TITLE 10.COMMUNITY DEVELOPMENT

Part 7. TEXAS RESIDENTIAL CONSTRUCTION COMMISSION

Chapter 303. REGISTRATION

Subchapter E. TEXAS STAR BUILDER PROGRAM

10 TAC §303.300

The Texas Residential Construction Commission proposes for comment amendments to 10 TAC §303.300, which sets forth the requirements for qualification for the Texas Star Builder Program. The amendments are, in part, the result of a petition for rulemaking filed by the Houston Center for Independent Living (HCIL). Commission rule 10 TAC §301.2 requires the commission to publish notice of a petition for rulemaking in the Texas Register . The HCIL petition was published on March 3, 2006 (31 TexReg 1524) and can be viewed at the agency website, www.trcc.state.tx.us. The proposed amendments add a new definition and new §303.300(f)(8) to the list of acceptable construction practices with which an applicant must comply to maintain Texas Star Builder status.

In addition, the amendments change the term of membership to match the two-year term registration requirements for builder registration adopted by the commission in February 2006 because Property Code §416.011(d) provides that the certification issued by the commission for a "Texas Star Builder" shall be for the same period of time as the builder's registration. Also, because of the change of builder registration from annual to biennial, amendments are proposed to clarify that the annual continuing education requirements for Texas Star Builder membership are separate from the renewal requirements.

Another amendment is proposed because the Texas Veterans Land Board no longer has a green building program.

Stephen A. Hester Jr., on behalf of the Houston Center for Independent Living (HCIL), submitted a petition for adoption of an amendment to the Texas Star Builder rule. The HCIL's stated justification is to require Texas Star Builders to serve all citizens, including those with disabilities.

The petition seeks to amend the rule to add a new section regarding barrier-free construction practices. The proposal would require a builder, when registering with the commission, to provide a sworn statement that the applicant constructed 8% of homes built during the previous year in compliance with a list of minimum requirements relating to: exterior doors; interior doorways and hallways; reinforced bathroom walls, tubs and showers; and maximum height restrictions for switches, boxes and thermostats.

The petition would permit a builder to apply for an exterior disability accessibility waiver if compliance is cost prohibitive (as determined by the builder or an architect).

The petition would require a builder to provide a list of "Universal Design Options" and cost estimations for incorporating an option as prescribed by the commission to potential homeowners 3 days prior to execution of a contract sale. The petition would exempt a builder who has more than 20% of homes built in compliance with the minimal standards from this section.

The commission received comments to the proposed petition for rulemaking from the Texas Association of Builders (TAB). TAB suggested that the rule be amended to add a builder's willingness (or ability) to build a given percentage or given number of houses that contain the additional accessibility features to the construction practices contained in §303.300(f) to encourage builders to build these kind of homes, without mandating that they do so. The amendment would encourage accessibility in buildings while keeping the program open to all builders.

The commission has reviewed the petition and related comments and has incorporated the responses into a new §303.300(f)(8), which incorporated the 8% construction commitment into one of the three qualifying events needed to receive the award of the Texas Star Builder designation.

The commission believes this amendment will enable builders to participate within a range of options and preserve the right of the individual to negotiate a contract for their home for the specific accessibility needs of the homeowner, and not create a boilerplate of features that may not be necessary or desired.

Susan Durso, General Counsel for the commission, has determined that for each year of the first five-year period that the proposed amendments are in effect there will be no increase in expenditures or revenue for state government and no fiscal impact for local government as a result of enforcing or administering the amended section.

Ms. Durso has also determined that for each year of the first five-year period the proposed amendments are in effect the public will benefit from having a broader range of selection criteria for builders/remodelers to utilize when applying to the program and from the clarification of the rule.

Ms. Durso has also determined that for each year of the first five-year period that the amendments are in effect there will not be an effect on individuals, or large, small or micro businesses. Further, there is no anticipated economic cost to persons who are required to comply with the proposed amendments.

