TITLE 10.COMMUNITY DEVELOPMENT

Part 1. TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS

Chapter 1. ADMINISTRATION

Subchapter A. GENERAL POLICIES AND PROCEDURES

10 TAC §1.10

The Texas Department of Housing and Community Affairs (the Department) proposes amendments to §1.10, concerning the Department's Public Comment Procedures and Topics at Public Hearings and Meetings. This section is proposed to implement new legislation enacted by the 78th Legislative Session and now codified as §2306.0661(f), Texas Government Code.

Ms. Edwina P. Carrington, Executive Director, has determined that for the first five-year period the section is in effect the public benefit anticipated as a result of enforcing the section will be to allow for more meaningful public input to the Department. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the amendment as proposed.

Comments on the proposal may be submitted to Ms. Sarah Anderson, Director of the Office of Housing Research, Planning, and Communications, Texas Department of Housing and Community Affairs, P.O. Box 13941, Austin, Texas 78711-3941, sarah.anderson@tdhca.state.tx.us, or by fax (512) 475-3746 within thirty days of this notice.

This section is proposed pursuant to the authority of the Texas Government Code, Chapter 2306.

No other code, articles or statutes are affected by this section.

§1.10.Public Comment Procedures and Topics at Public Hearings and Meetings.

(a) Purpose. The purpose of this section is to establish procedures for hearing public comments on issues being presented at meetings open to the public held by the Texas Department of Housing and Community Affairs and topics to be considered in accordance with Sections [ § ]2306.032 and 2306.0661(f) of the Texas Government Code.

(b) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Board--The Governing Board [ board of directors ] of the Department.

(2) Department--The Texas Department of Housing and Community Affairs.

(3) Meeting--A deliberation between a quorum of the board of the Department, or between a quorum of the board of the Department and another person, as defined under §551.001(4) of the Texas Government Code.

(4) Open Meetings Act--Chapter 551, Texas Government Code.

(c) Procedures.

(1) Members of the public may give testimony at the beginning of a board meeting.

(2) Members of the public may also give testimony on any agenda item of a board meeting after the presentation made by department staff and motions made by the board. The Board may consider the staff's presentation for purposes of this rule to be staff's written presentation in the Board's meeting book and posted on the Department's website.

(3) The Department shall provide witness affirmation forms at each board meeting for the public to complete in order to give public testimony.

(d) Reasonable limits. The Department may set reasonable limits on the number, frequency and length of presentations before it, but may not unfairly discriminate among speakers for or against a particular point of view.

(1) The board may consider the following when limiting the amount of time and the frequency each member of the public is allowed to provide testimony:

(A) the number of witness affirmations received;

(B) the number of agenda items to be heard; and

(C) the time duration for the meeting.

(2) If the board limits the number of presentations, the board will limit the number of presentations equally among those speakers that are for a particular point of view and those speakers that are against a particular point of view, if practical.

(e) Topics. The Department shall consider the following topics in relation to a proposed housing development:

(1) the developer market study;

(2) the location;

(3) the compliance history of the developer;

(4) the financial feasibility;

(5) the appropriateness of the development's size and configuration in relation to the housing needs of the community in which the development is located;

(6) the development's proximity to other low income housing developments;

(7) the availability of adequate public facilities and services;

(8) the anticipated impact on local school districts;

(9) zoning and other land use considerations; and

(10) any other topics that the board by rule determines to be appropriate.

(f) [ (e) ] Inquiry made at meeting (§551.042, Texas Government Code). Members of the public may raise a subject that has not been included in the notice for the meeting; however, any discussion of the subject by the board must be limited to a proposal to place the subject on the agenda for a future meeting.

(1) The notice requirements under the Open Meetings Act do not apply to:

(A) a statement of specific factual information given in response to the inquiry; or

(B) a recitation of existing policy in response to the inquiry.

(2) Any deliberation of or decision about the subject of the inquiry shall be limited to a proposal to place the subject on the agenda for a subsequent meeting.

(g) [ (f) ] This rule does not entitle a member of the public to choose the items to be discussed.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 22, 2003.

TRD-200308854

Edwina P. Carrington

Executive Director

Texas Department of Housing and Community Affairs

Earliest possible date of adoption: February 8, 2004

For further information, please call: (512) 475-4595


Part 6. OFFICE OF RURAL COMMUNITY AFFAIRS

Chapter 257. EXECUTIVE COMMITTEE FOR OFFICE OF RURAL COMMUNITY AFFAIRS

Subchapter A. POLICIES AND PROCEDURES

10 TAC §257.10

The Office of Rural Community Affairs (Office) proposes the creation of §257.10 of the Texas Administrative Code to provide an appeals process for persons protesting the award of a contract by the Office. (For purposes of this section contract does not include grant contracts.) Section 2155.132 of the Texas Government Code requires the Texas Building and Procurement Commission (TBPC) to formulate a procurement plan for the purchase of goods and services for state agencies. Pursuant to that directive the TBPC has adopted regulations that require state agencies to provide a process to appeal an agency's decision when it selects a vendor or consultant.

The proposed rule provides for an appeal to be in writing, sworn to and filed within 10 days of the award of the contract with the Executive Director. They establish required elements in the written appeal and allow for an appeal of the staff's determination to be made to the Executive Director and ultimately to the Executive Committee.

