TREC Update

[Nolan Kienitz]

I received an update from a legal contact of mine at TREC. A very good person who works hard to provide data as best as possible.

I've pasted some of the data below for review.

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Now that the Governor has signed (confirmed 06-20-07) SB 914 into law, TREC has requested that the Attorney General clarify the general vs. professional liability issue. Because it can take 180 days or more to receive a response, at its last meeting the Commission issued agency staff a policy directive to treat this bill as requiring professional liability insurance until and unless we hear otherwise from the Attorney General. (The reference to Subchapter G, which includes negligence and incorporates the Standards of Practice, strongly suggests that the legislature intended this requirement to be professional liability insurance. However, because "negligence" can occur in a number of ways, the amendment could be determined to require both professional and general liability insurance.) Once the Attorney General's Office receives and processes the request, you should be able to track it at http://www.oag.state.tx.us/opinopen/opinhome.shtml.

The insurance requirement will phase in over the next 2+ years as inspectors' licenses renew. Renewals on or after September 1 will have to show proof of insurance. There is only a 90-day renewal window before a license expires, so a license that expires at the end of April 2008 cannot be renewed until February. (The agency will also require inspectors who needed to show insurance to obtain or renew the license to maintain it between renewals.) The law does not require inspectors' insurance policies to extend coverage to agents, although I understand that this is a common term of these policies.

I am not sure where the Governor's $1300 figure came from. TREC does not track insurance companies or prices, although we may begin a list of companies that offer the insurance once we start to receive that information with applications and renewals.

SB 914 also made several changes to the Inspector Committee, as recommended by the Sunset Commission. The Committee will still be provided for in Chapter 1102, although it will become an advisory committee. The current Committee functions in an advisory capacity, so the change to an "advisory committee" mostly means that different provisions of the Government Code, rather than Chapter 1102, regulate its functioning, and (most importantly) its members will now be able to meet by teleconference. (Meetings will still be posted publicly, and they will be broadcast in real time - presumably by speakerphone - at TREC. We are still working out all of the details of the changes.)

You are correct that the corporation/LLC inspector license requirement was abolished in this legislative session. That change was made through HB 1530 and will also become effective on September 1.
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More food for thought.

[Emmanuel J. Scanlan]

Originally Posted by nkienitz

I received an update from a legal contact of mine at TREC. A very good person who works hard to provide data as best as possible.

I've pasted some of the data below for review.

============================================
Now that the Governor has allowed SB 914 to pass into law (without his signature), TREC has requested that the Attorney General clarify the general vs. professional liability issue. Because it can take 180 days or more to receive a response, at its last meeting the Commission issued agency staff a policy directive to treat this bill as requiring professional liability insurance until and unless we hear otherwise from the Attorney General. (The reference to Subchapter G, which includes negligence and incorporates the Standards of Practice, strongly suggests that the legislature intended this requirement to be professional liability insurance. However, because "negligence" can occur in a number of ways, the amendment could be determined to require both professional and general liability insurance.) Once the Attorney General's Office receives and processes the request, you should be able to track it at http://www.oag.state.tx.us/opinopen/opinhome.shtml.

The insurance requirement will phase in over the next 2+ years as inspectors' licenses renew. Renewals on or after September 1 will have to show proof of insurance. There is only a 90-day renewal window before a license expires, so a license that expires at the end of April 2008 cannot be renewed until February. (The agency will also require inspectors who needed to show insurance to obtain or renew the license to maintain it between renewals.) The law does not require inspectors' insurance policies to extend coverage to agents, although I understand that this is a common term of these policies.

I am not sure where the Governor's $1300 figure came from. TREC does not track insurance companies or prices, although we may begin a list of companies that offer the insurance once we start to receive that information with applications and renewals.

SB 914 also made several changes to the Inspector Committee, as recommended by the Sunset Commission. The Committee will still be provided for in Chapter 1102, although it will become an advisory committee. The current Committee functions in an advisory capacity, so the change to an "advisory committee" mostly means that different provisions of the Government Code, rather than Chapter 1102, regulate its functioning, and (most importantly) its members will now be able to meet by teleconference. (Meetings will still be posted publicly, and they will be broadcast in real time - presumably by speakerphone - at TREC. We are still working out all of the details of the changes.)

