By Wentworth                                    S.B. No. 1097

      75R6484 CAG-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the creation of the Texas Real Estate Inspector

 1-3     Licensing Board and the regulation of real estate inspectors;

 1-4     providing a criminal penalty.

 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-6           SECTION 1.  Title 113A, Revised Statutes, is amended by

 1-7     adding Article 6573a.3 to read as follows:

 1-8           Art. 6573a.3.  TEXAS REAL ESTATE INSPECTOR LICENSING BOARD

 1-9           Sec. 1.  SHORT TITLE.  This article may be cited as the Texas

1-10     Real Estate Inspector License Act.

1-11           Sec. 2.  DEFINITIONS.  In this article:

1-12                 (1)  "Board" means the Texas Real Estate Inspector

1-13     Licensing Board.

1-14                 (2)  "Continuing education course" means an educational

1-15     course approved by the board relating to the real estate inspection

1-16     profession, including a core inspection course.

1-17                 (3)  "Core inspection course" means an educational

1-18     course approved by the board relating to the profession of real

1-19     estate inspection, including a course on:

1-20                       (A)  structural and construction principles,

1-21     including components that constitute a structure such as walls,

1-22     floors, ceilings, doors, and windows, and their claddings,

1-23     coverings, or finishes;

1-24                       (B)  electrical, mechanical, plumbing, or roofing

 2-1     systems;

 2-2                       (C)  appliances, equipment, or other improvements

 2-3     to real property;

 2-4                       (D)  the standards of practice, conduct, or

 2-5     ethics of inspectors;

 2-6                       (E)  inspection report writing;

 2-7                       (F)  legal or business principles; or

 2-8                       (G)  the study of environmental conditions that

 2-9     have a direct bearing on real estate inspections.

2-10                 (4)  "Direct supervision" means the instruction and

2-11     control by a professional inspector or a real estate inspector

2-12     license holder who is:

2-13                       (A)  responsible for the actions of a person

2-14     performing a real estate inspection or preparing a report of an

2-15     inspection;

2-16                       (B)  available to consult with or assist a person

2-17     performing a real estate inspection or preparing a report of an

2-18     inspection; and

2-19                       (C)  physically present at the inspection.

2-20                 (5)  "Indirect supervision" means the instruction and

2-21     control by a professional inspector license holder who is:

2-22                       (A)  responsible for the actions of a person

2-23     performing a real estate inspection or preparing a report of an

2-24     inspection;

2-25                       (B)  available to consult with or assist a person

2-26     performing a real estate inspection or preparing a report of an

2-27     inspection; and

 3-1                       (C)  not required to be physically present at the

 3-2     inspection but is reasonably available, as determined by the board,

 3-3     to provide oversight or assistance.

 3-4                 (6)  "Inspection" means a written or oral opinion

 3-5     concerning  the condition of an improvement to real property,

 3-6     including an opinion on:

 3-7                       (A)  the condition of a structure and the

 3-8     components that constitute the structure and its cladding,

 3-9     covering, or waterproofing or weatherproofing;

3-10                       (B)  the structure's electrical, mechanical,

3-11     heating, ventilation, air conditioning, plumbing, roofing, or other

3-12     system; or

3-13                       (C)  other appliances or equipment on the

3-14     property.

3-15                 (7)  "Inspector" means a person licensed by the board.

3-16           Sec. 3.  POWERS AND DUTIES OF BOARD.  (a)  The Texas Real

3-17     Estate Inspector Licensing Board shall administer this article.

3-18           (b)  The board may adopt:

3-19                 (1)  rules for the licensing of inspectors;

3-20                 (2)  rules relating to the enforcement of this article

3-21     and discipline of an inspector licensed under this article;

3-22                 (3)  rules relating to the education and experience

3-23     requirements for licensing as an inspector;

3-24                 (4)  rules relating to the qualifying examination

3-25     required for licensing as an inspector;

3-26                 (5)  rules relating to the approval of education

3-27     providers or schools providing inspection-related courses for core

 4-1     inspection and continuing education courses;

 4-2                 (6)  rules establishing a code of professional conduct

 4-3     and ethics for inspectors;

 4-4                 (7)  reasonable fees in amounts necessary to implement

 4-5     this article, including a license application fee, an examination

 4-6     fee, a license renewal fee, or any other fee required by law;

 4-7                 (8)  rules relating to the length and content of core

 4-8     inspection courses and continuing education requirements for an

 4-9     inspector;

4-10                 (9)  rules relating to the standards of practice for

4-11     conducting an inspection;

4-12                 (10)  rules relating to grounds for granting or denying

4-13     an application for a license;

4-14                 (11)  rules prescribing the form and content of an

4-15     application or form required under this article; and

4-16                 (12)  rules relating to the design and use of a seal or

4-17     imprint on reports and other documents.

4-18           (c)  The board may employ an administrator, an assistant

4-19     administrator, or other staff necessary to implement this article.

4-20     The board may contract with another agency or board for the

4-21     provision of goods or services necessary to implement this article.

4-22           (d)  The board shall adopt a seal.  A copy of a record of the

4-23     board, certified and authenticated by the seal, shall be received

4-24     in evidence in a court and considered as the original.