The Office's Chief Financial Officer, Robert McGlasson, has determined that for the first five-year period the section is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the proposed rule. Mr. McGlasson has also determined that for each year of the first five years the proposed rule is in effect the public benefit anticipated will be a public review of the process to assure a proper and fair process has been administered in the award of the contract. There will not be an effect on small businesses. There is no economic cost to persons who are required to comply with the proposed rule.

Comments on the proposal may be submitted in writing to J. Randel (Jerry) Hill, General Counsel, P.O. Box 12877, Austin, Texas 78711, or by e-mail to jhill@orca.state.tx.us, or by fax to (512) 936 6776. All requests for a public hearing on the proposed rule must be received by J. Randel (Jerry) Hill, not more than 15 calendar days after notice of the proposed rule has been published in the Texas Register.

The rule is proposed under §487.052 of the Texas Government Code and implements §2155.132 of the Texas Government Code.

§257.10.Appeals Process to Award of Contract.

(a) Any actual or prospective bidder, offeror, or contractor who is aggrieved in connection with the solicitation, evaluation, or award of a contract may formally protest to the Office of Rural Community Affairs, hereinafter referred to as the Office. Such protests must be in writing and received in the executive director's office within 10 working days after such aggrieved person knows, or should have known, of the occurrence of the action which is protested. Formal protests must conform to the requirements of this subsection and subsection (c) of this section, and shall be resolved in accordance with the procedure set forth in subsections (d) and (e) of this section. Copies of the protest must be mailed or delivered by the protesting party to the Office and other interested parties. For the purposes of this section, "interested parties" means all vendors who have submitted bids or proposals for the contract involved.

(b) In the event of a timely protest or appeal under this section, the Office shall not proceed further with the solicitation or with the award of the contract unless the executive director, makes a written determination that the award of the contract without delay is necessary to protect the best interests of the state.

(c) A formal protest must be sworn and contain:

(1) a specific identification of the statutory or regulatory provision(s) that the action complained of is alleged to have violated;

(2) a specific description of each act alleged to have violated the statutory or regulatory provision(s) identified in paragraph (1) of this subsection;

(3) a precise statement of the relevant facts;

(4) an identification of the issue or issues to be resolved;

(5) argument and authorities in support of the protest; and

(6) a statement that copies of the protest have been mailed or delivered to the Office and other identifiable interested parties.

(d) The staff of the Office, hereinafter referred to as the staff, shall have the authority, prior to appeal to the executive director, to settle and resolve the dispute concerning the solicitation or award of a contract. The staff may solicit written responses to the protest from other interested parties.

(e) If the protest is not resolved by mutual agreement, the staff will issue a written determination on the protest.

(1) If the staff determines that no violation of rules or statutes has occurred, it shall so inform the protesting party, and other interested parties by letter that sets forth the reasons for the determination.

(2) If the staff determines that a violation of the rules or statutes has occurred in a case where a contract has not been awarded, it shall so inform the protesting party, and other interested parties by letter which sets forth the reasons for the determination and the appropriate remedial action.

(3) If the staff determines that a violation of the rules or statutes has occurred in a case where a contract has been awarded, it shall so inform the protesting party, and other interested parties by letter which sets forth the reasons for the determination, which may include ordering the contract to be voided.

(f) The staff's determination on a protest may be appealed by the protesting party to the executive director. An appeal of the staff's determination must be in writing and must be received in the executive director's office no later than 10 working days after the date of the staff's determination. The appeal shall be limited to review of the staff's determination. Copies of the appeal must be mailed or delivered by the protesting party to the other interested parties and must contain a certified statement that such copies have been provided.

(g) The executive director may confer with the general counsel in the review of the matter appealed. The executive director may, in his/her discretion, refer the matter to the executive committee for its consideration at a regularly scheduled open meeting or issue a written decision on the protest.

(h) When a protest has been appealed to the executive director under subsection (f) of this section and has been referred to the executive committee by the executive director under subsection (g) of this section, the following requirements shall apply:

(1) Copies of the appeal and responses of interested parties, if any, shall be mailed to the executive committee.

(2) All interested parties who wish to make an oral presentation at the open meeting are requested to notify the general counsel at least 48 hours in advance of the open meeting.

(3) The executive committee may consider oral presentations and written documents presented by staff and interested parties. The chairman shall set the order and amount of time allowed for presentations.

(4) The executive committees' determination of the appeal shall be by duly adopted resolution reflected in the minutes of the open meeting, and shall be final.

(i) Unless good cause for delay is shown or the executive committee determines that a protest or appeal raises issues significant to procurement practices or procedures, a protest or appeal that is not filed timely will not be considered.

(j) A decision issued either by the executive committee in open meeting, or in writing by the executive director, shall be the final administrative action of the Office.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 22, 2003.

TRD-200308865

Robt. J. "Sam" Tessen

Executive Director

Office of Rural Community Affairs

Earliest possible date of adoption: February 8, 2004

For further information, please call: (512) 936-6710


Part 7. TEXAS RESIDENTIAL CONSTRUCTION COMMISSION

Chapter 301. GENERAL PROVISIONS

Subchapter A. DEFINITIONS

10 TAC §301.1

The Texas Residential Construction Commission (the "commission") proposes for adoption a new rule at Title 10, Part 7, Chapter 301, Subchapter A, Definitions, §301.1, concerning definitions to be used in construing agency rules promulgated to implement the Texas Residential Construction Commission Act, Title 16, Property Code.

