The Texas Real Estate Commission (TREC) proposes amendments to §§535.71-535.73, concerning mandatory continuing education (MCE) for real estate licensees.

Under Texas Civil Statutes, Article 6573a, §7A, (the Act), TREC is authorized to approve providers to offer MCE courses to licensees. Real estate licensees who are subject to MCE requirements must complete 15 hours of courses every two years to renew a license on active status. Sections 535.71-535.73 provide guidelines for the regulation of MCE providers by TREC. The proposed amendments generally are intended to eliminate unnecessary restrictions on providers, to reduce the amount of paperwork required of applicants or providers and to clarify examination requirements for courses offered by correspondence or by alternative education delivery methods, such as by computer.

The amendment to §535.71 addresses the process by which MCE providers, courses and instructors are approved by TREC. The amendment would modify the definition of the term "hour" to reflect that a credit hour for all forms of education is based on 50 minutes. The term "proctor" has been added to the list of definitions to provide examples of persons who may be approved by TREC to proctor course examinations. The term "hour" is redefined as 50 minutes of session time, to be consistent with the rest of the rules. To streamline the process for new providers, a person would be permitted to apply for an MCE providership without submitting course materials at that time. A separate MCE instructor approval process for each course is deleted, because inspectors will qualify under other TREC rules governing approval of instructors for accredited schools. The rules are simplified by referring to the TREC manual for creating an MCE course, now identified as MCE form 13-0, rather than by specifying requirements in the section. Persons who hold a CREI designation issued by the Texas Association of Real Estate Teachers or DREI designation issued by the National Association of Real Estate Educators would deemed to have satisfied the requirements for instructor approval. The process for approving the instructor for a single course offering would be simplified by permitting the provider to submit a resume for the instructor, rather than completing a form. The full fee, currently $100, would required for all course applications; under the current section, one-half the fee is charged if the course is to be offered for less than one year. The amendment also would require a provider to furnish each student with an itemized statement for fees for supplies, materials or books before the student registers for the course. A requirement that all fees be stated in the advertisements for the course would be deleted. The amendment also would clarify that correspondence courses may be offered only by colleges or universities accredited by a regional accrediting association, such as the Commission on Colleges of the Southern Association of Colleges and Schools, or equivalent, and that the examination for a correspondence MCE course must be a proctored written examination. Requirements for machine or computer grading of written course work and examinations for correspondence or alternative delivery method courses would be clarified. Written course work for correspondence courses must be graded either by the instructor or by the provider's coordinator/director, using answer keys approved by the instructor or provider. Correspondence final exams must be graded by the instructor, or, if the exam is graded mechanically or by use of a computer, by the provider, using answer keys approved by the instructor or provider. Alternative delivery method courses may be graded by the instructor, or by the provider's coordinator/director .The examination for an alternative delivery course, such as a course offered by computer, must be administered under controlled conditions to positively identify students, at a location and by an official approved by the commission. To provide flexibility to providers, a current provision requiring each correspondence course to prove 15 hours of instruction would be deleted.

The amendment to §535.72 address the presentation of courses, advertising and records. Providers would be required to file course schedules and course schedule changes. Providers would be required to make every reasonable effort not to give course credit to students who persist in disruptive behavior after being cautioned to cease. The prohibition against holding courses in a broker's office would be eliminated, but courses would have to be offered in a location conducive to instruction that is separate and apart from the work area, such as a classroom, training room, conference room, or assembly hall. Providers would be prohibited from promoting the sale of goods of services only during class presentations. The number of prior approvals for changes in a provider's operation would be reduced; only a change in ownership of a provider would require prior TREC approval. Changes in business name, street or mailing address, persons responsible for records, and other changes would only be reported. Instructor course credits would be limited to the portion of the course taught by the instructor, although the instructor may obtain full credit by attending all the course. At the student's option, a provider would be authorized to credit the student for another course of equal or greater credit hours if the original course is canceled.

The amendment to §535.73 addresses compliance and enforcement. Provisions for audits and enforcement would be modified to be consistent with those recently adopted for accredited schools. Commission employees would be authorized to file complaints against providers and instructors if documents filed with the commission provides reasonable cause to believe a violation of the rules had occurred, and providers and instructors would be obligated to cooperate with TREC in an audit or investigation and to provide documents or information requested by the commission.

Mark A. Moseley, general counsel, has determined that for the first five-year period the sections are in effect there will be fiscal implications for the state as a result of enforcing or administering the sections. Revenue from filings of course offerings would increase by an estimated $1,000 in FY 2000 and for each of the five years thereafter. There are no anticipated fiscal implications for units of local government. There is no anticipated impact on small businesses, micro businesses or local or state employment as a result of implementing the sections.

Mr. Moseley also has determined that for each year of the first five years the sections as proposed are in effect the public benefit anticipated as a result of enforcing the sections will be greater ease in reading and following TREC rules and an enhancement of the educational process for licensees. There is no anticipated economic cost to persons who are required to comply with the proposed sections.

Comments on the proposal may be submitted to Mark A. Moseley, General Counsel, Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188.

The sections are proposed under Texas Civil Statutes, Article 6573a, §5(h), which authorize the Texas Real Estate Commission to make and enforce all rules and regulations necessary for the performance of its duties.

The statute which is affected by this proposal is Texas Civil Statutes, Article 6573a.