HBA-NRS C.S.H.B. 659 77(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 659 By: Pickett Licensing & Administrative Procedures 3/29/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, Texas law requires real estate brokers, salespersons, and inspectors to conform to certain requirements of The Real Estate License Act. C.S.H.B. 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.), and SECTION 8 (Section 23, Article 6573a, V.T.C.S.) of this bill. ANALYSIS C.S.H.B. 659 amends The Real Estate License Act (Act) by deleting the provision requiring a real estate broker desiring to engage a person to participate in real estate brokerage activity to join the person in filing an application for a salesperson license. The bill provides that a person desiring to act as a real estate salesperson must apply for a salesperson license on a form prescribed by the Texas Real Estate Commission (commission). If the person satisfies all requirements for a salesperson license, the bill authorizes the commission to issue an inactive salesperson license to the person. The bill prohibits a person from acting as a salesperson unless the person is sponsored by a licensed broker who has notified the commission and paid the fee for issuance of an active license to the salesperson. (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). C.S.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 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 8). 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 8). EFFECTIVE DATE September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 659 differs from the original bill by deleting the provision authorizing, instead of requiring, a real estate 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, instead of a salesperson license. The substitute modifies the original by restoring the provision authorizing a person previously licensed as a broker to apply for inactive status. The substitute modifies the original bill by providing that a person desiring to act as a real estate salesperson must apply for a salesperson license on a form prescribed by the Texas Real Estate Commission (commission). If the person satisfies all requirements for a salesperson license, the substitute authorizes the commission to issue an inactive salesperson license to a person and prohibits the person from acting as a salesperson unless the person is sponsored by a licensed broker who has notified the commission and paid the fee for issuance of an active license to the salesperson. (Sec. 6). The substitute removes provisions authorizing the commission by rule to limit the number of times an applicant may take a licensing examination and removes provisions that modified continuing education program requirements.