TITLE 10.COMMUNITY DEVELOPMENT

Part 1. TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS

Chapter 80. MANUFACTURED HOUSING

The Manufactured Housing Division of the Texas Department of Housing and Community Affairs (the "Department") adopts with non-substantive changes amendments to §§80.208, 80.240 and 80.260. The rules will be republished. The proposed rule was published in the May 26, 2006, issue of the Texas Register (31 TexReg 4299).

The proposed amendment to §80.11(28) is withdrawn and may be reproposed in §80.133 in the future, which was found to be a more accurate location for the text. The proposed amendment to §80.119(b)(3) is withdrawn because of opposition to the proposal.

The rules will be effective thirty (30) days following the date of publication with the Texas Register of notice that the rule has been adopted.

A public hearing was held on June 26, 2006. The following interested groups or associations presented comments either at the hearing or in writing: Texas Manufactured Housing Association ("TMHA").

Section 80.208: TMHA suggested the Department change the term "Taxing Unit" to "Taxing Entity" to avoid confusion since "Unit" is used to describe a manufactured home section. The Department agrees to change the term.

Figure: 10 TAC §80.240(a)(13): TMHA suggested the Department change the term "Taxing Unit" to "Taxing Entity" to avoid confusion since "Unit" is used to describe a manufactured home section. The Department agrees to change the term.

Figure: 10 TAC §80.260(a)(14) and (a)(15): TMHA suggested the Department change the term "Taxing Unit" to "Taxing Entity" to avoid confusion since "Unit" is used to describe a manufactured home section. The Department agrees to change the term.

Except as noted below, the rules as proposed on May 26, 2006, are adopted as final rules with the following non-substantive changes.

Section 80.208(d) - Changed "taxing unit" to "taxing entity."

Figure: 10 TAC §80.240(a)(13) - Changed "taxing unit" to "taxing entity."

Figure: 10 TAC §80.260(a)(14) - Changed "taxing unit" to "taxing entity."

Figure: 10 TAC §80.260(a)(15) - Changed "taxing unit" to "taxing entity."

The following is a restatement of the rules' factual basis:

Section 80.208 is adopted (with changes) to revise subsection (a) to address filing tax liens manually and add new subsection (b) to address filing tax liens electronically. Also, subsection (d) is added to provide a method for tax collectors who file for multiple taxing entities to file as a central tax collector under a single taxing entity ID number. It is not a requirement for tax collectors that file for multiple taxing entities to file as a central tax collector.

Figure: 10 TAC §80.208(b) - the proposal to relocate the tax lien form to §80.260(a)(14) is adopted (without changes).

Section 80.240(a)(13) - The layout example for filing tax liens electronically is adopted (with changes).

Figure: 10 TAC §80.240(a)(13) - Tax lien layout for electronically filed tax liens is adopted (with changes).

Section 80.260(a)(14) and (15) - is adopted (with changes) relating to moving the tax lien form from §80.208(b) and adding a new form for tax collectors to file as a central tax collector if they file for multiple taxing entities.

Figure: 10 TAC §80.260(a)(14) - is adopted (with changes) relating to moving the tax lien form from §80.208(b) and revising the certification statements in blocks 2 and 3 to address certifying as a central tax collector.

Figure: 10 TAC §80.260(a)(15) - is adopted (with changes) relating to adding a new form for tax collectors to file as a central tax collector if they collect for multiple taxing entities.

Subchapter G. STATEMENTS OF OWNERSHIP AND LOCATION

10 TAC §80.208

The amended rules are adopted under the Texas Manufactured Housing Standards Act, Occupations Code, Chapter 1201, §1201.052, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the Department and under Texas Government Code, Chapter 2306, §2306. 6014, which authorizes the director to administer and enforce the manufactured housing program through the Manufactured Housing Division.

No other statute, code, or article is affected by the adopted rules.

§80.208.Recording Tax Liens on Manufactured Homes.

(a) Manually filed tax liens shall be filed with the Department using the form provided in §80.260(a)(14) of this title (relating to Required and Optional Forms). No other form will be accepted for the manual filing of tax liens. The form must be properly completed.

(b) Electronically filed tax liens and tax lien releases shall be filed with the Department using the required file layout as provided in §80.240(a)(13) of this title (relating to Tables and Figures). No other format will be accepted for electronic filing of tax liens.

(c) For tax liens recorded after June 18, 2005, but prior to the effective date of these rules, those tax liens relating to tax years prior to 2001 will be disregarded and will not be treated as having been recorded.

