The Texas Real Estate Commission (TREC or the commission) adopts amendments to §535.71, regarding Approval of Providers, Courses, and Instructors; §535.72, regarding Presentation of Courses, Advertising and Records; §535.73, regarding Compliance and Enforcement; and new §535.74, regarding Additional Information Related to an Application. Sections 535.71 and 535.72 are adopted with changes to the proposed text as published in the September 10, 2010, issue of the Texas Register (35 TexReg 8257) and will be republished. Sections 535.73 and 535.74 are adopted without changes and will not be republished.

The differences between the rules as proposed and the rules as finally adopted are as follows: A typographical error in §535.71(bb) was corrected to reference "subsection (r)" instead of "subsection (l)." Section 535.72(i) is changed to require schools to use, at a minimum, course and instructor evaluation criteria established by the commission, rather than requiring schools to use evaluation forms approved by the commission.

TREC is simultaneously adopting the amendments and new rule as part of a comprehensive rule review of 22 TAC Chapter 535.

The amendments to §535.71(a) delete the definitions as they have been moved to Subchapter E. Subsection (b) is deleted because the requirements are referenced under §535.92; subsection (c) is deleted because the application forms will be approved by the commission but not promulgated by rule; all the subsections are relettered; the renewal term for instructor approval is changed from five to two years in subsections (i) and (j); alternative delivery method courses for required legal credit will need to be certified by a distance learning certification center that is acceptable to the commission under new subsection (z); some of the paragraphs of subsection (z) are deleted and renumbered because distance learning certification ensures the requirements of that subparagraph and it was therefore redundant. Currently, the only distance learning certification center deemed acceptable by the commission is the International Distance Education Certification Center approved by the commission as acceptable in 2007 based on the alternative delivery method course requirements in place at the time the rule was adopted.

The amendments to §535.72 delete the reference to specific form numbers as they will no longer be promulgated by rule. Subsection (i) is a new provision which requires a provider to make available to students and maintain for commission review instructor and course evaluation for each course. Schools are required to use, at a minimum, course and instructor evaluation criteria established by the commission.

Under relettered subsection (k), a provider is required to maintain the same types of records and for the same period of time as required of schools accredited under Subchapter F regarding core education providers.

The amendments to §535.73 delete the reference to evaluations as evaluations are now covered in the amendments to §535.72.

New §535.74(a) deals with additional information related to an application for an MCE provider, course or instructor; and subsection (b) which addresses the commission's delegation of authority to staff.

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

The reasoned justification for the amendments is more streamlined, consistent and readable rules, and more accountability for schools, instructors, and courses accredited by the commission.

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 changes in the rules reflect a nonsubstantive variation from the proposed rules to make the affected rule consistent with other rules.

The Texas Association of Realtors and the Texas Apartment Association commented on the rules as proposed.

The commission received four comments on the rules as proposed.

Comment: Two commenters expressed concern about the criteria used by the commission to determine acceptability of distance education certification centers.

Response: The commission determined in 2007 that the ARELLO International Distance Education Certification Center or IDECC met the commission standards to approve distance education courses. While other entities may provide similar certification services, the commission would need to approve the entity before the commission would accept distance education certification from the entity for distance learning courses. The criteria used to approve IDECC were based on the commission rules in place at the time.

Comment: Three commenters suggested that the commission should not require that schools use a commission approved form for course and instructor evaluations. Instead, the commission should permit schools to use their own forms as long as they use commission approved criteria at a minimum.

Response: The commission agrees with the comments and has changed the rules accordingly.

Comment: One commenter expressed concerns about the amendments to §535.71(z)(2) regarding certification of required legal and ethics MCE courses offered by alternative delivery method. The commenter believes that certification by a distance learning certification center should not be required because existing rules require that such courses meet certain criteria that the certification center would evaluate and therefore certification by such entity would be redundant with the criteria that TREC staff currently evaluates.

Response: The commission respectfully disagrees with the commenter. Similar to the determination made by the commission in 2007 to require distance education certification for core courses offered by alternative delivery method, certification by an independent entity created for the purpose of evaluating such things as mastery, timing, security, etc. (those criteria unique to courses offered by alternative delivery method) is a reasonable requirement for MCE providers to meet prior to submitting the course for TREC approval so that TREC staff may more appropriately focus on whether such courses meet substantive requirements.

Comment: Two commenters suggested that the commission should clarify records retention requirements for records held in an electronic format.

Response: The commission agrees with the comments and has revised Subchapter F, §535.65(9)(D) and referenced such requirements in Subchapter G, §535.72(k).

The amendments and new rule 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.