You are correct that the corporation/LLC inspector license requirement was abolished in this legislative session. That change was made through HB 1530 and will also become effective on September 1.
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More food for thought.

Nolan,

Thanks for the heads up!! Has your contact at TREC advised if TREC will take an official stance on this via any method of notifications to Inspectors, i.e. a simple statement on the TREC WEB site regarding this either in the Q&A or directly on a page discussing this?

From reading the information provided above it appears that TREC intends to follow "The Letter Of The Law" ( re: the statement above "The insurance requirement will phase in over the next 2+ years as inspectors' licenses renew.") unless the AG opinion comes back otherwise. If that is the intended official position then only those obtaining or renewing a license on and after 1 Sept. will be required to carry E&O. From your communications with your contact is that the understanding you obtained?

[Nolan Kienitz]

Originally Posted by escanlan

From your communications with your contact is that the understanding you obtained?

I've not directly asked just how TREC will notify us. Maybe that will be next week's question.

My contact sent me a message this morning with an update that the Governor "did" sign the bill. His (Governor's) website had been down and it was not clear until that was resolved. Not that it made any difference one way or another. I will likely update the post to reflect that.

As for the insurance requirement ... yes, assumption is E&O at this time, but carefully read the note. The AG view could come back with a requirement for both Professional & General Liability. I don't want to start a stir with that, but stranger things have happened.

As for having the coverage ... For example: My license will renew in April - 2008. At that renewal process time I will have to show proof of the required amount of insurance to have my license renew. No proof of insurance ... no license renewal.

It could be that someone who is able to renew in July-August of 2007 will then have almost two years before they would have to show proof of insurance at the next renewal in July-August of 2009.

Now ... in the meantime ... should there be a situation where someone would want to start an action against that inspector who does not have insurance (yet) due to that time window ... I'm not sure what would happen in that situation. Seeing as how some may only lock on to the fact that it is required 09/01/07, but not grasp or want to grasp that it is on a two-year phase implementation.

I would guess that scenario above would follow the current path of review, but I don't even want to suggest that or not. Too many variables!!!

[Nolan Kienitz]

I sent another letter to Governor Rick Perry's office this week (2nd letter since SB 914 came to light) expressing my concern about the amendment, etc., etc.

I was taken aback this afternoon when one of his staffers called me to discuss the letter and share the Governor's views. The call lasted for 45-minutes and we covered many, many things regarding this amendment, bill, TREC and general politics. It was a very good and enlightening call.

He is in agreement with our views about the 11th hour way things were handled and is not at all pleased with the Plano Representative. She (Governor's staffer) said the TDI provided the range of insurance cost that began with $1300 ... ergo the number put in his statement for signing.

Line item veto is not available for such bills ... only those dealing with budget ... else he would have exercised that option to remove it.

Bottom line is that we need to speak up (diplomatically) to be heard. The call I received today was a sample of that.

We're not always going to get what we want, but if we don't vote and exercise our voice (again ... diplomatically) we won't get anything done.

I would also suggest that we all get involved in at least some of our representative organizations and work through those channels as well as a combined resource.

ASHI, TAREI, NACHI ... I belong to some, but not all (again we all have to watch budgets), but whatever the group it would be a combined effort that "may" help.

[Jack R. Robnett]

Since Texas has too many inspectors, does anyone think the EO will cause the part timers to close shop and discourage new inspectors?

[Bruce Thompson]

Originally Posted by jrobnett

Since Texas has too many inspectors, does anyone think the EO will cause the part timers to close shop and discourage new inspectors?

No disrespect intended.

4000 active inspectors is too much? What happened to competition? I'll adapt and overcome. I'm more concerned with becoming what I consider to be a "master" (I'll agree that is a vague term) in this profession. The best I can be.

I will agree with you in the sense that some "part-timers" are giving us a bad name. I had a young man call me once - out of the blue - and ask me about becoming an HI. I asked him his experience (he was in his 20's) and he said, "Oh, I'm pretty handy around the house." I fell out.

I'm a part-timer if you could call it that, except I spend more days inspecting than I do at my "full-time" job.

Bruce

[Barry Adair]

Originally Posted by nkienitz

I would also suggest that we all get involved in at least some of our representative organizations and work through those channels as well as a combined resource.
but whatever the group it would be a combined effort that "may" help.

Please publish contact names, addresses, and phone numbers, for this to be meaningful.