Section 301.1, relating to definitions, defines words and terms that are used in Part 7 of Title 10 of the Texas Administrative Code. It defines Accrual or accrued, Act, Affiliate, Builder, Building and performance standards, Commission, Construction defect, Executive Director, Home, ICC, Improvement to the interior of an existing home when the cost of the work exceeds $20,000, Living space, Local building official, Material improvement, Person, Statutory warranty, State inspector, Third-party inspector and Transaction governed by the Act.

Stephen D. Thomas, Executive Director, has determined that for each year of the first five-year period the proposed rule is in effect there will be no fiscal implications for local government as a result of enforcing or administering the proposed rule.

Mr. Thomas has also determined that for each year of the first five-year period the proposed rule is in effect the public will benefit from the clarity provided by the adoption of definitions that assist interested persons in interpreting commission-promulgated rules.

Mr. Thomas has also determined that there will be no effect on large, small and micro-businesses as a result of the adoption of the proposed rule.

Mr. Thomas has also determined that for each year of the first five-year period the proposed rule is in effect there should be no effect on a local economy; therefore, no local employment impact statement is required under Administrative Procedure Act §2001.022.

Interested persons may submit written comments (16 copies) on the proposed rule to Susan K. Durso, General Counsel, Texas Residential Construction Commission, P.O. Box 13144, Austin, Texas, 78711. Comments may be submitted electronically to rulescomments@trcc.state.tx.us . The deadline for submission of comments is thirty (30) days from the date of publication of the proposed rules in the Texas Register . Comments should be organized in a manner consistent with the organization of the proposed rule. The commission is particularly interested in comments raised by the definition of "home" as it relates to the inclusion of a multi-unit residential structure in which there is a transfer of fee simple title to the homeowner, such as in the case of a townhouse or condominium.

The new rule is proposed to implement new legislation enacted during the 78th Legislative Session, Regular Session, House Bill 730 (Act effective Sept. 1, 2003, 78th Leg., R.S., ch. 458, §1.01), including Title 16, Property Code. Section 408.001 of the Property Code provides general authority for the commission to adopt rules necessary for the implementation of Title 16, Property Code.

The proposed rule is being simultaneously adopted as an emergency rule in the Emergency Rules section of this issue of the Texas Register .

The statutory provisions affected by the proposal are those set forth in the Title 16, Property Code and House Bill 730, 78th Legislature, R.S.

No other statutes, articles, or codes are affected by the proposal.

§301.1.Definitions.

The following words and terms, when used in rules promulgated by the commission, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Accrual or accrued--when a homeowner first becomes aware that the property damage in the home 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) as defined by Property Code §401.003, 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 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 adopted by the commission pursuant to §430.001 of the Act.

(6) Commission--the Texas Residential Construction Commission.

(7) Construction defect--as defined in §401.004 of the Act:

(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.

(8) Executive Director--the individual employed by the commission pursuant to §407.001 of the Act, which may include a person delegated by the Executive Director to perform a specific function on behalf of the Executive Director.

(9) Home--the real property and improvements and appurtenances thereto for a single-family residential dwelling or duplex.

(10) ICC--the International Code Council, Inc., currently located at 5203 Leesburg Pike, Suite 708, 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.

(11) Improvement to the interior of an existing home when the cost of the work exceeds $20,000--modifications to the interior living space of a home that include the addition of permanent fixtures inside the home. The commission shall determine whether such modifications meet the monetary threshold for inclusion within the requirements of the Act by aggregating the total consideration paid by a homeowner within a twelve-month period for all such modifications to the home.

(12) Living space--the enclosed area in a home that is suitable for year-round use, embodying walls, floors, and ceilings that are similar to the rest of the home.

(13) 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 residential structures in that locality.

(14) 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.

(15) Person--an individual, partnership, company, corporation, association, or any other legal entity, however organized.

(16) Statutory warranty--

(A) that warranty defined in §430.001(b) of the Act covering:

(i) one year for workmanship and materials;

(ii) two years for plumbing, electrical, heating, and air-conditioning delivery systems; and

(iii) ten years for major structural components of the home; or

(B) that limited warranty of habitability created in §430.002 of the Act.

(17) State inspector--a person employed by the commission pursuant to §427.002 of the Act to:

(A) review on an appeals panel the recommendations of third-party inspectors;

(B) provide consultation to third-party inspectors; and

(C) administer the state-sponsored inspection and dispute resolution process.

(18) Third-party inspector--a person approved by the commission to perform services under the state-sponsored inspection and dispute resolution process.

(19) Transaction governed by the Act--

(A) the construction of a new home; or

(B) for an existing home:

(i) a material improvement to a home other than an improvement solely to replace or repair the roof; or

(ii) an improvement to the interior when the cost paid for the work exceeds $20,000.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 19, 2003.

