The Texas Real Estate Commission (TREC or the commission) adopts new §535.50, regarding Definitions; amendments to §535.53, regarding Corporations and Limited Liability Companies; new §535.54, regarding General Provisions Regarding Education and Experience Requirements for a License; new §535.55, regarding Education Requirements for a Salesperson License; new §535.56, regarding Education and Experience requirements for a Broker License; and new §535.57, regarding Examination Requirements for a License. Sections 535.54 and 535.56 are adopted with changes to the proposed text as published in the September 10, 2010, issue of the Texas Register (35 TexReg 8255) and will be republished. Sections 535.50, 535.53, 535.55, and 535.57 are adopted without changes and will not be republished.

The differences between the rule as proposed and the rule as finally adopted are as follows: §535.54 is changed to clarify that a bachelor's degree from an accredited college or university counts towards all the related education requirements for a salesperson or broker license, and the proposed amendment regarding acceptance of associate's degrees is deleted. In new §535.56(b)(3), "eight-year" is changed to "six-year" to provide consistency with the change from six years to four years as detailed below.

The amendments and new rules are adopted as part of a comprehensive rule review of 22 TAC Chapter 535.

The definitions in §535.50 are moved from §535.71 and apply to Subchapter E regarding Requirements for Licensure; Subchapter F regarding Pre-License Education and Examination; and Subchapter G regarding Mandatory Continuing Education. Subchapter F only applies to examinations and accreditation of schools, instructors and courses in pre-license education programs.

The amendments to §535.53 clarify the requirements for obtaining and maintaining a broker license for a corporation or limited liability company. New subsection (c) of §535.53 provides that if a corporation or limited liability company is dissolved with the Office of the Secretary of State the license becomes null and void.

New §§535.54, 535.55, and 535.56 are moved from existing §535.63 in Subchapter F since these sections apply to general education, experience and examination requirements for a license and more appropriately fit under Subchapter E (Requirements for License). New subsection (b) in §535.54 provides that a bachelor's degree counts towards all the related education requirements for a salesperson license or broker license.

New §535.57 is moved from existing §535.61. The commission has the authority under §1101.362 of the Act to waive some or all of the education and experience requirements for someone who has been licensed within the six years preceding the date the application is filed. Under current §535.56, the commission has waived the education and experience required for a broker license for a broker who was licensed in the preceding six years (the maximum authorized under the Act) and otherwise meets the requirements of the section. The rule changes the period from six years to four years so that a person who was licensed in the preceding four years and otherwise meets the requirements of the section (experience) could apply for a broker license. Under new §535.56, the applicant would be required to take the examination if the applicant was licensed more than two years prior to the filing of the application.

Generally speaking, the amendment and new rules correct typographical errors, reorganize, clarify, and streamline existing rules, and update cites to new laws and codes.

The revisions to the rules as adopted do not change the nature or scope so much that they could be deemed different rules. The rules as adopted do not affect individuals other than those contemplated by the rules as proposed. The rules as adopted do not impose more onerous requirements than the proposed versions and do not materially alter the issues raised in the proposed rules.

The reasoned justification for the amendments is more streamlined, consistent and readable rules, and to ensure adequate education of brokers getting back into the industry after being out for a significant period of time.

The Texas Association of Realtors and the Metrotex Association of Realtors commented on 22 TAC §535.54.

The commission received six comments on the rules as proposed.

Comment: One commenter believes that the commission should evaluate anyone with an associate's degree to determine whether the courses taken meet the related course requirements for a salesperson license.

Response: The commission agrees with the commenter and has changed the rule to be consistent with the comment.

Comment: Two commenters disagree with the proposed changes to §535.54 because they believe that it lowers the bar for licensing of salespersons and brokers.

Response: The commission has changed the rule to be consistent with the comment with respect to an associate's degree. With respect to a bachelor's degree, the commission respectfully disagrees with the commenters. Staff experience with evaluation of applicants with bachelor degrees shows that there are normally sufficient basic education requirements in such degree programs to meet the related course requirements for a salesperson or broker license. In addition, the commission has revised the rule to clarify that only bachelor's degrees from accredited colleges or universities will be deemed to meet the related course requirements for a license.

Comment: Two commenters disagree with the proposed changes to §535.54 because they believe that it lowers the bar for licensing of salespersons and brokers because the commission would be accepting the bachelor's degree to count for all education requirements.

Response: The commission respectfully clarifies to the commenters that §535.54(b) applies only to related coursework, not real estate education.

Comment: One commenter disagrees with the changes to §535.56 because the commenter believes that it waters down the requirements for a broker's license.

Response: The commission respectfully disagrees with the comment. The changes would permit an applicant to use existing education requirements if the applicant had been previously licensed no more than four years before. The existing rule permits an applicant with a previous broker's license to reapply within six years based on then existing education requirements. Therefore, the new rule actually raises the bar by changing the time period from six to four years.

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