2011 Session Summary (Updated!)

In previous ADVOCACY blogs, we reported that all our priority bills had passed so, barring a veto from Governor Perry, they would become law. We’re delighted to say that, for the first time in four sessions, the Governor didn’t veto a single bill we identified—and supported—as architectural practice priority. Since we previously described those priority bills in some detail, this report will focus more on when those changes become effective, etc., as well as providing a link to more detailed information, including a link to the Enrolled version of each bill. (Click on bill numbers in the sub-titles.) In reverse numerical order, they are:

HB 2284 (see May 25, 27 and June 6 blogs)

Summary—A/E “Peace Accord” bill that settles 20+-year scope-of-practice disputes between the professions. In trade for creating a process by which certain licensed engineers can be “grandfathered” (between September 1, 2011 and January 1, 2012) to continue practicing architecture without an architecture license, language was added to the Engineering Practice Act stating that an architect must prepare the architectural plans and specifications for any building intended for human use or occupancy, as well as “the practice of engineering does not include the practice of architecture.”

Effective Date—September 1, 2011

Exemptions or Exclusions—See those previously reported on the TSA Blog regarding an engineer’s eligibility to apply for “grandfathering.”

HB 2093 (see May 25 and 27 blogs)

Summary—Makes broad-form indemnification clauses “void and unenforceable.” In other words, as a matter of public policy, after the effective date most contracts will require each party to be responsible for its own acts, and will not allow one party to dictate to another that a “second party” must indemnify and defend the “first party” against the first party’s acts of negligence. The “void and unenforceable” limitation also extends to any requirement to purchase additional insurance for such indemnification contingencies.

Effective Date—January 1, 2012

Exemptions or Exclusions—Specific classes of exempted construction contracts include residential (single family house, townhouse or duplex, including any related land development) and municipal projects. In addition, language for common or current exemptions such as bodily injury or death of an employee, breach of contract, general indemnity agreements required by sureties or in loan or financing documents, general “benefits and protections” language under state workers comp or governmental immunity laws, etc., are included.

HB 1728 (see May 25 and June 7 blogs)

Summary—Establishes parameters for energy-performance or energy-conservation contracts, including available sources of funds to pay for them. Of particular interest to architects is the language limiting K-12 public education entities from disallowing “proper allocation” of available tax credits added to Section 44.902 of the Education Code (See page 3). Similar language for other public entities is found in HB 51.

Effective Date—September 1, 2011

Exemptions or Exclusions—None

HB 628 (see May 25 and May 27 blogs)

Summary—Consolidates the language dealing with Alternative Project Delivery methods now found in three different codes (Education, Government and Local Government) into a single chapter of the Government Code. It also provides a bit of needed tort reform by requiring that money received by a school district as the result of a construction-defect lawsuit—regardless whether a settlement or verdict—be spent to fix the problem for which the lawsuit was filed.

Effective Date— September 1, 2011

Exemptions or Exclusions—While the bill has almost universal impact on all public entities, there are notable exceptions like the Texas Department of Transportation and institutions of higher learning (although community and junior colleges are included).

HB 51 (see May 25 and June 7 blogs)

Summary—Requires state buildings to be designed and constructed or renovated to achieve certification under a nationally recognized program such as LEED or Green Globes, or a comparable program developed by a municipally owned energy producer. Also includes language that says a design professional’s services to achieve such third-party certification are not to be considered “basic services,” and that public entities may not disallow proper allocation of potential tax credits. (See page 5, lines 15-24 of the bill.)

Effective Date—September 1, 2011

Exemptions or Exclusions—Higher education buildings may be exempted in cases where the governing board has already adopted another, reasonably equivalent, set of energy-conservation standards, or requests and is granted an “undue hardship” waiver from SECO, which includes providing documentation demonstrating need for the waiver. Also, buildings for which a Higher Ed entity advertises seeking RFQs, RFPs, bids, etc., before September 1, 2013 are exempt. Only their buildings or projects initiated after that date are covered. For state buildings, the effective date is September 1, 2011.

Advocacy Update

David Lancaster

TSA Senior Manager of Advocacy

After every session, there is a 20-day “post-session review period,” in which the Texas Governor can 1) veto, 2) sign into law, or 3) let become law without signature any bill that was passed during that Regular Session. While waiting for the 2011 period to run its course, here are some additional comments in response to questions that have already been raised about two bills mentioned in our May 25 and May 27 Advocacy Updates blogs, and/or the most recent CheckSet article.