4-25           (e)  The board may adopt and enforce rules necessary for the

4-26     performance of its duties, establish standards of conduct and

4-27     ethics for inspectors, or ensure compliance with this article.

 5-1           (f)  In addition to any other action, proceeding, or remedy,

 5-2     the board may institute an action in district court in its own name

 5-3     to enjoin any violation of this article or a board rule.  In filing

 5-4     such an action, the board is not required to allege or prove either

 5-5     that an adequate remedy at law does not exist or that substantial

 5-6     or irreparable damage would result from the continued violation.  A

 5-7     party to an action filed under this section may appeal to an

 5-8     appellate court.  The board is not required to give an appeal bond

 5-9     in any action or proceeding to enforce this article.

5-10           (g)  Money derived from fees, assessments, or charges under

5-11     this article shall be paid by the board to the comptroller for

5-12     safekeeping and shall be placed by the comptroller in a separate

5-13     fund to be available for the use of the board in the administration

5-14     of this article, including the payment of expenses related to

5-15     equipment and maintenance of supplies for the offices or quarters

5-16     occupied by the board and necessary travel expenses for the board

5-17     or its employees.  The comptroller shall, on requisition of the

5-18     board, draw warrants from time to time for the amount specified in

5-19     the requisition.  All money spent in the administration of this

5-20     article shall be specified and determined by an itemized

5-21     appropriation in the General Appropriations Act for the Texas Real

5-22     Estate Inspector Licensing Board.  The board shall file with the

5-23     governor and the presiding officer of each house of the legislature

5-24     an annual detailed written report accounting for all funds received

5-25     and disbursed by the board during the preceding fiscal year.  The

5-26     annual report must be in the form and reported in the time provided

5-27     by the General Appropriations Act.

 6-1           (h)  The board may contract for services or authorize

 6-2     specific employees to conduct hearings and render final decisions

 6-3     in contested cases.  The board may employ or contract for services

 6-4     from another agency, board, or commission of a general counsel,

 6-5     attorneys, investigators, and support staff to administer and

 6-6     enforce this article.

 6-7           Sec. 4.  TEXAS REAL ESTATE INSPECTOR LICENSING BOARD.

 6-8     (a)  The Texas Real Estate Inspector Licensing Board consists of

 6-9     nine members appointed by the governor with the advice and consent

6-10     of the senate.

6-11           (b)  Five members of the board must be professional

6-12     inspectors. Three members of the board must be public members.  One

6-13     member of the board must be a licensed real estate broker.

6-14           (c)  The members of the board hold office for staggered terms

6-15     of six years, with the terms of three members expiring February 1

6-16     of each odd-numbered year.  Each member holds office until the

6-17     member's successor is appointed.  Not later than the 15th day after

6-18     the date of the person's appointment to the board, the person must

6-19     take the constitutional oath of office.

6-20           (d)  An appointment to the board shall be made without regard

6-21     to the sex, race, color, age, disability, religion, or national

6-22     origin of the appointee.

6-23           (e)  A professional inspector member of the board may not

6-24     hold an active real estate broker or salesman license and must have

6-25     been licensed and practicing as an inspector for at least 10 years

6-26     preceding appointment to the board.

6-27           (f)  A member of the board is entitled to compensation and

 7-1     reimbursement of the member's travel expenses as provided by the

 7-2     General Appropriations Act.

 7-3           (g)  The board shall elect annually from its membership a

 7-4     presiding officer, assistant presiding officer, and secretary.  The

 7-5     presiding officer and assistant presiding officer must be

 7-6     professional inspectors.

 7-7           (h)  Five members of the board are necessary for a quorum.

 7-8           (i)  The board shall adopt procedural rules to be used by the

 7-9     board in implementing its powers and duties.

7-10           (j)  The board and its employees and agents are subject to

7-11     Chapters 551 and 2001, Government Code.

7-12           (k)  The board shall meet semiannually.  The board may also

7-13     meet at the call of a majority of its members.

7-14           Sec. 5.  REMOVAL OF MEMBER.  (a)  It is a ground for removal

7-15     from the board if the member:

7-16                 (1)  does not have at the time of appointment or does

7-17     not maintain during service on the board the qualifications

7-18     required by Section 4 of this article;

7-19                 (2)  cannot discharge the member's duties for a

7-20     substantial part of the term for which the member is appointed

7-21     because of illness or disability;

7-22                 (3)  violates a prohibition established by Section 6 of

7-23     this article; or

7-24                 (4)  is absent from more than half of the regularly

7-25     scheduled board meetings that the member is eligible to attend

7-26     during each year, unless the absence is excused by the board.

7-27           (b)  The validity of an action of the board is not affected

 8-1     by the fact that it was taken when a ground for removal of a board

 8-2     member existed.

 8-3           (c)  If a board member has knowledge that a potential ground

 8-4     for removal exists, the member shall notify the presiding officer

 8-5     of the board of the potential ground.  The presiding officer shall

 8-6     then notify the governor and the attorney general that a potential

 8-7     ground for removal exists.  If the potential ground for removal

 8-8     involves the presiding officer, the member shall notify the next

 8-9     highest officer of the board, who shall notify the governor and the

8-10     attorney general that a potential ground for removal exists.

