The Texas Real Estate Commission (TREC) proposes amendments to §535.210, regarding Inspector Fees. The amendments would increase the professional inspector application fee from $90 to $104, the real estate inspector application fee from $75 to $89, and the apprentice inspector application fee from $35 to $84, the annual renewal fees for professional and real estate inspectors from $27 to $32, and the annual renewal fee for an apprentice inspector from $22 to $27.

The justification for the fee increases is to generate sufficient revenue to fund operations of the agency and to comply with requirements of Senate Bill 1000, 82nd Texas Legislature, Regular Session (2011).

Senate Bill 1000 makes the Texas Real Estate Commission self-directed and semi-independent. The bill removes the agency from the legislative budgeting process and requires the commission to adopt and approve an annual budget. The bill requires that the commission collect sufficient fees to fund operations to carry out its function and to fund the budget. In relevant part, the bill also requires the agency to remit $750,000 to the general revenue fund not later than August 31 of each fiscal year, to remit a nonrefundable retainer to the State Auditor of $10,000 per fiscal year, a nonrefundable retainer to the Attorney General of $75,000 per fiscal year, and a nonrefundable retainer to the State Office of Administrative Hearings of $75,000 per fiscal year. TREC will be required to reimburse each agency for all costs incurred in excess of the retainers for providing services to the commission. In addition, the bill requires the agency to pay rent in a reasonable amount to be determined by the Texas Facilities Commission with aggregate rent payments to be not less than $550,000 per fiscal year for state fiscal years ending August 31, 2012 and August 31, 2013; and not less than $425,000 per fiscal year for each year ending August 31, 2014, August 31, 2015, and August 31, 2016.

Karen Alexander, Staff Services Director, has determined that for the first five-year period §535.210(a)(1) - (6) are in effect there will be fiscal implications for the state, but not to units of local government as a result of enforcing or administering the subsection. Approximately 400 applicants and 1,500 renewal applicants would be required to pay the increased fees in the remaining months of FY 2012 for a total estimated revenue of $17,167. For FY 2013, the total estimated revenue would be $20,600. For each of the three years after (2014 - 2016), the estimated revenue would be $20,600 per year.

Ms. Alexander has determined that there is no anticipated impact on local or state employment as a result of implementing the amendments. However, there is an anticipated impact on small businesses and micro-businesses. The Commission has approximately 3,000 home inspectors licensed in Texas. It is estimated that nearly all of the licensees are small businesses and many of them are micro-businesses. The projected economic impact of this rule amendment on these small businesses will be negative due to the increased application and renewal fees. Under §2006.002, Texas Government Code, an agency is required to consider alternative regulatory methods only if the alternative methods would be consistent with the health, safety and environmental and economic welfare of the state. TREC has developed this proposed rule in accordance with a legislative mandate to cover all costs of operation under Senate Bill 1000, 82nd Legislature, Regular Session (2011). Consequently, any variance from the legislative mandate would not be consistent with the health, safety, and environmental and economic welfare of the state, and no alternative regulatory methods have been considered.

Ms. Alexander also has determined that for each year of the first five years the increased fees under §535.210 are in effect the public benefit anticipated as a result of enforcing the amendments is that the agency will raise sufficient revenue to fund costs of agency operations and required payments to the General Revenue Fund and other state agencies under Senate Bill 1000, 82nd Legislature, Regular Session (2011).

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 deadline for comments is 30 days after publication in the Texas Register.

The amendments are proposed under Texas Occupations Code, §1101.151, which authorizes the Texas Real Estate Commission to adopt and enforce rules necessary to administer Chapters 1101 and 1102; and to establish standards of conduct and ethics for its licensees to fulfill the purposes of Chapters 1101 and 1102 and ensure compliance with Chapters 1101 and 1102.

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