TRD-200308760

Susan K. Durso

General Counsel

Texas Residential Construction Commission

Earliest possible date of adoption: February 8, 2004

For further information, please call: (512) 463-9524


Chapter 302. FEES

10 TAC §302.1

The Texas Residential Construction Commission (the "commission") proposes a new rule at Title 10, Part 7, Chapter 302, §302.1, regarding reasonable and necessary fees to provide sufficient revenue to cover the costs of administering Title 16, Property Code.

Section 302.1, relating to Adoption of Fees, requires the commission to annually review and consider for adoption a fee schedule to provide for fees that are reasonable and necessary to provide sufficient revenue to cover the costs of administering the Act. The commission shall publish its fees as adopted and make them available to the public upon request.

Stephen D. Thomas, Executive Director, has determined that for each year of the first five-year period that the new rule is in effect there will be no fiscal implications for local government as a result of enforcing or administering the new rule. During the first five-year period fees adopted by the commission pursuant to the new rule will provide revenue to the state to cover the costs of administering the Texas Residential Construction Commission Act, Title 16, Property Code.

Mr. Thomas has also determined that for each year of the first five-year period the new rule is in effect, the public will benefit from the agency oversight functions funded by any fees adopted by the commission. The commission provides a neutral entity for assistance in resolving disputes, which will provide a less costly method of resolving those disputes than litigation.

Mr. Thomas has also determined that large, small and micro-businesses that fall within the purview of the new agency will be only modestly affected by the fees paid pursuant to the fees schedule adopted by the commission but not more so than is reasonable and necessary to cover the costs of administering the Act.

Mr. Thomas has also determined that for each year of the first five-year period the proposed rule is in effect there should be no effect on a local economy; and therefore no local employment impact statement is required under Administrative Procedure Act §2001.022.

Interested persons may submit written comments (16 copies) on the proposed rule to Susan K. Durso, General Counsel, Texas Residential Construction Commission, P.O. Box 13144, Austin, Texas, 78711. Comments may be submitted electronically to rulescomments@trcc.state.tx.us . The deadline for submission of comments is thirty (30) days from the date of publication of the proposed rules in the Texas Register . Comments should be organized in a manner consistent with the organization of the proposed rule.

The new rule is proposed to implement new legislation enacted during the 78th Legislative Session, Regular Session, including House Bill 730. The new section is adopted under Property Code §408.001, which provides general authority for the commission to adopt rules necessary for the implementation of Title 16, Property Code, and under the authority provided in §408.002, Property Code (Act effective Sept. 1, 2003, 78th Leg., R.S., ch. 458, §1.01), which provides in part that the commission may adopt reasonable fees to administer Title 16, Property Code, beginning January 1, 2004.

The statutory provisions affected by the proposal are those set forth in the Title 16, Property Code, §408.002 and House Bill 730, 78th Legislature.

No other statutes, articles, or codes are affected by the proposal.

§302.1.Adoption of Fees.

(a) At least annually the commission shall review and consider for adoption fees that are reasonable and necessary to provide sufficient revenue to cover the costs of administering the Act.

(b) The commission shall publish fees adopted and make the information available to the public upon request.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 19, 2003.

TRD-200308761

Susan K. Durso

General Counsel

Texas Residential Construction Commission

Earliest possible date of adoption: February 8, 2004

For further information, please call: (512) 463-9524


Chapter 303. REGISTRATION

Subchapter A. REGISTRATION OF BUILDERS

10 TAC §§303.1, 303.3, 303.5, 303.7, 303.9, 303.11, 303.13, 303.15, 303.17, 303.19, 303.21, 303.23

The Texas Residential Construction Commission (the "commission") proposes for adoption new rules at Title 10, Part 7, Chapter 303, Subchapter A, §§303.1, 303.3, 303.5, 303.7, 303.9, 303.11, 303.13, 303.15, 303.17, 303.19, 303.21 and 303.23, regarding the registration of builders in the State of Texas.

Section 303.1, relating to process, states that all builders must register with the commission using a commission-prescribed form. A builder must submit a registration form and filing fee for issuance of a certificate of registration for each name under which it intends to operate as a builder in this state. The commission shall issue to each builder who meets the requirements of the Act a certificate of registration within fifteen (15) days after receipt of a complete registration form and the required fee.

Section 303.3, relating to provisional registration, states that if the commission determines that it is in the public interest, the commission may issue a provisional certificate of registration pending the results of a criminal background check. Upon receipt of the results of the background check, the commission will either issue a certificate of registration or shall deny the registration form and revoke the provisional certificate. If the commission revokes the provisional certificate, it shall provide written notice to the applicant stating the reason for its decision. Notice under this subsection shall be made by certified mail, return receipt requested, within three business days of the commission's decision. Within three days of receipt of the commission's notice, the applicant shall return the provisional certificate to the commission. Failure to return the certificate may result in the imposition of administrative penalties or other enforcement action within the discretion of the commission. This section will expire January 1, 2005.

Section 303.5, relating to registration form, the registration form shall require all information necessary to determine if that the applicant meets the requirements of the Act and to satisfy the commission that the applicant is honest, trustworthy, and has integrity.

Section 303.7, relating to designated agents, requires identified business entities to designate an agent for the purposes required under the Act and to register with the commission each designated agent individually as a builder.

Section 303.9, relating to eligibility requirements, states the minimum eligibility requirements of an applicant for registration as a builder under the Act.