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

Interested persons may send written comments regarding these proposed amendments to the Texas Residential Construction Commission, P.O. Box 13144, Austin, Texas 78711-3144. Comments regarding these amendments will be accepted for 30 days following the date of publication in the Texas Register . Thereafter, the comments will not be considered as timely filed. Comments may also be submitted electronically to comments@trcc.state.tx.us. For comments submitted electronically, please include "303 amendments" in the subject line. Comments submitted electronically that do not include "303 amendments" in the subject line may not be considered.

The amendments are proposed pursuant to 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 §416.011.

No other statutes or codes are affected by the amendments.

§303.300.Texas Star Builder Program.

(a) Purpose. The Texas Star Builder Program is a voluntary program for builders and remodelers that are [ have been ] registered and are in good standing under Subchapter A of this chapter for a period of twelve months immediately preceding their application to the program. Participation in this program is not required to be a builder or remodeler in the State of Texas.

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

(1) - (3) (No change.)

(4) Foundation Practices--

(A) Foundations are designed by a structural engineer based on a site specific geotechnical report as may be required by the engineer of record; [ and ]

(B) The site specific geotechnical report is one that is appropriate for the circumstances with the frequency and spacing of the borings determined by the geotechnical engineer; [ and ]

(C) Foundations are built as designed; [ and ]

(D) The construction of the foundation system is inspected prior to the placement of the concrete by the engineer or an employee of the engineer who issues an inspection report; [ and ]

(E) If the foundation system is designed for post-tension cables, then the builder shall maintain a record of the stressing certification; [ and ]

(F) The builder makes a record of the elevations of the foundation prior to substantial completion of the home or an improvement to the home; [ and ]

(G) (No change.)

(H) The builder who constructs the major structural components of a single-family dwelling or duplex or a material improvement, for a period of ten years following the date of substantial completion, shall maintain:

(i) - (iv) (No change.)

(5) Member--A person registered as a builder or remodeler or designated agent of a builder or remodeler by the commission who has been approved by the commission for admission into the Texas Star Builder program.

(6) Program Year--Beginning July 1, 2006, the twelve months from July 1 to June 30 each year will constitute a Program Year for the Texas Star Builder Program.

(7) [ (6) ] Responsible Party--An individual who is authorized to act on behalf of a business entity that is a registered builder or remodeler in transactions involving amounts in excess of $100,000, excluding execution of contracts or instruments of conveyance for the sale of a single lot or dwelling unit, or the acquisition of materials for construction thereof.

(8) [ (7) ] SIRP--The State-sponsored Inspection and Dispute Resolution Process.

(9) Universal Design Options--Features in residential construction that provide barrier-free access and easy mobility and independence for people with a broad variety of physical needs including all of the following: barrier-free construction of exterior doors; interior doorways and hallways; reinforced bathroom walls, tubs and showers; and maximum height restrictions for switches, boxes and thermostats.

(c) Eligibility.

(1) An applicant who is a sole proprietor [ not a business entity ] must satisfy one of the following:

(A) (No change.)

(B) seven years of experience immediately preceding the application acting as a builder or remodeler of single family dwellings or duplexes in the State of Texas, is an active builder member of and with [ has had ] continuous membership in a trade association related to the construction industry for at least five years preceding the date of the application; or

(C) - (D) (No change.)

(2) An applicant that is a business entity, which registered 40 homes or less in the preceding twelve months, must have at least one responsible party of the applicant who satisfies one of the following:

(A) (No change.)

(B) seven years of experience immediately preceding the application acting as a builder or remodeler of single family dwellings or duplexes in the State of Texas, is an active builder member of and with [ has had ] continuous membership in a trade association related to the construction industry for at least five years preceding the date of the application; or

(C) - (D) (No change.)

