The Texas Real Estate Commission (TREC) adopts amendments to §535.206, concerning the Texas Real Estate Inspector Committee; §535.208, concerning Application for a License; §535.210, concerning Fees; §535.212, concerning Education and Experience for an Inspector License; §535.215, concerning Inactive Inspector Status; §535.216, concerning Renewal of License or Registration; §535.224, concerning Practice and Procedure; and new §535.211, concerning Professional Liability Insurance. Sections 535.212 and 535.215 are adopted with changes to the proposal as published in the October 26, 2007, issue of the Texas Register (32 TexReg 7656) and will be republished. Sections 535.206, 535.208, 535.210, 535.211, 535.216, and 535.224 are adopted without change and will not be republished.

Section 535.212(b) is changed to require that a person who chooses to obtain alternate experience requirements by working with a professional inspector must work with a professional inspector who is approved to be a sponsor under Texas Occupations Code, §1102.113. Section 535.212(b)(1) is changed to replace the word "or" with "and" in the first line to track the statutory requirements in §1102.111, Texas Occupations Code. Section 535.215(a)(4) is changed to delete a redundant "or."

The adopted amendments to §535.206 set the composition of the Texas Real Estate Inspector Committee and detail the qualifications and terms for each member.

The adopted amendments to §535.208 require all applicants for inspector licenses to provide proof that the applicant maintains professional liability insurance or any other insurance that provides coverage for violations of Subchapter G of Chapter 1102 of the Texas Occupations Code and adopt by reference Certificate of Insurance, Form REI 8-0 to provide the requisite proof of insurance.

The adopted amendments to §535.210 establish the fee or an educational evaluation and delete the fee provisions for filing and renewing a professional inspector business license, as the business license requirement was repealed by House Bill 1530, enacted during the 80th Legislative Session.

The adoption of new §535.211 provides for inspector applicants to show proof of professional liability insurance or any other insurance that provides coverage for violations of Subchapter G of Chapter 1102, Texas Occupations Code.

The adopted amendments to §535.212 require both education and experience in lieu of the experience required under the traditional three-tier application process in order to reflect new requirements under §1102.111, Texas Occupations Code. The amendments require an applicant under the alternate application process for a professional inspector license to provide proof of completion of 200 additional hours of education and either proof of completion of 120 hours of an experience training module, 120 hours of experience working with a licensed professional inspector who is approved to be a sponsor under Texas Occupations Code, §1102.113, or evidence of 5 years of experience in a field directly related to home inspecting.

Under the rule, there are three ways for applicants who are other than actively practicing licensed or registered architects, professional engineers, or engineers-in-training to gain the required experience. The "education experience module" alternative will provide for experience to be obtained under conditions where the hands-on experience is systematic in its coverage under closely supervised field instruction by an approved education provider. The "inspection experience" alternative will assure that the aspiring licensee gets actual home inspecting experience with a licensed professional inspector for a stated period. Lastly, the experience alternative assures that the applicant has experience in a field directly related to home inspecting. An applicant will be able to choose which method of alternate experience is best suited to an applicant's background and training.

The adopted amendments to §535.212 require applicants under the alternate application process for a real estate inspector license to provide proof of completion of 30 additional hours of education and proof of either completion of 60 hours of an experience training module, 60 hours of experience working with a licensed professional inspector who is approved to be a sponsor under Texas Occupations Code, §1102.113, or evidence of 3 years of experience in a field directly related to home inspecting.

If the applicant is an actively practicing licensed or registered architect, professional engineer, or engineer-in-training, the applicant meets the professional inspector education and experience requirement by actively practicing for 3 years and meets the real estate inspector education and experience requirement by actively practicing for 1 year.

If the applicant was enrolled in an education program with a significant experience component prior to September 1, 2007, the applicant meets the experience requirement in §1102.111(a), Texas Occupations Code. Not more than two persons may accompany a licensed professional inspector on inspections to meet the alternate experience component described in the amendments to §535.212.

All applicants under the alternate education and experience licensing method would be required to take the threshold education courses for each licensed type and to pass the relevant licensing examination.

The adopted amendments to §535.215 provide that a license will revert to inactive status if a licensee is unable to maintain professional liability insurance coverage or any other insurance that provides coverage for violation of Subchapter G of Chapter 1102, Texas Occupations Code.

The adopted amendments to §535.216 provide for home inspector renewal applicants to show proof of professional liability insurance or any other insurance that provides coverage for violations of Subchapter G of Chapter 1102, Texas Occupations Code.

The adopted amendments to §535.224 delete provisions that authorized the Texas Real Estate Inspector Committee to hear disciplinary cases as such cases must, under new laws, be heard by the State Office of Administrative Hearings. The amendments also provide that failure to maintain proof of professional liability insurance or any other insurance that provides coverage for violations of Subchapter G of Chapter 1102, Texas Occupations Code, is an additional cause for disciplinary action.

The commission received three comments during the notice and comment period regarding adoption of the amendments and the new rule, two from the Texas Real Estate Inspector Committee (the Committee) and one from a licensed inspector.

Comment: The Committee, by unanimous vote in public meeting, recommended that TREC not enforce the requirement that applicants and license holders provide proof of professional liability insurance coverage or any other insurance that provides coverage for violations of Subchapter G of Chapter 1102, Texas Occupations Code.

Response: The Commission respectfully disagrees with the Committee as the Commission has no discretion to choose whether to enforce the requirements of Texas Occupations Code, §1102.114 which requires applicants for a home inspector license to provide proof that the applicant maintains liability insurance to protect the public against a violation of Subchapter G of Chapter 1102 of the Texas Occupations Code.

Comment: The Committee voted to recommend a change to the "fast track" experience component to require that the 120 hours of hands on experience with a professional inspector be with a professional inspector who is qualified to be a sponsor by having reached the 200 inspection mark and having been approved by TREC.

Response: The Commission agrees with the comment and has changed the rule accordingly.

Comment: The licensed inspector recommended that those entering the inspection business have 448 core educational hours and 120 hours of hands on and simulated experience, which he indicated was the position of the Texas Association of Real Estate Inspectors.

Response: The Commission respectfully disagrees with the commenter as it believes that 328 core education hours and 120 hours of hands on or simulated experience is sufficient to meet the education and experience requirements under §1102.111, Texas Occupations Code.

The reasoned justification for the adoption of the amendments is the implementation of legislation enacted during the 80th Legislative Session. Senate Bill 914 and House Bill 1530, each of which became effective September 1, 2007, included revisions to Texas Occupations Code, Chapter 1102.

The amendments and the new rule are adopted under Texas Occupations Code, §1101.151, which authorizes TREC to adopt and to enforce rules necessary to administer Chapter 1102.

The statutes affected by this adoption are Texas Occupations Code, Chapters 1101 and 1102. No other statute, code, or article is affected by the adopted rules.