Homeowners of Texas - 05/11/09: HOUSE APPROVES TRCC BILL AUTHORED BY REPRESENTATIVE MCCLENDON

HOUSE APPROVES TRCC BILL AUTHORED BY REP. MCCLENDON

Monday, May 11, 2009 (Austin) -- A major bill affecting homeowners and homebuilders has passed in the House of Representatives, which would extend the Texas Residential Construction Commission (TRCC) as a state agency through 2015. State Representative Ruth Jones McClendon (District 120, San Antonio) is the author of House Bill 2295, which is a result of the state's periodic review of the agency by the Sunset Advisory Commission. McClendon said, "The crafting of this legislation truly has been a successful, collaborative effort between the Sunset Advisory Commission, the House Business & Industry Committee, building industry members, and consumer advocates and groups. It strikes a good balance between the economics of the industry and the concerns of the homeowners, and promotes alternative dispute resolution." The House voted in favor of the Bill on Third Reading today with a 140-7 vote, and it will now advance to the Senate.

[Yes, HOT was involved in the Sunset process, but this bill does NOT represent a collaborative effort with consumer groups. In fact, an August 2008 Sunset Commission Staff Report recommended ABOLISHING the agency, and 246 people (mostly homeowners) testified AGAINST keeping the TRCC. Only 14 people (all builders or their representatives) supported keeping it. McClendon's Sunset bill mentions consumer protections that we offered as minimum requirements but, as written in the bill, the public would be better off by treating the TRCC to a well deserved sunset. Unfortunately, this 62-page bill was written by builder lobbyists and attorneys and is horribly deceptive, convoluted and misleading. It constantly links to different sections of the bill and different statutes entirely. The only reason for doing that is to hide its true intent, and only an experienced construction law attorney after lengthy study would discover the illusion of reforms.]

Highlights of H.B. 2295 include: the licensure of builders along with continued education; misdemeanor criminal penalties for persons acting as a builder without a license; extended statutory warranty periods from one to two years for workmanship and materials, and from two to four years for plumbing, electrical, heating and air-conditioning delivery systems; and an optional mediation process as an alternative to the State Inspection and Review Program (SIRP), which is being streamlined. For the first time in Texas, H.B. 2295 establishes a recovery fund to provide some monetary relief for homeowners who are unable to collect a judgment against a homebuilder, and officially establishes an Office of the Ombudsman to ensure consumer interests are represented within the agency and before the Commission. Of special interest to homeowners and developers building in rural areas, the Bill would authorize the agency to adopt rules (after notice and comment), for applying appropriate provisions of the International Residential Building Code in unincorporated areas, where municipal building codes may not be well-enforced. The Bill also enhances the Commission’s authority to suspend or revoke a builder’s registration and take general enforcement actions.

[Licensure - is a joke that will give a false sense of security, where homeowners believe the state is protecting them from bad builders. 'Not true. All registered builders are grandfathered in. There's no way to weed out or keep out incompetant builders.
Education - is a joke since builders only need 8 hours/year of continuing education with no testing and too many ways to get credit, including a builder association rally day at the Capitol.
Criminal Penalties - is good.
Extended Warranties - is inaccurate. The amended bill does NOT extend plumbing, electrical and HVAC to 4 years. It stays 2.
Optional Mediation - is an illusion since that option is ONLY available if a builder requests SIRP, which is highly unlikely
Streamlined SIRP - is a slight improvement but allows for an unlimited number of delays in the process.
Recovery Fund - is a good concept and improved with one of our amendments that raised the maxium recoverable to $175K.
Ombudsman - is window dressing. Why would a "consumer protection" agency need someone to look out for consumers? Because it really serves to protect builders rather than consumers.
Building Codes - standardizes on an old version of IRC. Municipalities can no longer require stronger building codes.]

As a member of the Sunset Advisory Commission, Representative McClendon was charged with carrying the House version of the Sunset Bill for the TRCC. During the Sunset review process in 2008, the agency faced intense public scrutiny and the possibility of being abolished. Responding to the approval of H.B. 2295 by the House today, Representative McClendon issued the following statement: "I want to thank Chair Carl Isett (House District 84, Lubbock) for assigning me to carry the TRCC Sunset bill. I feel privileged that he entrusted me to help frame this important legislation, which enables the agency to continue and provide improved service to the homeowners of Texas. Although the agency faced the 'acid test' of Sunset review and could have been abolished, I have confidence that this legislation will provide the agency the tools it has needed in order to conduct its work faster and more effectively, and it will be on firm footing to help builders and homeowners resolve disputes in the future."

There would be a "special purpose" review of the TRCC after another four years, to measure the success of its performance in accord with the changes made in the final version of the law, assuming the Senate and the Governor approve it. Every Legislative Session, the Sunset Advisory Commission (SAC) reviews the mission and viability of Texas agencies on the basis of a twelve-year rotation cycle. In April of 2008, the SAC began considering the legislative renewal of 27 state agencies and entities, including the TRCC. The SAC recommended abolishing the TRCC, and public hearings were held in Austin, in which the agency faced strong criticism by consumer groups. After much discussion, the SAC voted to renew the agency for another four years; however, the Business & Industry Committee that reviewed the bill this Session voted to renew the agency for another six years. Including McClendon, there are 12 members on the SAC: 5 Representatives, 5 Senators, and 2 public members.

During the 81st Session, Representative McClendon serves on the House Committee on Appropriations and the budget bill joint Conference Committee, and on the House Committee on Transportation. She also serves as Chair of the House Committee on Rules & Resolutions. In addition, she serves on the Sunset Advisory Commission and the Criminal Justice Legislative Oversight Committee. The 2009 Legislative Session is her seventh term serving District 120 in the Texas House; prior to that, she served as a City Council Member in San Antonio and as a juvenile probation office officer and administrator.

Contact: Janis Reinken, Chief of Staff
Casandra Anderson, Legislative Aide
(512) 463-0708

###