Part 1.
TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS
Chapter 49.
2005 HOUSING TAX CREDIT PROGRAM QUALIFIED ALLOCATION PLAN AND RULES
10 TAC §§49.3, 49.7, 49.9
The Texas Department of Housing and Community Affairs (the
Department) adopts, without changes, the amendment of §49.3 (relating
to Definitions), §49.7 (relating to Regional Allocation Formula, Set-Asides,
Redistribution of Credits), and §49.9 (relating to Application: Submission,
Adherence to Obligations, Evaluation Process, Required Pre-Certification and
Acknowledgement, Threshold Criteria, Selection Criteria, Evaluation Factors,
Staff Recommendations) of the 2005 Housing Tax Credit Program Qualified Allocation
Plan and Rules (QAP) as proposed and published in the January 7, 2005, issue
of the
Texas Register
(30 TexReg 13).
The section is amended in order to enact changes considering the Governor's
rejection of the 2005 qualified allocation plan. On February 23, 2005, by
Order 05-02, the Governor approved these amendments.
No comments were received regarding adoption of the amendments.
The amendments are adopted under the Texas Government Code, Chapter
2306; the Internal Revenue Code of 1986, §42, as amended, which provides
the Department with the authority to adopt rules governing the administration
of the Department and its programs; and Executive Order AWR-92-3 (March 4,
1992), which provides this Department with the authority to make housing tax
credit allocations in the State of Texas.
No other code, article or statute is affected by these amended sections.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on April 18, 2005.
TRD-200501592
Edwina Carrington
Executive Director
Texas Department of Housing and Community Affairs
Effective date: May 8, 2005
Proposal publication date: January 7, 2005
For further information, please call: (512) 475-4595
10 TAC §51.5
The Texas Department of Housing and Community Affairs (the
Department) adopts, without changes, the amendment of §51.5, concerning
Basic Eligible Activities for the Housing Trust Fund as published in the December
3, 2004, issue of the
Texas Register
(29 TexReg
11234).
No comments were received.
The amendment is adopted pursuant to the authority of the Texas
Government Code, Chapter 2306.
No other code, articles or statutes are affected by the amendments.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on April 18, 2005.
TRD-200501598
Edwina Carrington
Executive Director
Texas Department of Housing and Community Affairs
Effective date: May 8, 2005
Proposal publication date: December 3, 2004
For further information, please call: (512) 475-4595
Chapter 301.
GENERAL PROVISIONS
10 TAC §301.1
The Texas Residential Construction Commission ("commission")
adopts amendments at Title 10, Part 7, Chapter 300, §301.1, concerning
definitions used in construing agency rules promulgated to implement the Texas
Residential Construction Commission Act ("Act"), Title 16, Property Code.
The amendments are adopted with changes to the proposed text as published
in the January 28, 2005 issue to the
Texas Register
(30 TexReg 351). The amendments add definitions for the terms "construction
activity" and "structural failure" and revises the definition of "statutory
warranty".
The amendments are adopted to implement Property Code §408.001, which
provides general authority for the commission to adopt rules necessary for
the implementation of Title 16, Property Code. The amendments are also adopted
to implement Property Code §§401.002(14) and 430.001, which requires
the commission to adopt warranty and building and performance standards, and
specifically a definition for "structural failure."
Written comments were received from Robert L. Russell Bush on February
23, 2005, and Mr. Gregory Harwell on February 26, 2005, regarding the proposed
addition of the term "structural failure". Texas Association of Builders sent
a letter concurring with Mr. Bush’s comments. Mr. Bush and Mr. Harwell
commented that the proposed definition of "structural failure" in §301.1(23)
should be changed. Mr. Bush stated that the proposed definition is inaccurate
from an engineering standpoint because it infers that a failure has occurred
merely because there has been a finding of some non-compliance with the commission-adopted
performance standards. Mr. Bush stated that not all deviations from the performance
standards will so drastically impact the structural performance of a house
that it can be said to have failed.
Mr. Bush further commented that the proposed definition does not draw the
necessary distinction between failures discussed from a structural aspect
as opposed to failures discussed from a performance aspect. Mr. Bush stated
that this concern over the use of the term "failure" has been raised previously
by the Texas Board of Professional Engineers and the Texas Section of the
American Society of Civil Engineers.
Mr. Bush further stated that if the proposed definition were adopted then
any deviations from the performance standards, no matter how slight, will
be seen as a structural failure, even if the deviation has no effect on the
performance of the house for residential use. Mr. Bush suggested that the
proposed definition be changed to read: "Structural failure - The non-compliance
with the performance standards for major structural components found in §304.100
of these rules, coupled with a loss of the component’s load-bearing
capacity to the degree that it materially impacts homeowner safety."