8-11           Sec. 6.  CONFLICTS OF INTEREST.  (a)  An officer, employee,

8-12     or paid consultant of a Texas trade association in the field of

8-13     real estate inspections may not be a public member of the board or

8-14     employee of the board who is exempt from the state's position

8-15     classification plan or is compensated at or above the amount

8-16     prescribed by the General Appropriations Act for step 1, salary

8-17     group 17, of the position classification salary schedule.

8-18           (b)  A person who is the spouse of an officer, manager, or

8-19     paid consultant of a Texas trade association in the field of real

8-20     estate inspections may not be a public member of the board and may

8-21     not be an employee of the board who is exempt from the state's

8-22     position classification plan or is compensated at or above the

8-23     amount prescribed by the General Appropriations Act for step 1,

8-24     salary group 17, of the position classification salary schedule.

8-25           (c)  For the purposes of this section, a Texas trade

8-26     association is a nonprofit, cooperative, and voluntarily joined

8-27     association of business or professional competitors in this state

 9-1     designed to assist its members and its industry or profession in

 9-2     dealing with mutual business or professional problems and in

 9-3     promoting their common interest.

 9-4           Sec. 7.  LOBBYIST RESTRICTION.  A person may not serve as a

 9-5     member of the board or act as the general counsel to the board if

 9-6     the person is required to register as a lobbyist under Chapter 305,

 9-7     Government Code, because of the person's activities for

 9-8     compensation on behalf of a profession related to the operation of

 9-9     the board.

9-10           Sec. 8.  PUBLIC PARTICIPATION.  The board shall develop and

9-11     implement policies that provide the public with a reasonable

9-12     opportunity to appear before the board and to speak on any issue

9-13     under the jurisdiction of the board.

9-14           Sec. 9.  MEMBER TRAINING.  (a)  Before a member of the board

9-15     may assume the member's duties and before the member may be

9-16     confirmed by the senate, the member must complete at least one

9-17     course of a training program established by the board.

9-18           (b)  A training program established under this section must

9-19     provide information to the member regarding:

9-20                 (1)  the enabling legislation that created the board to

9-21     which the member is appointed to serve;

9-22                 (2)  the programs operated by the board;

9-23                 (3)  the role and functions of the board;

9-24                 (4)  the rules of the board, with an emphasis on the

9-25     rules that relate to disciplinary and investigatory authority;

9-26                 (5)  the current budget for the board;

9-27                 (6)  the results of the most recent formal audit of the

 10-1    board;

 10-2                (7)  the requirements of the:

 10-3                      (A)  open meetings law, Chapter 551, Government

 10-4    Code;

 10-5                      (B)  open records law, Chapter 552, Government

 10-6    Code; and

 10-7                      (C)  administrative procedure law, Chapter 2001,

 10-8    Government Code;

 10-9                (8)  the requirements of the conflict of interest laws

10-10    and other laws relating to public officials; and

10-11                (9)  any applicable ethics policies adopted by the

10-12    agency or the Texas Ethics Commission.

10-13          Sec. 10.  RESPONSIBILITIES OF BOARD AND STAFF.  The board

10-14    shall develop and implement policies that clearly separate the

10-15    policy-making responsibilities of the board and the management

10-16    responsibilities of the board and the staff of the board.

10-17          Sec. 11.  CAREER LADDER.  The board or the board's designee

10-18    shall develop an intra-agency career ladder program that addresses

10-19    opportunities for mobility and advancement for employees within the

10-20    board.  The program must require intra-agency posting of all

10-21    positions concurrently with any public posting.

10-22          Sec. 12.  PERFORMANCE REVIEW.  The board or the board's

10-23    designee shall develop a system of annual performance evaluations

10-24    that are based on documented employee performance.  All merit pay

10-25    for board employees must be based on the system established under

10-26    this section.

10-27          Sec. 13.  PUBLIC INFORMATION.  The board or the board's

 11-1    designee shall provide to members of the board and to board

 11-2    employees, as often as necessary, information regarding their

 11-3    qualifications for office or employment under this article and

 11-4    their responsibilities under applicable laws relating to standards

 11-5    of conduct for state officers or employees.

 11-6          Sec. 14.  EQUAL EMPLOYMENT OPPORTUNITY.  (a)  The board or

 11-7    the board's designee shall prepare and maintain a written policy

 11-8    statement to assure implementation of a program of equal employment

 11-9    opportunity under which all personnel transactions are made without

11-10    regard to race, color, disability, sex, religion, age, or national

11-11    origin.  The policy statement must include:

11-12                (1)  personnel policies, including policies relating to

11-13    recruitment, evaluation, selection, appointment, training, and

11-14    promotion of personnel that are in compliance with requirements of

11-15    Chapter 21, Labor Code;

11-16                (2)  a comprehensive analysis of the board workforce

11-17    that meets federal and state guidelines;

11-18                (3)  procedures by which a determination can be made

11-19    about the extent of underuse in the board workforce of all persons

11-20    for whom federal or state guidelines encourage a more equitable

11-21    balance; and

11-22                (4)  reasonable methods to appropriately address those

11-23    areas of underuse.

