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Dallas legislator tries roofing regulation — again

By   /   February 2, 2016  /   News  /   No Comments

What followed the tornadoes responsible for eight dead in Garland just after Christmas was as inevitable as the roofing companies descending on neighborhoods to ply their trade.

For the third time in his three terms in the Texas House, Rep. Kenneth Sheets (R-Dallas) is going to ask state government to involve itself in the regulation of the roofing industry.

Rep. Kenneth Sheets (R-Dallas) says he's going to try for a third time to get a state registry for the roofing industry.

Rep. Kenneth Sheets (R-Dallas) says he’s going to try for a third time to get a state registry for the roofing industry.

If it isn’t ignored altogether, Sheets’ bill will ask legislators to decide if government is the right instrument to referee transactions between homeowners and contractors. Recent history suggests the legislature’s answer will be a resounding “no”.

After Garland came the inevitable warnings to homeowners, particularly seniors, to be careful of fraud when roofers came calling to do repairs. The state attorney general’s office makes a regular practice of issuing warnings after a disaster.

Those warnings also become news stories, stories that are seen by homeowners with big holes in their roofs and by the lawmakers who represent them. And while many of these stories did not actually document people being swindled by an unscrupulous contractor, they offered the opportunity for Sheets to promise he will once again see what the state can do to help victims of roofing fraud.

“This is one of those things he hears about most from people in the district,” said Dustin Meador, Sheets’ chief of staff.

Sheets will almost certainly have a very tough go of it. Occupational licensing for such specialized practices as hair braiding and eyebrow threading were pounded out of existence by Texas Supreme Court rulings over the past year.

In both of those decisions, the state’s high court ruled in favor of the right of small business people to make a living and against government licensing that makes entry into those businesses onerous or impossible.

Arif Panju, the attorney for the Institute for Justice who won both of those cases, says any kind of licensing in the roofing business would face the same legal tests.

“Both of those cases show the limits of government power when it intersects with economic liberty and an infringement on the right of someone to earn an honest living,” Panju said.

Institute for Justice attorney Arif Panju says state licensing is protectionism.

Institute for Justice attorney Arif Panju says state licensing is protectionism.

Sheets is well aware the Texas House has become more conservative and anti-regulatory since 2010 when he was first elected, Meador said. “There is a feeling that there are going to be bad actors in any industry and that it should be ‘Buyer beware,’” he said.

Legislators who were around for the 2009 session well recall the state’s last major effort at contractor regulation, the Texas Residential Construction Commission.

In 2003, the legislature had created the commission to be an arbitrator between home builders and home buyers. And like many government attempts at regulating business, the commission was almost immediately co-opted by the more powerful arbitrating party.

It didn’t help that the 2003 law was written by John Krugh, an attorney for Bob Perry, one of the biggest home builders in Texas and one of the biggest political donors to Gov. Rick Perry and other prominent Republicans in charge of the state government.

Perry appointed Krugh to serve on that first commission.

The Texas Association of Builders was the commission’s most ardent supporter and a regular contributor to almost every elected official in the legislature, Republican and Democrat.

To the surprise of virtually no one, the commission regularly dismissed out of hand homeowner complaints and resolved fewer than one in eight cases. Homeowners were just as apt to complain about the commission as they were about their builder.

“Two state reports on TRCC have concluded that it is beholden to the building industry,” Tom Archer, president of the non-profit Homeowners of Texas, said at the time.

The state’s Sunset Advisory Commission codified the public outcry by recommending the Legislature either abolish the commission or give it the composition and authority to regulate on behalf of consumers.

“Sunset staff did not trust that the commitment exists to establish the true regulation needed for the protection of the public,” the Sunset Commission said in its final report published in July 2009. “Sunset staff concluded that anything short of a true regulatory program does more harm than good, and should be abolished. Good intentions are not a substitute for having adequate statutory tools.”

The Legislature chose to abolish.

Protectionism on both ends

The Construction Commission was doomed by the same inherent flaws as licensing: the outsized influence of market participants who stand to gain from the government regulation, Panju said.

“Licensing is protectionism on the front end and the commission is protectionism on the back end,” he said.

Sheets first filed a bill in 2013 calling for roofers to have a state-issued occupational license. The bill proved so unpopular, Meador said, Sheets filed another bill that would have created a state registry, allowing contractors to volunteer to sign up, while offering proof of insurance and an address for the state to keep on file.

“There just wasn’t much appetite for anything involving occupational licensing at the time,” Meador said. “The feeling was, why would the state need to be in the business of regulating this industry.”

He filed virtually the same bill in this past session, but it did not even get a hearing. The hearing for the 2013 bill offers some clue as to why even a voluntary regulation of roofers remains toxic to lawmakers.

Lined up to speak for the bill were representatives of the North Texas Roofing Contractors Association and the Professional Roofing Standards Council. Those who spoke against it represented the Texas Independent Roofing Contractor’s Association and the U.S. Hispanic Contractors Association.

“We hear from people who say they’re against the bill because it doesn’t go far enough,” Meador said. “There are some who think this is just another form of protectionism for the industry. And then there is this weird bipartisan group that thinks this is just more big government, that doesn’t want any more regulation.”

The roofing industry in Texas is fully capable of regulating itself through voluntary certification or licensing, not unlike that offered by the Roofing Contractors Association of Texas, Panju said.

“And if it turns out to be valuable, the market will reward it,” Panju said. “The courts have made clear there has to be evidence of a real problem. Mere assertions are insufficient.”

Undaunted, Sheets is determined the state needs to be involved in an industry that literally puts a roof over people’s heads.

“We want to get the word out,” Meador said. “He has every intent to try this bill again in the next session.”

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Mark Lisheron is the Austin-based reporter for Watchdog.org. He first served as a national Watchdog reporter before joining Texas Watchdog. He spent almost 30 years in newspapers, 14 of those years for the Milwaukee Journal Sentinel and a decade with the Austin American-Statesman. Mark can be reached on Twitter at @marktxwatchdog or by email at [email protected]