(d) If a tax collector wishes, it may file as a central tax collector under a single taxing entity ID number, in which case the liens recorded or released under that taxing entity ID number will extend to all liens created for tax obligations to the taxing entity for which the filer collects. In order, however, to file as a central collector, the filer must complete and provide to the Department the form set out in §80.260(a)(15) of this title (relating to Required and Optional Forms).

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 July 24, 2006.

TRD-200603870

Timothy K. Irvine

Executive Director, Manufactured Housing Division of TDHCA

Texas Department of Housing and Community Affairs

Effective date: September 3, 2006

Proposal publication date: May 26, 2006

For further information, please call: (512) 475-2206


Subchapter H. TABLES AND FIGURES

10 TAC §80.240

The amended rules are adopted under the Texas Manufactured Housing Standards Act, Occupations Code, Chapter 1201, §1201.052, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the Department and under Texas Government Code, Chapter 2306, §2306. 6014, which authorizes the director to administer and enforce the manufactured housing program through the Manufactured Housing Division.

No other statute, code, or article is affected by the adopted rules.

§80.240.Tables and Figures.

(a) Tables.

(1) Maximum Spacing for Diagonal Ties.

Figure: 10 TAC §80.240(a)(1) (No change.)

(2) Minimum Number of Diagonal Ties.

Figure: 10 TAC §80.240(a)(2) (No change.)

(3) Maximum Spacing for Diagonal Ties (Wind Zone II) per side of the Assembled Unit.

Figure: 10 TAC §80.240(a)(3) (No change.)

(4) Bracket Installation - Maximum Centerline Wall Opening for Column Uplift Brackets.

Figure: 10 TAC §80.240(a)(4) (No change.)

(5) Floor Connections - Wind Zone I and II.

Figure: 10 TAC §80.240(a)(5) (No change.)

(6) Roof Connection - Fastener Type and Spacing.

Figure: 10 TAC §80.240(a)(6) (No change.)

(7) Main Panel Box Feeder Conductor Sizes.

Figure: 10 TAC §80.240(a)(7) (No change.)

(8) Footer Capacities.

Figure: 10 TAC §80.240(a)(8) (No change.)

(9) Pier Loads without Perimeter Supports.

Figure: 10 TAC §80.240(a)(9) (No change.)

(10) Pier Loads with Perimeter Supports.

Figure: 10 TAC §80.240(a)(10) (No change.)

(11) Mating Line Column Loads.

Figure: 10 TAC §80.240(a)(11) (No change.)

(12) Enforcement Matrix.

Figure: 10 TAC §80.240(a)(12) (No change.)

(13) Tax Lien Layout for Electronically Filed Tax Liens.

Figure: 10 TAC §80.240(a)(13) (.pdf)

(b) Figures.

(1) Counties Located in Wind Zone II.

Figure: 10 TAC §80.240(b)(1) (No change.)

(2) Anchor Installation.

Figure: 10 TAC §80.240(b)(2) (No change.)

(3) Placement of Stabilizing Devices.

Figure: 10 TAC §80.240(b)(3) (No change.)

(4) Wind Zone I Installation (Single & Multi-Section).

Figure: 10 TAC §80.240(b)(4) (No change.)

(5) Diagonal Strap Placement for Piers Exceeding 36 in. in Height.

Figure: 10 TAC §80.240(b)(5) (No change.)

(6) Diagonal and Vertical Ties.

Figure: 10 TAC §80.240(b)(6) (No change.)

(7) Typical Installation Details.

Figure: 10 TAC §80.240(b)(7) (No change.)

(8) Anchor Span.

Figure: 10 TAC §80.240(b)(8) (No change.)

(9) Typical Longitudinal Stabilizing Device.

Figure: 10 TAC §80.240(b)(9) (No change.)

(10) Longitudinal Ties.

Figure: 10 TAC §80.240(b)(10) (No change.)

(11) Mating Line Surfaces.

Figure: 10 TAC §80.240(b)(11) (No change.)

(12) Floor Connections.

Figure: 10 TAC §80.240(b)(12) (No change.)

(13) Endwall Connections.

Figure: 10 TAC §80.240(b)(13) (No change.)

(14) Roof Connection.

Figure: 10 TAC §80.240(b)(14) (No change.)

(15) Exterior Roof Close Up.

Figure: 10 TAC §80.240(b)(15) (No change.)

(16) HVAC (Heat/Cooling) Duct Crossover.

Figure: 10 TAC §80.240(b)(16) (No change.)

(17) Multi-Section Water Crossover Connections.

Figure: 10 TAC §80.240(b)(17) (No change.)

