The sections are proposed to implement House Bill 730 (Act effective Sept. 1, 2003, 78th Leg., R.S., ch. 458, §1.01). The new sections are proposed under Property Code §408.001, which provides generally authority for the commission to adopt rules necessary for the implementation of Title 16 and Chapter 416, which requires the commission to establish rules and procedures for a program through which a builder can be designated as a " Texas Star Builder."

Stephen D. Thomas, Executive Director, has determined that for each year of the first five-year period the proposed sections are in effect there will be no fiscal implications for local governments as a result of enforcing or administering the proposed sections. There will be a minor impact on state government from the fees received for membership; however, the fees collected will be applied to the agency’s administrative costs for the Texas Star Builder Program.

Mr. Thomas has also determined that for each year of the first five-year period the proposed sections are in effect the public will benefit from receiving additional information regarding builders’ expertise, experience and commitment to quality home building.

Mr. Thomas has also determined that there will be no effect on large, small and micro-businesses as a result of the adoption of the proposed sections. However, there may be a minimal financial impact on persons who apply for membership due to application and renewal fees and costs for fulfilling the continuing education requirements.

Mr. Thomas 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 Administrative Procedure Act § 2001.022.

 Interested persons may submit written comments (12 copies) on the new sections to Susan K. Durso, General Counsel , Texas Residential Construction Commission, P.O. Box 13144 , Austin , Texas, 78711. Comments may be submitted electronically to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it . For comments submitted electronically, please include “Proposed Star Builder Rule” in the subject line. The deadline for submission of comments is thirty days from the date of publication of the proposed section in the Texas Register. Comments should be organized in a manner consistent with the organization of the proposed rule. Comments submitted electronically to another electronic address or that do not include “Proposed Star Builder Rule” in the subject line may not be considered.

The new sections are proposed to implement legislation enacted during the 78th Legislative Session, Regular Session, House Bill 730 (Act effective Sept. 1, 2003 , 78th Leg., R.S., ch. 458, §1.01), including Title 16, Property Code and specifically, Property Code ch. 416.1

§303.300. Definitions.

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

(1) Applicant –

(A) The person identified on the Certificate of Registration issued by the commission pursuant to Subchapter A of this chapter that applies for membership in the Texas Star Builder Program under this subchapter; or,

(B) An individual approved as a designated agent by the commission pursuant to Subchapter A of this chapter who applies for membership in the Texas Star Builder Program under this subchapter.

(2) Continuing education -- Commission-approved professional education courses or professional development activities such as workshops, seminars, institutes, conferences or short-term courses that a member must complete annually for continued membership in the Texas Star Builder Program.

(3) 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;

(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;

(C) Foundations are built as designed; 
 

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

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

(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;

(G) Builder provides to the homeowner a final survey showing that the site drainage is in accordance with the International Residential Code;

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

(i)   the plans, specifications and recommendations provided by the engineer and the geotechnical report if required; 

(ii)  the inspection report;

                        (iii) the stressing certification; and

(iv) the record of the original elevations.

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

(5) 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 amount 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.

(6) SIRP -- The State-sponsored Inspection and Dispute Resolution Process.

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§303.301. Eligibility.

(a) Experience. An applicant must:

(1) have twelve years of experience acting as a builder or remodeler of single family dwellings or duplexes in the State of Texas for the twelve years immediately preceding the application; or

(2) have seven years experience acting as a builder or remodeler of single family dwellings or duplexes, is an active member and has been a continuing member of a trade association related to the construction industry for at least five years preceding the date of the application; or  

(3) five years experience acting as a builder or remodeler of single family dwellings or duplexes and the applicant or a responsible party of the applicant holds a four-year degree in construction science or its equivalent from an accredited college or university; or

(4) three years experience acting as a builder or remodeler of single family dwellings or duplexes and the applicant or a responsible party of the applicant 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.

(b) Financial Responsibility. An applicant must:

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

(A) Applicant has an excellent relationship with the financial institution (or highest  standard of relationship, as defined by the institution);

(B) Applicant is currently eligible for an extension of credit;

(C) Applicant is not in default of any credit obligations to the financial institution; and

(D) The officer or official of the financial institution that executes the document does not have actual knowledge that the applicant, any affiliate of the applicant or any of the applicant’s corporate officers as identified by the applicant to the institution, has filed for federal bankruptcy in this state or any state in the seven years immediately preceding the date of the application.