(3) An applicant that is a business entity, which registered more than 40 homes in the preceding twelve months, must have at least one responsible party of the applicant and one [ an ] employee of the applicant who is involved in on-site construction activities for each 40 homes registered in the preceding twelve months who each satisfy one of the following:

(A) (No change.)

(B) seven years of experience immediately preceding the application acting as a builder or remodeler of single family dwellings or duplexes in the State of Texas, is an active builder member of and with [ has had ] continuous membership in a trade association related to the construction industry for at least five years preceding the date of the application; or

(C) five years of experience immediately preceding the application acting as a builder or remodeler of single family dwellings or duplexes in the State of Texas and [ each ] holds a four-year degree in construction science or its equivalent from an accredited college or university; or

(D) three years of experience immediately preceding the application acting as a builder or remodeler of single family dwellings or duplexes in the State of Texas and [ each ] has credible documentation of completion of educational requirements administered by an association or institution that designates a level of expertise in the residential construction industry, such as the National Association of Home Builders Graduate Builder and Remodeler Programs.

(d) Financial Responsibility. An applicant must:

(1) provide documentation from a financial institution that includes a statement of the following information that at the time of the application:

(A) - (D) (No change.)

(E) The officer or official of the financial institution that executes the document does not have actual knowledge that the applicant has overdrafts or past due notices that have not been brought current in a timely manner within the standards of the lending[ /banking ] industry; and

(F) The officer or official of the financial institution that executes the document does not have actual knowledge of any current delinquency in property taxes, unsatisfied judgments or enforceable mechanic's or [ and ] materialmen's liens on any property for which applicant entered into a transaction governed by the Act as a result of failure to pay a subcontractor or supplier unless the builder has either:

(i) - (iii) (No change.)

(2) provide a sworn or attested statement of the applicant that:

(A) - (C) (No change.)

(D) the applicant has no enforceable mechanic's or [ and ] materialmen's liens on any property for which the applicant entered into a transaction governed by the Act as a result of failure to pay a subcontractor or supplier unless the builder has either:

(i) - (iii) (No change.)

(3) - (4) (No change.)

(e) Insurance requirements.

(1) A remodeler-applicant must maintain a general liability policy of:

(A) (No change.)

(B) $500,000 per occurrence, if the applicant registered between 76 - 125 [ 75 - 125 ] homes in the preceding twelve months; or

(C) (No change.)

(2) A remodeler-applicant who has registered fewer than 25 homes in the preceding twelve months does not need to comply with the general liability insurance requirements of this section . [ ; ]

(3) - (4) (No change.)

(f) Construction Practices. The applicant must provide a sworn or attested statement that the applicant shall comply during the term of membership with the requirements of at least three of the following:

(1) a green building program such as the Model Green Home Building Guidelines sponsored by [ the Green Building Program sponsored by the Texas Veterans Land Board or ] the National Association of Home Builders, [ or any successor entities, ] any local governmental authority or similar publicly or privately sponsored programs as approved by the Executive Director;

(2) (No change.)

(3) Certified Aging-in- Place [ place ] Specialist Program or EasyLiving Home Certification Program;

(4) a private inspection program for at least [ lease ] three (3) phases of construction for all homes built in a geographic area that are not inspected by municipal inspectors; or

(5) - (6) (No change.)

(7) provide [ Provide ] homeowners with whom it enters into a transaction governed by the Act with a third-party warranty program offered by a commission-approved third-party warranty company or provide those homeowners with a two-year warranty for all one-year workmanship and materials items pursuant to the building and performance standards set forth in Chapter 304, Subchapter B of this title ; or [ . ]

(8) affirm that 8% of homes constructed annually were built in accordance with Universal Design Options as defined in this section.

(g) Participation. Applicants must agree to actively participate in any eligible SIRP request submitted by a homeowner involving a residential construction project for which the applicant was the builder or remodeler and must agree to respond to the homeowner in good faith based on the final non-appealable SIRP report and recommendation.

