HBA-DMH C.S.H.B. 695 77(R)    BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 695
By: Reyna, Arthur
Licensing & Administrative Procedures
3/29/2001
Committee Report (Substituted)


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.  C.S.H.B. 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

C.S.H.B. 695 amends The Real Estate License Act (Act) to authorize the
Texas Real Estate Commission (commission) 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 the commission to apply for or renew a license (Secs. 7 and
23, Art. 6573a).  The bill authorizes the commission 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 the commission, 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 the commission 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 the commission 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, and
authorizes the commission 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 the commission 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 the commission 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 the commission is
authorized to assess (Secs.19 and 19A, Art. 6573a).  The bill authorizes
the commission 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 the commission 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 authorize the
commission to assess an administrative penalty on a person who violates the
Act or a rule or order adopted by the commission under the Act in the same
manner as the commission may assess an administrative penalty under The
Real Estate License Act (Sec. 23B, Art. 6573b).  The bill provide that the
commission may authorize a hearing examiner to conduct a hearing and enter
a final decision in a license suspension or revocation proceeding regarding
a service company (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. 

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 695 differs from the original bill by removing provisions that
authorize the Texas Real Estate Commission (commission) by rule to limit
the number of times a real estate license applicant may take all or part of
the examination that determines the competency of a real estate broker or
real estate salesperson. The substitute also removes provisions relating to
examination waiting periods (Sec. 7, Art. 6573a).  The substitute
authorizes the commission to adopt rules relating to the continuing
education courses a licensee must attend to renew a license and to provide
for the collection of assessments (Secs. 7A and 8, Art. 6573a). 

C.S.H.B. 695 differs from the original bill by removing provisions for a
judgment obtained by an aggrieved person.  C.S.H.B. 695 includes provisions
relating to investigation of a compliant and a  licensee's conduct
regarding Internet advertising (Secs. 15 and 15B, Art. 6573a).  The
substitute provides that the commission may authorize an administrator to
delegate authority to assess a penalty (Sec. 19A, Art. 6573a). 

C.S.H.B. 695 modifies penalties, fees, disciplinary action, continuing
education requirements, and inactive status license requirements (Secs. 6,
8, 11, 15, 19, 19A, and 23, Art. 6573a).  C.S.H.B. 695 includes
requirements relating to real estate inspectors and provisions relating to
the real estate recovery fund and the real estate inspection recovery fund
(Secs. 8 and 23 Art. 6573a).  The substitute amends the Residential Service
Company Act to add provisions regarding administrative penalties and
hearings (Secs. 18 and 23B, Art. 6573b)