(18) Drain, Waste and Vent Floor Piping System.

Figure: 10 TAC §80.240(b)(18) (No change.)

(19) Chassis Bonding.

Figure: 10 TAC §80.240(b)(19) (No change.)

(20) Electrical Crossover.

Figure: 10 TAC §80.240(b)(20) (No change.)

(21) Fuel Gas Pipe Crossover Connections.

Figure: 10 TAC §80.240(b)(21) (No change.)

(22) Footer Configurations.

Figure: 10 TAC §80.240(b)(22) (No change.)

(23) Pier Design (Single and Multi-Section Stack).

Figure: 10 TAC §80.240(b)(23) (No change.)

(24) Perimeter Pier Front & Side View.

Figure: 10 TAC §80.240(b)(24) (No change.)

(25) Typical Multi-Section Pier Layout.

Figure: 10 TAC §80.240(b)(25) (No change.)

(26) Typical Single Section Pier Layout.

Figure: 10 TAC §80.240(b)(26) (No change.)

(27) Determining Column Load and Marriage Line Elevation.

Figure: 10 TAC §80.240(b)(27) (No change.)

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 July 24, 2006.

TRD-200603871

Timothy K. Irvine

Executive Director, Manufactured Housing Division of TDHCA

Texas Department of Housing and Community Affairs

Effective date: September 3, 2006

Proposal publication date: May 26, 2006

For further information, please call: (512) 475-2206


Subchapter I. FORMS

10 TAC §80.260

The amended rules are adopted under the Texas Manufactured Housing Standards Act, Occupations Code, Chapter 1201, §1201.052, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the Department and under Texas Government Code, Chapter 2306, §2306. 6014, which authorizes the director to administer and enforce the manufactured housing program through the Manufactured Housing Division.

No other statute, code, or article is affected by the adopted rules.

§80.260.Required and Optional Forms.

(a) Required Forms.

(1) Site Preparation Notice.

Figure: 10 TAC §80.260(a)(1) (No change.)

(2) Consumer Disclosure Statement.

Figure: 10 TAC §80.260(a)(2) (No change.)

(3) Consumer Protection Disclosure - Chattel Mortgage Transactions.

Figure: 10 TAC §80.260(a)(3) (No change.)

(4) Notice of Installation (Form T).

Figure: 10 TAC §80.260(a)(4) (No change.)

(5) Estimate for Reassigned Warranty Work.

Figure: 10 TAC §80.260(a)(5) (No change.)

(6) Application for Statement of Ownership and Location.

Figure: 10 TAC §80.260(a)(6) (No change.)

(7) Release or Foreclosure of Lien (Form B).

Figure: 10 TAC §80.260(a)(7) (No change.)

(8) Quick Processing Form.

Figure: 10 TAC §80.260(a)(8) (No change.)

(9) Form M.

Figure: 10 TAC §80.260(a)(9) (No change.)

(10) Affidavit of Fact for Right of Survivorship.

Figure: 10 TAC §80.260(a)(10) (No change.)

(11) Retailer/Broker Disclosure Statement.

Figure: 10 TAC §80.260(a)(11) (No change.)

(12) Warranty of Habitability.

Figure: 10 TAC §80.260(a)(12) (No change.)

(13) Manufacturer's Certificate of Origin.

Figure: 10 TAC §80.260(a)(13) (No change.)

(14) Tax Lien Record and Release Form.

Figure: 10 TAC §80.260(a)(14) (.pdf)

(15) Notification of filing status as a Central Tax Collector.

Figure: 10 TAC §80.260(a)(15) (.pdf)

(b) Optional Forms. Spanish Version of Consumer Disclosure Statement.

Figure: 10 TAC §80.260(b) (No change.)

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 July 24, 2006.

TRD-200603872

Timothy K. Irvine

Executive Director, Manufactured Housing Division of TDHCA

Texas Department of Housing and Community Affairs

Effective date: September 3, 2006

Proposal publication date: May 26, 2006

For further information, please call: (512) 475-2206


Part 7. TEXAS RESIDENTIAL CONSTRUCTION COMMISSION

Chapter 313. STATE-SPONSORED INSPECTION AND DISPUTE RESOLUTION PROCESS (SIRP)

10 TAC §§313.2, 313.5, 313.6, 313.9, 313.15, 313.16, 313.21

The Texas Residential Construction Commission adopts amendments to 10 Texas Administrative Code (TAC) §§313.2, 313.6, and 313.21 without changes to the proposed text, as published in the March 10, 2006, issue of the Texas Register (31 TexReg 1558). The Commission also adopts amendments to 10 TAC §§313.5, 313.9, 313.15 and 313.16 with nonsubstantive changes to the proposed text, which also was published in the March 10, 2006, issue of the Texas Register (31 TexReg 1558).

