1-1  By:  Wentworth                                        S.B. No. 1636
    1-2        (In the Senate - Filed April 4, 1995; April 6, 1995, read
    1-3  first time and referred to Committee on State Affairs;
    1-4  April 21, 1995, reported favorably by the following vote:  Yeas 11,
    1-5  Nays 0; April 21, 1995, sent to printer.)
    1-6                         A BILL TO BE ENTITLED
    1-7                                AN ACT
    1-8  relating to the regulation of the practice of selling real estate.
    1-9        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
   1-10        SECTION 1.  Subsections (b), (c), (d), and (e), Section 1,
   1-11  The Real Estate License Act (Article 6573a, Vernon's Texas Civil
   1-12  Statutes), are amended to read as follows:
   1-13        (b)  It is unlawful for a person to act in the capacity of,
   1-14  engage in the business of, or advertise or hold that person
   1-15  <himself> out as engaging in or conducting the business of a real
   1-16  estate broker or a real estate salesperson <salesman> within this
   1-17  state without first obtaining a real estate license from the Texas
   1-18  Real Estate Commission.  It is unlawful for a person licensed as a
   1-19  real estate salesperson <salesman> to act or attempt to act as a
   1-20  real estate broker or salesperson <salesman> unless that person
   1-21  <he> is, at such time, associated with a licensed Texas real estate
   1-22  broker and acting for the licensed real estate broker.
   1-23        (c)  Each real estate broker licensed pursuant to this Act is
   1-24  responsible to the commission, members of the public, and the
   1-25  broker's <his> clients for all acts and conduct performed under
   1-26  this Act by the broker <himself> or by a real estate salesperson
   1-27  <salesman> associated with or acting for the broker.
   1-28        (d)  No real estate salesperson <salesman> shall accept
   1-29  compensation for real estate sales and transactions from any person
   1-30  other than the broker under whom the salesperson <he> is at the
   1-31  time licensed or under whom the salesperson <he> was licensed when
   1-32  the salesperson <he> earned the right to compensation.
   1-33        (e)  No real estate salesperson <salesman> shall pay a
   1-34  commission to any person except through the broker under whom the
   1-35  salesperson <he> is at the time licensed.
   1-36        SECTION 2.  Subdivision (4), Section 2, The Real Estate
   1-37  License Act (Article 6573a, Vernon's Texas Civil Statutes), is
   1-38  amended to read as follows:
   1-39              (4)  "Real estate salesperson <salesman>" means a
   1-40  person associated with a Texas licensed real estate broker for the
   1-41  purposes of performing acts or transactions comprehended by the
   1-42  definition of "real estate broker" as defined in this Act.
   1-43        SECTION 3.  Section 3, The Real Estate License Act (Article
   1-44  6573a, Vernon's Texas Civil Statutes), is amended to read as
   1-45  follows:
   1-46        Sec. 3.  The provisions of this Act shall not apply to any of
   1-47  the following persons and transactions, and each and all of the
   1-48  following persons and transactions are hereby exempted from the
   1-49  provisions of this Act:
   1-50              (1)  an attorney at law licensed in this state or in
   1-51  any other state;
   1-52              (2)  an attorney in fact under a duly executed power of
   1-53  attorney authorizing the consummation of a real estate transaction;
   1-54              (3)  a public official in the conduct of that person's
   1-55  <his> official duties;
   1-56              (4)  a person calling the sale of real estate by
   1-57  auction under the authority of a license issued by this state
   1-58  provided the person does not perform any other act of a real estate
   1-59  broker or salesperson <salesman> as defined by this Act;
   1-60              (5)  a person acting under a court order or under the
   1-61  authority of a will or a written trust instrument;
   1-62              (6)  a salesperson employed by an owner in the sale of
   1-63  structures and land on which said structures are situated, provided
   1-64  such structures are erected by the owner in the due course of the
   1-65  owner's <his> business;
   1-66              (7)  an on-site manager of an apartment complex;
   1-67              (8)  transactions involving the sale, lease, or
   1-68  transfer of any mineral or mining interest in real property;
    2-1              (9)  an owner or the owner's <his> employees in renting
    2-2  or leasing the owner's <his> own real estate whether improved or
    2-3  unimproved;
    2-4              (10)  transactions involving the sale, lease, or
    2-5  transfer of cemetery lots; <or>
    2-6              (11)  transactions involving the renting, leasing, or
    2-7  management of hotels or motels;  or
    2-8              (12)  a person performing an appraisal of real estate
    2-9  or providing real estate services, regardless of whether in a
   2-10  federally related transaction, who is registered, licensed, or
   2-11  certified by the Texas Appraiser Licensing and Certification Board.
   2-12        SECTION 4.  Section 4, The Real Estate License Act (Article
   2-13  6573a, Vernon's Texas Civil Statutes), is amended to read as
   2-14  follows:
   2-15        Sec. 4.  A person who, directly or indirectly for another,
   2-16  with the intention or on the promise of receiving any valuable
   2-17  consideration, offers, attempts, or agrees to perform, or performs,
   2-18  a single act defined in Subdivisions 2 and 3, Section 2 of this
   2-19  Act, whether as a part of a transaction, or as an entire
   2-20  transaction, is deemed to be acting as a real estate broker or
   2-21  salesperson <salesman> within the meaning of this Act.  The
   2-22  commission of a single such act by a person required to be licensed
   2-23  under this Act and not so licensed shall constitute a violation of
   2-24  this Act.
   2-25        SECTION 5.  Subsections (a), (f), (g), (i), and (m), Section
   2-26  5, The Real Estate License Act (Article 6573a, Vernon's Texas Civil
   2-27  Statutes), are amended to read as follows:
   2-28        (a)  The administration of the provisions of this Act is
   2-29  vested in a commission, to be known as the "Texas Real Estate
   2-30  Commission," consisting of nine members to be appointed by the
   2-31  governor with the advice and consent of two-thirds of the senate
   2-32  present.  The commissioners hold office for staggered terms of six
   2-33  years with the terms of three members expiring January 31 of each
   2-34  odd-numbered year.  Each member holds office until the member's
   2-35  <his> successor is appointed and has qualified.  Within 15 days
   2-36  after <his> appointment, each member shall qualify by taking the
   2-37  constitutional oath of office and furnishing a bond payable to the
   2-38  Governor of Texas in the penal sum of $10,000, conditional on the
   2-39  faithful performance of the member's <his> duties as prescribed by
   2-40  law.  A vacancy for any cause shall be filled by the governor for
   2-41  the unexpired term.  The governor shall designate as chairperson
   2-42  <chairman> of the commission one member of the commission who is a
   2-43  licensed real estate broker.  The chairperson <chairman> serves in
   2-44  that capacity at the pleasure of the governor.  At a regular
   2-45  meeting in February of each year, the commission shall elect from
   2-46  its own membership a vice chairperson <vice-chairman> and
   2-47  secretary.  A quorum of the commission consists of five members.
   2-48        (f)  If the administrator has knowledge that a potential
   2-49  ground for removal exists, the administrator shall notify the
   2-50  chairperson <chairman> of the commission of the ground.  The
   2-51  chairperson <chairman> shall then notify the governor that a
   2-52  potential ground for removal exists.
   2-53        (g)  Each member of the commission shall receive as
   2-54  compensation for each day actually spent on the member's <his>
   2-55  official duties the sum of $75 and the <his> actual and necessary
   2-56  expenses incurred in the performance of the member's <his> official
   2-57  duties.
   2-58        (i)  The commission is empowered to select and name an
   2-59  administrator and to select and employ such other subordinate
   2-60  officers and employees as are necessary to administer this Act.
   2-61  The salaries of the administrator and the officers and employees
   2-62  shall be fixed by the commission not to exceed such amounts as are
   2-63  fixed by the applicable general appropriations bill.  The
   2-64  commission may designate a subordinate officer as assistant
   2-65  administrator who shall be authorized to act for the administrator
   2-66  in the administrator's <his> absence.  The administrator or the
   2-67  administrator's designee shall develop a system of annual
   2-68  performance evaluations.  All merit pay for commission employees
   2-69  must be based on the system established under this subsection.  The
   2-70  administrator or the administrator's designee shall develop an
    3-1  intraagency career ladder program.  The program shall require
    3-2  intraagency postings of all nonentry level positions concurrently
    3-3  with any public posting.
    3-4        (m)  Fifteen dollars received by the commission for a renewal
    3-5  of a broker license before the expiration of the license or before
    3-6  the first anniversary of the date the license expired and $7.50
    3-7  received by the commission for a renewal of a salesperson
    3-8  <salesman> license before the expiration of the license or before
    3-9  the first anniversary of the date the license expired shall be
   3-10  transmitted annually to Texas A&M University for deposit in a
   3-11  separate banking account.  The money in the separate account shall
   3-12  be expended for the support and maintenance of the Texas Real
   3-13  Estate Research Center and for carrying out the purposes,
   3-14  objectives, and duties of the center.  However, all money expended
   3-15  from the separate account shall be as determined by legislative
   3-16  appropriation.
   3-17        SECTION 6.  Subsections (a) and (b), Section 6, The Real
   3-18  Estate License Act (Article 6573a, Vernon's Texas Civil Statutes),
   3-19  are amended to read as follows:
   3-20        (a)  A person desiring to act as a real estate broker in this
   3-21  state shall file an application for a license with the commission
   3-22  on a form prescribed by the commission.  A broker desiring to
   3-23  engage a person to participate in real estate brokerage activity
   3-24  shall join the person in filing an application for a salesperson
   3-25  <salesman> license on a form prescribed by the commission.  A
   3-26  person previously licensed as a broker may apply for inactive
   3-27  status.  A person previously licensed as a salesperson <salesman>
   3-28  may apply for inactive status without the participation of a
   3-29  broker.  The person must apply for inactive status on a form
   3-30  prescribed by the commission not later than the fifth <first>
   3-31  anniversary of the date of the expiration of the broker or
   3-32  salesperson <salesman> license.
