HBA-DMH H.B. 695 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 695 By: Reyna, Arthur Licensing & Administrative Procedures 7/19/2001 Enrolled BACKGROUND AND PURPOSE The Texas Real Estate Commission regulates real estate brokers, salespersons, inspectors, and other related professionals. Certain provisions in The Real Estate License Act make regulating such professionals inefficient. The Texas Association of Realtors supports legislation that would ensure smooth and consumerfriendly regulation of the real estate industry. House Bill 695 modifies language to facilitate the administration of provisions relating to The Real Estate License Act. 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 7, Article 6573a, V.T.C.S.), SECTION 3 (Section 7A, Article 6573a, V.T.C.S.), and SECTION 4 (Section 8, Article 6573a, V.T.C.S.) of this bill. ANALYSIS House Bill 695 amends The Real Estate License Act (Act) to authorize the Texas Real Estate Commission (TREC) by rule to prescribe the content of the core real estate courses required for a license (Sec. 7, Art. 6573a). The bill modifies the number of semester or classroom hours for which an applicant is required to furnish satisfactory evidence of completion to TREC to apply for or renew a license (Secs. 7 and 23, Art. 6573a). The bill authorizes TREC to prescribe by rule the title, content, and duration of continuing education courses that a licensee must attend to renew a license (Sec. 7A, Art. 6573a). The bill increases from $50 to $100 the fee amount for an application for a license examination and from $15 to $20 the fee amount for a transcript evaluation (Sec.11, Art. 6573a). The bill provides that at any time determined by TREC, rather than on December 31 of any year, the balance remaining in the real estate recovery fund is less than $1 million, an additional license fee is required on next renewal of a license (Sec. 8, Art. 6573a). If at any time, rather than on December 31 of any year, the balance remaining in the real estate inspection recovery fund is less than $300,000, each real estate inspector is required to pay an additional fee on next renewal of license (Sec. 23, Art. 6573a). To ensure the availability of a sufficient amount to pay anticipated claims on the real estate recovery fund or the real estate inspection recovery fund, the bill authorizes TREC by rule to provide for the collection of assessments at different times and under conditions other than those specified by the Act (Secs. 8 and 23, Art. 6573a). The bill deletes the provision requiring an aggrieved person to show 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, on a hearing for an application (Secs. 8 and 23, Art. 6573a). The bill increases the cap for certain payments for claims from the real estate inspection recovery fund (Sec. 23, Art. 6573a). The bill requires TREC on signed complaint in writing of any person, rather than a consumer or service recipient, to investigate the actions and records of a real estate broker or real estate salesperson. The bill provides that a service contract that a licensee under the Act enters into for services governed by the Act is not a good or service governed by consumer transaction provisions of the Business & Commerce Code. The bill authorizes TREC to take other disciplinary action authorized by the Act at any time when it has been determined that the licensee has been guilty of publishing, or causing to be published, an advertisement that is misleading or deceptive using the Internet. (Sec.15, Art. 6573a). The bill authorizes TREC to conduct an investigation if a licensee fails to complete required continuing education within the period prescribed by commission rules or the licensee fails to provide, within a reasonable time, information requested by TREC in connection with an application to renew a license (Sec.15B, Art. 6573a). The bill modifies penalties for a person acting as a real estate broker or real estate salesperson without obtaining the appropriate license or certificate of registration, including administrative penalties that TREC is authorized to assess (Secs.19 and 19A, Art. 6573a). The bill authorizes TREC to authorize an administrator to delegate to another commission employee the administrator's authority to assess a penalty and to authorize the hearing examiner to conduct the hearing and enter a final decision. The bill requires a penalty collected for a violation by an unlicenced person to be deposited in the real estate recovery fund or the real estate inspection recovery fund (Sec.19A, Art. 6573a). The bill modifies inactive status requirements for a real estate salesperson and deletes provisions requiring a joint application with a real estate broker for a real estate salesperson license (Sec. 6, Art. 6573a). The bill modifies real estate inspector license requirements regarding renewal and expiration and requires TREC to charge and collect a 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 (Sec. 23, Art. 6573a). The bill amends the Residential Service Company Act to provide that TREC may authorize a hearing examiner to conduct a hearing and to enter a final decision in a license suspension or revocation proceeding regarding a service company. A final decision of a hearing examiner is appealable to TREC as provided by TREC rule. The bill provides that the sale of a residential service contract governed by the Act is not a good or service governed by consumer transaction provisions of the Business & Commerce Code (Sec. 18, Art. 6573b). EFFECTIVE DATE September 1, 2001. Provisions relating to the modified number of required classroom hours for a real estate broker or real estate salesperson take effect January 1, 2002, and apply only to an application for a real estate broker license or real estate salesperson license filed on or after January 1, 2002. Provisions relating to the modified number of required classroom hours for a real estate inspector take effect December 31, 2001, and apply only to a real estate inspector license or professional inspector license that expires on or after December 31, 2001.