HBA-NRS H.B. 659 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 659 By: Pickett Licensing & Administrative Procedures 2/11/2001 Introduced BACKGROUND AND PURPOSE Currently, Texas law requires real estate brokers, salespersons, and inspectors to conform to certain requirements of The Real Estate License Act. House Bill 659 modifies current requirements relating to the sale and inspection of real estate. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Real Estate Commission in SECTION 2 (Section 8, Article 6573a, V. T. C. S.), SECTION 8 (Section 23, Article 6573a, V.T.C.S.), and SECTION 10 (Section 23, Article 6573a, V.T.C.S.) of this bill. ANALYSIS House Bill 659 amends The Real Estate License Act (Act) to authorize, instead of require, a broker desiring to engage a person to participate in real estate brokerage activity to join the person in filing an application for an active salesperson license, rather than a salesperson license. The bill removes the provision authorizing a person previously licensed as a broker to apply for inactive status and removes the provision that a person must apply for inactive status not later than the first anniversary of the date of the expiration of the broker or salesperson license (Sec. 6). The bill modifies the provision relating to the payment of specified license renewal fees required to be deposited in the real estate recovery fund to require that fees be assessed on determination by the Texas Real Estate Commission (commission) at any time, rather than on December 31 of any year. The bill authorizes the commission by rule to provide for the collection of assessments at different times and under conditions other than those specified in the Act to ensure the availability of money to pay anticipated claims on the fund. The bill removes the requirement that an aggrieved person show on a hearing for reimbursement that the person has obtained a judgment that is not subject to a stay or discharge in bankruptcy stating the amount of the judgment and the amount owing on the judgment at the date of the application (Sec. 8). The bill raises the required fee for transcript evaluations from $15 to $20 (Sec. 11). The bill expands the authority of the commission to take other disciplinary actions authorized by the Act , in addition to suspension or revocation of a license. The bill provides that it is a violation for a licensed real estate broker or salesperson to publish, or cause to be published, misleading or deceptive advertising on the Internet (Sec. 15). The bill authorizes a commission employee to file a signed written complaint against a licensee and to conduct an investigation if the licensee fails to comply with a commission rule under which a license is issued, renewed, or returned to active status, or the licensee fails to provide information requested by the commission in connection with an application to renew a license (Sec. 15B). The bill requires the penalty for each violation to be set in an amount not to exceed $1,000 a day, rather than $1,000, and authorizes each day a violation continues or occurs to be considered as a separate violation for penalty assessment. The commission may authorize the administrator to delegate to another commission employee the administrator's authority to act concerning administrative penalties. The commission may authorize the hearing examiner to conduct the hearing and enter a final decision concerning a violation of the Act. The bill requires an administrative penalty collected for a violation by a person who is not licensed to be deposited in the real estate recovery fund or the real estate inspection recovery fund (Sec. 19A). H.B. 659 requires the commission to charge and a collect fee not to exceed $20 for filing a request for issuance of a license because of a change of name, return to active status, or change in sponsoring professional inspector (SECTION 7). The bill authorizes the commission by rule to limit the number of times an applicant may take all or part of a licensing examination and to set a reasonable waiting period before a person who fails an examination may file another application. The rules adopted by the commission may permit a person to file another application without regard to the waiting period if the person has completed additional courses of study specified by the commission. The bill removes the provision relating to application for reexamination when an applicant fails the examination three consecutive times (SECTION 8). For annual real estate inspection courses, the bill increases the number of classroom hours from four to eight hours that a real estate inspector, and from eight to 16 hours that a professional inspector, must submit before a license renewal is issued. This change in law applies only to a license that expires on or after December 31, 2001 (SECTIONS 9 and 11). The bill modifies the provision relating to the real estate inspection recovery fund to require each inspector to deposit specified fees in the recovery fund if the balance in the fund is less than $300,000 at any time, rather than on December 31 of any year. The bill authorizes the commission by rule to provide for the collection of assessments at different times and under conditions other than those specified in the Act to ensure the availability of a sufficient amount of money to pay anticipated claims on the fund (SECTION 10). The bill removes the provision requiring an aggrieved person to show, on the hearing on the application for reimbursement for certain actual damages, that the person has obtained a judgment that is not subject to a stay or discharge in bankruptcy stating the amount of the judgment and the amount owing on the judgment at the date of the application. The bill increases the limit on the aggregate payment for claims, including attorney fees, interest, and court costs, arising out of the same transaction from $7,500 to $10,000. The bill increases the limit on the aggregate payment for claims based on judgments against a licensed inspector from $15,000 to $30,000 (SECTION 10). EFFECTIVE DATE September 1, 2001.