   3-33        (b)  To be eligible for a license, an individual must be a
   3-34  citizen of the United States or a lawfully admitted alien, be at
   3-35  least 18 years of age, and be a legal resident of Texas at the time
   3-36  of the filing of an application, and must satisfy the commission as
   3-37  to the individual's <his> honesty, trustworthiness, integrity, and
   3-38  competency.  However, the competency of the individual, for the
   3-39  purpose of qualifying for the granting of a license, shall be
   3-40  judged solely on the basis of the examination referred to in
   3-41  Section 7 of this Act.
   3-42        SECTION 7.  Subsection (a), Section 6A, The Real Estate
   3-43  License Act (Article 6573a, Vernon's Texas Civil Statutes), is
   3-44  amended to read as follows:
   3-45        (a)  If, at any time before a person applies for a license
   3-46  under this Act, the person requests the commission to determine
   3-47  whether the person's <his> moral character complies with the
   3-48  commission's moral character requirements for licensing under this
   3-49  Act and the person pays a fee set by the commission for the moral
   3-50  character determination, the commission shall make its
   3-51  determination of the person's moral character.
   3-52        SECTION 8.  Subsections (a), (c), (d), (e), (f), (g), (h),
   3-53  and (k), Section 7, The Real Estate License Act (Article 6573a,
   3-54  Vernon's Texas Civil Statutes), are amended to read as follows:
   3-55        (a)  Competency as referred to in Section 6 of this Act shall
   3-56  be established by an examination prepared by or contracted for by
   3-57  the commission.  The examination shall be given at such times and
   3-58  at such places within the state as the commission shall prescribe.
   3-59  The examination shall be of scope sufficient in the judgment of the
   3-60  commission to determine that a person is competent to act as a real
   3-61  estate broker or salesperson <salesman> in a manner to protect the
   3-62  interest of the public.  The examination for a salesperson
   3-63  <salesman> license shall be less exacting and less stringent than
   3-64  the examination for a broker license.  The commission shall furnish
   3-65  each applicant with study material and references on which the
   3-66  <his> examination shall be based.  When an applicant for a real
   3-67  estate license fails a qualifying examination, the applicant <he>
   3-68  may apply for reexamination by filing a request therefor together
   3-69  with the proper fee.  The examination requirement must be satisfied
   3-70  not later than six months after the date on which the application
    4-1  for a license is filed.  Courses of study required for a license
    4-2  may include but are not limited to the following, which shall be
    4-3  considered core real estate courses for all purposes of this Act:
    4-4              (1)  Principles of Real Estate (or equivalent) shall
    4-5  include but not be limited to an overview of licensing as a real
    4-6  estate broker and salesperson <salesman>, ethics of practice,
    4-7  titles to and conveyancing of real estate, legal descriptions, law
    4-8  of agency, deeds, encumbrances and liens, distinctions between
    4-9  personal and real property, contracts, appraisal, finance and
   4-10  regulations, closing procedures, real estate mathematics, and at
   4-11  least three classroom hours of instruction on federal, state, and
   4-12  local laws relating to housing discrimination, housing credit
   4-13  discrimination, and community reinvestment.
   4-14              (2)  Real Estate Appraisal (or equivalent) shall
   4-15  include but not be limited to the central purposes and functions of
   4-16  an appraisal, social and economic determinant of value, appraisal
   4-17  case studies, cost, market data and income approaches to value
   4-18  estimates, final correlations, and reporting.
   4-19              (3)  Real Estate Law (or equivalent) shall include but
   4-20  not be limited to legal concepts of real estate, land description,
   4-21  real property rights and estates in land, contracts, conveyances,
   4-22  encumbrances, foreclosures, recording procedures, and evidence of
   4-23  titles.
   4-24              (4)  Real Estate Finance (or equivalent) shall include
   4-25  but not be limited to monetary systems, primary and secondary money
   4-26  markets, sources of mortgage loans, federal government programs,
   4-27  loan applications, processes and procedures, closing costs,
   4-28  alternative financial instruments, equal credit opportunity acts,
   4-29  community reinvestment act, and state housing agency.
   4-30              (5)  Real Estate Marketing (or equivalent) shall
   4-31  include but not be limited to real estate professionalism and
   4-32  ethics, characteristics of successful salespersons <salesmen>, time
   4-33  management, psychology of marketing, listing procedures,
   4-34  advertising, negotiating and closing, financing, and the Deceptive
   4-35  Trade Practices-Consumer Protection Act, as amended, Section 17.01
   4-36  et seq., Business & Commerce Code.
   4-37              (6)  Real Estate Mathematics (or equivalent) shall
   4-38  include but not be limited to basic arithmetic skills and review of
   4-39  mathematical logic, percentages, interest, time-valued money,
   4-40  depreciation, amortization, proration, and estimation of closing
   4-41  statements.
   4-42              (7)  Real Estate Brokerage (or equivalent) shall
   4-43  include but not be limited to law of agency, planning and
   4-44  organization, operational policies and procedures, recruiting,
   4-45  selection and training of personnel, records and control, and real
   4-46  estate firm analysis and expansion criteria.
   4-47              (8)  Property Management (or equivalent) shall include
   4-48  but not be limited to role of property manager, landlord policies,
   4-49  operational guidelines, leases, lease negotiations, tenant
   4-50  relations, maintenance, reports, habitability laws, and the Fair
   4-51  Housing Act.
   4-52              (9)  Real Estate Investments (or equivalent) shall
   4-53  include but not be limited to real estate investment
   4-54  characteristics, techniques of investment analysis, time-valued
   4-55  money, discounted and nondiscounted investment criteria, leverage,
   4-56  tax shelters depreciation, and applications to property tax.
   4-57              (10)  Law of Agency (or equivalent) shall include but
   4-58  not be limited to the principal-agent and master-servant
   4-59  relationships, the authority of an agent, the termination of an
   4-60  agent's authority, the fiduciary and other duties of an agent,
   4-61  employment law, deceptive trade practices, listing or buying
   4-62  representation procedures, and the disclosure of agency.
   4-63        (c)  The commission shall waive the examination of an
   4-64  applicant for a broker license who has, within two years <one year>
   4-65  previous to the filing of the <his> application, been licensed in
   4-66  this state as a broker, and shall waive the examination of an
   4-67  applicant for a salesperson <salesman> license who has, within two
   4-68  years <one year> previous to the filing of the <his> application,
   4-69  been licensed in this state as either a broker or salesperson
   4-70  <salesman>.  If an application is filed after the second
    5-1  anniversary of the expiration date of the applicant's previous
    5-2  license, the applicant must satisfy the examination requirement and
    5-3  any continuing education required under Section 7A(b) of this Act.
    5-4  If an application is filed after the fifth anniversary of the
    5-5  expiration date of the applicant's previous license, the applicant
    5-6  must satisfy the experience, examination, and education
    5-7  requirements for an original license under this Act.
    5-8        (d)  Each applicant for a broker license shall furnish the
    5-9  commission satisfactory evidence that the applicant <he> has had
   5-10  not less than two years active experience in this state as a
   5-11  licensed real estate salesperson <salesman> or broker during the
   5-12  seven-year <36-month> period immediately preceding the filing of
   5-13  the application; and, in addition, shall furnish the commission
   5-14  satisfactory evidence of having completed successfully 60 semester
   5-15  hours, or equivalent classroom hours, of core real estate courses
   5-16  or related postsecondary education courses accepted by the
   5-17  commission.  These qualifications for a broker license may not be
   5-18  required of an applicant who, at the time of making the
   5-19  application, is duly licensed as a real estate broker by any other
   5-20  state in the United States if that state's requirements for
   5-21  licensure are comparable to those of Texas.  As a prerequisite for
   5-22  applying for a broker license, those persons licensed as
   5-23  salespersons <salesmen> subject to the annual education
   5-24  requirements provided by Subsection (e) of this section shall, as
   5-25  part of the hours required by this subsection, furnish the
   5-26  commission satisfactory evidence of having completed all the
   5-27  requirements of Subsection (e) of this section.
   5-28        (e)  Each applicant for a salesperson <salesman> license
   5-29  shall furnish the commission satisfactory evidence of having
   5-30  completed 12 semester hours, or equivalent classroom hours, of
   5-31  postsecondary education, six hours of which must be completed in
   5-32  core real estate courses, of which a minimum of two hours must be
   5-33  completed in Principles of Real Estate as described in Subsection
   5-34  (a)(1) of this section and a minimum of two hours must be completed
   5-35  in Law of Agency as described in Subsection (a)(10) of this
   5-36  section.  The remaining six hours shall be completed in core real
   5-37  estate courses or related courses.  As a condition for the first
   5-38  renewal of a salesperson <salesman> license, the applicant shall
   5-39  furnish the commission satisfactory evidence of having completed a
   5-40  minimum of 14 semester hours, or equivalent classroom hours, eight
   5-41  hours of which must be completed in core real estate courses.  As a
   5-42  condition for the second renewal of a salesperson <salesman>
   5-43  license, the applicant shall furnish the commission satisfactory
   5-44  evidence of having completed a minimum of 16 semester hours, or
   5-45  equivalent classroom hours, 10 hours of which must be completed in
   5-46  core real estate courses.  As a condition for the third renewal of
   5-47  a salesperson <salesman> license, the applicant shall furnish the
   5-48  commission satisfactory evidence of having completed a minimum of
   5-49  18 semester hours, or equivalent classroom hours, 12 hours of which
   5-50  must be completed in core real estate courses.