(h) (No change.)

(i) Application. Applicants must submit a completed commission-prescribed application form and credible documentation supporting the information supplied in the application for each applicant seeking membership or renewal in the Texas Star Builder Program.

(1) An applicant may submit an application for membership in the Texas Star Builder Program only once during a Program Year [ any calendar year ].

(2) (No change.)

(3) Applicants shall respond to inquiries from the commission for further information regarding an application for membership or renewal of membership. Failure to respond within 15 days to a request for information shall result in the administrative withdrawal of the application.

(4) (No change.)

[(5) Failure to submit all requested documentation within fifteen days of notice of an incomplete application will result in the administrative withdrawal of the application.]

(5) [ (6) ] A Texas Star Builder certificate of membership shall be [ remain ] effective for a two-year term of membership to expire at the end of the second Program Year of membership [ one year ] from the date of issuance unless revoked , without proration for any portion of a Program Year in which the membership is not yet approved .

(j) Continuing education. Beginning July 1 [ January 1 ], 2006, all members shall complete at least 16 hours of continuing education per Program Year [ year ]. A [ member may not submit for credit ] continuing education course with the same course content as [ one ] previously submitted for credit cannot be repeated for credit [ by the same member ].

(1) For purposes of this requirement:

(A) (No change.)

(B) any member that is a business entity[ , ] that registered fewer than 40 homes in the preceding twelve months[ , ] shall require at least one officer of the member to maintain the continuing education requirement; or

(C) (No change.)

(D) Beginning July 1, 2006 [ January 1, 2007 ], and each Program Year thereafter, members must submit evidence no later than June 30 of each Program Year that they have completed [ of completion of ] the continuing education requirements of this section during the preceding 12 months. Proof of continuing education must be submitted to the commission with a completed Texas Star Builder continuing education form and processing fee [ must be submitted with each renewal application ].

(E) Approved Continuing Education Courses or Programs.

(i) The Executive Director shall [ annually ] review all courses or programs submitted and shall approve those that [ sufficient to ] satisfy the continuing education requirement. The Executive Director shall consider in the approval process of a proposed training program, the objective and purpose of the program, the content and subject matter of each course and the qualifications of the presenters.

[(ii) Any member that registers more than 30 homes per year who wishes to conduct an in-house training program for its employees in order to satisfy the continuing education requirement of this section may submit course materials to the Executive Director for approval. The Executive Director shall consider in the approval process of a proposed in-house training program, the objective and purpose of the program, the content and subject matter of each course and the qualifications of the presenters.]

(ii) [ (iii) ] Any member that registers more than 30 homes per year that wished to conduct an in-house training program for its employees or any person who wishes to sponsor a course or training program for continuing education purposes under this section must submit a written request for consideration, a detailed course agenda, a written course description and resume or biographical information of each speaker or presenter to the Executive Director for approval, not later than sixty (60) [ thirty ] days prior to the proposed event.

(2) Substitutions for Continuing Education Coursework.

(A) A member may substitute not more than three credit hours of continuing education per Program Year [ membership year ] for participation in an active leadership role (such as an officer or committee chairperson) in a trade association for the Program Year [ membership year ] in which the continuing education hours would have been taken. To receive this leadership credit, the member shall submit to the commission written verification from the president, executive officer, or other equivalent of the association, certifying the member's leadership status.

(B) A member may not substitute more than two credit hours of continuing education for self-study in a Program Year . To receive [ this ] self-study credit, the member must submit to the commission a statement that verifies the completion of self-study and the materials studied.

(C) A member may substitute instructor credit for up to five credit hours of continuing education in a Program Year . Each hour of instruction given is equivalent to an hour of continuing education credit. To receive [ this ] instructor credit, the member must submit to the commission a copy of the published course agenda.

(k) (No change.)

(l) Denial.

(1) - (2) (No change.)

