The Texas Real Estate Commission (TREC) proposes amendments to §535.206, concerning the Texas Real Estate Inspector Committee; §535.208, concerning Application for a License; §535.209, concerning Examinations; §535.210, concerning Fees; §535.211, concerning Professional Liability Insurance, or Any Other Insurance That Provides Coverage for Violations of Subchapter G of Texas Occupations Code, Chapter 1102; and §535.216, concerning Renewal of License.

Most of the amendments are proposed to implement the relevant provisions of House Bill (HB) 2911, 83rd Session, Texas Legislature, Regular Session (2013). The effective date of the relevant provisions of HB 2911 is September 1, 2013. The adoption of the amendment is necessary to comply with the effective date of the bill. In relevant part, HB 2911 amended Texas Occupations Code, Chapter 1102 regarding examinations, late renewals, education requirements, financial responsibility, and fingerprinting. Much of the same amendments were adopted on an emergency basis because of the September 1, 2013 effective date. Other amendments were made pursuant to the recommendation of the Texas Real Estate Inspector Committee.

The amendments to §535.206 add term limits for inspector and public members.

The amendments to §535.208 change the reference to professional responsibility requirements, change the period for completing all application requirements from six to 12 months, and add a new fingerprinting requirement for applicants to be consistent with new statutory requirements.

The amendment to §535.209 adds a new subsection to the rule regarding additional education requirements for applicants who fail an exam three consecutive times to be consistent with new statutory requirements.

The amendments to §535.210 add new fees for late renewals and fingerprinting to be consistent with new statutory requirements. In addition, the amendments to §535.210 propose a new fee of $40 for preparing a certificate of active licensure or sponsorship.

The amendments to §535.211 add new proof of professional responsibility requirements to be consistent with new statutory requirements.

The amendments to §535.216 add new fees for late renewals and fingerprinting to be consistent with new statutory requirements.

Melissa Huerta, Staff Services Director, has determined that for the first five-year period new §535.210(11) and (21) - (27) 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 subsections. Per year, the agency receives approximately 13 requests for preparing a license history and 5 requests for certificates of active licensure or sponsorship for inspectors; approximately 215 applicants successfully complete their examination; and 75 requests for renewals, change requests or other records are requested via paper form. Currently the agency does not have a late renewal for inspectors. When an inspector license expires, they must submit a request for reinstatement. Per year, the agency receives approximately 139 reinstatement requests for inspector licenses. Per year, the agency receives an estimated 370 applications and 950 renewals that require fingerprinting services. For FY 2014, the total estimated revenue increase for operations would be $8,567; for each of the three years after (2015-2017), the estimated revenue would be $8,500 per year. The increase to the Real Estate Inspector Recovery fund is estimated to be $21,500 per year.

Ms. Huerta has determined that there is no anticipated impact on local or state employment as a result of implementing the amendments. The Commission has approximately 2,900 inspectors licensed in Texas. It is estimated that nearly all of these 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 additional fees. Under Texas Government Code, §2006.002, 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.

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 or via email to general.counsel@trec.texas.gov. 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 amendment is Texas Occupations Code, Chapter 1102. No other statute, code or article is affected by the proposed amendments.