   5-51        (f)  Insofar as is necessary for the administration of this
   5-52  Act, the commission is authorized to inspect and accredit
   5-53  educational programs or courses of study in real estate and real
   5-54  estate inspection and to establish standards of accreditation for
   5-55  such programs conducted in the State of Texas, other than
   5-56  accredited colleges and universities.  The commission shall
   5-57  determine the acceptability of real estate courses and real estate
   5-58  inspection courses offered to satisfy the requirements of this Act,
   5-59  and by rule may provide reasonable criteria for the approval of
   5-60  those courses.  Schools, other than accredited colleges and
   5-61  universities, which are authorized to offer real estate educational
   5-62  courses pursuant to provisions of this section, shall be required
   5-63  to maintain a corporate surety bond, or other security acceptable
   5-64  to the commission, in the sum of $10,000, payable to the
   5-65  commission, for the benefit of a party who may suffer damages
   5-66  resulting from failure of a commission approved school or course to
   5-67  fulfill obligations attendant to the approval.  The commission by
   5-68  rule may provide for the reapplication by and reaccreditation of a
   5-69  school accredited by the commission before September 1, 1995, and
   5-70  may collect a reasonable filing fee to implement this section.  A
    6-1  fee collected under this subsection may not exceed $400 for an
    6-2  application for the reaccreditation of a school and $100 for an
    6-3  application for the approval of a course of study.
    6-4        (g)  Notwithstanding any other provision of this Act, each
    6-5  applicant for a broker license shall furnish the commission with
    6-6  satisfactory evidence:
    6-7              (1)  that the applicant <he> has satisfied the
    6-8  requirements of Subsection (d) of this section;
    6-9              (2)  that the applicant <he> is a licensed real estate
   6-10  broker in another state, <that he> has had not less than two years'
   6-11  active experience in the other state as a licensed real estate
   6-12  salesperson <salesman> or broker during the seven-year <36-month>
   6-13  period immediately preceding the filing of the application, and
   6-14  <that he> has satisfied the educational requirements for a broker
   6-15  license as provided by Subsection (d) of this section; or
   6-16              (3)  that the applicant <he> has, within five years
   6-17  <one year> previous to the filing of the <his> application, been
   6-18  licensed in this state as a broker.
   6-19        (h)  Notwithstanding any other provision of this Act, the
   6-20  commission shall waive the requirements of Subsection (e) of this
   6-21  section for an applicant for a salesperson <salesman> license who
   6-22  has, within five years <one year> previous to the filing of the
   6-23  <his> application, been licensed in this state as a broker or
   6-24  salesperson <salesman>.  However, with respect to an applicant for
   6-25  a salesperson <salesman> license who was licensed as a salesperson
   6-26  <salesman> within five years <one year> previous to the filing of
   6-27  the application but whose original license was issued under the
   6-28  provisions that the first, second, and third renewal of the license
   6-29  would be conditioned upon furnishing satisfactory evidence of
   6-30  successful completion of additional education, the commission shall
   6-31  require the applicant to furnish satisfactory evidence of
   6-32  successful completion of any additional education that would have
   6-33  been required if the license had been maintained without
   6-34  interruption <during the previous year>.
   6-35        (k)  The commission may accept examinations administered by a
   6-36  testing service as satisfying the examination requirements imposed
   6-37  under this Act.  The commission may negotiate agreements with those
   6-38  testing services relating to examination development, preparation
   6-39  of study materials, collection of filing fees, acceptance and
   6-40  processing of license applications, test scheduling, examination
   6-41  site arrangements, and test administration, grading, reporting, and
   6-42  analysis.  The commission may require a testing service to
   6-43  correspond directly with the license applicants regarding the
   6-44  administration of the examinations and may require that a testing
   6-45  service collect fees for providing an applicant with study
   6-46  materials, filing an application for a license, processing license
   6-47  applications, or administering the examinations directly from the
   6-48  applicants.  The commission also may require a testing service to
   6-49  administer examinations at specific locations and specified
   6-50  frequencies.  The commission shall retain the authority to
   6-51  establish the scope and type of all examinations.  The commission
   6-52  shall adopt rules and standards as necessary to implement this
   6-53  section.  In the absence of an agreement with a testing service,
   6-54  the commission shall administer any required qualifying examination
   6-55  in accordance with this Act.
   6-56        SECTION 9.  Subsections (a), (b), (c), and (d), Section 7A,
   6-57  The Real Estate License Act (Article 6573a, Vernon's Texas Civil
   6-58  Statutes), are amended to read as follows:
   6-59        (a)  To renew an active real estate broker license or an
   6-60  active real estate salesperson <salesman> license that is not
   6-61  subject to the annual education requirements of this Act, the
   6-62  licensee must provide the commission proof of attendance at at
   6-63  least 15 classroom hours of continuing education courses approved
   6-64  by the commission during the term of the current license.  The
   6-65  commission by rule may provide for the substitution of relevant
   6-66  educational experience or correspondence courses approved by the
   6-67  commission instead of classroom attendance.  In addition,
   6-68  supervised video instruction may be approved by the commission as a
   6-69  course counting as classroom hours of mandatory continuing
   6-70  education.  At least six hours of instruction must be devoted to
    7-1  the rules of the commission, fair housing laws, agency laws,
    7-2  antitrust laws, the Deceptive Trade Practices-Consumer Protection
    7-3  Act (Subchapter E, Chapter 17, Business & Commerce Code),
    7-4  disclosures to buyers and sellers, current contract and addendum
    7-5  forms, the unauthorized practice of law, case studies involving
    7-6  violations of laws and regulations, current Federal Housing
    7-7  Administration and Veterans Administration regulations, tax laws,
    7-8  and other legal topics approved by the commission.  The remaining
    7-9  hours may be devoted to other real estate-related topics approved
   7-10  by the commission.  The commission may consider equivalent courses
   7-11  for continuing education credit.  The commission, on the request of
   7-12  a provider of education, shall review a core real estate course
   7-13  authorized under Section 7 of this Act and may approve it as a
   7-14  mandatory continuing education course.  Real estate related courses
   7-15  approved by the State Bar of Texas for minimum continuing legal
   7-16  education participatory credit and core real estate courses under
   7-17  Section 7(a) of this Act shall automatically be approved as
   7-18  mandatory continuing education courses under this Act.  The
   7-19  commission may not require examinations except for correspondence
   7-20  courses.  Daily course segments must be at least three hours long
   7-21  but not more than 10 hours long.  <If the license being renewed
   7-22  under this section was issued for less than two years, the licensee
   7-23  must provide the commission proof of attendance at at least eight
   7-24  classroom hours of continuing education within the term of the
   7-25  current license, three classroom hours of which must have been
   7-26  devoted to the legal topics specified in this section.>
   7-27        (b)  An applicant for an active real estate broker license or
   7-28  an active real estate salesperson <salesman> license who is not
   7-29  subject to the education requirements of Section 7 of this Act must
   7-30  provide the commission with proof of attendance of the number of
   7-31  classroom hours of continuing education that would have been
   7-32  required for a timely renewal as specified in Subsection (a) of
   7-33  this section during the two-year period preceding the filing of the
   7-34  application.
   7-35        (c)  As a condition of returning to active status, an
   7-36  inactive salesperson <salesman> whose license is not subject to the
   7-37  annual education requirements of this Act must provide the
   7-38  commission with proof of attendance at at least 15 hours of
   7-39  continuing education as specified in Subsection (a) of this section
   7-40  during the two-year period preceding the filing of the application.
   7-41        (d)  The commission may adopt rules and set and collect
   7-42  reasonable fees to implement this section, including a fee not to
   7-43  exceed $400 for an application for approval of a provider of
   7-44  continuing education and a fee not to exceed $100 for an
   7-45  application for a course of study to be offered for continuing
   7-46  education.  If the commission determines that an applicant
   7-47  satisfies the requirements of this section and any rules adopted by
   7-48  the commission under this section, the commission may authorize a
   7-49  provider to offer continuing education for a period of four <two>
   7-50  years or authorize the offering of a course of study for a period
   7-51  of two years.
   7-52        SECTION 10.  Section 8, The Real Estate License Act (Article
   7-53  6573a, Vernon's Texas Civil Statutes), is amended by amending
   7-54  Subsections (a), (b), (c), (d), (e), (f), (h), (i), (j), (l), (n),
   7-55  and (q) and by adding Subsection (r) to read as follows:
   7-56        (a)  The commission shall establish a real estate recovery
   7-57  fund which shall be set apart and maintained by the commission as
   7-58  provided in this section.  The fund shall be used in the manner
   7-59  provided in this section for reimbursing aggrieved persons who
   7-60  suffer actual damages by reason of certain acts committed by a duly
   7-61  licensed real estate broker or salesperson <salesman>, or by an
   7-62  unlicensed employee or agent of a broker or salesperson <salesman>,
   7-63  provided the broker or salesperson <salesman> was licensed by the
   7-64  State of Texas at the time the act was committed and provided
   7-65  recovery is ordered by a court of competent jurisdiction against
   7-66  the broker or salesperson <salesman>.  The use of the fund is
   7-67  limited to an act that constitutes a violation of Section 15(a)(3)
   7-68  or (6) of this Act.
   7-69        (b)  On application for an original license pursuant to this
   7-70  Act, the applicant shall pay, in addition to the <his> original
    8-1  license application fee, a fee of $10 which shall be deposited in
    8-2  the real estate recovery fund.