The amendments to these sections clarify the procedures for participation in the state-sponsored inspection and dispute resolution process and improve the readability of the sections.

Section 313.2 describes the actions that the commission may take if a homeowner fails to provide thirty days notice to a builder of alleged defects prior to filing a request for the SIRP. Section 313.5 relates to the SIRP inspection fee. Section 313.6 sets forth the information required to file a SIRP request. Section 313.9 describes the procedure for withdrawal if a requestor fails to timely provide information to complete a request to participate in the SIRP. Section 313.15 provides for a reasonable extension of time for a third-party inspector to meet commission deadlines. Section 313.16 describes the commission's expectations regarding the third-party inspector's duties to complete the report, revise the report or re-inspect an alleged defect on remand. Section 313.21 clarifies the appeal process and the obligations of the appeal panel regarding the appeal and the third-party inspector regarding any matter remanded to him after an appeal.

No comments were received regarding the proposed amendments to the sections.

The amendments are adopted under §408.001 of the Property Code which provides general authority for the commission to adopt rules necessary for the implementation of Title 16, Property Code; Property Code Chapter 426 which provides for the implementation of the SIRP; and Property Code Chapter 27 which includes statutory requirements that affect users of the SIRP. The statutory provisions affected by this adoption are those set forth in the Title 16, Property Code Chapters 408, 426, 428 and Title 4, Property Code Chapter 27.

Cross Reference to Statutes: Title 16, Property Code Chapters 408, 426 and 428, and Title 4, Property Code Chapter 27. No other statutes, articles, or codes are affected by the adoption.

§313.5.Filing a Request to Initiate the SIRP.

(a) Either the homeowner or the builder may initiate the SIRP by filing a request with the commission.

(b) If the affected home is not registered with the commission at the time the request is filed, the requesting party must also register the home with the commission by submitting a Home Registration Form and the appropriate fee. A builder who failed to register the affected home in accordance with Chapter 303 of this title, Registration of Homes, shall reimburse the cost of the home registration fee if paid by the homeowner under this section.

(c) When a person contacts the commission to initiate the SIRP, the commission will provide the person with information necessary to file a request, information on the applicable fees to request a third-party inspection, the registration status of the affected home and instructions to register an unregistered home, if applicable.

§313.9.Initial Request Review.

(a) Upon receipt of a request to initiate the SIRP, the commission shall review the request for eligibility to determine if the request contains information alleging or otherwise demonstrating:

(1) that the dispute arises from a transaction governed by the Act;

(2) that the request is complete and includes the required attachments and the payment of the appropriate fees;

(3) that the affected home is registered with the commission;

(4) that the alleged construction defect(s) were discovered on or after September 1, 2003;

(5) that the request is timely under §313.4 of this chapter; and

(6) that the request involves a dispute between a homeowner and a builder regarding alleged construction defect(s) giving rise to a claim that is not:

(A) solely for personal injury, survival, wrongful death; or

(B) solely for damage to goods not including damage to the home; or

(C) for an alleged violation of §27.01, Business and Commerce Code, regarding Fraud in Real Estate and Stock Transactions; or

(D) based solely on a builder's wrongful abandonment of an improvement project before completion; or

(E) for an alleged violation of Property Code, Chapter 162, regarding Construction Payments, Loan Receipts, and Misapplication of Trust Funds.

(b) If the commission determines that the request is not complete or that the claim is not eligible for the SIRP, the commission shall notify the requestor in writing and specify the reason(s) the request is not complete or is ineligible for the SIRP.

(c) A requestor who has submitted an incomplete request will be provided an opportunity to supplement the request to cure its deficiencies. If a requestor fails to complete a request or to provide supplemental information requested by the commission within ten business days after the commission has made the request, the commission will administratively withdraw the request and refund any inspection fee paid.

(d) If the commission determines that the claim is ineligible for the SIRP, the commission will retain copies of all materials submitted, return all originally submitted materials to the requestor and will refund any inspection fee paid.

§313.15.Extension of Time.

(a) The Executive Director may grant an extension of time for a period of no longer than five days for any deadline imposed on the third-party inspector under §313.13 of this chapter upon the written request of a third-party inspector.

(b) The Executive Director may grant an extension of time for any deadline imposed on the third-party inspector under §313.13 of this chapter upon receipt of a written request from either party to the SIRP.

