.
(g) A [The department shall issue a] certificate of
compliance issued by the department or association under Section
2210.2515 demonstrates compliance with the applicable building
code under the plan of operation [for each structure that qualifies
for coverage]. The certificate is evidence of insurability of the
structure by the association. [The decision whether to issue a
certificate of compliance for a structure is wholly within the
discretion of the department and is not dependent on the actions of
the Texas Board of Professional Engineers or any other regulatory
agency.]
SECTION 3. Subchapter F, Chapter 2210, Insurance Code, is
amended by adding Section 2210.2515 to read as follows:
Sec. 2210.2515. ISSUANCE OF CERTIFICATES OF COMPLIANCE.
(a) In this section:
(1) "Completed improvement" means:
(A) an improvement in which the original transfer
of title from the builder to the initial owner of the improvement
has occurred; or
(B) if a transfer under Paragraph (A) is not
contemplated, an improvement that is substantially completed.
(2) "Improvement" means the construction of or repair,
alteration, remodeling, or enlargement of a structure to which the
plan of operation applies.
(3) "Ongoing improvement" means:
(A) an improvement in which the original transfer
of title from the builder to the initial owner of the improvement
has not occurred; or
(B) if a transfer under Paragraph (A) is not
contemplated, an improvement that is not substantially completed.
(b) A person shall provide written notice on a form
prescribed by and submitted to the department of the person's
intent to construct, repair, alter, remodel, or enlarge a structure
for which the person is seeking coverage under this chapter before
the person begins to construct, repair, alter, remodel, or enlarge
the structure.
(c) A person may apply to the association on a form
prescribed by the department for a certificate of compliance for a
completed improvement. The association shall issue a certificate
of compliance for a completed improvement if a professional
engineer licensed by the Texas Board of Professional Engineers:
(1) has designed the improvement, has affixed the
engineer's seal on the design, and submits to the association on a
form prescribed by the department an affirmation of compliance with
the applicable building code under the plan of operation; or
(2) completes a sealed post-construction evaluation
report that confirms compliance with the applicable building code
under the plan of operation.
(d) A person may apply to the department on a form
prescribed by the department for a certificate of compliance for an
ongoing improvement. Except as provided by Subsection (e), the
department shall issue a certificate of compliance for an ongoing
improvement if a qualified inspector under Section 2210.254
inspects the ongoing improvement in accordance with commissioner
rule and affirms that the improvement:
(1) conforms to a design of the improvement that has a
seal affixed by a professional engineer licensed by the Texas Board
of Professional Engineers and complies with the applicable building
code under the plan of operation; or
(2) complies with the applicable building code under
the plan of operation.
(e) Except as otherwise provided by this subchapter, the
department may not issue a certificate of compliance under
Subsection (d) if within six months after the date of the final
inspection of the structure that is the subject of the application,
the department has not received:
(1) fully completed forms prescribed by the department
demonstrating that the improvement satisfies the requirements
under Subsection (d)(1) or (2); and
(2) payment in full of all inspection fees, including
fees for prior department inspections, owed to the department.
(f) If the department determines not to issue a certificate
of compliance under Subsection (e), a person may apply for a
certificate of compliance under Subsection (c).
(g) The department may enter into contracts as necessary to
implement this section.
(h) The department may charge a reasonable fee to cover the
cost of making building requirements and inspection standards
available to the public. The department shall charge a reasonable
fee for each inspection of each structure under this section in an
amount set by the commissioner.
SECTION 4. Section 2210.254(a), Insurance Code, is amended
to read as follows:
(a) For purposes of this chapter, a "qualified inspector"
includes:
(1) a person determined by the department to be
qualified because of training or experience to perform building
inspections;
(2) a licensed professional engineer [who is on the
roster described by Section 1001.652, Occupations Code, and meets
the requirements specified by commissioner rule for appointment to
conduct windstorm inspections]; and
(3) an inspector who:
(A) is certified by the International Code
Council, the Building Officials and Code Administrators
International, Inc., the International Conference of Building
Officials, or the Southern Building Code Congress International,
Inc.;
(B) has certifications as a buildings inspector
and coastal construction inspector; and
(C) complies with other requirements specified
by commissioner rule.