    8-3        (c)  If on December 31 of any year the balance remaining in
    8-4  the real estate recovery fund is less than $1 million, each real
    8-5  estate broker and each real estate salesperson <salesman>, on the
    8-6  next renewal of the <his> license, shall pay, in addition to the
    8-7  <his> license renewal fee, a fee of $10, which shall be deposited
    8-8  in the real estate recovery fund, or a pro rata share of the amount
    8-9  necessary to bring the fund to $1.7 million, whichever is less.  If
   8-10  on December 31 of any year the balance remaining in the real estate
   8-11  recovery fund is more than $3.5 million or more than the total
   8-12  amount of claims paid from the fund during the previous four fiscal
   8-13  years, whichever is greater, the amount of money in excess of the
   8-14  greater amount shall be transferred to the general revenue fund.
   8-15        (d)  No action for a judgment which subsequently results in
   8-16  an order for collection from the real estate recovery fund shall be
   8-17  started later than two years from the accrual of the cause of
   8-18  action.  When an aggrieved person commences action for a judgment
   8-19  which may result in collection from the real estate recovery fund,
   8-20  the real estate broker or real estate salesperson <salesman> shall
   8-21  notify the commission in writing to this effect at the time of the
   8-22  commencement of the action.
   8-23        (e)  When an aggrieved person recovers a valid judgment in a
   8-24  court of competent jurisdiction against a real estate broker or
   8-25  real estate salesperson <salesman>, on the grounds described in
   8-26  Subsection (a) of this section that occurred on or after May 19,
   8-27  1975, the aggrieved person may, after final judgment has been
   8-28  entered, execution returned nulla bona, and a judgment lien
   8-29  perfected, file a verified claim in the court in which the judgment
   8-30  was entered and, on 20 days' written notice to the commission, and
   8-31  to the judgment debtor, may apply to the court for an order
   8-32  directing payment out of the real estate recovery fund of the
   8-33  amount unpaid on the judgment, subject to the limitations stated in
   8-34  Subsection (n) of this section.
   8-35        (f)  The court shall proceed on the application forthwith.
   8-36  On the hearing on the application, the aggrieved person is required
   8-37  to show that:
   8-38              (1)  the judgment is based on facts allowing recovery
   8-39  under Subsection (a) of this section;
   8-40              (2)  the person <he> is not a spouse of the debtor, or
   8-41  the personal representative of the spouse; and the person <he> is
   8-42  not a real estate broker or salesperson <salesman>, as defined by
   8-43  this Act, who is seeking to recover a real estate commission in the
   8-44  transaction or transactions for which the application for payment
   8-45  is made;
   8-46              (3)  the person <he> has obtained a judgment under
   8-47  Subsection (e) of this section that is not subject to a stay or
   8-48  discharge in bankruptcy and has been judicially determined to be
   8-49  nondischargeable in a pending bankruptcy, stating the amount of the
   8-50  judgment and the amount owing on the judgment at the date of the
   8-51  application;
   8-52              (4)  based on the best available information, the
   8-53  judgment debtor lacks sufficient attachable assets in this state or
   8-54  any other state to satisfy the judgment; and
   8-55              (5)  the amount that may be realized from the sale of
   8-56  real or personal property or other assets liable to be sold or
   8-57  applied in satisfaction of the judgment and the balance remaining
   8-58  due on the judgment after application of the amount that may be
   8-59  realized.
   8-60        (h)  The court shall make an order directed to the commission
   8-61  requiring payment from the real estate recovery fund of whatever
   8-62  sum it finds to be payable on the claim, pursuant to and in
   8-63  accordance with the limitations contained in this section, if the
   8-64  court is satisfied, on the hearing, of the truth of all matters
   8-65  required to be shown by the aggrieved person by Subsection (f) of
   8-66  this section and that the aggrieved person has satisfied all of the
   8-67  requirements of Subsections (e) and (f) of this section.  The
   8-68  commission may relitigate any issue material and relevant in the
   8-69  hearing on the application that was determined in the underlying
   8-70  action on which the judgment in favor of the applicant was based.
    9-1  If the court finds that the aggregate amount of claims against a
    9-2  real estate broker or salesperson <salesman> exceeds the
    9-3  limitations contained in this section, the court shall reduce
    9-4  proportionately the amount it finds payable on the claim.
    9-5        (i)  A license granted under the provisions of this Act may
    9-6  be revoked by the commission on proof that the commission has made
    9-7  a payment from the real estate recovery fund of any amount toward
    9-8  satisfaction of a judgment against a licensed real estate broker or
    9-9  salesperson <salesman>.  The commission may probate an order
   9-10  revoking a license.  No broker or salesperson <salesman> is
   9-11  eligible to receive a new license until the broker or salesperson
   9-12  <he> has repaid in full, plus interest at the current legal rate,
   9-13  the amount paid from the real estate recovery fund on the broker's
   9-14  or salesperson's <his> account.
   9-15        (j)  The sums received by the real estate commission for
   9-16  deposit in the real estate recovery fund shall be held by the
   9-17  commission in trust for carrying out the purposes of the real
   9-18  estate recovery fund.  Subject to legislative appropriation, money
   9-19  in the fund may be used by the commission to pay the expenses
   9-20  involved in collecting judgments assigned to the commission.  These
   9-21  funds may be invested and reinvested in the same manner as funds of
   9-22  the Texas State Employees Retirement System, and the interest from
   9-23  these investments shall be deposited to the credit of the real
   9-24  estate recovery fund, provided, however, that no investments shall
   9-25  be made which will impair the necessary liquidity required to
   9-26  satisfy judgment payments awarded pursuant to this section.
   9-27        (l)  When, on the order of the court, the commission has paid
   9-28  from the real estate recovery fund any sum to the judgment
   9-29  creditor, the commission shall be subrogated to all of the rights
   9-30  of the judgment creditor to the extent of the amount paid.  The
   9-31  judgment creditor shall assign all of the creditor's <his> right,
   9-32  title, and interest in the judgment up to the amount paid by the
   9-33  commission which amount shall have priority for repayment in the
   9-34  event of any subsequent recovery on the judgment.  Any amount and
   9-35  interest recovered by the commission on the judgment shall be
   9-36  deposited to the fund.
   9-37        (n)  Notwithstanding any other provision, payments from the
   9-38  real estate recovery fund are subject to the following conditions
   9-39  and limitations:
   9-40              (1)  payments may be made only pursuant to an order of
   9-41  a court of competent jurisdiction, as provided in Subsection (e) of
   9-42  this section, and in the manner prescribed by this section;
   9-43              (2)  payments for claims, including attorneys' fees,
   9-44  interest, and court costs, arising out of the same transaction
   9-45  shall be limited in the aggregate to $50,000 regardless of the
   9-46  number of claimants; and
   9-47              (3)  payments for claims based on judgments against any
   9-48  one licensed real estate broker or salesperson <salesman> may not
   9-49  exceed in the aggregate $100,000 until the fund has been reimbursed
   9-50  by the licensee for all amounts paid.
   9-51        (q)  A broker or salesperson <salesman> licensed under this
   9-52  Act shall notify consumers and service recipients of the
   9-53  availability of the real estate recovery fund established under
   9-54  this section for reimbursing certain aggrieved persons.  The notice
   9-55  must include the name, mailing address, and telephone number of the
   9-56  commission and any other information required by commission rule.
   9-57  The notification may be provided with the notice required by
   9-58  Section 5(q) of this Act or:
   9-59              (1)  on a written contract for the services of a broker
   9-60  or salesperson <salesman>;
   9-61              (2)  on a brochure distributed by a broker or
   9-62  salesperson <salesman>;
   9-63              (3)  on a sign prominently displayed in the place of
   9-64  business of a salesperson <salesman> or broker; or
   9-65              (4)  in a bill or receipt for service provided by a
   9-66  broker or salesperson <salesman>.
   9-67        (r)  If the commission is notified before making a payment
   9-68  from the real estate recovery fund that a judgment debtor has
   9-69  initiated a bankruptcy proceeding involving a judgment that the
   9-70  commission has been ordered to pay, the commission may move for an
   10-1  order to withdraw the order directing the commission to make the
   10-2  payment pending a judicial determination in the bankruptcy
   10-3  proceeding that the judgment is not dischargeable.  A court shall
   10-4  grant the commission's motion on presentation by the commission of
   10-5  proof that the bankruptcy proceeding involving the judgment debtor
   10-6  was initiated by the judgment debtor.
   10-7        SECTION 11.  Subsections (a), (b), and (e), Section 9, The
   10-8  Real Estate License Act (Article 6573a, Vernon's Texas Civil
   10-9  Statutes), are amended to read as follows:
  10-10        (a)  When an applicant has satisfactorily met all
  10-11  requirements and conditions of this Act, a license shall be issued
  10-12  which may remain in force and effect so long as the holder of the
  10-13  license remains in compliance with the obligations of this Act,
  10-14  which include payment of the renewal fee as provided in Section 11
  10-15  of this Act.  Each active salesperson <salesman> license issued
  10-16  shall be delivered or mailed to the broker with whom the
  10-17  salesperson <salesman> is associated and shall be kept under the
  10-18  broker's <his> custody and control.
  10-19        (b)  An applicant is not permitted to engage in the real
  10-20  estate business either as a broker or salesperson <salesman> until
  10-21  a license evidencing the applicant's <his> authority to engage in
  10-22  the real estate business has been received.
