The Texas Real Estate Commission (TREC) adopts amendments to §535.61, Examinations; §535.62, Acceptable Courses of Study; and §535.64, Accreditation of Schools and Approval of Courses and Instructors. Section 535.61 is adopted with changes to the proposed text as published in the November 6, 2009, issue of the Texas Register (34 TexReg 7762). Sections 535.62 and 535.64 are adopted without changes and will not be republished.

The amendment to §535.61 as adopted establishes a broker pre-license examination passing score of at least 75% and a salesperson pre-license examination score of at least 70%. The difference between the rule as originally proposed and the rule as adopted is the proposed rule would have changed the passing score for both salesperson and broker examinations from at least 70% to at least 75%. The amendments to §535.62 and §535.64 define how TREC-approved proprietary schools' passage rates are calculated and published by the commission and implement the statutory requirement that schools demonstrate a 55% examination passage rate to renew their accreditation. In response to comments to previously proposed amendments to these rules, the amendments allow schools that offer correspondence courses in association with accredited colleges or universities to issue certificates of completion in the name of the TREC-approved school and to count the examination passage rates of students in those courses toward the school's overall passage rates. The amendments further state that correspondence courses offered in association with accredited colleges or universities, like correspondence courses offered by accredited colleges and universities, do not require commission pre-approval because all such courses must comply with the college or university's curriculum accreditation standards. The effective date of the amendments is September 1, 2010.

The reasoned justification for the amendments includes greater public availability of information regarding a TREC accredited school's examination passage rate, and increased agency ability to ensure the quality of education offered by these schools. The reasoned justification is further described below in response to the comments.

Six comments were received on the rules as proposed, including a comment from the Texas Association of Realtors.

Comment: One commenter commented favorably on establishing the pre-license examination passing score for salespersons and brokers at 75%.

Comment: One commenter generally agrees with the amendments.

Comment: One commenter suggested postponing for at least six months changing the passing score from 70% to 75% until the commission has collected additional statistical data on the recent changes to the examination structure and format.

Response: The commission respectfully disagrees with the commenter with respect to the broker examination and believes that increasing the passing score to 75% for the broker examination will further ensure well-qualified and educated brokers to better protect consumers of real estate services in Texas.

Comment: One commenter is not in favor of changing the passing score from 70% to 75%. The commenter indicates that there are no signs of concern with the current 70% passing score and such score is sufficient evidence of mastery.

Response: The commission respectfully disagrees with the commenter and believes that increasing the passing score to 75% for the broker examination will further ensure well-qualified and educated brokers to better protect consumers of real estate services in Texas.

Comment: One commenter is not in favor of changing the passing score from 70% to 75% and requested additional clarification on the amendments to §535.62 and §535.64. Regarding the examination passing score, the commenter states that since changing the passing score is not a matter of urgency, the commission should focus its attention on implementing the 55% first time pre-license exam pass rate before in considers raising the actual passing score for the examination.

Regarding the amendments to §535.62, the commenter asks for clarification about the use of the term "aggregate."

Response: The commission respectfully disagrees with the commenter with respect to the broker examination and believes that increasing the passing score to 75% for the broker examination will further ensure well-qualified and educated brokers to better protect consumers of real estate services in Texas.

As to the request for clarification regarding the use of the term "aggregate," the aggregate pass rate is the total number of broker, salesperson, real estate inspector, and professional inspector examinees (students) divided by the total number of students who passed the examination on the first attempt for the same period. The aggregate number of students does not include appraiser examinees.

Comment: One commenter stated that the commenter would be in favor of the amendments to §535.62 and §535.64 if it means that the correspondence courses submitted by a proprietary school in association with an accredited college or university need not be accredited for college credit in a degree program as long as the college or university certifies that the courses meet the college or university standards for adult education.

Response: Under the rule as adopted, correspondence courses submitted to TREC for proposed approval, if offered by a proprietary school in association with an accredited college or university, must include written certification that the course meets the curriculum standards maintained by the college or university for either 1) college credit in a degree awarding program, or 2) credit in a certificate awarding program approved by the college or university, such as a recognized adult education program.

The amendments 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 ensure compliance with the provisions of the Act.

The statute affected by this adoption is Texas Occupations Code, Chapter 1101. No other statute, code or article is affected by the amendments.