11-24          (b)  A policy statement prepared under Subsection (a) of this

11-25    section must cover an annual period, be updated annually and

11-26    reviewed by the Commission on Human Rights for compliance with

11-27    Subsection (a)(1) of this section, and be filed with the governor's

 12-1    office.

 12-2          (c)  The governor's office shall deliver a biennial report to

 12-3    the legislature based on the information received under Subsection

 12-4    (b) of this section.  The report may be made separately or as a

 12-5    part of other biennial reports made to the legislature.

 12-6          Sec. 15.  PUBLIC INTEREST INFORMATION.  (a)  The board shall

 12-7    prepare information of public interest describing the functions of

 12-8    the board and the procedures by which complaints are filed with and

 12-9    resolved by the board.  The board shall make the information

12-10    available to the public and appropriate state agencies.

12-11          (b)  The board by rule shall establish methods by which

12-12    consumers and service recipients are notified of the name, mailing

12-13    address, and telephone number of the board for the purpose of

12-14    directing complaints to the board.  The board may provide for that

12-15    notification:

12-16                (1)  on each registration form, application, or written

12-17    contract for services of an individual licensed under this article;

12-18                (2)  on a sign prominently displayed in the place of

12-19    business of each individual licensed under this article; or

12-20                (3)  in a bill for service provided by an individual

12-21    licensed under this article.

12-22          Sec. 16.  INFORMATION ON COMPLAINTS.  The board shall keep

12-23    information about each complaint filed with the board.  The

12-24    information must include:

12-25                (1)  the date the complaint is received;

12-26                (2)  the name of the complainant;

12-27                (3)  the subject matter of the complaint;

 13-1                (4)  a record of all persons contacted in relation to

 13-2    the complaint;

 13-3                (5)  a summary of the results of the review or

 13-4    investigation of the complaint; and

 13-5                (6)  for complaints for which the board took no action,

 13-6    an explanation of the reason the complaint was closed without

 13-7    action.

 13-8          Sec.  17.  NOTIFICATION OF COMPLAINTS.  The board shall keep

 13-9    a file about each written complaint filed with the board that the

13-10    board has authority to resolve.  The board shall provide to the

13-11    person filing the complaint and the persons or entities complained

13-12    about the board's policies and procedures pertaining to complaint

13-13    investigation and resolution.  The board, at least quarterly and

13-14    until final disposition of the complaint, shall notify the person

13-15    filing the complaint and the persons or entities complained about

13-16    of the status of the complaint unless the notice would jeopardize

13-17    an undercover investigation.

13-18          Sec. 18.  ACCESSIBILITY.  The board shall comply with federal

13-19    and state laws related to program and facility accessibility.  The

13-20    board shall also prepare and maintain a written plan that describes

13-21    how a person who does not speak English can be provided reasonable

13-22    access to the board's programs and services.

13-23          Sec. 19.  LICENSE REQUIRED.  A person may not act as a

13-24    professional inspector, a real estate inspector, or an apprentice

13-25    inspector of improvements to real property unless the person holds

13-26    the appropriate license issued by the board.

13-27          Sec. 20.  POWER AND DUTIES OF LICENSE HOLDER.  (a) A

 14-1    professional inspector license holder may represent to the public

 14-2    that the person is trained and qualified to perform an inspection

 14-3    and may accept employment to perform an inspection of improvements

 14-4    to real property for any party.

 14-5          (b)  A real estate inspector license holder may represent to

 14-6    the public that the person is trained and qualified to perform

 14-7    inspections under the indirect supervision of a professional

 14-8    inspector and may accept employment to perform an inspection of

 14-9    improvements to real property for any party.

14-10          (c)  An apprentice inspector license holder may perform

14-11    activities under the direct supervision of a professional inspector

14-12    or real estate inspector license holder that are necessary to

14-13    become qualified to perform an inspection.

14-14          Sec. 21.  ELIGIBILITY; APPLICATION.  (a)  To receive a

14-15    license as an apprentice inspector, an applicant must:

14-16                (1)  be a citizen of the United States or a lawfully

14-17    admitted alien;

14-18                (2)  be a resident of this state at the time of the

14-19    filing of the application;

14-20                (3)  be sponsored by a professional inspector license

14-21    holder who is determined by the commission to have performed 200 or

14-22    more inspections;

14-23                (4)  be 18 years of age or older; and

14-24                (5)  satisfy the board as to the applicant's honesty,

14-25    trustworthiness, and integrity.

14-26          (b)  To receive a license as a real estate inspector, an

14-27    applicant must:

 15-1                (1)  have been licensed as an apprentice inspector for

 15-2    three months or more;

 15-3                (2)  have performed 25 or more inspections under direct

 15-4    supervision before the date of the filing of an application for the

 15-5    license;

 15-6                (3)  satisfy the board as to the applicant's honesty,

 15-7    trustworthiness, integrity, and competency;

 15-8                (4)  present satisfactory evidence to the board of

 15-9    completion by the applicant of 200 or more classroom hours in core

15-10    inspection courses;

15-11                (5)  satisfy the examination requirements under Section

15-12    22 of this article; and

15-13                (6)  be sponsored by a professional inspector license

15-14    holder who is determined by the commission to have performed 200 or

15-15    more inspections.

