By Seidlits H.B. No. 2106
74R6950 DWS-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of business brokers.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Title 132A, Revised Statutes, is amended by
1-5 adding Article 9105 to read as follows:
1-6 Art. 9105. REGULATION OF BUSINESS BROKERS
1-7 Sec. 1. DEFINITIONS. In this article:
1-8 (1) "Business broker" means a person who, for or in
1-9 expectation of consideration, represents another person in
1-10 initiating, negotiating, or concluding a business sale.
1-11 (2) "Business sale" means the sale of:
1-12 (A) a majority of the ownership interest in a
1-13 business; or
1-14 (B) assets of a business representing more than
1-15 50 percent of the value of all the assets of the business.
1-16 (3) "Commissioner" means the commissioner of licensing
1-17 and regulation.
1-18 (4) "Department" means the Texas Department of
1-19 Licensing and Regulation.
1-20 (5) "Person" means an individual, firm, corporation,
1-21 or other legal entity.
1-22 Sec. 2. EXEMPTIONS. This article does not apply to:
1-23 (1) a real estate broker lawfully performing real
1-24 estate brokerage services;
2-1 (2) an attorney performing services constituting the
2-2 practice of law; or
2-3 (3) a dealer, agent, or salesman registered under The
2-4 Securities Act (Article 581-1 et seq., Vernon's Texas Civil
2-5 Statutes), acting in relation to a transfer of securities.
2-6 Sec. 3. LICENSE REQUIRED. A person may not act as a
2-7 business broker or represent to the public that the person is able
2-8 to act as a business broker unless the person is licensed under
2-9 this article.
2-10 Sec. 4. APPLICATION FOR LICENSE. (a) An applicant for a
2-11 license under this article must file a written application with the
2-12 department on a form prescribed by the commissioner.
2-13 (b) An application must be accompanied by an application
2-14 fee.
2-15 Sec. 5. ISSUANCE OF LICENSE; REQUIREMENTS. (a) The
2-16 commissioner shall issue a license to a person who meets the
2-17 requirements of this article and rules adopted under this article,
2-18 including payment of the required fee.
2-19 (b) The commissioner by rule shall establish requirements
2-20 for obtaining a license. The requirements may include:
2-21 (1) minimum education or experience requirements;
2-22 (2) proof of the applicant's good character; and
2-23 (3) other requirements the commissioner considers
2-24 appropriate to ensure the competence and integrity of license
2-25 holders.
2-26 Sec. 6. TERM; RENEWAL. A license issued under this article
2-27 expires on the first anniversary of its date of issuance. A person
3-1 may renew a license issued under this article by submitting a
3-2 renewal application in a form prescribed by the commissioner and
3-3 paying a renewal fee.
3-4 Sec. 7. FORMS; FEES. The commissioner by rule shall:
3-5 (1) prescribe the license application and renewal
3-6 forms; and
3-7 (2) set the amount of fees required under this article
3-8 so that the fees collected by the commissioner are sufficient to
3-9 recover the costs of administering this article.
3-10 Sec. 8. BOND. The commissioner by rule shall require a
3-11 person holding a license under this article to provide a bond to
3-12 protect persons damaged by the actions of the license holder. The
3-13 bond must be in an amount appropriate for the size of transactions
3-14 in which the license holder will be involved.
3-15 Sec. 9. MONEY-HANDLING GUIDELINES. The commissioner by rule
3-16 shall establish guidelines for the handling by a person licensed
3-17 under this article of money belonging to other persons. The rules
3-18 must specify the types of institutions and accounts in which the
3-19 money may be deposited.
3-20 Sec. 10. PROHIBITED CONDUCT. (a) A person holding a
3-21 license under this article may not:
3-22 (1) violate this article or a rule adopted under this
3-23 article;
3-24 (2) knowingly commit a false, misleading, or deceptive
3-25 act or practice in connection with acting as a business broker; or
3-26 (3) misapply money or other property that is in the
3-27 person's possession and that belongs to another person.
4-1 (b) The commissioner by rule may establish additional
4-2 prohibitions on the activities of a person holding a license under
4-3 this article.
4-4 SECTION 2. Section 12, The Securities Act (Article 581-12,
4-5 Vernon's Texas Civil Statutes), is amended to read as follows:
4-6 Art. 581-12. Registration of Persons Selling. A. Except as
4-7 provided by Subsection B of this section and <in> Section 5 of this
4-8 Act, no person, firm, corporation or dealer shall, directly or
4-9 through agents or salesmen, offer for sale, sell or make a sale of
4-10 any securities in this state without first being registered as in
4-11 this Act provided. No salesman or agent shall, in behalf of any
4-12 dealer, sell, offer for sale, or make sale of any securities within
4-13 the state unless registered as a salesman or agent of a registered
4-14 dealer under the provisions of this Act.
4-15 B. Notwithstanding any other provision of this Act, a person
4-16 licensed under Article 9105, Revised Statutes, is not required to
4-17 register as a dealer, agent, or salesman to engage in a business
4-18 sale, as defined by Section 1 of that article.
4-19 SECTION 3. Section 3, The Real Estate License Act (Article
4-20 6573a, Vernon's Texas Civil Statutes), is amended to read as
4-21 follows:
4-22 Sec. 3. Exemptions. The provisions of this Act shall not
4-23 apply to any of the following persons and transactions, and each
4-24 and all of the following persons and transactions are hereby
4-25 exempted from the provisions of this Act:
4-26 (1) an attorney at law licensed in this state or in
4-27 any other state;
5-1 (2) an attorney in fact under a duly executed power of
5-2 attorney authorizing the consummation of a real estate transaction;
5-3 (3) a public official in the conduct of his official
5-4 duties;
5-5 (4) a person calling the sale of real estate by
5-6 auction under the authority of a license issued by this state
5-7 provided the person does not perform any other act of a real estate
5-8 broker or salesman as defined by this Act;
5-9 (5) a person acting under a court order or under the
5-10 authority of a will or a written trust instrument;
5-11 (6) a salesperson employed by an owner in the sale of
5-12 structures and land on which said structures are situated, provided
5-13 such structures are erected by the owner in the due course of his
5-14 business;
5-15 (7) an on-site manager of an apartment complex;
5-16 (8) transactions involving the sale, lease, or
5-17 transfer of any mineral or mining interest in real property;
5-18 (9) an owner or his employees in renting or leasing
5-19 his own real estate whether improved or unimproved;
5-20 (10) transactions involving the sale, lease, or
5-21 transfer of cemetery lots; <or>
5-22 (11) transactions involving the renting, leasing, or
5-23 management of hotels or motels; or
5-24 (12) a person licensed under Article 9105, Revised
5-25 Statutes, engaging in a business sale, as defined by Section 1 of
5-26 that article.
5-27 SECTION 4. This Act takes effect September 1, 1995, except
6-1 that Section 1 of this Act, to the extent it prohibits acting as a
6-2 business broker without a license, takes effect January 1, 1996.
6-3 SECTION 5. The importance of this legislation and the
6-4 crowded condition of the calendars in both houses create an
6-5 emergency and an imperative public necessity that the
6-6 constitutional rule requiring bills to be read on three several
6-7 days in each house be suspended, and this rule is hereby suspended.