  10-23        (e)  The commission shall require in any application for a
  10-24  broker or salesperson <salesman> license or a renewal of a broker
  10-25  or salesperson <salesman> license the applicant to disclose whether
  10-26  the applicant has entered a plea of guilty or nolo contendere to,
  10-27  been found guilty of, or been convicted of a felony and the time
  10-28  for appeal has elapsed or the judgment or conviction has been
  10-29  affirmed on appeal, irrespective of an order granting probation
  10-30  following the conviction or suspending the imposition of sentence.
  10-31        SECTION 12.  Subsection (a), Section 10, The Real Estate
  10-32  License Act (Article 6573a, Vernon's Texas Civil Statutes), is
  10-33  amended to read as follows:
  10-34        (a)  If the commission declines or fails to license an
  10-35  applicant, it shall immediately give written notice of the refusal
  10-36  to the applicant.  Before the applicant may appeal to a district
  10-37  court as provided in Section 18 of this Act, the applicant <he>
  10-38  must file within 10 days after the receipt of the notice an appeal
  10-39  from the ruling, requesting a time and place for a hearing before
  10-40  the commission.  The commission shall set a time and place for the
  10-41  hearing within 30 days from the receipt of the appeal, giving 10
  10-42  days' notice of the hearing to the applicant.  The time of the
  10-43  hearing may be continued from time to time with the consent of the
  10-44  applicant.  Following the hearing, the commission shall enter an
  10-45  order which is, in its opinion, appropriate in the matter
  10-46  concerned.
  10-47        SECTION 13.  Section 11, The Real Estate License Act (Article
  10-48  6573a, Vernon's Texas Civil Statutes), is amended to read as
  10-49  follows:
  10-50        Sec. 11.  <(a)>  The commission shall charge and collect the
  10-51  following fees:
  10-52              (1)  a fee not to exceed $100 for the filing of an
  10-53  original application for a real estate broker license;
  10-54              (2)  a fee not to exceed $100 for annual renewal of a
  10-55  real estate broker license;
  10-56              (3)  a fee not to exceed $50 for the filing of an
  10-57  original application for a real estate salesperson <salesman>
  10-58  license;
  10-59              (4)  a fee not to exceed $50 for annual renewal of a
  10-60  real estate salesperson <salesman> license;
  10-61              (5)  a fee not to exceed $25 for an application for a
  10-62  license examination;
  10-63              (6)  a fee not to exceed $20 for filing a request for a
  10-64  license for each additional office or place of business;
  10-65              (7)  a fee not to exceed $20 for filing a request for a
  10-66  license for a change of place of business, change of name, return
  10-67  to active status, or change of sponsoring broker;
  10-68              (8)  a fee not to exceed $20 for filing a request to
  10-69  replace a license lost or destroyed;
  10-70              (9)  a fee not to exceed $400 for filing an application
   11-1  for approval of an education program under Section 7(f) of this
   11-2  Act;
   11-3              (10)  a fee not to exceed $200 a year for operation of
   11-4  an education program under Section 7(f) of this Act;
   11-5              (11)  a fee of $15 for transcript evaluation;
   11-6              (12)  a fee not to exceed $10 for preparing a license
   11-7  history; and
   11-8              (13)  a fee not to exceed $50 for the filing of an
   11-9  application for a moral character determination.
  11-10        SECTION 14.  Subsections (a), (b), and (d), Section 12, The
  11-11  Real Estate License Act (Article 6573a, Vernon's Texas Civil
  11-12  Statutes), are amended to read as follows:
  11-13        (a)  Each resident broker shall maintain a fixed office
  11-14  within this state.  The address of the office shall be designated
  11-15  on the broker's license.  Within 10 days after a move from a
  11-16  previously designated address, the broker shall submit an
  11-17  application for a new license, designating the new location of the
  11-18  broker's <his> office, together with the required fee, whereupon
  11-19  the commission shall issue a license, reflecting the new location,
  11-20  provided the new location complies with the terms of this section.
  11-21        (b)  If a broker maintains more than one place of business
  11-22  within this state, the broker <he> shall apply for, pay the
  11-23  required fee for, and obtain an additional license to be known as a
  11-24  branch office license for each additional office the broker <he>
  11-25  maintains.
  11-26        (d)  Each broker shall also prominently display in the
  11-27  broker's <his> place or in one of the broker's <his> places of
  11-28  business the license of each real estate salesperson <salesman>
  11-29  associated with the broker <him>.
  11-30        SECTION 15.  Section 13, The Real Estate License Act (Article
  11-31  6573a, Vernon's Texas Civil Statutes), is amended to read as
  11-32  follows:
  11-33        Sec. 13.  (a)  When the association of a salesperson
  11-34  <salesman> with the salesperson's <his> sponsoring broker is
  11-35  terminated, the broker shall immediately return the salesperson
  11-36  <salesman> license to the commission.  The salesperson <salesman>
  11-37  license then becomes inactive.
  11-38        (b)  The salesperson <salesman> license may be activated if,
  11-39  before the license expires, a request, accompanied by the required
  11-40  fee, is filed with the commission by a licensed broker advising
  11-41  that the broker <he> assumes sponsorship of the salesperson
  11-42  <salesman>.
  11-43        SECTION 16.  Subsection (a), Section 13A, The Real Estate
  11-44  License Act (Article 6573a, Vernon's Texas Civil Statutes), is
  11-45  amended to read as follows:
  11-46        (a)  A real estate broker who holds a license issued under
  11-47  this Act and who is not acting as a broker or sponsoring a
  11-48  salesperson <salesman> may apply to the commission in writing to be
  11-49  placed on the inactive status list maintained by the commission.
  11-50  The broker must apply for inactive status before the expiration of
  11-51  the broker's license.  The broker shall terminate the broker's
  11-52  association with any salesperson <salesmen> sponsored by the broker
  11-53  by giving written notice to the salesperson <salesmen> before the
  11-54  30th day before the date the broker applies for inactive status.  A
  11-55  person on inactive status under this section is required to pay the
  11-56  annual renewal fees.
  11-57        SECTION 17.  Section 14, The Real Estate License Act (Article
  11-58  6573a, Vernon's Texas Civil Statutes), is amended to read as
  11-59  follows:
  11-60        Sec. 14.  (a)  It is unlawful for a licensed broker to employ
  11-61  or compensate directly or indirectly a person for performing an act
  11-62  enumerated in the definition of real estate broker in Section 2 of
  11-63  this Act if the person is not a licensed broker or licensed
  11-64  salesperson <salesman> in this state.  However, a licensed broker
  11-65  may pay a commission to a licensed broker of another state if the
  11-66  foreign broker does not conduct in this state any of the
  11-67  negotiations for which the fee, compensation, or commission is
  11-68  paid.
  11-69        (b)  A resident broker of another state who furnishes the
  11-70  evidence required under Section 7(g) of this Act may apply for a
   12-1  license as a broker in this state.  A resident of another state who
   12-2  is not licensed as a broker but who was formerly licensed as a
   12-3  salesperson <salesman> or broker in this state may apply for a
   12-4  license in this state not later than the fifth <first> anniversary
   12-5  of the date of the expiration of the previous license.  An
   12-6  application by a nonresident is subject to the requirements under
   12-7  this Act for the type of license applied for.  A nonresident
   12-8  licensee need not maintain a place of business in this state.  The
   12-9  commission may in its discretion refuse to issue a license to an
  12-10  applicant who is not a resident of this state for the same reasons
  12-11  that it may refuse to license a resident of this state.  The
  12-12  commission shall judge the competency of a nonresident applicant
  12-13  solely on the basis of the examination conducted under Section 7 of
  12-14  this Act.
  12-15        (c)  Each nonresident applicant shall file an irrevocable
  12-16  consent that legal actions may be commenced against the applicant
  12-17  <him> in the proper court of any county of this state in which a
  12-18  cause of action may arise, or in which the plaintiff may reside, by
  12-19  service of process or pleading authorized by the laws of this
  12-20  state, or by serving the administrator or assistant administrator
  12-21  of the commission.  The consent shall stipulate that the service of
  12-22  process or pleading shall be valid and binding in all courts as if
  12-23  personal service had been made on the nonresident in this state.
  12-24  The consent shall be duly acknowledged, and if made by a
  12-25  corporation, shall be authenticated by its seal.  A service of
  12-26  process or pleading served on the commission shall be by duplicate
  12-27  copies, one of which shall be filed in the office of the commission
  12-28  and the other forwarded by registered mail to the last known
  12-29  principal address which the commission has for the nonresident
  12-30  against whom the process or pleading is directed.  No default in an
  12-31  action may be taken except on certification by the commission that
  12-32  a copy of the process or pleading was mailed to the defendant as
  12-33  provided in this section, and no default judgment may be taken in
  12-34  an action or proceeding until 20 days after the day of mailing of
  12-35  the process or pleading to the defendant.
  12-36        Notwithstanding any other provision of this subsection, a
  12-37  nonresident of this state who resides in a city whose boundaries
  12-38  are contiguous at any point to the boundaries of a city of this
  12-39  state, and who has been an actual bona fide resident of that city
  12-40  for at least 60 days immediately preceding the filing of the
  12-41  person's <his> application, is eligible to be licensed as a real
  12-42  estate broker or salesperson <salesman> under this Act in the same
  12-43  manner as a resident of this state.  If a person <he> is licensed
  12-44  in this manner, the person <he> shall at all times maintain a place
  12-45  of business either in the city in which the person <he> resides or
  12-46  in the city in this state which is contiguous to the city in which
  12-47  the person <he> resides, and the person <he> may not maintain a
  12-48  place of business at another location in this state unless the
  12-49  person <he> also complies with the requirements of Section 14(b) of
  12-50  this Act.  The place of business must satisfy the requirements of
  12-51  Subsection (a) of Section 12 of this Act, but the place of business
  12-52  shall be deemed a definite place of business in this state within
  12-53  the meaning of Subsection (a) of Section 12.