15-16          (c)  To receive a license as a professional inspector, an

15-17    applicant must:

15-18                (1)  have been licensed as a real estate inspector for

15-19    at least one year;

15-20                (2)  have performed 175 or more inspections under

15-21    indirect supervision before the date of the filing of an

15-22    application for the license;

15-23                (3)  submit satisfactory evidence to the board of the

15-24    completion by the applicant, since the issuance of a real estate

15-25    inspector license, of 64 or more classroom hours of core inspection

15-26    courses, of which 32 classroom hours must be related to the study

15-27    of standards of practice or ethics of inspection or legal issues

 16-1    related to the profession of inspections; and

 16-2                (4)  satisfy the examination requirements under Section

 16-3    22 of this article.

 16-4          (d)  The board by rule shall provide for the substitution of

 16-5    additional relevant experience or education to satisfy the

 16-6    requirements of performing a specified number of inspections or

 16-7    having been previously licensed as an apprentice inspector or a

 16-8    real estate inspector under this section.  A rule adopted under

 16-9    this subsection may not require an applicant seeking to substitute

16-10    relevant experience or education for other licensing requirements

16-11    to complete more than 60 additional classroom hours of core

16-12    inspection courses.

16-13          (e)  An applicant must file an application for a license on a

16-14    form prescribed by the board.

16-15          Sec. 22.  EXAMINATION.  (a)  The board shall prescribe and

16-16    prepare or contract for the preparation of a licensing examination.

16-17    The board may authorize a contract vendor to collect a fee for the

16-18    examination in an amount determined by the board.

16-19          (b)  A licensing examination must evaluate competence in the

16-20    subject matter of any core inspection courses.

16-21          (c)  The licensing examination shall be offered at least once

16-22    every two months in Austin.

16-23          (d)  If an applicant fails the examination, the applicant may

16-24    apply for reexamination by filing a request with the board and

16-25    paying the examination fee.

16-26          (e)  An applicant must satisfy the examination requirement

16-27    during the six-month period after the date the license application

 17-1    is filed.  A license applicant who fails to satisfy the examination

 17-2    requirement within that time must submit a new license application

 17-3    to the board and pay the examination fee to be eligible for

 17-4    examination.

 17-5          (f)  If a license applicant fails the examination four

 17-6    consecutive times in connection with an application for the same

 17-7    license, the applicant may not apply for reexamination or submit a

 17-8    new license application with the board until the expiration of six

 17-9    months after the date the applicant failed the last examination.

17-10          (g)  Not later than the 30th day after the date a licensing

17-11    examination is administered under this section, the board shall

17-12    notify each examinee of the results of the examination.  However,

17-13    if an examination is graded or reviewed by a national testing

17-14    service, the board shall notify examinees of the results of the

17-15    examination not later than the 14th day after the date the board

17-16    receives the results from the testing service. If the notice of

17-17    examination results graded or reviewed by a national testing

17-18    service will be delayed for longer than 90 days after the

17-19    examination date, the board shall notify the examinee of the reason

17-20    for the delay before the 90th day after the examination date.

17-21          (h)  If requested in writing by a person who fails a

17-22    licensing examination administered under this section, the board

17-23    shall furnish the person with an analysis of the person's

17-24    performance on the examination.

17-25          Sec. 23.  ISSUANCE OF LICENSE.  (a)  The board shall issue an

17-26    apprentice inspector license, a real estate inspector license, or a

17-27    professional inspector license to an applicant who possesses the

 18-1    required qualifications, passes the appropriate examination, if

 18-2    required, and pays the fee required by Section 29 of this article.

 18-3          (b)  The board may waive a license requirement for an

 18-4    applicant with a valid license from another state having license

 18-5    requirements substantially equivalent to those of this state.

 18-6          (c)  On receipt of notice that the person has successfully

 18-7    completed the licensing examination under Section 22 of this

 18-8    article, the person must pay, in addition to any other fees, a fee

 18-9    not to exceed $200, to be deposited in the inspection recovery fund

18-10    before the board issues the person a license.

18-11          Sec. 24.  RECIPROCAL LICENSES.  The board may waive any

18-12    prerequisite to obtaining a license for an applicant with a valid

18-13    license from another state with which this state has a reciprocity

18-14    agreement.  The board may enter into reciprocal agreements with

18-15    other states to allow for licensing by reciprocity.

18-16          Sec. 25.  EXPIRATION OF LICENSE; RENEWAL.  (a)  A license

18-17    issued under this article expires on the first anniversary of the

18-18    date it is issued.

18-19          (b)  A person may renew an unexpired license by paying to the

18-20    board before the expiration date of the license the required

18-21    renewal fee.

18-22          (c)  If a person's license has been expired for 90 days or

18-23    less, the person may renew the license by paying to the board the

18-24    required renewal fee and a fee that is one-half of the examination

18-25    fee for the license.

