Facing closure, TRCC makes some changes
The governing board of a state agency criticized for being too easy on shoddy home builders adopted proposals on Thursday to make the agency more consumer-friendly but declined to require builders to be licensed and bonded. The Texas Residential Construction Commission also voted down a proposal to modify the commission's makeup to have more public members than builder members. The commission now has four builder members, three public members, one engineer and one inspector. The commission was responding to a sunset staff review report that said the 5-year-old agency is ineffective and should be abolished.

Facing closure, TRCC makes some changes

Commission's upgrades stop short of a builder licensing process
By JANET ELLIOTT
Sept. 4, 2008

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AUSTIN — The governing board of a state agency criticized for being too easy on shoddy home builders adopted proposals on Thursday to make the agency more consumer-friendly but declined to require builders to be licensed and bonded.

The Texas Residential Construction Commission also voted down a proposal to modify the commission's makeup to have more public members than builder members. The commission now has four builder members, three public members, one engineer and one inspector.

The commission was responding to a sunset staff review report that said the 5-year-old agency is ineffective and should be abolished.

The construction commission registers builders but does not license them as 28 other states do. A licensing process would require builders to demonstrate financial stability, be fingerprinted and pass state tests.

But the commission did agree to several suggestions to make the agency more consumer-friendly.

They include: using a portion of builder registration fees for a consumer recovery fund; requiring more annual education for builders; establishing a public counsel office to protect consumer interests; establishing a voluntary mediation process; and granting the commission's executive director authority to immediately dispatch a state inspector to view a home in emergency situations.

The Sunset Advisory Commission staff report released last month said the agency is doing more harm to homeowners than good, partly because it was set up to register, but not license, builders.

The toughest reform proposals came from Commissioner Mickey Redwine, a public member from the Northeast Texas town of Ben Wheeler. He said that requiring builders to demonstrate financial stability would protect consumers from builders who fail to properly finish a home projects.

"It helps keep the riffraff out," said Redwine.

He argued that drastic measures are needed to keep the agency from being abolished.

But Commissioner John Krugh, corporate counsel for Houston-based Perry Homes, said the bonding requirement would "eradicate small builders" and leave the jobs of hundreds of employees of high-volume builders "resting on the license of one individual."

Duane Waddill, the agency's executive director, said the commission "provided effective and creative solutions" to the issues raised in the sunset report.

"The commission clearly took the position that regulation is important and the consumers of Texas deserve the agency to be there to help them," he said.

The sunset commission will discuss the construction commission report at a meeting later this month, and will make recommendations on the agency's future to the Legislature, which meets next year.

A bill must be passed to continue the construction commission or it will be shut down in two years.

This is the agency's first review since it was created in 2003.

The staff report said that only 12 percent of cases where the state has sent in inspectors have resulted in repair or compensation that satisfied consumers.

The agency sends inspectors to review home complaints but does not have authority to force builders to make repairs or offer compensation. Homeowners must complete the lengthy process before filing a lawsuit.

"No other regulatory agency has a program with such a potentially devastating effect on consumers' ability to seek their own remedies," the sunset report said.

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