The Texas Real Estate Commission (TREC) proposes amendments to §535.92, concerning Renewal: Time for Filing; Satisfaction of Mandatory Continuing Education (MCE) Requirements and §535.95, concerning Miscellaneous Provisions Concerning License or Registration Renewals.

The amendments to §535.92(f) change the procedure for licensees who choose to pay an MCE deferral fee under §1101.457, Texas Occupations Code to defer MCE requirements for an additional 60 days after the date the license is renewed. If a licensee fails to timely pay the deferral fee or fails to complete the MCE requirements within the 60-day period, the license will be placed on inactive status. To reactivate the license, the licensee must pay an additional $250 fee, pay the original $200 deferral fee, complete the MCE requirements, certify that the licensee has not engaged in real estate brokerage activity, and pay the appropriate change fee.

The amendments to §535.92(h) change the requirements for approval of correspondence courses offered to meet MCE requirements for a real estate salesperson or broker license under the Real Estate License Act, Texas Occupations Code, Chapter 1101. Currently correspondence courses must be offered by an accredited college or university. TREC would continue to accept correspondence courses offered by accredited colleges and universities, but correspondence courses approved by the commission and offered by a school accredited by the commission and acceptable correspondence courses approved by a real estate regulatory agency of another state could be used to meet mandatory continuing education requirements for a real estate salesperson or broker license under the Real Estate License Act.

The amendments to §535.95 are proposed to clarify recent amendments to the Real Estate License Act (the Act), Texas Occupations Code, Chapter 1101, enacted by House Bill 1530, 80th Legislative Session, Regular Session, regarding fingerprinting requirements. The amendments would clarify fingerprinting requirements in cases where a licensee renews a license, has been fingerprinted, and the fingerprints have been rejected by the DPS or the FBI. The proposed amendments to §535.95 amend the text of the title of the section and authorize the commission to renew a salesperson or broker license on active status if the licensee has provided at least one set of fingerprints to the Department of Public Safety (DPS), the fingerprints were rejected by the DPS or the Federal Bureau of Investigation (FBI), and the licensee has met all other requirements for renewal of the license including paying a renewal fee and completing or properly deferring MCE (MCE) requirements. In some cases the DPS or the FBI requires that the licensee, at no additional cost, submit additional data or more fingerprints if the first set of fingerprints were rejected for technical reasons. The proposed rule authorizes the commission to issue the license in such cases if the licensee has otherwise complied with all other renewal requirements, and requires the commission to notify the licensee that the licensee needs to contact the DPS to submit additional fingerprints. The proposed rule authorizes the commission to take disciplinary action against a licensee for failing to provide the requested data in a timely manner.

Karen Alexander, Staff Services Director, has determined that for the first five-year period the amendments to §535.92(f) are in effect there will be fiscal implications for the state, but not for units of local government as a result of enforcing or administering the sections. The Enforcement Division currently assesses administrative penalties against approximately 120 licensees per year for failing to timely complete MCE under §1101.456, Texas Government Code. If the trend continues the fiscal impact will be approximately ten licensees a month paying the $250 late reporting fee in lieu of administrative penalties producing $5,000 additional revenue for fiscal year 2008, $30,000 for 2009, $30,000 for 2010, $30,000 for 2011, $30,000 and $30,000 for 2012.

Ms. Alexander has determined that for the first five-year period the amendments to §535.92(g) and §535.95 are in effect there will be no significant fiscal implications for the state or for units of local government as a result of enforcing or administering the sections. There is no anticipated impact on local or state employment as a result of implementing any of the amendments. There is no anticipated adverse impact on small businesses and micro-businesses.

There is no anticipated economic cost to persons who are required to comply with the proposed amendments to §535.92(f). The proposed amendment to §535.92(f) merely changes the procedure so that rather than paying an administrative penalty, the licensee will pay a late reporting fee to reactivate his or her license. The economic cost to persons who are required to comply with the proposed amendments to §535.92(g) will be the fees associated with becoming a TREC MCE provider if the person is not already a TREC MCE provider. There is no anticipated economic cost to persons who are required to comply with the proposed amendments to §535.95.

Ms. Alexander also has determined that for each year of the first five years the amendments to §535.92(f) are in effect the public benefit anticipated as a result of enforcing the amendment will be fewer cases referred to enforcement for persons who fail to comply with the late MCE requirements as such licenses will automatically go on inactive status if the licensee fails to timely comply. For each year of the first five years the amendments to §535.92(g) are in effect the public benefit anticipated as a result of enforcing the amendment will be that existing TREC MCE providers will be able to independently offer correspondence courses that applicants and licensees may use for MCE credit. For each year of the first five years the amendments to §535.95 are in effect the public benefit anticipated as a result of enforcing the amendment will be clarification of fingerprinting requirements in cases where there have been technical difficulties obtaining the fingerprint so that the license may be issued if the licensee has otherwise met all other requirements for renewal of the license.

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

The amendments are proposed 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 proposal are Texas Occupations Code, Chapters 1101 and 1102, and Senate Bill 914 and House Bill 1530, 80th Legislature, Regular Session. No other statute, code or article is affected by the proposed amendments.