Section 303.11, relating to information regarding criminal history, states that each applicant will be required to disclose past criminal history for felonies and misdemeanor crimes involving moral turpitude. It further states that the commission will conduct a criminal background check on each applicant and may conduct a criminal background check on other individuals who are responsible for the registration. Information obtained by the commission from the conduct of a criminal background check that is not contained in a public record is confidential information and will not be released by the commission unless under court order or with the express written consent of the applicant.

Section 303.13, relating to designation of an address, requires that each builder designate a fixed physical address in the state of Texas as its designated address for purposes of compliance with the Act and states that within thirty (30) days of moving from that physical address, the builder must submit a new registration form and fee under this subchapter.

Section 303.15, relating to change of registered name, states that a builder must submit a written notice of a change of name within forty-five (45) days of the date upon which it commences operating as a builder under a name other than the one under which the certificate of registration was issued.

Section 303.17, relating to material change in information, states that unless otherwise expressly stated under this subchapter, a builder must notify the commission in writing within thirty (30) days of the material change in any information provided to the commission pursuant to this subchapter.

Section 303.19, relating to renewal, states that each registered builder shall re-file a registration form and pay the required fee for renewal of its certificate of registration no less than thirty (30) days prior to the expiration of the effective period stated in the certificate of registration.

Section 303.21, relating to denial, states that the commission shall provide each applicant with written notice of its decision to deny a registration within fifteen (15) days of receipt of a complete registration form and the required fee. The commission shall state the reason for its denial in the written notice to the applicant.

Section 303.23, relating to appeal from denial, states that an applicant must notice the commission in writing of its intent to appeal the commission's decision to deny its registration within thirty (30) days of receipt of the commission's written notice of its decision. Not later than thirty (30) days after receiving the applicant's notice of its intent to appeal, the commission shall set a time and place for a hearing on the appeal. Not less than fifteen (15) days prior to the date of the hearing, the commission shall provide notice of the hearing to the applicant. The commission shall appoint a hearings officer to conduct the hearings under this section. After the commencement of a hearing under this section, the hearings officer may continue the hearing from time to time with the consent of the applicant. After completion of the hearing under this section the hearings officer shall enter an appropriate order, which may be appealed to the commission.

Stephen D. Thomas, Executive Director, has determined that for the first five-year period the new rules are in effect there will be no fiscal implications for local government as a result of enforcing or administering the new rules. During the first five-year period fees collected by the commission pursuant to the new rules will provide revenue to the state to cover the costs of administering the Texas Residential Construction Commission Act, Title 16, Property Code.

Mr. Thomas has also determined that for each year of the first five-year period the new rules are in effect, the public will benefit from the implementation of the builder registrations and agency oversight functions funded by any fees adopted by the commission.

Mr. Thomas has also determined that large, small and micro-businesses that fall within the purview of the Act will be only minimally affected by the fees collected pursuant to the new rules but not more so that is reasonable and necessary to cover the costs of administering the Act. Each builder will pay the same registration fee regardless of the size of the business. Persons providing construction services that do not meet the statutory requirements for operating as a builder under the new rules will not be allowed to continue construction services that are covered by the Act. The proposed rules will help to make certain that only persons who have undergone a criminal history background check will be allowed to operate as builders in Texas.

Mr. Thomas has also determined that for each year of the first five year period the proposed rules are in effect there may be a minimal effect on local economies. Therefore, as required by Administrative Procedure Act §2001.022, the commission includes this statement of local employment impact: in each all geographical areas of the state in which persons have performed, prior to the effective date of the Act, such construction services that would bring them under the statutory oversight scheme adopted by the legislature, some local economies may be minimally impacted as a result of a denial of a builder registration pursuant to the terms of the proposed rules. Because the Act requires that all persons who operate as builders, as that term in defined by the Act, register with the commission, denial of a certificate of registration will prevent some persons who currently provide construction services covered by the Act from performing those services. However, the public benefit of ensuring that persons operating as builders in this state meet the statutory requirements will enhance the public confidence in the building industry and of ensuring the quality of home construction in the state outweighs the minimal potential impact on employment in some localities.

Interested persons may submit written comments (16 copies) on the proposed rules to Susan K. Durso, General Counsel, Texas Residential Construction Commission, P.O. Box 13144, Austin, Texas, 78711. Comments may be submitted electronically to rulescomments@trcc.state.tx.us . The deadline for submission of comments with the commission is (30) thirty days from the date of publication of the proposed rules in the Texas Register . Comments should be organized in a manner consistent with the organization of the proposed rules.

The new rules are proposed to implement new legislation enacted during the 78th Legislative Session, Regular Session, including House Bill 730. The new rules are proposed for adoption pursuant to Property Code, Chapter 416, which provides, in part, that builders must register with the commission beginning March 1, 2003, and generally, pursuant to Property Code §408.001, which provides authority for the commission to adopt rules necessary for the implementation of Title 16, Property Code (Act effective Sept. 1, 2003, 78th Leg., R.S., ch. 458, §1.01).

