The Texas Real Estate Commission (TREC) adopts amendments to §535.208, concerning Application for a License, and new §535.209, concerning Professional Inspector Corporations and Limited Liability Companies with changes to the proposed text as published in the September 2, 2005, issue of the Texas Register (30 TexReg 5247). The amendments, form, and new rule are adopted to implement revisions to Texas Occupations Code Chapter 1102 enacted during the 79th Legislative Session, Regular Session, by Senate Bill 810.

Chapter 1102 was revised to required licensing and renewal of corporations and limited liability companies that engage in professional home inspecting for buyers and sellers in Texas. The revisions to §535.208 adopt by reference one new application form to be used by corporations and limited liability companies applying for a professional inspector license. New §535.209 further clarifies licensing requirements for resident and non-resident corporations and limited liability corporations that act as professional inspectors in Texas. Certain foreign corporations and limited liability companies that are licensed as professional inspectors or the equivalent in another state may apply for a Texas professional inspector license as long as the designated person is a licensed Texas professional inspector. The reasoned justification for the amendments, new rule, and new form is to provide clarity in the implementation of the statutory requirements for licensing of corporations and limited liability companies that engage in home inspections in Texas and to assist interested persons in the application process.

The adopted amendments to §535.208 differ from the proposed amendments to reflect the adoption of only one form to be used by corporation and limited liability company applicants instead of two separate forms. New §535.209 does not include subsection (f) of the proposed rule which was appended because of a typographical error. The revisions to the rules and form as adopted do not change the nature or scope so much that it could be deemed a different rule. The rule as adopted do not affect individuals other than those contemplated by the rule as proposed. The rules as adopted do not impose more onerous requirements that the proposed version and do not materially alter the issues raised in the proposed rule.

Comments were received from the Texas Real Estate Inspector Committee at a public meeting of the Committee held on August 29, 2005. The chairman of the Inspector Committee provided to staff a copy of the proposed application form with additions and deletions that were discussed at the Inspector Committee meeting. Committee members and members of the public attending the meeting recommended several changes to the forms including the reduction or elimination of the cost provisions, elimination of some of the requirements to provide documentation in response to certain questions, deletion or revision of some of the questions asked in the forms, and revision of the certification of the applicant. The recommendations were made in part to streamline the forms, to make the forms easier to read, and to make it less costly for persons to apply for the license.

The Commission has reviewed the comments made at the Committee meeting and the revised form provided to TREC staff and agrees with some of the revisions recommended at the Committee meeting. As a result, the Commission has changed the proposed forms as follows: The two separate forms, one for corporation applicants and one for limited liability company applicants, have been combined into one form. The requirement that the applicant provide a certified copy of the articles of incorporation or articles of organization was removed from the form. The question requesting the entity's Texas Identification Number was removed as the applicant is also required to provide its federal Employer Identification Number. The form was renumbered and rearranged for readability and consistency. Many of the questions that required the applicant to provide supporting documentation for "yes" answers now require the applicant to provide only a written explanation. If necessary, the Commission reserves the right to request additional supporting documentation as necessary to determine the applicant's moral character as required by Subchapter C of Chapter 1102, Texas Occupations Code. The question requesting information about the owners of 10% or more of the applicant entity was revised to require the applicant to provide information on one owner only of the entity. The question requesting the applicant to provide the assumed name certificate filed with the Secretary of State was revised to require the applicant to provide only the business name assumed by the applicant without supporting documentation. The certification attesting to the truthfulness of the information provided in the application was changed to require signature by a corporation officer or limited liability company manager instead of certification by the designated officer, manager or employee of the applicant entity. An additional certification was included for the designated officer, manager or employee of the applicant entity to agree to act as such on behalf of the entity. Lastly, at the recommendation of Committee members, the application fee was reduced from $60 to $10, and the $100 recovery fund fee was deleted. Corporation and limited liability company applicants for a professional inspector license will therefore not be required to pay a fee to the Inspector Recovery Fund.

The amendments and new rule are adopted under Texas Occupations Code, §1101.151, which authorizes the Texas Real Estate Commission to make and enforce all rules and regulations necessary for the performance of its duties and to establish standards of conduct and ethics for its licensees in keeping with the purpose and intent of the Act to insure compliance with the provisions of the Act.

The statutes affected by this adoption are Texas Occupations Code, Chapters 1101 and 1102 and Senate Bill 810, 79th Legislature, R.S.