(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 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) secured a properly filed bond to indemnify the lien pursuant to the provisions of Property Code Chapter 53, Subchapter H;

(ii) secured the issuance of title insurance to protect the homeowner against the lien claim; or  

(iii) initiated legal action to contest the lien and demonstrated proof of financial responsibility to pay the costs of defense of title to the property and pay the lien claim if the lien is proven to be proper.

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

(A)              the applicant, any affiliate or any officer of the applicant has not filed for federal bankruptcy in this state or any state in the seven years immediately preceding the date of the application;

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(B) the applicant is current on all state property taxes unless a protest or legal challenge has been properly filed;

(C) the applicant has no unpaid judgments;

(D) the applicant has no enforceable mechanic’s 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) secured a properly filed bond to indemnify the lien pursuant to the provisions of Property Code Chapter 53, Subchapter H;

(ii) secured the issuance of title insurance to protect the homeowner against the lien claim; or

(iii) initiated legal action to contest the lien and demonstrated proof of financial responsibility to pay the costs of defense of title to the property and pay the lien claim if the lien is proven to be proper.

(3) The requirements of a statement prepared by a financial institution in accordance with subsection (b)(2) of this section do not require the financial institution to conduct any independent investigation beyond the institution’ own records and the actual knowledge of the officer or official who executes the document.

(c) Insurance requirements.

(1) A remodeler-applicant must maintain a general liability policy of $500,000 if the applicant’s annual volume sales total less than $2,000,000 or maintain a policy of $1,000,000 if the applicant’s annual volume sales total $2,000,000 or more.

(2) A builder-applicant who registers more than 50 homes in one year must have general liability insurance coverage during the term of membership in the Texas Star Builder Program in the following amounts, as applicable;

(A) an applicant that registers 51 - 250 homes per year must maintain a policy of $500,000 of liability coverage per occurrence;

(B) an applicant that registers 251 – 1,000 homes per year must maintain a policy of $1,000,000 of liability coverage per occurrence; or

(C) an applicant that registers over 1,000 homes per year must maintain a policy of $2,000,000 of liability coverage per occurrence.

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

(1) the Green Building Program sponsored by the Texas Veterans Land Board or the National Association of Builders, or any successor entities, any local governmental authority or similar programs as approved by the Executive Director;  

(2) the Energy Star Program or similar programs as approved by the Executive Director;

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

(4) Foundation Practices as defined under §303.300 of this subchapter; or

(5) Provide homeowners with whom it enters into a transaction governed by the Act with a third party warranty program 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

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Chapter 304 of this title.

(e) Participation in SIRP. Effective January 1, 2006, the number of homeowner requests for participation in the SIRP for alleged construction defects against the applicant that resulted in a finding by a third-party inspector or if the third-party inspector’s report is appealed, a finding by the appellate panel that a construction defect existed in an affected home may not exceed:

(1) two homes for applicants that registered less than 30 homes in the preceding calendar year; or

(2) five percent of the number of homes registered for applicants that registered 30 or more homes in the preceding calendar year.

§303.302. Process.

(a) Applicants must submit a completed commission-prescribed application form, credible documentation as set forth in §303.301 of this subchapter and the required non-refundable fee for each applicant seeking membership or renewal in the Texas Star Builder Program. 

(b) An applicant may submit an application for membership in the Texas Star Builder Program only once during any calendar year.

(c) For each applicant seeking membership under this subchapter, the commission shall publish a notice of application in the Texas Register. The commission shall accept written public comment on each application submitted to the commission for a period of twenty-one days following the date of publication of the notice and shall consider the comments received during the review of the application.

(d) The commission shall issue a Texas Star Builder certificate to each approved applicant for membership in the Texas Star Builder Program not later than twenty-one days following the expiration of the comment period under this section.

(e) Failure to submit all requested documentation within fifteen days of notice of an incomplete application will result in the administrative withdrawal of the application and forfeiture of the fee.

(f) A Texas Star Builder certificate shall remain effective for one year from the date of issuance unless revoked. 

 Â§303.303. Program Participation.

(a) Continuing education. All members shall complete at least 16 hours of continuing education per year.

(1) For purposes of this requirement:

(A) individual homebuilder members must maintain the continuing education requirement;

(B) any homebuilder member that is a business entity that registers 30 homes per year or less, shall require at least one officer of the member to maintain the continuing education requirement; or

(C) any homebuilder member that is a business entity that registers more than 30 homes per calendar year, shall require that:

(i) one officer of the member maintains the continuing education requirement; and

(ii) for every 30 homes registered, one employee of the member who is involved in construction shall also maintain the continuing education requirement.

(2) For purposes of this requirement,

(A) individual remodeler-members must maintain the continuing education requirement.