The commission declines to accept the suggested change. The commission
believes that Mr. Bush’s suggestion would limit the definition to require
a material impact on homeowner safety before being considered a structural
failure, whereas the performance standards for major structural components
adopted by the commission require that the component’s failure not compromise
the integrity of the structural system. Property Code §401.002 (14) states
that "structural failure", as used in Title 16 will have the meaning assigned
by the limited statutory warranty and building and performance standards adopted
by the commission under §430.001. In Title 16, the term "structural failure"
is used once in Chapter 429 regarding the requirement that if the third-party
inspector's recommendation involves a dispute regarding a "structural failure",
one of the state inspectors must be a licensed professional engineer. Given
the limited applicability of the term in Title 16 and that the commission’s
proposed definition is for the purpose of interpreting and construing commission
rules, the commission’s proposed definition is more appropriate for
those uses than the definition suggested by Mr. Bush.
Mr. Harwell asserted that three difficulties exist with the proposed definition
of "structural failure." He suggests that the commission revise the definition
to read "Structural failure - non-compliance with the performance standards
for major structural components found in §304.100 of these rules, causing
physical damage to the component, coupled with a loss of the component’s
load-bearing capacity to the degree that it materially impacts homeowner safety."
Mr. Harwell states that making the definition of structural failure synonymous
with non-compliance with the performance standard would "create a potentially
disastrous situation for homeowners" because homeowners would be required
to disclose at the time that the home is sold that it had a "structural failure"
even if the problem was a slightly bowing wall that was corrected years previously.
Mr. Harwell further speculates that homeowners insurance companies may decline
to insure house that have suffered a "structural failure" much like the problems
that have arisen from homes that have experienced water leaks.
Mr. Harwell similarly objects to the proposed definition of the term for
the reason stated by Mr. Bush that the definition is at odds with the consensus
of engineering opinion on the term. Finally, Mr. Harwell states that his proposed
definition is similar to that promulgated by the United States Department
of Housing and Urban Development.
For the reasons stated above regarding the limited use of the term "structural
failure" in Title 16 of the Property Code and the commission’s rules,
and further given that there is an entirely different definition for "structural
failure" when the term is used in Chapter 27 of the Property Code apparently
without causing problems with homeowner insurance availability and sales disclosures,
the commission declines to adopt Mr. Harwell’s suggested changes.
As a result of the comments, the commission has added language to the definition
of "structural failure" to clarify that the definition is applicable only
to Property Code §429.001(b).
All comments regarding these sections, including any not specifically referenced
herein, were fully considered by the commission.
Cross Reference to Statutes: Title 16, Property Code §§401.002(14),
408.001 and 430.001.
No other statutes, articles, or codes are affected by the adoption.
§301.1.Definitions.
The following words and terms, when used in rules promulgated by the
commission, shall have the following meanings unless the context of the rule
clearly indicates otherwise.
(1)
Accrual or accrued--when a homeowner first discovers a
condition in the home that is a potential construction defect.
(2)
Act--the Texas Residential Construction Commission Act,
Title 16, Property Code.
(3)
Affiliate--a person who directly or indirectly through
one or more Intermediaries controls, is controlled by or is under common control
with a specified person.
(4)
Builder--
(A)
any business entity or individual who, for a fixed price,
commission, fee, wage, or other compensation, constructs or supervises or
manages the construction of:
(i)
a new home;
(ii)
a material improvement to a home, other than an improvement
solely to replace or repair a roof of an existing home; or
(iii)
an improvement to the interior of an existing home when
the cost of the work exceeds $20,000.
(B)
When required by the context of the rule, the term may
include:
(i)
an owner, officer, director, shareholder, partner, affiliate
or employee of the builder;
(ii)
a risk retention group governed by §21.54, Insurance
Code, that insures all or any part of builder’s liability for the cost
to repair a residential construction defect; and
(iii)
a third-party warranty company and its administrator.
(5)
Building and performance standards--those standards that
apply to home construction built pursuant to a transaction governed by the
Act.
(6)
Commission--the Texas Residential Construction Commission.
(7)
Construction Activities--actions taken by the builder or
at the direction of the builder by an employee, agent, contractor or subcontractor
of the builder during the process of building the home or the improvement
to the home.
(8)
Construction defect--
(A)
the failure of the design, construction or repair of a
home, an alteration of or a repair, addition or improvement to an existing
home, or an appurtenance to a home to meet the applicable warranty and building
and performance standards during the applicable warranty period; and
(B)
any physical damage to the home, an appurtenance to the
home, or real property on which the home or appurtenance is affixed that is
proximately caused by that failure.