  12-54        SECTION 18.  Subsections (a) and (d), Section 15, The Real
  12-55  Estate License Act (Article 6573a, Vernon's Texas Civil Statutes),
  12-56  are amended to read as follows:
  12-57        (a)  The commission may, on its own motion, and shall, on the
  12-58  signed complaint in writing of any person <a consumer or service
  12-59  recipient>, provided the complaint, or the complaint together with
  12-60  evidence, documentary or otherwise, presented in connection with
  12-61  the complaint, provides reasonable cause, investigate the actions
  12-62  and records of a real estate broker or real estate salesperson
  12-63  <salesman>.  The commission may suspend or revoke a license issued
  12-64  under the provisions of this Act at any time when it has been
  12-65  determined that:
  12-66              (1)  the licensee has entered a plea of guilty or nolo
  12-67  contendere to, or been found guilty of, or been convicted of, a
  12-68  felony, in which fraud is an essential element, and the time for
  12-69  appeal has elapsed or the judgment or conviction has been affirmed
  12-70  on appeal, irrespective of an order granting probation following
   13-1  such conviction, suspending the imposition of sentence;
   13-2              (2)  the licensee has procured, or attempted to
   13-3  procure, a real estate license, for the licensee <himself> or
   13-4  another person <a salesman>, by fraud, misrepresentation or deceit,
   13-5  or by making a material misstatement of fact in an application for
   13-6  a real estate license;
   13-7              (3)  the licensee, when selling, buying, trading, or
   13-8  renting real property on the licensee's <in his> own account
   13-9  <name>, engaged in misrepresentation or dishonest or fraudulent
  13-10  action;
  13-11              (4)  the licensee has failed within a reasonable time
  13-12  to make good a check issued to the commission after the commission
  13-13  has mailed a request for payment by certified mail to the
  13-14  licensee's last known business address as reflected by the
  13-15  commission's records;
  13-16              (5)  the licensee has disregarded or violated a
  13-17  provision of this Act;
  13-18              (6)  the licensee, while performing an act constituting
  13-19  an act of a broker or salesperson <salesman>, as defined by this
  13-20  Act, has been guilty of:
  13-21                    (A)  making a material misrepresentation, or
  13-22  failing to disclose to a potential purchaser any latent structural
  13-23  defect or any other defect known to the broker or salesperson
  13-24  <salesman>.  Latent structural defects and other defects do not
  13-25  refer to trivial or insignificant defects but refer to those
  13-26  defects that would be a significant factor to a reasonable and
  13-27  prudent purchaser in making a decision to purchase;
  13-28                    (B)  making a false promise of a character likely
  13-29  to influence, persuade, or induce any person to enter into a
  13-30  contract or agreement when the licensee could not or did not intend
  13-31  to keep such promise;
  13-32                    (C)  pursuing a continued and flagrant course of
  13-33  misrepresentation or making of false promises through agents,
  13-34  salespersons <salesmen>, advertising, or otherwise;
  13-35                    (D)  failing to make clear, to all parties to a
  13-36  transaction, which party the licensee <he> is acting for, or
  13-37  receiving compensation from more than one party except with the
  13-38  full knowledge and consent of all parties;
  13-39                    (E)  failing within a reasonable time properly to
  13-40  account for or remit money coming into the licensee's <his>
  13-41  possession which belongs to others, or commingling money belonging
  13-42  to others with the licensee's <his> own funds;
  13-43                    (F)  paying a commission or fees to or dividing a
  13-44  commission or fees with anyone not licensed as a real estate broker
  13-45  or salesperson <salesman> in this state or in any other state for
  13-46  compensation for services for which <as> a real estate license is
  13-47  required by this Act <agent>;
  13-48                    (G)  failing to specify in a listing contract or
  13-49  in another contract in which the licensee agrees to perform
  13-50  services for which a license is required under this Act a definite
  13-51  termination date which is not subject to prior notice;
  13-52                    (H)  accepting, receiving, or charging an
  13-53  undisclosed commission, rebate, or direct profit on expenditures
  13-54  made for a principal;
  13-55                    (I)  soliciting, selling, or offering for sale
  13-56  real property under a scheme or program that constitutes a lottery
  13-57  or deceptive practice;
  13-58                    (J)  acting in the dual capacity of broker and
  13-59  undisclosed principal in a transaction;
  13-60                    (K)  guaranteeing, authorizing, or permitting a
  13-61  person to guarantee that future profits will result from a resale
  13-62  of real property;
  13-63                    (L)  placing a sign on real property offering it
  13-64  for sale, lease, or rent without the written consent of the owner
  13-65  or the owner's <his> authorized agent;
  13-66                    (M)  inducing or attempting to induce a party to
  13-67  a contract of sale or lease to break the contract for the purpose
  13-68  of substituting in lieu thereof a new contract;
  13-69                    (N)  negotiating or attempting to negotiate the
  13-70  sale, exchange, lease, or rental of real property with an owner,
   14-1  <or> lessor, buyer, or tenant, knowing that the owner, <or> lessor,
   14-2  buyer, or tenant had a written outstanding contract, granting
   14-3  exclusive agency in connection with the transaction <property> to
   14-4  another real estate broker;
   14-5                    (O)  offering real property for sale or for lease
   14-6  without the knowledge and consent of the owner or the owner's <his>
   14-7  authorized agent, or on terms other than those authorized by the
   14-8  owner or the owner's <his> authorized agent;
   14-9                    (P)  publishing, or causing to be published, an
  14-10  advertisement including, but not limited to, advertising by
  14-11  newspaper, radio, television, or display which is misleading, or
  14-12  which is likely to deceive the public, or which in any manner tends
  14-13  to create a misleading impression, or which fails to identify the
  14-14  person causing the advertisement to be published as a licensed real
  14-15  estate broker or salesperson <agent>;
  14-16                    (Q)  having knowingly withheld from or inserted
  14-17  in a statement of account or invoice, a statement that made it
  14-18  inaccurate in a material particular;
  14-19                    (R)  publishing or circulating an unjustified or
  14-20  unwarranted threat of legal proceedings, or other action;
  14-21                    (S)  establishing an association, by employment
  14-22  or otherwise, with an unlicensed person who is expected or required
  14-23  to perform an act for which <as> a real estate license is required
  14-24  by this Act <licensee>, or aiding or abetting or conspiring with a
  14-25  person to circumvent the requirements of this Act;
  14-26                    (T)  failing or refusing on demand to furnish
  14-27  copies of a document pertaining to a transaction dealing with real
  14-28  estate to a person whose signature is affixed to the document;
  14-29                    (U)  failing to advise a purchaser in writing
  14-30  before the closing of a transaction that the purchaser should
  14-31  either have the abstract covering the real estate which is the
  14-32  subject of the contract examined by an attorney of the purchaser's
  14-33  own selection, or be furnished with or obtain a policy of title
  14-34  insurance;
  14-35                    (V)  conduct which constitutes dishonest
  14-36  dealings, bad faith, or untrustworthiness;
  14-37                    (W)  acting negligently or incompetently in
  14-38  performing an act for which a person is required to hold a real
  14-39  estate license;
  14-40                    (X)  disregarding or violating a provision of
  14-41  this Act;
  14-42                    (Y)  failing within a reasonable time to deposit
  14-43  money received as escrow agent in a real estate transaction, either
  14-44  in trust with a title company authorized to do business in this
  14-45  state, or in a custodial, trust, or escrow account maintained for
  14-46  that purpose in a banking institution authorized to do business in
  14-47  this state;
  14-48                    (Z)  disbursing money deposited in a custodial,
  14-49  trust, or escrow account, as provided in Subsection (Y) before the
  14-50  transaction concerned has been consummated or finally otherwise
  14-51  terminated; or
  14-52                    (AA)  discriminating against an owner, potential
  14-53  purchaser, lessor, or potential lessee on the basis of race, color,
  14-54  religion, sex, national origin, <or> ancestry, familial status, or
  14-55  disability, including directing prospective home buyers or lessees
  14-56  interested in equivalent properties to different areas according to
  14-57  the race, color, religion, sex, national origin, <or> ancestry,
  14-58  familial status, or disability of the potential owner or lessee;
  14-59              (7)  the licensee has failed or refused on demand to
  14-60  produce a document, book, or record in the licensee's <his>
  14-61  possession concerning a real estate transaction conducted by the
  14-62  licensee <him> for inspection by the commission or its authorized
  14-63  personnel or representative;
  14-64              (8)  the licensee has failed within a reasonable time
  14-65  to provide information requested by the commission in connection
  14-66  with an investigation to determine whether the licensee has
  14-67  violated a provision of this Act or a rule of the commission <as a
  14-68  result of a formal or informal complaint to the commission which
  14-69  would indicate a violation of this Act>; or
  14-70              (9)  the licensee has failed without just cause to
   15-1  surrender to the rightful owner, on demand, a document or
   15-2  instrument coming into the licensee's <his> possession.
   15-3        (d)  The commission may not investigate under this section a
   15-4  complaint submitted more than four years after the date of the
   15-5  incident involving a real estate broker or salesperson <salesman>
   15-6  that is the subject of the complaint.