(c) The Executive Director shall grant an extension of time requested under subsection (a) of this section upon a showing that the cause for the delay was not reasonably foreseeable by the third-party inspector when the appointment was accepted.

(d) The Executive Director shall grant an extension under subsection (b) of this section as follows:

(1) for any reasonable period requested without regard to cause if the parties to the dispute agree to the extension in writing; or

(2) for any reasonable period requested under the circumstances upon a showing of good cause by the requesting party or

(3) if the other party to the dispute does not agree to an extension.

(e) The Executive Director's decision on whether to grant or deny an extension of time requested under this section is a final agency decision not subject to further administrative appeal.

§313.16.Third-Party Inspector's Report.

(a) The third-party inspector's report shall be submitted to the commission on the commission's Third-Party Inspection Form or in a format substantially similar to the commission's form, so long as the report includes all of the information required by the commission's form.

(b) The commission shall return any third-party inspector's report that fails to provide the required information or that includes findings, conclusions, comments or other information outside the scope of the third-party inspector's duties to the assigned third-party inspector for revision.

(c) If a third-party inspector fails to revise a report returned for revision within a reasonable time after notification of the need for revision, the commission may consider that failure in making a determination whether the third-party inspector has fulfilled his duties and is thus eligible for payment and in making a determination as to whether to assign the third-party inspector to future SIRP requests or to renew the third-party inspector's registration under Chapter 303 of this title.

(d) The third-party inspector shall submit his completed report to the commission and the commission shall promptly transmit the completed report, or revised report if required, to the homeowner and the builder.

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 July 21, 2006.

TRD-200603865

Susan K. Durso

General Counsel

Texas Residential Construction Commission

Effective date: August 10, 2006

Proposal publication date: March 10, 2006

For further information, please call: (512) 463-2886


10 TAC §313.7

The Texas Residential Construction Commission adopts amendments to 10 Texas Administrative Code §313.7, concerning notice of the request, with changes to the proposed text, as published in the March 10, 2006, issue of the Texas Register (31 TexReg 1558).

The changes are made to clarify the information that must be provided for participation in the state-sponsored inspection and dispute resolution process and to clarify the commission's procedure when a request for a SIRP is received and a suit or arbitration is pending between the homeowner and builder.

Section 313.7 explains the items that a requestor must submit with the request and information that a recipient of notice of a request must submit to the commission.

Gregory Harwell of Gardere, Wynne, & Sewell, LLP, submitted written comments on the proposed amendments via facsimile transmission on March 27, 2006. Mr. Harwell commented that §313.7(d) should be amended to delete language that the commission determines that compliance with Subtitle D of Title 16 is not required, because if the commission made such a determination it would not then "proceed" with the SIRP. Mr. Harwell's comment raises a good point--the proposed sentence as constructed would provide for the commission to proceed with the SIRP when Title 16 does not apply. The commission will adopt the proposed amendment for the commission to abate an inspection request if there is pending litigation between the parties until the commission learns of an order dismissing or abating the litigation. Rather the commission will proceed with any eligible request for an inspection unless the parties are ordered to abate or withdrawal the request.

All comments regarding the section, including any not specifically referenced herein, were fully considered by the commission. The commission has made other minor modifications to the proposed rule text for the purpose of clarifying its intent and improving style and readability.

The amendment is adopted under §408.001 of the Property Code which provides general authority for the commission to adopt rules necessary for the implementation of Title 16, Property Code; Property Code Chapter 426 which provides for the implementation of the SIRP; and Property Code Chapter 27 which includes statutory requirements that affect users of the SIRP. The statutory provisions affected by this adoption are those set forth in the Title 16, Property Code Chapters 408 and 426; Title 4, Property Code Chapter 27 and House Bill 730, 78th Legislature, Regular Session.

Cross Reference to Statutes: Title 16, Property Code Chapters 408 and 426, and Title 4, Property Code Chapter 27. No other statutes, articles, or codes are affected by the adoption.

§313.7.Notice of the Request.

(a) The requestor shall send a copy of the request and copies of all information submitted to the commission along with the request, by certified mail, return receipt requested, to all other interested parties to the dispute.

(b) A copy of the request and the submitted information mailed to other interested parties under subsection (a) of this section must also be mailed to counsel for any interested party represented by counsel, if the identity of counsel is known to the requestor.

(c) An interested party who receives notice that a request has been submitted to the commission and who has information pertaining to the determination of eligibility under §313.9 of this chapter shall submit that information to the commission and provide a copy of the information to the requestor within ten days of receiving a copy of the notice of the request.