The proposed rules were also adopted on an emergency basis to comply with new legislation enacted during the 78th Legislative Session, Regular Session, including House Bill 730. The new rules were adopted under Chapter 416, Property Code (Act effective Sept. 1, 2003, 78th Leg., R.S., ch. 458, §1.01), which provides in part that builders become registered with the commission by March 1, 2004. The adoption of the emergency rules was necessary to allow the commission to comply with the timetable prescribed by House Bill 730 and set out in Title 16, Property Code. These emergency rules are published in the Emergency Rules section of this issue of the Texas Register .

The statutory provisions affected by the proposal are those set forth in the Property Code, Chapter 416 and House Bill 730, 78th Legislature.

No other statutes, articles, or codes are affected by the proposal.

§303.1.Process.

All builders must register with the commission, using a commission prescribed-form, in order to do business as a builder in the state of Texas. A builder must submit a registration form and filing fee for issuance of a certificate of registration in each name under which it intends to operate as a builder in this state. Not later than fifteen (15) days after the commission has received a complete registration form and the required fee from an applicant who meets the requirements of the Act, the commission shall provide the builder with a certificate of registration.

§303.3.Provisional Registration.

(a) If the commission determines it is in the public interest, it may issue a provisional certificate pending the results of a criminal background check.

(b) Upon completion of the criminal background check, the commission shall issue a certificate of registration pursuant to this subchapter or, if the results of the background check are unfavorable, the commission shall deny the registration form and revoke the provisional certificate.

(c) If the commission denies the registration form and revokes the provisional certificate, it shall provide written notice to the applicant stating its reason for revocation.

(1) The commission shall send notice under this subsection by certified mail, return receipt requested, within three business days of making its decision.

(2) Within three business days of receipt of notice under this subsection, the applicant shall return the provisional certificate to the commission.

(3) Failure to return the provisional certificate to the commission may result in the imposition of administrative penalties upon the applicant or other enforcement action within the discretion of the commission.

(d) This section expires January 1, 2005.

§303.5.Registration Form.

The registration form shall request information deemed necessary by the commission for the commission to determine that the applicant meets the requirements of the Act, to conduct a criminal background check and to satisfy the commission that the applicant is honest, trustworthy and has integrity.

§303.7.Designated Agents.

(a) To be eligible for a certificate of registration under this subchapter:

(1) a corporation must designate one of its officers as its agent for the purposes of the Act;

(2) a limited liability company must designate one of its managers as its agent for the purposes of the Act; and

(3) a partnership, limited partnership or limited liability partnership must designate one of its managing partners as its agent for the purposes of the Act.

(b) A corporation, limited liability company, partnership, limited partnership or limited liability partnership is not eligible to be registered under this subchapter and may not act as a builder unless the entity's designated agent is individually registered as a builder.

(c) An individual named as designated agent under this section will be considered the applicant for purposes of this subchapter.

§303.9.Eligibility Requirements.

At the time of filing the registration form, an applicant must be

(1) at least 18 years of age; and

(2) a citizen of the United States or a lawfully admitted alien.

§303.11.Information Regarding Past Criminal History.

(a) The applicant must disclose on the registration form:

(1) whether the applicant has entered a plea of guilty or nolo contendere to a felony or misdemeanor charge involving moral turpitude; or

(2) whether the applicant has been convicted of a felony or misdemeanor involving moral turpitude and that the time for appeal of the conviction has elapsed or that the conviction has been affirmed on appeal.

(b) The commission will conduct a criminal background check of each applicant and may conduct a criminal background check on any other person responsible for the registration if the commission determines it necessary to further the purposes of the Act.

(c) Information obtained as a result of the criminal background check that is not contained in a public record at the time the commission obtains the information is confidential and the commission will not release or disclose the information except under a court order or with the express written consent of the applicant.

§303.13.Designated Address.

(a) Each builder shall designate a fixed physical address located in this state to serve as its principal place of business for purposes of the Act.

(b) Each builder shall submit a new registration form accompanied by the required fee not later than thirty (30) days from the date the builder moves from the address designated as its principal place of business under this section.

§303.15.Change of Registered Name.

Within forty-five (45) days of the date upon which it commences operating as a builder under any name other than the one set forth in the certificate of registration issued by the commission, a registered builder shall submit written notice to the commission of the new name under which it is operating.

§303.17.Material Change in Information.

Except as expressly otherwise provided in this subchapter, each builder shall report to the commission in writing any material change in the information provided to the commission pursuant to this subchapter within thirty (30) days of the change.

§303.19.Renewal.

Not later than thirty (30) days prior to the expiration of the effective period shown on the certificate of registration provided by the commission, a builder shall re-file with the commission a registration form for renewal of its registration and shall pay the required fee for renewal.

§303.21.Denial of Registration.

(a) If the commission denies a registration form, the commission shall provide written notice to the applicant not later than the 15th day after the date the commission receives the complete registration form and required fee.

(b) The commission shall state the reason for denial of the registration in its written notice to the applicant.

§303.23.Appeal from Denial.

(a) An applicant may appeal the commission's decision to deny its registration if, on or before the 30th day after the date the applicant receives written notice of the denial, the applicant files a written request for a hearing before the commission.

(b) The commission shall:

(1) set a time and place for the hearing not later than the 30th day after the date the commission receives the notice of the appeal; and

(2) provide notice of the hearing to the applicant at least fifteen (15) days before the date of the hearing.