18-26          (d)  If a person's license has been expired for longer than

18-27    90 days but for less than two years, the person may renew the

 19-1    license by paying to the board the unpaid renewal fees and a fee

 19-2    that is equal to the examination fee for the license.

 19-3          (e)  Except as provided by Section 26 of this article, if a

 19-4    person's license has been expired for two years or longer, the

 19-5    person may not renew the license and may obtain a new license only

 19-6    by submitting to reexamination, if required, and complying with the

 19-7    requirements and procedures for obtaining an original license.

 19-8          Sec. 26.  LAPSED LICENSE.  (a)  The board may renew without

 19-9    reexamination an expired license of a person who was licensed in

19-10    this state, moved to another state, and is currently licensed and

19-11    has been in practice in the other state for at least one year

19-12    before the date of the application.  The person must pay to the

19-13    board a fee that is equal to the examination fee for the license

19-14    and an additional fee, not to exceed $200, to be deposited in the

19-15    inspection recovery fund.

19-16          (b)  The board may issue a license to an applicant under this

19-17    section who has satisfied all requirements for a license, including

19-18    requirements satisfied under Section 21(d) of this article, as a

19-19    professional inspector or real estate inspector if:

19-20                (1)  the applicant was previously licensed as a

19-21    professional inspector or real estate inspector during the 24

19-22    months before the date of the filing of the application;

19-23                (2)  the applicant is sponsored by a professional

19-24    inspector, if the applicant is applying for a real estate inspector

19-25    license; and

19-26                (3)  the applicant satisfies the board as to the

19-27    applicant's honesty, trustworthiness, and integrity.

 20-1          Sec. 27.  NOTIFICATION; CHANGE OF ADDRESS.  (a)  Before the

 20-2    30th day preceding the expiration date of a person's license, the

 20-3    board shall send written notice of the impending license expiration

 20-4    to the person at the person's last known address according to the

 20-5    records of the board.

 20-6          (b)  An inspector shall notify the board and pay the required

 20-7    fee, if any, not later than the 30th day after the date a change of

 20-8    place of business occurs.

 20-9          Sec. 28.  INACTIVE LICENSE.  The board by rule may adopt

20-10    terms and conditions by which an inspector may apply for, renew, or

20-11    place a license on inactive status and rules by which an inactive

20-12    inspector may return to active status.

20-13          Sec. 29.  FEES.  (a) The board shall charge and collect

20-14    reasonable and necessary fees to recover the costs of administering

20-15    this article.

20-16          (b)  A fee may be paid by cash, check, cashier's check, or

20-17    money order.

20-18          (c)  A fee set by the board shall be reviewed annually and

20-19    reduced to the extent that the costs of administering this article

20-20    are funded by the inspector regulation account established under

20-21    Section 41 of this article.

20-22          Sec. 30.  CONTINUING EDUCATION STANDARDS.  (a) The board

20-23    shall recognize, prepare, or administer continuing education

20-24    programs for inspectors.

20-25          (b)  Before a real estate inspector license holder may renew

20-26    a license, the holder must submit satisfactory evidence to the

20-27    board of successful completion of at least 16 classroom hours of

 21-1    continuing education courses in the year preceding the date of

 21-2    renewal.

 21-3          (c)  Before a professional inspector license holder may renew

 21-4    a license, the holder must submit satisfactory evidence to the

 21-5    board of successful completion of at least 16 classroom hours of

 21-6    continuing education courses in the year preceding the date of

 21-7    renewal.

 21-8          (d)  If an inspector does not complete any continuing

 21-9    education requirement before the date of renewal of a license, the

21-10    inspector may renew the inspector's license if the inspector:

21-11                (1)  completes the requirement not later than the 90th

21-12    day after the date of renewal; and

21-13                (2)  pays a fee, determined by the board, not to exceed

21-14    $300.

21-15          Sec. 31.  PROHIBITED ACTS.  An inspector may not:

21-16                (1)  accept an assignment for an inspection if the

21-17    employment or fee is contingent on the reporting of a specific,

21-18    predetermined condition of the improvements to real property or is

21-19    contingent on the reporting of specific findings other than those

21-20    known by the inspector to be facts at the time of accepting the

21-21    assignment;

21-22                (2)  act in a manner or engage in a practice that is

21-23    dishonest or fraudulent or that involves deceit or

21-24    misrepresentation;

21-25                (3)  perform an inspection in a negligent or

21-26    incompetent manner, as determined by the standards of practice

21-27    adopted by the board;

 22-1                (4)  act in the dual capacity of inspector and

 22-2    undisclosed principal in a transaction;

 22-3                (5)  act in the dual capacity of inspector and real

 22-4    estate broker or salesman in a transaction;

 22-5                (6)  perform or agree to perform any repair or

 22-6    maintenance in connection with an inspection; or

 22-7                (7)  violate this article or a rule of the board.

 22-8          Sec. 32.  OFFENSE.  (a)  A person commits an offense if the

 22-9    person knowingly engages in the business of inspections and does

22-10    not hold a license issued under this article.