(d) A homeowner is required to request a SIRP prior to initiating an action for damages or other relief arising from an alleged construction defect.

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 July 24, 2006.

TRD-200603879

Susan K. Durso

General Counsel

Texas Residential Construction Commission

Effective date: August 13, 2006

Proposal publication date: March 10, 2006

For further information, please call: (512) 463-2886


10 TAC §§313.11, 313.17, 313.19, 313.20

The Texas Residential Construction Commission adopts amendments to §§313.11, 313.17, 313.19 and 313.20, related to the state-sponsored inspection and dispute resolution process, with changes to the proposed text, as published in the March 10, 2006, issue of the Texas Register (31 TexReg 1558). Changes made to the sections were in response to comments received, to correct errors and for clarification purposes.

The amendments clarify the procedures for participation in the state-sponsored inspection and dispute resolution process.

Section 313.11 incorporates language previously contained in §313.12 which the commission intends to repeal upon the effective date of these amendments and provides a description of the process by which a qualified third-party inspector is first identified by the commission, the strike period that follows and the subsequent notice to the third-party inspector of the appointment. The rule describes the third-party inspector's obligation to notify the commission of any potential conflict of interest after the commission informs the inspector of the assignment. The rule also explains that during the strike period the parties are not to initiate contact with the third-party inspector. Section 313.17 describes the commission's expectations regarding the third-party inspector's duties to complete the report, revise the report or re-inspect an alleged defect on remand. Section 313.19 provides for a reasonable extension of time to appeal a third-party inspector report. Section 313.20 explains that information that is not provided to a third-party inspector for inspection prior to writing the report will not be provided to or considered by the appeals panel and clarifies the appeal process and the obligations of the appeal panel regarding the appeal and the third-party inspector regarding any matter remanded to him after an appeal.

Gregory Harwell of Gardere, Wynne, & Sewell, LLP, submitted written comments on the proposed amendments via facsimile transmission on March 27, 2006.

Mr. Harwell commented that §313.11(c) should be amended to include language relating to the identity of the third-party inspector. The commission accepts the suggested modification, which has been incorporated into the rule.

Mr. Harwell also commented that §313.11(d) should be amended to delete language relating to a conflict of interest that could not have been reasonably discovered based on the rationale that parties should not be compelled to search out conflict of interest issues in advance. However, if the rule were to be revised as suggested, then a party who failed to timely object to the identified third-party inspector but who discovers information after the expiration of the strike period, that if known, would have been material to the party's decision whether to assert a strike, will have no opportunity to do so. The current statutory timetable for the issuing a report on a SIRP request on workmanship and materials issues is 15 days. Accordingly, the strike period is limited to two business days. The short strike period makes a search for potential conflicts of interest very difficult but does allow parties to note any objection that arises simply from knowing the identity of the assigned inspector. This is one of the reasons the commission has imposed on the third-party inspector the obligation to inform the commission of any conflicts of interest that the third-party inspector has determined make him unable to perform the inspection without bias for or against either party to the dispute. Once the third-party inspector has received notice of the assignment, with the identity of the parties and the address of the residence in question, the third-party inspector should be able to determine whether he will be able to perform his duties without bias. The commission finds that the rule as proposed offers a limited opportunity for a party to assert an objection for cause after expiration of the strike period, without allowing those who are simply dilatory in asserting their objections another bite at the apple. Therefore, the commission declines to modify the rule as suggested by Mr. Harwell.

Mr. Harwell commented that §313.11(f) should be amended to substitute the word "notify" for "notice." The commission agrees that Mr. Harwell's suggested word choice is better and has incorporated the change into the rule.

Mr. Harwell commented that §313.11(g) and §313.11(g)(1) should be amended to refer to "conflicts" as "potential conflicts." The commission declines to accept the suggested modifications to the rule because it is incumbent upon the third-party inspector to determine if an actual conflict exists. The determination of a conflict rests solely with the third-party inspector who must report them as required by rule. Third-Party inspectors are required to take commission training prior to assignment of a SIRP. The training includes information on ethics and maintaining the integrity of the SIRP through avoiding the appearance of impropriety. The rule as written puts the onus on the third-party inspector to determine whether he can perform the inspection without bias for or against either party. If the third-party inspector cannot perform the inspection without bias, then he must notify the commission and decline the assignment. However, Mr. Harwell's comment raises an issue that suggests the section can be improved upon by making clear what the commission believes is a conflict of interest for a third-party inspector, to wit: the inability to perform the inspection without bias for or against either party. Accordingly, the section has been modified for clarity.