After this year’s constitutional “veto period” ends, we’ll post a more comprehensive “final action” report about bills that were on TSA’s Legislative Tracking System, including descriptions of some “non-bill” lobbying activities (like working to defeat bad amendments to good—or at least benign—legislation) that we believe helped to advance or protect the profession.

HB 2284
The potential for a “grandfather” opportunity for engineers mentioned in June’s CheckSet article is much different from the one that came with passage of the interior designer title act in 1991. Because so many architects were grandfathered 20 years ago under that earlier law, several called or wrote asking for more detail, or at least clarification, about the difference or similarities between the two situations.

For an engineer to be granted a waiver by TBAE, he or she must offer documentation that they prepared the architectural plans and specifications for at least three projects that exceeded the threshold where an architect would be required. That application and documentation process must occur between Sept. 1, 2011, and Jan. 1, 2012. The Board of Architectural Examiners must determine during that time whether or not the projects are eligible or not, and if the projects were built "safely and adequately." (The TBAE decision is appealable to the State Office of Administrative Hearings.)

Contrast that with 1991 when, because all architects were exempt under that new title (as opposed to practice) law, they had two years in which to do so. All that was necessary was that an architect file the required paperwork asking to be jointly recognized and registered as an Architect and Interior Designer.

One of the most important elements of HB 2284 is the wording that, while architecture and engineering may be closely related...while they even have significant areas of overlap, the two professions are sufficiently different that the legislature had reason to put into statute that engineers may not prepare all the plans and specifications for a building intended for human use or occupancy; architects must be involved in those projects, too.

That clarification – that the practice of engineering does not include the practice of architecture – is what has been sought for many years. Given this clarification, our part of the negotiations centered on how to develop the best, most responsible "prove up" grandfathering process to qualify the number of engineers who might make it onto TBAE's “exempt list.”

HB 51/HB 1728
We’ve received numerous calls from optimistic members (or their accountants) about the “IRS Code, Section 179D” tax credit potential in both these bills, so here’s more helpful detail from the AIA national headquarters. (Note: there are two hyper-links embedded in the AIA article below, including one to a webinar on the topic. If you have questions that still can’t be answered, contact Christina Finkenhofer at christinafinkenhofer@aia.org or call her 202/626-7478.)

*179D Energy Efficient Commercial Buildings Tax Deduction

Advocacy Update: Week 11

April 4-8 could be a critical week for TSA’s 2011 advocacy efforts. A hard-earned negotiated agreement between architects and engineers that might end more than 20 years of struggle over where one discipline ends and the other begins is up for review and potential action by the Licensing & Administrative Procedures committee Tues., April 5. This effort is the result of negotiations that began in the summer, which appeared lately to be off-course, but through the good efforts of Rep. Mike Hamilton (Beaumont) are back on track.

Assuming things work out as hoped/planned, one of the bills the Society was most concerned with previously—HB 2284, relating to the practice of engineering—will become the vehicle to spell out our AE agreement when that new language is introduced in the form of a Committee Substitute (CS) at Tuesday’s hearing. Not only would the bill that was arguably considered our biggest threat become one of our new favorites, the substitute language would likely eliminate the likelihood for up to seven other “troubling” bills being considered further, too.

The potential is tremendous…and we’re not out of the woods by any stretch of the imagination, but things are looking so much brighter than just a couple of weeks ago. It’s not too early, however, to say “thanks” to Rep. Mike Hamilton for his “encouragement” to both sides to work things out, as well as his leadership and staff assistance in helping craft an agreement-in-principle last week.

The House’s version of the biennial budget was finally approved Sun., April 3, pretty much along straight party lines after two days of marathon debate. It’s really lean…and about $10 billion less than what’s expected to come out of the Senate, so there will need to be a lot of negotiation and compromise if a special session is to be avoided.

Hearings on other bills this week (4/4-8) include: HB 1041, relating to the waiver of sovereign immunity by state agencies for certain claims; HB 1859, loosening the ADA-TAS requirements on facilities owned by religious institutions; HB 2432, setting out the limits and authority for public-private partnerships (P3) as a way to finance certain construction projects; HB 3756, allowing those executing interior design contracts to file a lien for non-payment; SB 5, the comprehensive funding bill for higher education that last week contained an exemption from QBS for institutions of higher learning—language that is gone from this week’s version of the bill as a result of our previous visits; and, Sunset bills for various agencies, including the Texas Department of Housing & Community Affairs and State Preservation Board.

David Lancaster, Hon. AIA

TSA Senior Manager of Advocacy