The Texas Real Estate Commission (TREC) adopts amendments to §§535.71 - 535.73, concerning mandatory continuing education (MCE) for real estate licensees, with changes to the proposed text as published in the February 25, 2000, issue of the Texas Register (25 TexReg 1508).

The amendment to §535.71 addresses the process by which MCE providers, courses and instructors are approved by TREC. The amendment generally clarifies key definitions, simplifies the approval process for courses and instructors and provides alternative means of grading examinations and correspondence course work. Restrictions on the number of hours for correspondence courses and the offering of MCE courses in a broker's office have been removed. A TREC publication, "Guidelines for Creating a Course Instructor's Manual for Mandatory Continuing Education Courses", MCE Form 13-0, has been revised and updated and adopted by reference in the amendment to §535.71.

The amendment to §535.72 addresses the presentation of courses, advertising and records. The amendment clarifies filing requirements for MCE providers, responsibility for the conduct of disruptive students and requirements for offering courses in a broker's office. A restriction against promoting the sale of goods of services was revised to clarify that the restriction addressed only promotions occurring during class presentations.

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

A number of comments were received on the proposal. The Texas Association of Realtors (TAR) generally supported adoption of the amendments but also suggested a number of changes. TAR suggested several technical changes in §535.71 to clarify that instructor manuals are not required for courses approved for single offerings. The commission concurred and made the suggested changes. TAR also suggested that providers have the flexibility to offer such courses again without having to file another full application if the provider notifies the commission and pays a $25 fee. The commission determined that it was appropriate to permit limited additional offerings of such courses but that the courses should not be offered more than four times without undergoing the more comprehensive review required of courses that are approved for unlimited offerings. The single course offering process was intended to streamline the approval process for courses that would be offered to a limited number of students. To permit a provider unlimited offerings of the course without more detailed review of the course material could result in a dilution of course quality and result in all providers bypassing such review by having their courses approved under this exception to the usual review process. The final text permits the provider to offer a course originally approved for a single offering up to four times during the year after the course is approved or until the provider's authority to act as a provider comes to an end. At least seven days prior to the subsequent offerings, the provider must notify the commission of the date, time, location, and fee to be charged and pay a fee of $25 for each subsequent offering. TAR also suggested that instructors who have been qualified to teach in the Realtor's Institute, like the instructors holding CREI and DREI credentials, should be considered qualified to act as MCE instructors. The commission agreed, but also expanded the section to recognize that instructors who have received comparable credentials form other organizations also would be deemed to meet the teaching experience and education requirements to be an MCE instructor. The commission also concurred with TAR's suggestions broadening the scope of material to be presented by computer and permitting course examinations to be taken by computer and modified the final text of §535.71 accordingly. The commission also concurred with a suggestion from TAR that it might be difficult for a provider to ensure that an instructor was available at all times to answer students' questions in a course presented by an alternative delivery system such as by computer. The section was modified to require a qualified person to be available, rather than requiring an instructor at all times. TAR also suggested deletion of provisions relating to space in handouts for notetaking, requiring the filing of course schedules and itemization of fees in advertising and prohibiting the promotion of goods or services during course presentations. The commission determined that these requirements or prohibitions did not create excessive burdens for providers and tended to benefit students by providing more information or requiring providers to use class session time for educational purposes. The commission accordingly declined to make the suggested changes.

Several comments opposed the elimination of the current restriction on the offering of MCE courses in a broker's offices as a conflict of interest or lowering of course quality. The commission had previously eliminated that restriction in its regulation of core real estate courses offered by TREC's accredited schools and was advised by its legal counsel that it should treat all its regulated providers consistently. The commission declined to make this suggested change to restrict where MCE courses could be held. The amendment to §535.72 ensures that MCE classroom courses will be presented in a location conducive to instruction, because the location must be separate from any work area.

Based on suggestions from TREC staff, the commission also made a number of nonsubstantive changes in the final text to make the sections easier to read.

The amendments are adopted 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.