IMF C.S.H.B. 2416 75(R)BILL ANALYSIS
C.S.H.B. 2416
By: Danburg
State Affairs
5-2-97
Committee Report (Substituted)
BACKGROUND
Currently, Texas real estate inspectors are licensed and regulated by the
Texas Real Estate Commission (TREC), a commission consisting of real
estate brokers and public members. There is no representation from the
real estate inspection industry on the commission. This situation does not
exist elsewhere, where an industry such as real estate sales, that has an
economic interest in the sale of property, has oversight and rulemaking
authority over another industry that prepares reports on the condition of
the property that could have a negative impact on a transaction.
The real estate inspection field is a highly technical, and
multi-discipline field requiring special expertise in regulation and
rulemaking. The real estate inspector typically represents the purchaser
in a real estate transaction. A conflict of interest exists in that the
typical real estate broker or sales agent represents the seller of real
estate, yet the same board regulates the two parties. H.B. 2416 would
create a separate, revenue-neutral board, consisting of inspectors, a real
estate broker, and public members to eliminate the potential conflict of
interest.
PURPOSE
As proposed, C.S.H.B. 2416 would establish the Texas Real Estate Licensing
Board to develop rules, regulations and standards of practice, and provide
for educational and experience requirements for inspectors.
RULEMAKING AUTHORITY
Rulemaking authority is granted to the Texas Real Estate Inspector License
Board in SECTION 1 (Sections 3, 4, 15, 21(d), and 28, Article 6573a.3,
V.T.C.S.) and in SECTION 4(e) (Chapter 2001, Government Code and Article
6573a.3 V.T.C.S.) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Title 11A, V.T.C.S., by adding Article 6573a.3, as
follows:
Art. 6573a.3. TEXAS REAL ESTATE INSPECTOR LICENSING BOARD
Sec. 1. SHORT TITLE: Real Estate Inspector License Act.
Sec. 2. DEFINITIONS. Defines "board," "continuing education course," "core
inspection course," "direct supervision," "indirect supervision,"
"inspection," and "inspector."
Sec. 3. POWERS AND DUTIES OF BOARD. Requires the Texas Real Estate
Inspector Licensing Board (board) to administer this article. Requires
the board to be an independent subdivision of the Texas Real Estate
Commission and to reimburse the commission for any costs for office
facilities, administrative, legal and enforcement support, computer and
secretarial support, and supplies. Authorizes the board to adopt certain
rules. Sets forth powers and duties of the board.
Sec. 4. TEXAS REAL ESTATE INSPECTOR LICENSING BOARD. Sets forth the
constituency, terms, qualifications, and requirements of the board.
Sec. 5. REMOVAL OF MEMBER. Sets forth requirements and procedures for
removal of a member of the board.
Sec. 6. CONFLICTS OF INTEREST. Sets forth conflicts of interest of a
board member and procedures and requirements for dealing with such
conflicts.
Sec. 7. LOBBYIST RESTRICTION. Prohibits a person from being a board
member and be registered as a lobbyist.
Sec. 8. PUBLIC PARTICIPATION. Requires the board to develop and implement
policies to provide for public participation.
Sec. 9. MEMBER TRAINING. Sets forth requirements for a training program to
be taken by members before they assume the member's duties.
Sec. 10. RESPONSIBILITIES OF BOARD AND STAFF. Requires the board to
develop and implement policies separating policy-making responsibilities
and management responsibilities.
Sec. 11. CAREER LADDER. Requires the board to develop an intra-agency
career ladder program.
Sec. 12. PERFORMANCE REVIEW. Requires the board or its designee to
develop a system for annual performance evaluations.
Sec. 13. PUBLIC INFORMATION. Requires the board or its designee to
provide to members of the board information about qualifications for
office and responsibilities.
Sec. 14. EQUAL EMPLOYMENT OPPORTUNITY. Requires the board to prepare and
maintain a policy providing for equal employment opportunities. Sets
forth requirements of the policy. Requires the governor's office to
deliver a biennial report to the legislature on information received under
this section. Authorizes the report to be made separately or with other
biennial reports.
Sec. 15. PUBLIC INTEREST INFORMATION. Sets forth requirements for
disseminating information of the board. Requires the board, by rule, to
establish methods for directing complaints to the board. Authorizes the
board to provide for notification of certain items.
Sec. 16. INFORMATION ON COMPLAINTS. Requires the board to keep
information on complaints. Sets forth items the information is to
include.
Sec. 17. NOTIFICATION OF COMPLAINTS. Sets forth requirements for
notification of complaints.
Sec. 18. ACCESSIBILITY. Requires the board to comply with laws related to
program and facility accessibility. Requires the board to prepare and
maintain a plan for non-English speakers to have access to the board's
programs and services.
Sec. 19. LICENSE REQUIRED. Requires a person who acts as a professional
inspector to hold an appropriate license issued by the board.
Sec. 20. POWER AND DUTIES OF LICENSE HOLDER. Sets forth powers and duties
of a license holder.
Sec. 21. ELIGIBILITY; APPLICATION. Sets forth requirements of eligibility
and application of an applicant for a license.
Sec. 22. EXAMINATION. Sets forth requirements and procedures of an
examination to become a license holder.
Sec. 23. ISSUANCE OF LICENSE. Sets forth requirements and procedures for
issuance of a license.
Sec. 24. RECIPROCAL LICENSES. Authorizes the board to waive any
prerequisite for a license for an applicant with a valid license form
another state which has a reciprocity agreement. Authorizes the board to
enter into reciprocity agreements.