   15-7        SECTION 19.  Subsection (a), Section 15B, The Real Estate
   15-8  License Act (Article 6573a, Vernon's Texas Civil Statutes), is
   15-9  amended to read as follows:
  15-10        (a)  Notwithstanding any other provision of the Act, there
  15-11  shall be no undercover or covert investigations of a person
  15-12  licensed under this Act conducted by authority of this Act unless
  15-13  expressly authorized by the commission after due consideration of
  15-14  the circumstances and determination by the commission that such
  15-15  measures are necessary to carry out the purposes of this Act.  No
  15-16  investigations of licensees or any other actions against licensees
  15-17  shall be initiated on the basis of anonymous complaints whether in
  15-18  writing or otherwise but shall be initiated only upon the
  15-19  commission's own motion or a signed written complaint <from a
  15-20  consumer or service recipient>.  The commission may authorize an
  15-21  employee of the commission to file a signed written complaint
  15-22  against a licensee relating to a payment from a recovery fund
  15-23  established under this Act, a criminal conviction, or an act of the
  15-24  licensee that involves obtaining or attempting to obtain a license
  15-25  by fraud, engaging in misrepresentation or deceit, or failing to
  15-26  make good a check issued to the commission.  Upon the adoption of
  15-27  such motion by the commission or upon receipt of such complaint,
  15-28  the licensee shall be notified promptly and in writing <unless the
  15-29  commission itself, after due consideration, determines otherwise>.
  15-30        SECTION 20.  Section 15D, The Real Estate License Act
  15-31  (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
  15-32  as follows:
  15-33        Sec. 15D.  No licensed real estate broker, licensed real
  15-34  estate salesperson <salesman>, or not for profit real estate board
  15-35  or association which provides information about real property sales
  15-36  prices or terms of sale for the purpose of facilitating the
  15-37  listing, selling, leasing, financing, or appraisal of real property
  15-38  shall be liable to any other person as a result of so providing
  15-39  such information unless the disclosure of same is otherwise
  15-40  specifically prohibited by statute.
  15-41        SECTION 21.  Subsections (a), (b), (d), and (e), Section 16,
  15-42  The Real Estate License Act (Article 6573a, Vernon's Texas Civil
  15-43  Statutes), are amended to read as follows:
  15-44        (a)  A license granted under the provisions of this Act shall
  15-45  be suspended or revoked by the commission on proof that the
  15-46  licensee, not being licensed and authorized to practice law in this
  15-47  state, for a consideration, reward, pecuniary benefit, present or
  15-48  anticipated, direct or indirect, or in connection with or as a part
  15-49  of the licensee's <his> employment, agency, or fiduciary
  15-50  relationship as a licensee, drew a deed, note, deed of trust, will,
  15-51  or other written instrument that may transfer or anywise affect the
  15-52  title to or an interest in land, except as provided in the
  15-53  subsections below, or advised or counseled a person as to the
  15-54  validity or legal sufficiency of an instrument or as to the
  15-55  validity of title to real estate.
  15-56        (b)  Notwithstanding the provisions of this Act or any other
  15-57  law, the completion of contract forms which bind the sale,
  15-58  exchange, option, lease, or rental of any interest in real property
  15-59  by a real estate broker or salesperson <salesman> incident to the
  15-60  performance of the acts of a broker as defined by this article does
  15-61  not constitute the unauthorized or illegal practice of law in this
  15-62  state, provided the forms have been promulgated for use by the
  15-63  commission for the particular kind of transaction involved, or the
  15-64  forms have been prepared by an attorney at law licensed by this
  15-65  state and approved by said attorney for the particular kind of
  15-66  transaction involved, or the forms have been prepared by the
  15-67  property owner or prepared by an attorney and required by the
  15-68  property owner.
  15-69        (d)  The Texas Real Estate Broker-Lawyer Committee shall have
  15-70  12 members including six members appointed by the commission and
   16-1  six members of the State Bar of Texas appointed by the President of
   16-2  the State Bar of Texas.  The members of the committee shall hold
   16-3  office for staggered terms of six years with the terms of two
   16-4  commission appointees and two State Bar appointees expiring every
   16-5  two years.  Each member shall hold office until the member's <his>
   16-6  successor is appointed.  A vacancy for any cause shall be filled
   16-7  for the expired term by the agency making the original appointment.
   16-8  Appointments to the committee shall be made without regard to race,
   16-9  creed, sex, religion, or national origin.
  16-10        (e)  In the best interest of the public the commission may
  16-11  adopt rules and regulations requiring real estate brokers and
  16-12  salespersons <salesmen> to use contract forms which have been
  16-13  prepared by the Texas Real Estate Broker-Lawyer Committee and
  16-14  promulgated by the commission; provided, however, that the
  16-15  commission shall not prohibit a real estate broker or salesperson
  16-16  <salesman> from using a contract form or forms binding the sale,
  16-17  exchange, option, lease, or rental of any interest in real property
  16-18  which have been prepared by the property owner or prepared by an
  16-19  attorney and required by the property owner.  For the purpose of
  16-20  this section, contract forms prepared by the Texas Real Estate
  16-21  Broker-Lawyer Committee appointed by the commission and the State
  16-22  Bar of Texas and promulgated by the commission prior to the
  16-23  effective date of this Act shall be deemed to have been prepared by
  16-24  the Texas Real Estate Broker-Lawyer Committee.  The commission may
  16-25  suspend or revoke a license issued under the provisions of this
  16-26  article when it has determined that the licensee failed to use a
  16-27  contract form as required by the commission pursuant to this
  16-28  section.
  16-29        SECTION 22.  Subsection (a), Section 17, The Real Estate
  16-30  License Act (Article 6573a, Vernon's Texas Civil Statutes), is
  16-31  amended to read as follows:
  16-32        (a)  If the commission proposes to suspend or revoke a
  16-33  person's license or registration, the person is entitled to a
  16-34  hearing before the commission or a hearings officer appointed by
  16-35  the commission.  The commission shall prescribe procedures by which
  16-36  all decisions to suspend or revoke are made by or are appealable to
  16-37  the commission.  The commission shall prescribe the time and place
  16-38  of the hearing.  However, the hearing shall be held, if the
  16-39  licensee so desires, within the county where the licensee has the
  16-40  licensee's <his> principal place of business, or if the licensee is
  16-41  a nonresident, the hearing may be called for and held in any county
  16-42  within this state.  The hearing is governed by the procedures for a
  16-43  contested case under Chapter 2001, Government Code <the
  16-44  Administrative Procedure and Texas Register Act (Article 6252-13a,
  16-45  Vernon's Texas Civil Statutes)>.
  16-46        SECTION 23.  Subsection (a), Section 18A, The Real Estate
  16-47  License Act (Article 6573a, Vernon's Texas Civil Statutes), is
  16-48  amended to read as follows:
  16-49        (a)  Any listing contract form adopted by the commission
  16-50  relating to the contractual obligations between a seller of real
  16-51  estate and a real estate broker or salesperson <salesman> acting as
  16-52  an agent for the seller shall include a section that informs the
  16-53  parties to the contract that real estate commissions are
  16-54  negotiable.
  16-55        SECTION 24.  Subsection (a), Section 18B, The Real Estate
  16-56  License Act (Article 6573a, Vernon's Texas Civil Statutes), is
  16-57  amended to read as follows:
  16-58        (a)  If a person files a complaint with the commission
  16-59  relating to a real estate broker or salesperson <salesman>, the
  16-60  commission shall furnish to the person an explanation of the
  16-61  remedies that are available to the person under this Act and
  16-62  information about appropriate state or local agencies or officials
  16-63  with which the person may file a complaint.  The commission shall
  16-64  furnish the same explanation and information to the person against
  16-65  whom the complaint is filed.
  16-66        SECTION 25.  Subsections (a) and (b), Section 19, The Real
  16-67  Estate License Act (Article 6573a, Vernon's Texas Civil Statutes),
  16-68  are amended to read as follows:
  16-69        (a)  A person acting as a real estate broker or real estate
  16-70  salesperson <salesman> without first obtaining a license is guilty
   17-1  of a misdemeanor and on conviction shall be punishable by a fine of
   17-2  not less than $100 nor more than $500, or by imprisonment in the
   17-3  county jail for a term not to exceed one year, or both; and if a
   17-4  corporation or a limited liability company, shall be punishable by
   17-5  a fine of not less than $1,000 nor more than $2,000.  A person, on
   17-6  conviction of a second or subsequent offense, shall be punishable
   17-7  by a fine of not less than $500 nor more than $1,000, or by
   17-8  imprisonment for a term not to exceed two years, or both; and if a
   17-9  corporation or a limited liability company, shall be punishable by
  17-10  a fine of not less than $2,000 nor more than $5,000.
  17-11        (b)  In case a person received money, or the equivalent
  17-12  thereof, as a fee, commission, compensation, or profit by or in
  17-13  consequence of a violation of Subsection (a) of this section, the
  17-14  person <he> shall, in addition, be liable to a penalty of not less
  17-15  than the amount of the sum of money so received and not more than
  17-16  three times the sum so received, as may be determined by the court,
  17-17  which penalty may be recovered in a court of competent jurisdiction
  17-18  by an aggrieved person.
  17-19        SECTION 26.  Subsection (o), Section 19A, The Real Estate
  17-20  License Act (Article 6573a, Vernon's Texas Civil Statutes), is
  17-21  amended to read as follows:
  17-22        (o)  A penalty collected under this section for a violation
  17-23  by a person licensed as a real estate broker or salesperson
  17-24  <salesman> shall be deposited in the real estate recovery fund.  A
  17-25  penalty collected under this section for a violation by a person
  17-26  licensed or registered as a real estate inspector shall be
  17-27  deposited in the real estate inspection recovery fund.