22-11          (b)  An offense under this section is a Class B misdemeanor.

22-12          Sec. 33.  DISCIPLINARY ACTIONS.  (a)  The board may  conduct

22-13    an administrative hearing and may recommend disciplinary actions in

22-14    contested cases regarding an inspector.

22-15          (b)  The board may contract with another agency to conduct

22-16    hearings or may authorize specific persons to conduct hearings and

22-17    render final decisions in contested cases regarding an inspector.

22-18          (c)  The board may investigate the actions of an inspector

22-19    and may, after notice and hearing, reprimand, place on probation,

22-20    or suspend or revoke the license of a person for a violation of

22-21    this article or a rule of the board.

22-22          (d)  If the board revokes a person's license, the person may

22-23    not apply to the board before the first anniversary of the date of

22-24    revocation.

22-25          (e)  A license granted under this article may be revoked by

22-26    the board on proof that the board has made a payment from the

22-27    inspection recovery fund of any amount toward satisfaction of a

 23-1    judgment against the inspector.  The board may probate an order

 23-2    revoking a license.  An inspector is not eligible to receive a new

 23-3    license until the person has repaid in full, including interest at

 23-4    the current legal rate, the amount paid from the inspection

 23-5    recovery fund on the person's account.

 23-6          (f)  This section does not limit the authority of the board

 23-7    to take disciplinary action against an inspector for a violation of

 23-8    this article or a rule of the board.  The repayment in full of an

 23-9    obligation to the inspection recovery fund by a person does not

23-10    nullify or modify the effect of any other disciplinary proceeding

23-11    of the board.

23-12          Sec. 34.  DISCIPLINARY ACTIONS.  The board may revoke,

23-13    suspend, or refuse to renew a license, place on probation a person

23-14    whose license has been suspended, or reprimand a license holder for

23-15    a violation of this article or a rule of the board.  If a license

23-16    suspension is probated, the board may require the practitioner:

23-17                (1)  to report regularly to the board on matters that

23-18    are the basis of the probation;

23-19                (2)  to limit practice to the areas prescribed by the

23-20    board; or

23-21                (3)  to continue or review professional education until

23-22    the practitioner attains a degree of skill satisfactory to the

23-23    board in those areas that are the basis of the probation.

23-24          Sec. 35.  EXEMPTIONS.  (a)  This article does not apply to a

23-25    person licensed by this state as an architect, engineer, plumber,

23-26    or heating and air conditioning contractor, a person engaged in the

23-27    business of structural pest control under the Texas Structural Pest

 24-1    Control Act (Article 135b-6, Vernon's Texas Civil Statutes), or

 24-2    another person who, under a license or registration issued to that

 24-3    person, repairs, maintains, or inspects improvements to real

 24-4    property and who does not represent to the public through

 24-5    solicitation or public advertising that the person is in the

 24-6    business of inspecting the improvements, unless the person's

 24-7    license or registration permits inspections.

 24-8          (b)  This article does not prevent a person from performing

 24-9    an act that the person is authorized to perform under a license,

24-10    permit, certification, or registration issued by the federal

24-11    government, this state, or a political subdivision.

24-12          (c)  A person licensed under this article is exempt from any

24-13    other law that conflicts with this article.

24-14          Sec. 36.  INSPECTION RECOVERY FUND.  (a)  The board shall

24-15    establish an inspection recovery fund.

24-16          (b)  The fund shall be used to reimburse a person who suffers

24-17    actual damages by reason of an act committed by an inspector, if:

24-18                (1)  the inspector was licensed at the time the act was

24-19    committed; and

24-20                (2)  recovery of damages is ordered by a court of

24-21    competent jurisdiction against the inspector.

24-22          (c)  The use of the fund is limited to an act that is a

24-23    violation of Section 31 of this article.

24-24          Sec. 37.  LIMITATIONS ON CLAIMS AGAINST FUND.  (a)  An action

24-25    for a judgment that results in an order for collection from the

24-26    inspection recovery fund must be commenced not later than the

24-27    second anniversary of the date of the accrual of the cause of

 25-1    action.

 25-2          (b)  If an aggrieved person commences an action for a

 25-3    judgment that may result in collection from the inspection recovery

 25-4    fund, the inspector who is the subject of the lawsuit shall

 25-5    promptly notify the board in writing.

 25-6          (c)  The failure by an aggrieved person to comply with this

 25-7    section constitutes a waiver of any right to recover from the

 25-8    inspection recovery fund.

 25-9          Sec. 38.  PREREQUISITES FOR CLAIMS AGAINST FUND.  (a)  If an

25-10    aggrieved person recovers a valid judgment in a court of competent

25-11    jurisdiction against an inspector on the grounds described in

25-12    Section 36 of this article, the aggrieved person may, after final

25-13    judgment has been entered, execution returned nulla bona, and a

25-14    judgment lien perfected, file a verified claim in the court in

25-15    which the judgment was entered.  After the 20th day after the date

25-16    written notice was given to the board and the judgment debtor, the

25-17    aggrieved person may apply to the court in which the judgment was

25-18    rendered for an order directing payment out of the inspection

25-19    recovery fund in the amount unpaid on the judgment, subject to the

25-20    limitations under Section 39 of this article.