(c) The commission shall appoint a hearings officer to conduct the hearing.

(d) After commencement of the hearing, the hearing may be continued from time to time with consent of the applicant.

(e) After completion of the hearing, the hearings officer shall enter an appropriate order. The order of the hearings officer under this section is a final decision, unless appealed to the commission.

(f) A decision by the hearings officer may be appealed to the commission.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 19, 2003.

TRD-200308762

Susan K. Durso

General Counsel

Texas Residential Construction Commission

Earliest possible date of adoption: February 8, 2004

For further information, please call: (512) 463-9524


Subchapter B. REGISTRATION OF HOMES

10 TAC §§303.100, 303.110, 303.120, 303.130, 303.140, 303.150, 303.160, 303.170

The Texas Residential Construction Commission (the "commission") proposes for adoption new rules at Title 10, Part 7, Chapter 303, Subchapter B, §§303.100, 303.110, 303.120, 303.130, 303.140, 303.150, 303.160 and 303.170, regarding the registration of a home in the State of Texas.

Section 303.100 describes the requirements for registering a new home with the commission. All new homes constructed in this state on or after January 1, 2004, in a transaction governed by the Act shall be registered with the commission. A builder that constructs a new home in a transaction governed by the Act on or after January 1, 2004, shall register the home with the commission on a commission-prescribed form accompanied by the appropriate fee. The builder must register the new home before the 15th day of the month that follows the month in which the title transfer took place.

Section 303.110 describes the requirements for registering an existing home to which a material improvement has been made or an improvement to the interior of an existing home when the cost of the work exceeds $20,000. A builder who enters into a transaction governed by the Act on or after January 1, 2004, with a homeowner to construct a material improvement or an improvement to the interior of an existing home for consideration in excess of $20,000 shall register the home with the commission. The builder shall register the home with the commission on a commission-prescribed form accompanied by the appropriate fee. The builder must register the affected home on the 15th day after the earlier of the date the homeowner and the builder enter into an agreement for a governed transaction or the date work commences on the home. A builder may withdraw a registration submitted under this section if the underlying transaction does not commence; however, the registration fee is not refundable.

Section 303.120 describes the requirements for registration of a home by a homeowner. The owner of a new home for which the first title transfers from a builder to the homeowner between September 1, 2003, and December 31, 2003, must register the home with the commission if the homeowner submits a request to utilize the state-sponsored inspection and dispute resolution process. A homeowner who enters into a transaction governed by the Act with a builder between September 1, 2003, and December 31, 2003, must register the home with the commission if the homeowner submits a request to utilize the state-sponsored inspection and dispute resolution process. The homeowner must file the home registration in accordance with this subchapter prior to filing the request to utilize the state-sponsored inspection and dispute resolution process.

Section 303.130 identifies homes that are not subject to the provisions of the Act. The commission will not register a home under this subchapter if the home was built by the homeowner utilizing his own employees or independent contractors and the home has been used by the homeowner-builder as the homeowner-builder's primary residence for at least one year after completion or substantial completion of construction of the home.

Section 303.140 states that a person registering a home under this subchapter shall use a commission-prescribed form. The completed form must be accompanied by the appropriate fee as adopted by the commission. Further, the person may submit the registration materials utilizing first class mail, personal delivery or, if provided by the commission, an electronic method of submission.

Section 303.150 states that the fees required under this subchapter are payable to the commission by check, money order or other method acceptable to the commission. A builder who fails to timely register a home under this subchapter may be required to pay a late penalty of two times the regular registration fee, if the builder registers the home within the 60 days following the required registration period. Furthermore, a builder who has been granted Internal Revenue Code §501(c)(3) tax exempt status by the Internal Revenue Service may seek waiver of a home registration fee required by this subchapter by submitting a request on a commission-prescribed form and written documentation from the Internal Revenue Service granting the builder §501(c)(3) tax-exempt status.

Section 303.160 states that the commission shall provide information regarding the commission's functions, the limited statutory warranty and building and performance standards adopted by the commission, the state-sponsored inspection and dispute resolution process, a description of the complaint resolution process and other information as determined by the commission to the homeowner of a home registered under this subchapter within thirty (30) days of receipt of the completed registration.

Section 303.170 states that a builder who fails to register a home with the commission pursuant to the requirements of this subchapter may be subject to an administrative penalty or other disciplinary action within the commission's authority.

Stephen D. Thomas, Executive Director, has determined that for each year of the first five-year period the new rules are in effect there will be no fiscal implications for local government as a result of enforcing or administering the new rules. During the first five-year period fees collected by the commission pursuant to the new rules will provide revenue to the state to cover the costs of administering the Texas Residential Construction Commission Act, Title 16, Property Code.

Mr. Thomas has also determined that for each year of the first five-year period the new rules are in effect, the public will benefit from the implementation of the home registrations and agency oversight functions funded by any fees adopted by the commission.

Mr. Thomas has also determined that large, small and micro-businesses that fall within the purview of the Act agency will be only minimally affected by the fees collected pursuant to the new rule but not more so that is reasonable and necessary to cover the costs of administering the Act.

Mr. Thomas has also determined that for each year of the first five-year period the proposed rules are in effect there will be no effect on local economies; therefore, no local employment impact statement is required pursuant to Administrative Procedure Act §2001.022.