  17-28        SECTION 27.  Section 20, The Real Estate License Act (Article
  17-29  6573a, Vernon's Texas Civil Statutes), is amended to read as
  17-30  follows:
  17-31        Sec. 20.  (a)  A person may not bring or maintain an action
  17-32  for the collection of compensation for the performance in this
  17-33  state of an act set forth in Section 2 of this Act without alleging
  17-34  and proving that the person performing the brokerage services was a
  17-35  duly licensed real estate broker or salesperson <salesman> at the
  17-36  time the alleged services were commenced, or was a duly licensed
  17-37  attorney at law in this state or in any other state.
  17-38        (b)  An action may not be brought in a court in this state
  17-39  for the recovery of a commission for the sale or purchase of real
  17-40  estate unless the promise or agreement on which the action is
  17-41  brought, or some memorandum thereof, is in writing and signed by
  17-42  the party to be charged or signed by a person lawfully authorized
  17-43  by the party <him> to sign it.
  17-44        (c)  When an offer to purchase real estate in this state is
  17-45  signed, the real estate broker or salesperson <salesman> shall
  17-46  advise the purchaser or purchasers, in writing, that the purchaser
  17-47  or purchasers should have the abstract covering the real estate
  17-48  which is the subject of the contract examined by an attorney of the
  17-49  purchaser's own selection, or that the purchaser or purchasers
  17-50  should be furnished with or obtain a policy of title insurance.
  17-51  Failure to advise the purchaser as provided in this subsection
  17-52  precludes the payment of or recovery of any commission agreed to be
  17-53  paid on the sale.
  17-54        SECTION 28.  Subdivisions (2), (5), and (9), Subsection (b),
  17-55  Section 23, The Real Estate License Act (Article 6573a, Vernon's
  17-56  Texas Civil Statutes), are amended to read as follows:
  17-57              (2)  The committee is composed of nine members
  17-58  appointed by the commission.  The members of the committee hold
  17-59  office for staggered terms of six years, with the terms of three
  17-60  members expiring February 1 of each odd-numbered year.  Each member
  17-61  holds office until the member's successor is appointed.
  17-62  Appointments to the committee shall be made without regard to the
  17-63  sex, race, color, age, handicap, religion, or national origin of
  17-64  the appointees.  In the event of a vacancy during a term, the
  17-65  commission shall appoint a replacement who meets the qualifications
  17-66  for appointment under this subdivision to fill the unexpired part
  17-67  of the term.  A member of the committee must be a professional
  17-68  inspector actively engaged in the practice of real estate
  17-69  inspecting at the time of appointment and must have been primarily
  17-70  engaged in the practice of real estate inspecting for at least five
   18-1  years before the member's appointment.  A member of the committee
   18-2  may not hold a real estate broker or salesperson <salesman>
   18-3  license.  Each member of the committee is entitled to a per diem
   18-4  allowance and to reimbursement of travel expenses necessarily
   18-5  incurred in performing functions as a member of the committee,
   18-6  subject to any applicable limitation in the General Appropriations
   18-7  Act.  The committee shall annually elect from its members a
   18-8  chairperson <chairman>, a vice chairperson <vice-chairman>, and
   18-9  secretary.  A quorum of the committee consists of five members.
  18-10              (5)  If the administrator of the commission has
  18-11  knowledge that a potential ground for removal exists, the
  18-12  administrator shall notify the chairperson <chairman> of the
  18-13  commission that a potential ground exists.
  18-14              (9)  The committee shall act in an advisory capacity to
  18-15  develop and recommend to the commission rules under this section.
  18-16  The committee shall review commission rules relating to this
  18-17  section and recommend changes in the rules to the commission.  The
  18-18  commission shall submit all proposed rules, all proposed rule
  18-19  changes and all requests for proposed rules or rule changes that
  18-20  relate to the regulation and licensing of inspectors under this
  18-21  section to the committee for development or recommendation.  The
  18-22  commission may modify the rules developed by the committee if the
  18-23  commission finds such modifications are in the public interest.
  18-24  This section does not prohibit the commission from developing and
  18-25  adopting rules relating to the regulation and licensing of
  18-26  inspectors under this section if the committee fails to develop or
  18-27  recommend rules under this section within a reasonable period of
  18-28  time after the commission submits the proposed rules, rule changes
  18-29  or requests for proposed rules or rule changes to the committee.
  18-30  If the committee determines that a rule requested by the commission
  18-31  should not be developed or recommended for adoption by the
  18-32  commission, the committee shall submit a report on the matter to
  18-33  the commission.  The chairperson <chairman> of the commission and
  18-34  the chairperson <chairman> of the committee shall then appoint
  18-35  three members each from their respective bodies to meet as an ad
  18-36  hoc committee to consider the report and recommend possible action
  18-37  by the commission.  The chairperson <chairman> of the commission or
  18-38  a member of the commission designated by the chairperson <chairman>
  18-39  shall serve as the seventh member of the ad hoc committee.  At
  18-40  least one member of the ad hoc committee must be a public member of
  18-41  the commission.
  18-42        SECTION 29.  Subsection (l), Section 23, The Real Estate
  18-43  License Act (Article 6573a, Vernon's Texas Civil Statutes), is
  18-44  amended to read as follows:
  18-45        (l)  Prohibited acts.  A professional inspector, real estate
  18-46  inspector or an apprentice inspector licensed under this section
  18-47  may not:
  18-48              (1)  accept an assignment for real estate inspection if
  18-49  the employment or fee is contingent on the reporting of a specific,
  18-50  predetermined condition of the improvements to real property or is
  18-51  contingent on the reporting of specific findings other than those
  18-52  known by the inspector to be facts at the time of accepting the
  18-53  assignment;
  18-54              (2)  act in a manner or engage in a practice that is
  18-55  dishonest or fraudulent or that involves deceit or
  18-56  misrepresentation;
  18-57              (3)  perform a real estate inspection in a negligent or
  18-58  incompetent manner;
  18-59              (4)  act in the dual capacity of inspector and
  18-60  undisclosed principal in a transaction;
  18-61              (5)  act in the dual capacity of inspector and real
  18-62  estate broker or salesperson <salesman> in a transaction;
  18-63              (6)  perform or agree to perform any repairs or
  18-64  maintenance in connection with a real estate inspection pursuant to
  18-65  the provisions of any earnest money contract, lease agreement, or
  18-66  exchange of real estate; or
  18-67              (7)  violate the rules adopted by the commission or any
  18-68  provisions of this section.
  18-69        SECTION 30.  Subsection (o), Section 23, The Real Estate
  18-70  License Act (Article 6573a, Vernon's Texas Civil Statutes), is
   19-1  amended by amending Subdivisions (7) and (11) and by adding
   19-2  Subdivision (19) to read as follows:
   19-3              (7)  The court shall proceed on the application
   19-4  forthwith.  On the hearing on the application, the aggrieved person
   19-5  is required to show:
   19-6                    (A)  that the judgment is based on facts allowing
   19-7  recovery under Subdivision (1) of this subsection;
   19-8                    (B)  that the person is not a spouse of the
   19-9  debtor or the personal representative of the spouse and the person
  19-10  is not a licensed <an> inspector, as defined by this section;
  19-11                    (C)  that the person has obtained a judgment
  19-12  under Subdivision (6) of this subsection that is not subject to a
  19-13  stay or discharge in bankruptcy and has been judicially determined
  19-14  to be nondischargeable in a pending bankruptcy, stating the amount
  19-15  of the judgment and the amount owing on the judgment at the date of
  19-16  the application;
  19-17                    (D)  that based on the best information
  19-18  available, the judgment debtor lacks sufficient attachable assets
  19-19  in this state or any other state to satisfy the judgment; and
  19-20                    (E)  the amount that may be realized from the
  19-21  sale of real or personal property or other assets liable to be sold
  19-22  or applied in satisfaction of the judgment and the balance
  19-23  remaining due on the judgment after application of the amount that
  19-24  may be realized.
  19-25              (11)  The sums received by the commission for deposit
  19-26  in the real estate inspection recovery fund shall be held by the
  19-27  commission in trust for carrying out the purpose of the real estate
  19-28  inspection recovery fund.  Subject to legislative appropriation,
  19-29  money in the fund may be used by the commission to pay the expenses
  19-30  involved in collecting a judgment assigned to the commission.
  19-31  These funds may be invested and reinvested in the same manner as
  19-32  funds of the Employees Retirement System of Texas, and the interest
  19-33  from these investments shall be deposited to the credit of the real
  19-34  estate inspection recovery fund.  However, investments may not be
  19-35  made that will impair the necessary liquidity required to satisfy
  19-36  judgment payments awarded pursuant to this subsection.
  19-37              (19)  If the commission is notified before making a
  19-38  payment from the real estate inspection recovery fund that a
  19-39  judgment debtor has initiated a bankruptcy proceeding involving a
  19-40  judgment that the commission has been ordered to pay, the
  19-41  commission may move for an order to withdraw the order directing
  19-42  the commission to make the payment pending a judicial determination
  19-43  in the bankruptcy proceeding that the judgment is nondischargeable.
  19-44  A court shall grant the commission's motion on presentation by the
  19-45  commission of proof that the bankruptcy proceeding involving the
  19-46  judgment debtor was initiated by the judgment debtor.
  19-47        SECTION 31.  (a)  This Act takes effect September 1, 1995.
  19-48        (b)  The change made by this Act in the title of a person
  19-49  licensed to sell real estate does not affect the validity of a
  19-50  license issued or an act performed before the effective date of
  19-51  this Act.
  19-52        SECTION 32.  The importance of this legislation and the
  19-53  crowded condition of the calendars in both houses create an
  19-54  emergency and an imperative public necessity that the
  19-55  constitutional rule requiring bills to be read on three several
  19-56  days in each house be suspended, and this rule is hereby suspended.
  19-57                               * * * * *