NDT C.S.S.B. 1100 75(R)BILL ANALYSIS LICENSING & ADMINISTRATIVE PROCEDURES C.S.S.B. 1100 By: Wentworth (Jones, Delwin) 5-6-97 Committee Report (Substituted) BACKGROUND The Texas Real Estate Commission is charged with the responsibility to regulate real estate brokers, salesmen, and inspectors. This bill addresses house-keeping concerns relating to the administration of the Texas Real Estate License Act. PURPOSE C.S.S.B. 1100 provides for the regulation of real estate brokers, real estate salesmen, and inspectors. C.S.S.B. 1100: (1) clarifies the current meaning of "person" under The Real Estate License Act (Article 6573a, Vernon's Texas Civil Statutes); (2) makes the law of contracts a core real estate course for prelicensing requirements; (3) raises the fee limit for applications; (4) authorizes commission employees to file certain administrative type of complaints; (5) permits the substitution of relevant education for experience requirements for inspectors; and (6) increases the number of inspections necessary to obtain a professional inspector license. RULEMAKING AUTHORITY Rulemaking authority is granted to the Texas Real Estate Commission in SECTIONS 3 and 4 of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 2(5), The Real Estate License Act (Article 6573a, Vernon's Texas Civil Statutes) to clarify that the current meaning of "person" under The Real Estate License Act means an individual or any other entity including a government or governmental subdivision or agency, a limited liability company, a limited liability partnership, a partnership, or a foreign or domestic corporation. The intent of this amendment is not to change existing law, but rather to clarify the original intent of The Real Estate License Act. SECTION 2. Amends Section 3, The Real Estate License Act (Article 6573a, Vernon's Texas Civil Statutes) to maintain the currently recognized exemption of a partnership or limited liability partnership from the licensing requirements of The Real Estate License Act where the partnership or limited liability partnership is acting as a broker or real estate salesman through a partner who is a licensed real estate broker. This language is necessary to maintain the exemption after the language clarifying the current meaning of "person" under SECTION 1 above is adopted. The intent of this amendment is not to change existing law, but rather to clarify the original intent of The Real Estate License Act. SECTION 3. Amends Section 7(a), Article 6573a, V.T.C.S. (The Real Estate License Act), to delete from the requirements of the principals of real estate the law of agency and contracts. Requires the law of contract (or equivalent) to include but not be limited to the elements of a contract, offer and acceptance, statute of frauds, specific performance and remedies for breach, unauthorized practice of law, commission rules relating to the use of promulgated forms, and owner disclosure requirements. Amends Section 7(c), Article 6573a, V.T.C.S., to authorize the commission, by rule, to provide for a waiver of some or all of the requirements for a license under this Act, notwithstanding any other provision of this Act, if the applicant was previously licensed in this state within the six-year period prior to the filing of the application. Amends Section 7(e), Article 6573a, V.T.C.S., to require each applicant for a salesman license to furnish the commission satisfactory evidence of having completed a minimum of two hours in law of contracts as described in Subsection (a)(11) of this section. SECTION 4. Amends Section 7A(g), Article 6573a, V.T.C.S., to authorize the commission, by rule, to establish procedures under which licenses are issued or renewed, or licensees are returned to active status, prior to the completion of the continuing education required by this section. Authorizes the commission to require a licensee to pay an additional fee not to exceed $200 and to complete the required continuing education within 60 days after the license was issued or renewed, or the licensee was returned to active status. SECTION 5. Amends Section 11(a), Article 6573a, V.T.C.S., to require the commission to charge and collect a fee not to exceed $50, rather than $25, for an application for a license examination. SECTION 6. Amends Section 15B(a), Article 6573a, V.T.C.S., by substituting the word "person" for "consumer or service recipient". The intent of this amendment is to not change existing law, but rather to clarify that the term "consumer" or "service recipient" includes any person. Also amends Section 15B(e), Article 6573a, V.T.C.S., to authorize the commission to authorize its employees to file signed written complaints against licensees and to conduct investigations in limited circumstances. SECTION 7. Amends Section 23(b)(2), Article 6573a, V.T.C.S., to allow no more than three members of the Texas Real Estate Inspector Committee to be licensed real estate brokers or salesmen in addition to being licensed real estate inspectors. SECTION 8. Amends Section 23(d)(4), Article 6573a, V.T.C.S., to require the commission to provide for the substitution of relevant experience or additional education in lieu of the number of real estate inspections and prior licensing as an apprentice inspector or real estate inspector required by this section. Requires a person to provide certification acceptable to the commission that the person has completed at least 200 real estate inspections while licensed under this section before a person licensed as a professional inspector may sponsor an apprentice inspector or a real estate inspector. SECTION 9. Repealer: Section 24(g), Article 6573a, V.T.C.S. moved to 7(c) in section 3 of the bill. SECTION 10. (a) Effective date: September 1, 1997. (b) Effective date for amended Section 7(e), The Real Estate License Act (Article 6573a, Vernon's Texas Civil Statutes): January 1, 1998. SECTION 11. Emergency clause. COMPARISON OF C.S.S.B. 1100 TO S.B. 1100 The substitute clarifies that the current meaning of "person" under The Real Estate License Act means an individual or any other entity including a government or governmental subdivision or agency, a limited liability company, a limited liability partnership, a partnership, or a foreign or domestic corporation. The substitute maintains the currently recognized exemption of a partnership or limited liability partnership from the licensing requirements of The Real Estate License Act where the partnership or limited liability partnership is acting as a broker or real estate salesman through a partner who is a licensed real estate broker. The substitute authorizes the commission to provide for a waiver of some or all of the requirements for a license under The Real Estate License Act if the applicant was previously licensed in this state within the six-year period prior to the filing of the application (rather than within the five-year period prior to the filing of the application as provided in the filed version of S.B. 1100). The substitute authorizes the commission to initiate investigations of or actions against licensees based on a signed written complaint from any person, not just a consumer or service recipient. The substitute allows no more than three members of the Texas Real Estate Inspector Committee to be licensed real estate brokers or salesmen in addition to being licensed real estate inspectors.