Mr. Harwell offered language revisions for §313.11(g)(2) that the commission has determined are non-substantive language changes. The commission declines the suggested modifications because the proffered language directs the party to "proceed," but does not provide further instruction on the procedure. One of the reasons behind the commission's decision to propose amendments to the SIRP rules is that the procedures are not clear to many homeowners and builders who are not represented by legal counsel. The proposed language requires that the process "begin, again," which the commission finds sufficiently clear to explain that the steps enumerated in the section will be followed, again, if necessary. Throughout Mr. Harwell's comments, he makes good suggestions for eliminating redundancies. However, the commission finds that many of its stakeholders need more guidance rather than less in the rule language; thus, while the commission appreciates the thoughtfulness of Mr. Harwell's comments, many have not been accepted even if the rule language is repetitive.

Mr. Harwell commented that §313.17 and §313.19 should be amended to insert a capital letter in references to a Third-Party Inspector. The commission has revised all the section subtitles that use the term Third-Party Inspector so that the capitalization is uniform.

Mr. Harwell commented that the subtitle to §313.19 should be amended to substitute the word "deadline" for "time." The commission finds that the suggestion does not offer a substantive change to the rule and declines to accept the suggested modification.

Mr. Harwell suggested edits and deletions to §313.20(d) relating to the availability of information to the third-party inspector. The commission accepts most of Mr. Harwell's recommended changes, which improve readability. However, Mr. Harwell suggested removing the language stating that information submitted with an appeal that had not been provided to the inspector for consideration in writing his report would not be provided to the appeal panel. The commission does not give the appeal panel information submitted by a party with its appeal, if the information was not available to the third-party inspector at the time he wrote his report. This policy avoids the possibility that new information may affect the panel's review. Therefore, the commission declines to accept that suggestion.

All comments regarding these sections, including any not specifically referenced herein, were fully considered by the commission. The commission has made other minor modifications to the proposed rule text for the purpose of clarifying its intent and improving style and readability.

The amendments are adopted under §408.001 of the Property Code which provides general authority for the commission to adopt rules necessary for the implementation of Title 16, Property Code; Property Code Chapter 426 which provides for the implementation of the SIRP; and Property Code Chapter 27 which includes statutory requirements that affect users of the SIRP. The statutory provisions affected by this adoption are those set forth in the Title 16, Property Code Chapters 408, 426, and Property Code Chapter 27.

Cross Reference to Statutes: Title 16, Property Code Chapters 408 and 426, and Property Code Chapter 27. No other statutes, articles, or codes are affected by the adoption.

§313.11.Appointment of Third-Party Inspector.

(a) No later than fifteen days after the commission has determined that the request to initiate a SIRP is complete and that the dispute is eligible for the SIRP, the commission shall identify a third-party inspector for assignment to conduct an inspection and shall notify the requestor and respondent of the identity of the third-party inspector in writing.

(1) Written notification under this subsection will be provided by the most expedient and effective means that is available to both parties, including facsimile or electronic transmission.

(2) The commission, in its sole discretion, shall determine the most expedient and effective means available to both parties for transmission of the written notice of the appointment based upon the contact information provided by the parties.

(b) The commission shall identify a qualified third-party inspector from the list of registered third-party inspectors maintained by the commission. The inspector identified shall be the next available inspector on the list of qualified inspectors in the affected home's geographic region.

(c) Each party shall have one opportunity to object to the third-party inspector identified, with or without cause. The objection must be submitted to the commission in writing, by mail, facsimile or electronic transmission within two business days of receipt of notice of the identity of the third-party inspector.

(d) Failure to timely notify the commission of a party's objection to the notice of third-party inspector's identity waives the party's right to object.

(e) If the commission does not receive a timely written objection to the third-party inspector notice, the commission shall notify the third-party inspector of the SIRP assignment and provide the inspector with the names of the interested parties and their counsel, if any, and a copy of the SIRP request and other information provided by the parties, if it relates to the inspection request.

(f) After receipt of the assignment notice under subsection (e) of this section, the third-party inspector shall advise the commission of a conflict of interest that prevents him from performing the inspection without bias for or against either party to the dispute or any other reason that the third-party inspector is unable to accept the assignment. If the third-party inspector advises the commission of a conflict of interest that prevents him from accepting the assignment, the inspector will return the material provided to the commission.

(g) If the third-party inspector assigned is unable to accept the assignment or a party objects timely to the third-party inspector identified, the commission shall identify another qualified third-party inspector and the process for assignment of a third-party inspector shall begin, again, as provided in this subsection.