SECTION 5. Section 2210.2551, Insurance Code, is amended by
amending Subsections (a) and (b) and adding Subsection (f) to read
as follows:
(a) The department has exclusive authority over all matters
relating to the appointment and oversight of qualified inspectors
for purposes of this chapter and to the physical inspection of
structures for the purposes of determining whether to issue a
certificate of compliance under Section 2210.2515(d) [this
chapter], including the submission of documents to the department
or association regarding the physical inspection of structures.
(b) The commissioner by rule shall establish criteria to
ensure that a person seeking appointment as a qualified inspector
under this subchapter[, including an engineer seeking appointment
under Section 2210.255,] possesses the knowledge, understanding,
and professional competence to perform windstorm inspections for
the issuance of a certificate of compliance under Section
2210.2515(d) [under this chapter] and to comply with other
requirements of this chapter.
(f) The commissioner may not adopt or enforce a rule that
requires an engineer to affix the engineer's seal to an inspection
form submitted under this subchapter.
SECTION 6. Section 2210.256(a-1), Insurance Code, is
amended to read as follows:
(a-1) In addition to any other action authorized under this
section, the commissioner ex parte may enter an emergency cease and
desist order under Chapter 83 against a qualified inspector, or a
person acting as a qualified inspector, if:
(1) the commissioner believes that:
(A) the qualified inspector has:
(i) through submitting or failing to submit
to the department [sealed plans, designs, calculations, or other]
substantiating information, failed to demonstrate that a structure
or a portion of a structure subject to inspection is built to a
design that conforms to the requirements described by Section
2210.2515(d) [meets the requirements of this chapter and department
rules]; or
(ii) refused to comply with requirements
imposed under this chapter or department rules; or
(B) the person acting as a qualified inspector is
acting without appointment as a qualified inspector under Section
2210.254 [or 2210.255]; and
(2) the commissioner determines that the conduct
described by Subdivision (1) is fraudulent or hazardous or creates
an immediate danger to the public.
SECTION 7. Section 2210.258(b), Insurance Code, is amended
to read as follows:
(b) Except as provided by Subsection (c), the association
may not insure a structure described by Subsection (a) until[:
[(1) the structure has been inspected for compliance
with the plan of operation in accordance with Section 2210.251(a);
and
[(2)] a certificate of compliance has been issued for
the structure in accordance with Section 2210.2515 [2210.251(g)].
SECTION 8. Section 83.002(c), Insurance Code, is amended to
read as follows:
(c) This chapter also applies to:
(1) a person appointed as a qualified inspector under
Section 2210.254 [or 2210.255]; and
(2) a person acting as a qualified inspector under
Section 2210.254 [or 2210.255] without being appointed as a
qualified inspector under either of those sections.
SECTION 9. The following laws are repealed:
(1) Sections 2210.251(c), (h), (i), (j), (k), (l), and
(m), Insurance Code;
(2) Section 2210.255, Insurance Code;
(3) Sections 2210.2551(d) and (e), Insurance Code;
(4) Section 2210.256(f), Insurance Code; and
(5) Subchapter N, Chapter 1001, Occupations Code.
SECTION 10. The commissioner of insurance shall adopt rules
to implement this Act not later than December 31, 2016.
SECTION 11. The changes in law made by this Act apply only
to a Texas Windstorm Insurance Association policy delivered, issued
for delivery, or renewed on or after January 1, 2017. An association
policy delivered, issued for delivery, or renewed before January 1,
2017, is governed by the law in effect immediately before the
effective date of this Act, and that law is continued in effect for
that purpose.
SECTION 12. This Act takes effect September 1, 2015.
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