(9)
Cosmetic deficiency--any marred, scuffed, scratched or
smudged painted surface or countertop; chipped or stained porcelain, tile,
grout, or fiberglass; chipped surfaces of appliances or plumbing fixtures;
torn or defective window or door screens; marred, smudged, scratched or stained
cabinet surfaces or finishes; or, broken, chipped or scratched glass, window
or mirror.
(10)
Dwelling unit--a single unit providing complete independent
living facilities for one or more persons, including permanent provisions
for living, sleeping, eating, cooking and sanitation.
(11)
Executive Director--the individual employed by the commission
as the chief executive for the agency or any person to whom the Executive
Director has delegated the authority to act on behalf of the Executive Director.
(12)
Home--the real property, improvements and appurtenances
thereto for a single-family residential dwelling unit or duplex.
(13)
ICC--the International Code Council, Inc., currently located
at 5203 Leesburg Pike, Suite 600, Falls Church, Virginia, 22041-3401, or at
a subsequent address, and any successor organization that performs substantially
the same functions that the ICC performs as of December 1, 2003.
(14)
Improvement to the interior of an existing home when the
cost of the work exceeds $20,000--any modification to the interior living
space of a home, which includes the addition or installation of permanent
fixtures inside the home, pursuant to an agreement for work for total consideration
in excess of $20,000 to be paid by a homeowner to a single builder.
(15)
Living space--the enclosed area in a home that is suitable
for year-round residential use.
(16)
Local building official--the agency or department of a
municipality, county or other local political subdivision with authority to
make inspections and to enforce the laws, ordinances, and regulations applicable
to the construction, alteration, or repair of homes in that locality.
(17)
Material improvement--a modification to an existing home
that either increases or decreases the home’s total square footage of
living space that also modifies the home’s foundation, perimeter walls
or roof. A material improvement does not include modifications to an existing
home if the modifications are designed primarily to repair or replace the
home’s component parts.
(18)
Person--an individual, partnership, company, corporation,
association, or any other legal entity, however organized.
(19)
Remodeler--any business entity or individual who, for
a fixed price, commission, fee, wage, or other compensation, constructs or
supervises or manages the construction of a material improvement to an existing
home or an improvement to the interior of an existing home when the cost of
the work exceeds $20,000.
(20)
Single-family residential dwelling--a building that contains
one or two dwelling units, including a townhouse, complete with independent
living facilities for one or more persons suitable for one household, including
permanent provisions for living, sleeping, eating, cooking and sanitation.
(21)
State inspector--a person employed by the commission whose
duties include serving as a member of an appellate panel to:
(A)
review the recommendations of third-party inspectors;
(B)
provide consultation to third-party inspectors; and
(C)
administer the state-sponsored inspection and dispute resolution
process.
(22)
Statutory warranty--the legal requirement that the component
parts of a home perform to the building and performance standards applicable
to the construction for the number of years as set in statute, to wit:
(A)
one year for workmanship and materials;
(B)
two years for plumbing, electrical, heating, and air conditioning
delivery systems; and
(C)
ten years for major structural components of the home;
and
(D)
ten years for the warranty of habitability.
(23)
Structural failure--for purposes of Property Code §429.001(b)
only, the term means non-compliance with the commission-adopted performance
standards for major structural components.
(24)
Third-party inspector--a person approved by the commission
to conduct an objective home inspection and prepare a report of that inspection
as part of the state-sponsored inspection and dispute resolution process.
(25)
Townhouse--a single-family dwelling unit constructed in
a group of three or more attached dwelling units in which each unit extends
from foundation to roof and with open space on at least two sides not more
than three stories in height with a separate means of ingress and egress.
(26)
Transaction governed by the Act--an agreement between
a homeowner and a builder:
(A)
for the construction of a new home; or
(B)
for construction on an existing home that is:
(i)
a material improvement to the home other than an improvement
solely to replace or repair the roof; or
(ii)
an improvement to the interior of the home when the cost
paid for the work exceeds $20,000.
This agency hereby certifies that the adoption
has been reviewed by legal counsel and found to be a valid exercise of the
agency's legal authority.
Filed with the Office of
the Secretary of State on April 14, 2005.
TRD-200501539
Susan Durso
General Counsel
Texas Residential Construction Commission
Effective date: May 4, 2005
Proposal publication date: January 28, 2005
For further information, please call: (512) 475-0595
Subchapter D. THIRD-PARTY WARRANTY COMPANIES
Chapter 51.
HOUSING TRUST FUND RULES
Part 7.
TEXAS RESIDENTIAL CONSTRUCTION COMMISSION
Chapter 303.
REGISTRATION