Interested persons may submit written comments (16 copies) on the proposed rules to Susan K. Durso, General Counsel, Texas Residential Construction Commission, P.O. Box 13144, Austin, Texas, 78711. Comments may be submitted electronically to rulescomments@trcc.state.tx.us . The deadline for submission of comments with the commission is thirty (30) days from the date of publication of the proposed rules in the Texas Register . Comments should be organized in a manner consistent with the organization of the proposed rules.

The new rules are proposed to implement new legislation enacted during the 78th Legislative Session, Regular Session, including House Bill 730 (Act effective Sept. 1, 2003, 78th Leg., R.S., ch. 458, §1.01). The new rules are proposed for adoption pursuant to Property Code, Chapter 426, which provides, in part, that new homes and homes in which certain material improvements have been made must be registered with the commission beginning January 1, 2004. The adoption of the proposed rules will allow the commission to collect information necessary to implement House Bill 730 and Chapter 426, Property Code, and provides the public with the information necessary to comply with the new legislation.

The new rules have been simultaneously adopted as emergency rules and are being published in the Emergency Rules section of this issue of the Texas Register .

The statutory provisions affected by these proposed are those set forth in the Property Code, Chapter 46 and House Bill 730, 78th Legislature.

No other statutes, articles, or codes are affected by the proposal.

§303.100.New Home Registration Requirement.

(a) All new homes constructed in this state on or after January 1, 2004, in a transaction governed by the Act shall be registered with the commission.

(b) A builder shall submit a registration form accompanied by the appropriate fee to register a new home with the commission on or before the 15th day of the month that follows the month in which the transfer of title from the builder to the initial homeowner occurs.

§303.110.Registration of Existing Homes by a Builder.

(a) A builder who enters into a transaction governed by the Act on or after January 1, 2004, with a homeowner to construct a material improvement or an improvement to the interior of an existing home for consideration in excess of $20,000, shall register the home with the commission.

(b) A builder registering a home under this section shall submit the registration form accompanied by the appropriate fee to the commission not later than the 15th day after the date that the builder and the homeowner enter an agreement that describes the transaction for construction work described in subsection (a) of this section or the commencement of the work on the home, whichever is earlier.

(c) A builder may withdraw a registration submitted to the commission under this section if the underlying transaction does not commence; however, the registration fee is not refundable.

§303.120.Registration of a Home by a Homeowner.

(a) The owner of a new home who entered into a transaction governed by the Act between September 1, 2003, and December 31, 2003, must register the home with the commission if the homeowner submits a request to utilize the state-sponsored inspection and dispute resolution process.

(b) A homeowner who entered into a transaction governed by the Act with a builder for a material improvement or an improvement to the interior of an existing home for consideration in excess of $20,000 between September 1, 2003, and December 31, 2003, must register the home with the commission if the homeowner submits a request to utilize the state-sponsored inspection and dispute resolution process.

(c) A homeowner must file the home registration in accordance with the provisions of this subchapter prior to filing the request to utilize the state-sponsored inspection and dispute resolution process.

§303.130.Homes Not Subject to Registration.

The commission shall not register a home under this subchapter if the home was constructed by the homeowner acting as his own builder or with the assistance of the homeowner's employees or independent contractors hired by the homeowner and the home has been used by the homeowner-builder as the homeowner-builder's primary residence for at least one year after completion or substantial completion of construction of the home.

§303.140.Home Registration Process.

(a) A person registering a home under this subchapter shall use a commission-prescribed form.

(b) A completed home registration form submitted to the commission must be accompanied by the appropriate fees as adopted by the commission.

(c) For the purposes of this subchapter, a person submitting to the commission a completed home registration form and fee may utilize first class mail, personal delivery or, if provided by the commission, an electronic method of submission.

§303.150.Fees.

(a) Fees required under this section are payable to the Texas Residential Construction Commission via check, money order, or other method acceptable to the commission.

(b) A builder who registers with the commission less than sixty (60) days after the registration period for registration of a new or an existing home under this subchapter may register the home during that sixty (60) day period by paying a late payment penalty of two times the home registration fee adopted by the commission.

(c) A builder who has been granted Internal Revenue Code §501(c)(3) tax exempt status by the Internal Revenue Service may seek waiver of a home registration fee required by this subchapter by submitting to the commission a fee waiver request on a commission-prescribed form and written documentation from the Internal Revenue Service granting the builder §501(c)(3) tax-exempt status.

§303.160.Public Information.

Within thirty (30) days of the receipt of the home registration information required by this subchapter, the commission shall provide to the homeowner of the registered home the following:

(1) information regarding the functions of the commission;

(2) information on the limited statutory warranty and building and performance standards adopted by the commission;

(3) a description of the state-sponsored inspection and dispute resolution process;

(4) a description of the commission complaint resolution procedures; and

(5) other information as determined by the commission.

§303.170.Administrative Penalties.

A builder who fails to register a home with commission pursuant to the requirements of this subchapter may be subject to an administrative penalty or other disciplinary action within the commission's authority.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 19, 2003.

TRD-200308763

Susan K. Durso

General Counsel

Texas Residential Construction Commission

Earliest possible date of adoption: February 8, 2004

For further information, please call: (512) 463-9524