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(a)Application for approval. (1)Unless otherwise exempt under subsection (b), a person desiring to be approved by the Commission to offer real estate or real estate inspection qualifying courses shall: (A)file an application on the appropriate form approved by the Commission, with all required documentation; (B)submit the required fee under §535.101 or §535.210 of this title; (C)submit the statutory bond or other security acceptable to the Commission under §1101.302 of the Act; and (D)maintain a fixed office in the state of Texas or designate a resident of this state as attorney-in-fact to accept service of process and act as custodian of any records in Texas which the provider is required to maintain by this Subchapter. (2)The Commission may: (A)request additional information be provided to the Commission relating an application; and (B)terminate an application without further notice if the applicant fails to provide the additional information not later than the 60th day after the Commission mails the request. (3)An approved provider is permitted to offer courses in both real estate and real estate inspection that have been approved by the Commission. (b)Exempt Providers. (1)The following persons may submit real estate qualifying courses for approval for credit under §535.62(i) of this subchapter without becoming an approved provider of qualifying courses: (A)a person approved by a real estate regulatory agency to offer qualifying real estate courses in another state; (B)a post-secondary educational institution established in and offering qualifying real estate courses in another state; (C)a United States armed forces institute; and (D)a nationally recognized professional designation institute or council in the real estate industry. (2)The following persons may submit real estate inspector qualifying courses for approval for credit under §535.62(i) of this subchapter without becoming an approved provider of qualifying courses: (A)a provider approved by an inspector regulatory agency of another state; (B)a United States armed forces institute; (C)a unit of federal, state or local government; (D)a nationally recognized building, electrical, plumbing, mechanical or fire code organization; (E)a professional trade association in the inspection field or in a related technical field; or (F)an entity whose courses are approved and regulated by an agency of this state. (c)Standards for approval. To be approved as a provider by the Commission, the applicant must meet the following standards: (1)the applicant must satisfy the Commission as to the applicant's ability to administer courses with competency, honesty trustworthiness and integrity. If the applicant proposes to employ another person to manage the operation of the applicant, that person must meet this standard as if that person were the applicant. (2)the applicant must demonstrate that the applicant has sufficient financial resources to conduct its proposed operations on a continuing basis without risk of loss to students taking courses from the approved provider ;and (3)that any proposed facilities will be adequate and safe for conducting courses (d)Financial review. An applicant shall provide the following information to enable the Commission to determine if an applicant has sufficient financial resources to conduct its proposed operations: (1)business financial statements prepared in accordance with generally accepted accounting principles, which shall include a current statement of financial condition and a current statement of net worth; (2)a proposed budget for the first year of operation; and (3)a market survey indicating the anticipated enrollment for the first year of operation. (e)Insufficient financial condition. The existence of any of the following conditions shall constitute prima facie evidence that an applicant's financial condition is insufficient: (1)nonpayment of a liability when due, if the balance due is greater than 5% of the approved provider's current assets in the current or prior accounting period; (2)nonpayment of three or more liabilities when due, in the current or prior accounting period, regardless of the balance due for each liability; (3)a pattern of nonpayment of liabilities when due, in two or more accounting periods, even if the liabilities ultimately are repaid; (4)a current ratio of less than 1.75 for the current or prior accounting period, this ratio being total current assets divided by total current liabilities; (5)a quick ratio of less than 1.60 for the current or prior accounting period, this ratio being the sum of all cash equivalents, marketable securities, and net receivables divided by total current liabilities; (6)a cash ratio of less than 1.40 for the current or prior accounting period, this ratio being the sum of cash equivalents and marketable securities divided by total current liabilities; (7)a debt ratio of more than .40 for the current or prior accounting period, this ratio being total liabilities divided by total assets; (8)a debt-to-equity ratio of greater than .60 for the current or prior accounting period, this ratio being total liabilities divided by owners' or shareholders' equity; (9)a final judgment obtained against the approved provider for nonpayment of a liability which remains unpaid more than 30 days after becoming final; or (10)the execution of a writ of garnishment on any of the assets of the approved provider. (f)Approval notice. An applicant shall not act as or represent itself to be an approved provider until the applicant has received written notice of approval from the Commission. (g)Period of initial approval. The initial approval of a provider of qualifying courses is valid for four years. (h)Payment of annual operation fee. (1)An approved provider shall pay an annual operation fee prescribed by §535.101 of this title no later than each anniversary of the date of the provider's approval. (2)An approved provider who fails to pay the annual operation fee as prescribed shall be placed on inactive status and notified in writing by the Commission. (3)The approved provider will remain on inactive status until the annual fee is paid. (4)The Commission will not give credit for courses given by a provider on inactive status. (i)Disapproval of application. (1)If the Commission determines that an applicant does not meet the standards for approval, the Commission will provide written notice of disapproval to the applicant. (2)The disapproval notice, applicant's request for a hearing on the disapproval, and any hearing are governed by the Administrative Procedure Act, Texas Government Code, Chapter 2001, and Chapter 533 of this title (relating to Practice and Procedure). Venue for any hearing conducted under this section shall be in Travis County. (j)Renewal. (1)Not earlier than 90 days before the expiration of its current approval, an approved provider may apply for renewal for another four year period. (2)Approval or disapproval of a renewal application shall be subject to: (A)the standards for initial applications for approval set out in this section; and (B)whether the approved provider has met or exceeded the exam passage rate benchmark established by the Commission under subsection (k). (3)The Commission will not require a financial review for renewal if the applicant has provided a statutory bond or other security acceptable to the Commission under §1101.302 of the Act, and there are no unsatisfied final money judgments against the applicant. (k)Exam passage rates. (1)For purposes of this subsection, a student is affiliated with the approved provider where the student took his or her last qualifying course. The Commission will not count the student in calculating the approved provider's exam pass rate if the student's last qualifying course was taken more than two years before the date the approved provider or student submitted the course to the Commission. (2)The exam passage rate of approved providers for each category of license will be calculated on a quarterly basis by dividing the number of students affiliated with that approved provider, who passed the examination on their first attempt in the four-year period ending on the last day of the previous quarter, by the total number of the approved provider's graduates who took the exam for the first time during that same period. (3)If an approved provider offers courses to multiple license categories, the exam results for that approved provider will be calculated by license category. The passage rate for each license category that will be used to determine whether the approved provider has met or exceeded the established benchmark for the license category is the most current rate published by the Commission as of the date the Commission receives the timely application for renewal or, if the approval expired before being renewed, the most recent rate published by the Commission as of the expiration date of that provider's approval. (4)Providers who do not meet the established benchmark for a license category may be denied renewal for that license category or placed on probation by the Commission under terms acceptable to the Commission. (5)In determining whether an approved provider qualifies for renewal for a particular license category based on its examination passage rate, the Commission may consider a variety of factors, including: (A)the overall passage rate for sales, broker, and inspector applicants; and (B)any trends within the approved provider's passage rate over the four-year approval period. (6)The Commission will publish the exam passage rate of providers by category of license on the Commission's website on a quarterly basis.
The agency certifies that legal counsel has reviewed
the
proposal and found it to be within the state agency's legal authority
to adopt.
Filed
with the Office of the Secretary of State on August 25, 2014
TRD-201404030 Kerri Lewis
General Counsel
Texas Real Estate Commission
Earliest possible date of adoption: October 5, 2014
For further information, please call: (512) 936-3092
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