(h) If a third-party inspector declines an assignment without an explanation that is satisfactory to the Executive Director on more than three occasions, the commission may consider that information when determining whether to continue offering assignments to the inspector and whether to renew the third-party inspector's registration under Chapter 303 of this title.

(i) Until the commission has finally assigned a third-party inspector and the inspector has contacted the parties to determine the date of the inspection, the parties shall not initiate contact with the third-party inspector.

§313.17.Issues Remanded to the Third-Party Inspector.

(a) If the appellate panel remands an issue to the third-party inspector under §313.20 of this chapter, the third-party inspector shall respond to the matter remanded as directed by the appellate panel and file the third-party inspector's report on the remanded matter(s) with the commission within ten business days of receipt of the appellate report.

(b) If a third-party inspector fails to timely file the report on remanded matters, the commission may consider that failure in making a determination whether the third-party inspector has fulfilled his duties and is thus eligible for payment and in making a determination as to whether to assign the third-party inspector to future SIRP requests or to renew the third-party inspector's registration under Chapter 303 of this title.

(c) Within three business days of receipt of the third-party inspector's report filed pursuant to subsection (a) of this section, the Executive Director shall issue the report to the parties.

(d) A report issued on remanded matters is subject to appeal pursuant to the provisions of §313.19 and §313.20 of this chapter.

§313.19.Time to Appeal the Third-Party Inspector's Report.

(a) A homeowner or builder may appeal the third-party inspector's report and recommendation(s) on or before the 15th day after the date of the commission's letter issuing the report to the parties.

(b) A party to the dispute may request in writing an extension of time to file a notice of appeal of the third-party inspector's report in writing.

(1) Upon a showing of good cause for an extension of time to file a notice of appeal, the Executive Director may extend the deadline for a reasonable time under the circumstances.

(2) The Executive Director's determination of good cause to grant or deny an extension of time under this subsection is a final agency decision and is not subject to further administrative appeal.

§313.20.Appeal Process.

(a) A homeowner or builder may appeal the standards applied to support findings or the reasonableness of the repair recommendations in a third-party inspector's report.

(b) Upon receipt of an appeal from either party, the Executive Director shall refer the appeal to a three-person panel of state inspectors. If the request includes a structural matter, one of the panel members shall be a licensed professional engineer.

(c) The appellate panel shall conduct a review of the third-party inspector's report and the written documents and tangible things considered by the third-party inspector in making the findings and recommendations, including but not limited to materials submitted with the request, any information or data gathered by the third-party inspector and documentation or tangible things provided to the third-party inspector by one of the parties during the SIRP and prior to the issuance of the report.

(d) Information submitted with the appeal by either party that was not provided to the third-party inspector for his consideration when preparing his report will not be provided to or considered by the appellate panel.

(e) The appellate panel shall make written findings of fact and shall recommend approval, rejection or modifications to the findings and recommendations of the third-party inspector or shall recommend that the matter be remanded to the third-party inspector for further action as directed by the appellate panel.

(f) The appellate panel shall file a written report of its findings and recommendations with the Executive Director not later than the 25th day after the notice of appeal is filed with the commission.

(g) The Executive Director shall transmit the appellate panel's rulings to the parties to the appeal not later than the fifth day after receipt of the appellate panel's rulings.

(h) The Executive Director shall return to the appointed third-party inspector for a response any issue remanded by the appellate panel.

(i) A ruling by an appellate panel under this section is a final agency decision not subject to further administrative appeal.

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 July 24, 2006.

TRD-200603880

Susan K. Durso

General Counsel

Texas Residential Construction Commission

Effective date: August 13, 2006

Proposal publication date: March 10, 2006

For further information, please call: (512) 463-2886


10 TAC §313.12

The Texas Residential Construction Commission adopts the repeal of §313.12, relating to State Sponsored Inspection and Dispute Resolution Process and the parties right to strike a third-party inspector assigned. The repeal is adopted without changes to the proposal as published in the March 10, 2006, issue of the Texas Register (31 TexReg 1564).

The repealed rule is incorporated into amendments to §313.11, which were adopted by order of the commission on July 19, 2006.

No comments were received regarding the proposal.

The repeal 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 Property Code §428.003.

Cross Reference to Statutes: Title 16, Property Code §408.001 and §428.003.

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 July 21, 2006.

TRD-200603839

Susan K. Durso

General Counsel

Texas Residential Construction Commission

Effective date: August 10, 2006

Proposal publication date: March 10, 2006

For further information, please call: (512) 463-2886