Sec. 25. EXPIRATION OF LICENSE; RENEWAL. Provides that a license expires
on the last day of the twelfth month of the date issued. Sets forth
requirements for renewing a license.
Sec. 26. LAPSED LICENSE FOR RESIDENTS AND NONRESIDENTS. Sets forth
requirements for obtaining a license if the license has lapsed.
Sec. 27. NOTIFICATION; CHANGE OF ADDRESS. Sets forth requirements for a
licensee's change of address.
Sec. 28. INACTIVE LICENSE. Requires the board, by rule, to adopt terms and
conditions reactivate an inactive status license.
Sec. 29. FEES. Sets forth the fees charged by the board.
Sec. 30. CONTINUING EDUCATION STANDARDS. Sets forth requirements for
continuing education by a licensee.
Sec. 31. PROHIBITED ACTS. Sets forth prohibited acts of inspectors.
Sec. 32. OFFENSE. Provides that an offense for engaging in the business of
inspections without a license is a Class B misdemeanor.
Sec. 33. DISCIPLINARY ACTIONS. Authorizes the board to issue certain
disciplinary actions. Sets forth requirements and procedures for
disciplinary actions conducted by the board.
Sec. 34. PROBATION. Sets forth requirements and procedures for
disciplinary actions conducted by the board.
Sec. 35. EXEMPTIONS. Sets forth exemptions of this article to certain
persons.
Sec. 36. INSPECTION RECOVERY FUND. Requires the board to establish an
inspection fund. Sets forth uses of the fund.
Sec. 37. LIMITATIONS ON CLAIMS AGAINST FUND. Sets forth the statute of
limitations on claims against the inspection recovery fund. Sets forth
notice requirement and waiver of right to recover from the inspection
recovery fund.
Sec. 38. PREREQUISITES FOR CLAIMS AGAINST FUND. Sets forth prerequisites
and procedures for recovering against the inspection recovery fund.
Sec. 39. LIMITATIONS ON PAYMENT FROM FUND. Provides that payments from
the inspection recovery fund are subject to certain limitations. Entitles
a person receiving payment from the inspection recovery fund to receive
attorney's fees.
Sec. 40. CONSUMER NOTIFICATION. Sets forth notice requirements regarding
giving notice on the availability of the inspection recovery fund for
reimbursing certain persons.
Sec. 41. OPERATION OF FUND; NECESSARY BALANCES. Provides that Section
403.095, Government Code, does not apply to the inspection recovery fund.
Sets forth required balances to be kept by the fund.
Sec. 42. RECOMMENDATIONS BY INTERESTED PARTIES. Require the board to
consider recommendations relating to qualifications and licensing of
inspectors.
Sec. 43. ADVERTISING. Sets forth requirements for advertising rules.
SECTION 2. Repealer: Section 23, Article 6573a, V.T.C.S. (Real estate
inspectors).
SECTION 3. Sets forth appointments, terms, and requirements for initial
members of the board.
SECTION 4. (a) Provides that unobligated and unexpended balance of the
appropriations made to the Texas Real Estate Commission for the regulation
of real estate inspectors for the fiscal year ending August 31, 1997, is
transferred to the Texas Real Estate Inspector Licensing Board. (b)
Provides for the transfer of certain records from the Texas Real Estate
Commission to the Texas Real Estate Inspector Licensing Board. (c)
Abolishes the Texas Real Estate Inspector Committee on the effective date
of this Act. (d) Sets forth procedures for issuance of certain licenses.
(e) Authorizes the Texas Real Estate Inspector Licensing Board to adopt
the existing rules in effect under the previous Act and emergency rules.
SECTION 5. Makes application of this Act prospective.
SECTION 6. Makes application of this Act prospective.
SECTION 7. Effective date: September 1, 1997.
SECTION 8. Emergency clause.
COMPARISON OF ORIGINAL TO SUBSTITUTE
SECTION 1.
Sec. 3. POWERS AND DUTIES OF THE BOARD. Clarifies that the Real Estate
Inspector Licensing Board is an independent subdivision of the Texas Real
Estate Commission (TREC) and requires TREC to provide office space,
computers and and administrative, secretarial, legal and enforcement
support. Requires the Real Estate Inspector Licensing Board to reimburse
TREC for any costs for the support provided by TREC.
Sec. 4. TEXAS REAL ESTATE INSPECTOR LICENSING BOARD. Changes the makeup
of the board from 5 professional inspectors, 3 public members, and 1 real
estate broker to 5 public members, and 4 professional inspectors. One of
the five public members may be a real estate broker.
Sec. 22. EXAMINATIONS. Changes the offering of licensing examination to
be made at any location. Deletes language stating a request for
reexamination must be filed with the board and adds that the fee be set by
the board. Changes "national testing service" to "contract vendor" to
provide any grading or review.
Sec. 25. EXPIRATION OF LICENSE; RENEWAL. Changes the expiration of a
license to the last day of the twelfth month after issuance.
Sec. 26. LAPSED LICENSE FOR RESIDENCES AND NONRESIDENTS. Clarifies that
subsection (a) only deals with non-resident renewals.
Sec. 33. DISCIPLINARY ACTIONS. Adds subsection (c) to provide that the
board may take other action deemed appropriate.
SECTION 3. Adds subsection (c) to require existing members of the Texas
Real Estate Inspector Committee to be seated as members of the new board
until a new board is appointed and confirmed.
SECTION 4. Requires that a person licensed under the previous Act will
be issued an appropriate license if all the requirements of this Act are
met. Provides in subsection (e) that the board may adopt existing rules
in effect under the previous Act.
SECTION 7. Changes the Effective date to September 1, 1997.