BILL ANALYSIS


                                                    C.S.S.B. 1398
                                                   By: Barrientos
                                             Economic Development
                                                         05-10-95
                                   Committee Report (Substituted)
BACKGROUND

The Real Estate License Act requires that those persons operating
residential real estate rental locator services be licensed. In
many cities, locator services advertise property in a manner some
consider to be deceptive. Often, locators steer prospective clients
inquiring about lower priced advertised units to higher priced
properties. An investigation of the practices is currently being
conducted by the attorney general's office.

PURPOSE

As proposed, C.S.S.B. 1398 regulates certain residential real
estate rental locators and provides penalties.

RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority is granted
to the Texas Real Estate Commission under SECTION 1 (Section 24(c),
Article 6573a, V.T.C.S.) of this bill.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Article 6573a, V.T.C.S. (Real Estate License
Act), by adding Section 24, as follows:

     Sec. 24. RESIDENTIAL RENTAL LOCATORS. (a) Defines "residential
     rental locator."
     
     (b) Prohibits a person from engaging in business as a
       residential rental locator (locator) in this state unless
       the person holds a license issued under this Act to operate
       as a real estate broker or real estate salesman.
       
       (c) Requires the Texas Real Estate Commission (commission),
       by rule, to adopt regulations and to establish standards
       relating to the permissible forms of advertising by a person
       licensed under this section.
         (d) Requires each residential rental locator to post in a
       conspicuous place accessible to clients and prospective
       clients the locator's license, a statement that the locator
       is licensed by the commission, and the name, mailing
       address, and telephone number of the commission as provided
       by Section 5(q) of this Act.
       
       (e) Provides that a violation of this section by a locator
       constitutes grounds under this Act for the suspension or
       revocation of the person's license, and for the assessment
       of an administrative penalty under Section 19A of this Act.
       
       (f) Provides that a person commits an offense if the person
       engages in business as a locator in this state without a
       license issued under this Act. Provides that an offense
       under this subsection is a Class B misdemeanor.
       
       SECTION 2.   Makes application of Section 24(f), Article 6573a,
V.T.C.S., as added by this Act, prospective.

SECTION 3. Requires the commission to adopt rules as required by
this Act by December 1, 1995.

SECTION 4. Effective date: September 1, 1995.

SECTION 5. Emergency clause.