(3) The commission shall state the reason(s) for denial of membership or renewed membership in the Texas Star Builder Program in its written notice to the applicant and provide an [ notice of the ] opportunity for appeal.

(m) (No change.)

(n) Revocation of Membership.

(1) The commission shall revoke a certificate of membership in the Texas Star Builder Program if the commission determines that:

(A) the member has been subject to a final disciplinary action from the commission pursuant to Chapter 418 [ §418.001 ] of the Act;

(B) (No change.)

(C) the member is no longer eligible for a Certificate of Registration as a builder or remodeler or is no longer eligible to serve as a designated agent for a builder or remodeler ; [ or ]

(D) the member's Certificate of Registration has been suspended, is placed in inactive status or the member has been placed under a commission probation order ; or [ . ]

(E) the member has failed to maintain the program's continuing education requirements.

(2) - (4) (No change.)

(o) (No change.)

(p) Recognition of Membership. A member may display the Texas Star Builder logo [ approved and submitted for trademark ] so long as that member remains in good standing in [ as a member of ] the Texas Star Builder Program. Members who have had continuous membership in the Texas Star Builder Program may display the number of years of continuous membership.

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 July 26, 2006.

TRD-200603948

Susan K. Durso

General Counsel

Texas Residential Construction Commission

Earliest possible date of adoption: September 10, 2006

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


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

10 TAC §313.13, §313.18

The Texas Residential Construction Commission proposes amendments to §313.13 and §313.18, which are different from the proposed amendments published in the March 10, 2006, issue of the Texas Register (31 TexReg 1558). The amendments published in the March 10, 2006, issue of the Texas Register are withdrawn.

Section 313.13 describes the third-party inspector's obligations to coordinate the date for the inspection with both parties and the parties' obligations to work cooperatively with the inspector to arrive at a mutually agreeable time and date for the inspection, as well as the third-party inspector's duties for the inspection report.

Section 313.13(e) permits a third-party inspector to suspend an inspection if a party makes it impossible for the inspector to conduct the inspection in an unbiased manner. The language is not new; however, staff has proposed a consequence in the event that the inspector is required to return to complete a suspended inspection. This proposal will require an amendment to §313.18, regarding orders for payment of inspection fees, discussed below.

Section 313.18 amendments make clear that, with one exception, the commission will reimburse a homeowner who pays a fee to initiate an SIRP if a final unappealable report issued by the commission affirms at least one alleged construction defect. The amendments create a mechanism by which a builder can appeal the order if the builder is able to show that he made an offer to make substantially the same repairs as recommended by the final unappealable report. It further clarifies the commission's delegation of authority to the Executive Director to order a builder to reimburse SIRP inspection fees if at least one alleged construction defect is affirmed. It also provides for an order for reimbursement of a second inspection fee if a party unduly interferes with an inspection under §313.13(e). If a homeowner or builder is the guilty party in causing an inspection to be suspended, the commission may order that person to pay the cost of the second inspection fee.

Other changes are proposed to streamline and provide clarity in the rule and to correct errors in the earlier published proposal.

Susan Durso, General Counsel for the commission, has determined that for each year of the first five-year period that the proposed sections are in effect there will be no increase in expenditures or revenue for state government and no fiscal impact for local government as a result of enforcing or administering the sections as proposed.

Ms. Durso has also determined that for each year of the first five-year period the proposed sections are in effect the public will benefit from a broader selection criteria to utilize when applying to the program and from the clarification of the rule. There will not be an effect on individuals, or large, small or micro businesses. There is no anticipated economic cost to persons who are required to comply with the proposed sections.

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

Interested persons may send written comments regarding these proposed amendments to the Texas Residential Construction Commission, P.O. Box 13144, Austin, TX 78711-3144. Comments regarding these amendments will be accepted for thirty days following the date of publication in the Texas Register . Thereafter, the comments will not be considered as timely filed. Comments may also be submitted electronically to comments@trcc.state.tx.us. For comments submitted electronically, please include "313. 13 & 313.18 amendments" in the subject line. Comments submitted electronically without "313.13 & 313.18" in the subject line may not be considered.