(B) any remodeler-member that is a business entity that registers 50 remodeling projects per year or less, shall require at least one officer of the member to maintain the continuing education requirement.

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(C) any remodeler member that is a business entity that registers more than 50 remodeling projects per year, shall require one officer of the member to maintain the continuing education requirement and shall require that one employee of the member for each 50 remodeling projects registered must also maintain the continuing education requirement.

(b) Beginning January 1, 2006 , the continuing education requirements of this subsection shall apply to all renewed memberships. Evidence of completion of the requirement of this section must be submitted with each renewal application in accordance with (a)(1) or (a)(2) of this section.

§303.304. Continuing Education Courses or Programs.

(a) The Executive Director shall annually review all courses or programs submitted and shall approve those sufficient to satisfy the continuing education requirement.

(b) 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 §303.303 of this subchapter 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.

(c) Any person who wishes to sponsor a course or training program to provide continuing education under this section must submit to the Executive Director for approval, not later than thirty days prior to the proposed event, a written request for consideration, a detailed course agenda, written course description and resume or biographical information of each speaker or presenter.

(d) Substitutions for Continuing Education Coursework.

(1) A member may substitute no more than three credit hours of continuing education per year for participation in an active leadership role (such as an officer or committee chairperson) in a trade association for the year in which the continuing education hours would nave 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.

(2) A member may substitute no more than two credit hours of continuing education for self study. To receive this self-study credit, the member shall submit to the commission a statement that verifies of the completion of self-study and the materials studied. 

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

(e) Level of Recognition.  

The commission shall confer the following designations on members of the Texas Star Builder Program to recognize consecutive years of membership in the program: 

(1) Bronze--two consecutive years of membership;

(2) Silver--five consecutive years of membership;

(3) Gold--seven consecutive years of membership;

(4) One Diamond--ten consecutive years of membership;

(5) Two Diamonds--twelve consecutive years of membership;

(6) Three Diamonds--fourteen consecutive years of membership; and

(7) Four Diamonds--sixteen or more years of consecutive membership.

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§303.305. Renewal.

In order to renew membership in the Texas Star Builder Program, a person shall submit a completed application for renewal with the required documentation set forth in §303.301 of this subchapter and the required non-refundable fee to the commission not later than thirty days prior to the expiration of the effective date shown on the current Texas Star Builder membership certificate.

§303.306. Denial.

(a) The commission shall deny an application for membership or the renewal of membership in the Texas Star Builder Program if the commission determines that the applicant is ineligible for admission or for continued membership in the program. 

(b) If the commission denies an application for membership or the renewal of membership, the commission shall provide written notice to the applicant not later than the 15th business day following the expiration of the public comment period set forth in §303.302 of this subchapter.

(c) The commission shall state the reason(s) for denial of membership or renewed membership in the program in its written notice to the applicant and provide notice of the opportunity for appeal.

§303.307. Appeal of Denial.

(a) An applicant who receives a notice of denial under §303.306 of this subchapter may appeal the decision to the Executive Director by submitting a written request for reconsideration not later than thirty days from receipt of the notice of denial.

(b) The decision of the Executive Director is a final agency decision not subject to further administrative appeal.

§303.308. Revocation of Membership.

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

(1) the member has been subject to a final disciplinary action from the commission pursuant to

§418.001 of the Act; 

(2) the member used fraud or deceit in obtaining the certificate of membership; 

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

(4) the commission has suspended the member’s Certificate of Registration or placed the member under a commission probation order. 

(b) If a membership is revoked, the commission shall provide written notice to the member not later than the 5th day after the revocation becomes effective. 

(c) The commission shall state the reason(s) for the revocation in its written notice to the member. 

(d) A member whose certificate of membership is subject to revocation for a finding under §303.308(a)(2) shall be provided an opportunity for appeal. 

§303.309. Appeal from Revocation. 

(a) A member whose membership has been revoked under §303.308(a)(2) may appeal the decision by submitting a written request for reconsideration to the Executive Director within ten days of receipt of notice of revocation. 

(b) The decision of the Executive Director on the appeal is a final agency decision not subject to further administrative appeal. 

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§303.310. Effect of Non-Renewal or Revocation.

Upon expiration or notice of revocation of membership in the Texas Star Builder Program, the former member shall immediately return the Texas Star Builder certificate and discontinue the use and dissemination of the “ Texas Star Builder” designation on all advertisements, promotions or written material. 

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 Texas Star Builder Proposed Rules 11-17-04

http://www.trcc.state.tx.us/Rules/Proposed/StarBuildRuleProposed11232004.pdf