The amendments are proposed pursuant to Property Code §408.001, which provides general authority for the commission to adopt rules necessary for the implementation of Title 16, Property Code, Property Code Chapters 426 and 428 and, specifically, Property Code §426.004(d).

Cross references to sections: Property Code, Chapters 426 and 428, and §408.001 and §426.004(d).

§313.13.Home Inspection and the Third-Party Inspector's Report .

[ (a) If the commission does not receive a timely written objection to the appointed third-party inspector, the commission shall contact the third-party inspector with information regarding the dispute, including the names of the interested parties and their counsel, if any. Unless the third-party inspector advises the commission of a conflict of interest with either of the parties to the dispute, the commission shall forward to the appointed third-party inspector a copy of the SIRP request and all documentation submitted with the request.]

(a) [ (b) ] As soon as practicable , but no later than two (2) business days after receipt of the SIRP request, the appointed third-party inspector shall contact the homeowner to ascertain several dates and times that are mutually convenient to conduct an inspection of the affected home. [ arrange a mutually convenient time to inspect the affected home. ] The third-party inspector shall then make reasonable attempts to contact the builder on business days during regular business hours to determine whether the builder or a representative is available to attend the inspection on one of the identified dates. If the builder affirms to the inspector that the builder would like to be present or to send a representative, the third-party inspector shall make reasonable efforts to work cooperatively with the builder and the homeowner to identify a mutually convenient date and time to conduct the inspection. If either party to the dispute fails to work cooperatively with the third-party inspector to arrange a time and date for the inspection, the third-party inspector shall notify the commission. Using the information provided by the third-party inspector regarding potential dates and times for the inspection, if any, the commission will resolve the matter for the parties by setting the date and time for the inspection [ notify the builder and the homeowner of the date and time of the inspection ].

(b) The homeowner and builder, including any of their consultants or representatives, may be present at the inspection.

(c) The third-party inspector shall gather all information and other data that the third-party inspector, in the inspector's sole professional judgment, deems relevant to conduct the inspection and write the inspection report and shall gather the information [ it ] by any reasonable means including taking photographs and measurements and interviewing the homeowner, the builder, and any consultants present , in order to document the alleged defects .

(d) A third-party inspector may conduct interviews at a later date or [ An interview under this subsection may take place ] outside the presence of others not aligned with the party subject to the interview, if the third-party inspector in the inspector's sole discretion deems it preferable for the orderly conduct of the inspection.

(e) [ (d) ] The third-party inspector may suspend the inspection if a party interferes with the inspection in such a manner as to prohibit the third-party inspector from performing the assigned duties in an impartial and professional manner. If the third-party inspector is required to suspend an inspection under this subsection, upon notice and hearing before SOAH, the commission may order the party who caused the suspension to reimburse the commission the costs of any second inspection fee required as provided in §313.18 of this chapter.

(f) [ (e) ] The third-party inspector shall not engage independently or employ the services of any testing company or any consultant.

(g) [ (f) ] Except as otherwise provided under §313.6(a)(9) of this chapter [ §313.6(a)(8) ], the builder shall submit to the third-party inspector any documentation or tangible things created or generated as a result of having received a notice of alleged construction defect(s) under §313.2 of this chapter for consideration in the third-party inspector's report to the commission.

(h) Either party may submit any information that the party wants considered by the third-party inspector in preparation of the inspection report to the inspector prior to the inspection or within a reasonable time after the inspection such that the inspector has an opportunity to review the information and timely submit the inspection report to the commission. A party that provides information to a third-party inspector shall also provide a copy of the information to the other party to the dispute and to the commission.

(i) If the alleged construction defect(s) described in the request do not include a structural matter, the third-party inspector shall submit a report with recommendations to the commission as soon as practicable after the inspection, but not later than the 12th day after the date the third-party inspector receives the SIRP request and materials submitted by the requestor from the commission, except as otherwise provided by this chapter.

(j) If the alleged construction defect(s) described in the request include a structural matter:

(1) the third-party inspector shall inspect the home as soon as practicable after receipt of the request from the commission, but not later than the 12th day after the date the third-party inspector receives the request and the requestor's submitted materials from the commission; and

(2) the third-party inspector shall submit a report after the inspection with recommendations to the commission as soon as practicable, but not later than the 45th day after the date the third-party inspector receives the request and materials submitted by the requestor from the commission, except as otherwise provided by this chapter.

(k) The third-party inspector's report shall:

(1) set forth the inspector's findings as to whether each alleged defect is in or out of compliance with the applicable warranty and building and performance standards;

(2) identify the warranty and building and performance standards upon which each finding is based; and,

(3) include one or more reasonable repair or remediation options to address any alleged construction defects found.

(l) A third-party inspector's report shall not include:

(1) a determination of liability or recommendation for payment of monetary damages;

(2) a price for any recommended repairs;

(3) comments regarding matters outside the scope of the SIRP or the third-party inspector's duties;

(4) a determination of the value of any loss allegedly suffered by the homeowner; or

(5) findings or recommendations for repair for alleged construction defects that are not listed in the SIRP or items that have been excluded by the commission as ineligible for inspection unless both the homeowner and builder agree in writing that the third-party inspector can include an inspection of those items in the report or unless the third-party inspector observes a construction defect that if left uncorrected immediately threatens the health and safety of the occupants.

§313.18. Order for Reimbursement of Fees and Costs.

(a) Upon issuance of a final unappealable report in which the [ If the third-party inspector's ] findings support all or a portion of the allegations of the requesting party and the requesting party is the homeowner, the Executive Director shall issue an order on behalf of the commission [ the commission may order the other party ] to reimburse the fees paid by the requestor and the costs of the inspection paid by the commission, except as otherwise provided in §313.13(e) of this chapter [ all or part of the fees or costs of inspection paid by the requestor ].

(1) A builder may appeal a notice of the order to reimburse fees and costs under this subsection.

(2) To appeal the notice of order to reimburse fees under this subsection, the builder must file written notice of its appeal with the commission. The commission will then set the appeal for a hearing with the SOAH. The hearing will be conducted pursuant to commission rules. In order to overcome the presumption that the builder must reimburse the commission for the cost of the inspection and fees paid by the requestor, the builder must demonstrate by credible documentation that, prior to the submission of the SIRP request to the commission, the builder made a written offer to the homeowner to repair, by the builder or a third-party, all of the affirmed construction defects in substantially the same manner as recommended in the commission's final unappealable report, and that the homeowner had notice of the offer, and that offer was not accepted by the homeowner.

(3) The notice of appeal must be received by the commission within ten calendar days of the date that the commission notices the builder of the obligation to reimburse the fees and costs under subsection (a) of this section.

(4) Notwithstanding a builder's successful appeal of an order to reimburse the commission for inspection fees issued under this subsection, the commission will reimburse the SIRP request fee to any homeowner who initiates a request and pays the appropriate fees under §313.5 of this chapter, if the final unappealable report issued by the commission affirms at least one alleged construction defect.

(b) If a third-party inspector finds it necessary to suspend an inspection under §313.13(e) of this chapter because a party interferes with the inspection in such a manner as to prohibit the third-party inspector from performing the assigned duties in an impartial and professional manner, then upon notice and hearing before SOAH, the commission may order the party who caused the suspension to reimburse the commission the costs of any second inspection fee required.

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 July 28, 2006.

TRD-200603973

Susan K. Durso

General Counsel

Texas Residential Construction Commission

Earliest possible date of adoption: September 10, 2006

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