25-21          (b)  The court shall promptly proceed on the aggrieved

25-22    person's application.  On hearing the application, the aggrieved

25-23    person is required to show:

25-24                (1)  that the judgment is based on facts allowing

25-25    recovery under Section 36 of this article;

25-26                (2)  that the person is not a spouse of the debtor or

25-27    the personal representative of the spouse;

 26-1                (3)  that the person has obtained a judgment under

 26-2    Section 36 of this article that is not subject to a stay or

 26-3    discharge in bankruptcy, stating the amount of the judgment and the

 26-4    amount owing on the judgment at the date of the application;

 26-5                (4)  that, based on the best information available, the

 26-6    judgment debtor lacks sufficient attachable assets in this state or

 26-7    any other state to satisfy the judgment; and

 26-8                (5)  the amount that may be realized from the sale of

 26-9    real or personal property or other assets liable to be sold or

26-10    applied in satisfaction of the judgment and the balance remaining

26-11    due on the judgment after application of the amount that may be

26-12    realized.

26-13          (c)  The court shall order the board to pay from the

26-14    inspection recovery fund the amount the court finds to be payable

26-15    on the claim, consistent with the limitations contained in Section

26-16    39 of this article, if the court is satisfied after hearing:

26-17                (1)  of the truth of all matters required to be shown

26-18    by the aggrieved person under Subsection (b) of this section; and

26-19                (2)  that the aggrieved person has satisfied all the

26-20    requirements of Subsections (b)(4) and (5) of this section.

26-21          (d)  On receipt of notice of entry of a final judgment and

26-22    that a hearing is to be conducted under Subsection (b), the board

26-23    may notify the attorney general of the board's desire to enter an

26-24    appearance, file a response, appear at the court hearing, defend

26-25    the action, or take other appropriate action.  In taking action,

26-26    the board and the attorney general shall act only to protect the

26-27    fund from spurious or unjust claims or to ensure compliance with

 27-1    the requirements for recovery under this section.

 27-2          (e)  In hearing the application, the board may relitigate any

 27-3    material and relevant issue that was determined in the underlying

 27-4    action on which the judgment in favor of the applicant was based.

 27-5          (f)  A recovery on the judgment against a single defendant

 27-6    made before payment from the inspection recovery fund must be

 27-7    applied by the creditor first to actual damages.

 27-8          (g)  If, on the order of the court, the board pays from the

 27-9    inspection recovery fund an amount to the judgment creditor, the

27-10    board is subrogated to all of the rights of the judgment creditor

27-11    to the extent of the amount paid.  The judgment creditor shall

27-12    assign all the creditor's right, title, and interest in the

27-13    judgment up to the amount paid by the board.  The amount paid by

27-14    the board has priority for repayment on a subsequent recovery on

27-15    the judgment.  Any amount in interest recovered by the board on the

27-16    judgment shall be deposited to the credit of the fund.

27-17          Sec. 39.  LIMITATIONS ON PAYMENT FROM FUND.  (a)

27-18    Notwithstanding any other provision of this article, payments from

27-19    the inspection recovery fund are subject to the following

27-20    conditions and limitations:

27-21                (1)  payments may be made only under an order by a

27-22    court of competent jurisdiction, as provided by Section 38 of this

27-23    article, and in the manner prescribed by this section;

27-24                (2)  payments for claims, including attorney's fees,

27-25    interest, and court costs, arising out of the same transaction are

27-26    limited in the aggregate to $7,500, regardless of the number of

27-27    claimants; and

 28-1                (3)  payments for claims based on judgments against an

 28-2    inspector may not exceed in the aggregate $15,000 until the fund

 28-3    has been reimbursed by the inspector for all amounts paid.

 28-4          (b)  A person receiving payment from the inspection recovery

 28-5    fund under Subsection (a) of this section is entitled to receive

 28-6    reasonable attorney's fees as determined by the court, subject to

 28-7    the limitations stated in that subsection.

 28-8          Sec. 40.  CONSUMER NOTIFICATION.  An inspector licensed under

 28-9    this article shall notify consumers and service recipients of the

28-10    availability of the inspection recovery fund for reimbursing

28-11    certain aggrieved persons. The notice must include the name,

28-12    mailing address, and telephone number of the board and any other

28-13    information required by board rule.  The notification may be

28-14    provided:

28-15                (1)  on a written contract for the services of an

28-16    inspector;

28-17                (2)  on a brochure distributed by an inspector;

28-18                (3)  on a sign prominently displayed in the place of

28-19    business of an inspector;

28-20                (4)  in a bill or receipt for service provided by an

28-21    inspector; or

28-22                (5)  on a written inspection report.

28-23          Sec. 41.  OPERATION OF FUND; NECESSARY BALANCES.  (a)

28-24    Section 403.095, Government Code, does not apply to the inspection

28-25    recovery fund or the inspector regulation account.

28-26          (b)  If on December 31 of any year the balance remaining in

28-27    the inspection recovery fund is less than $300,000, each inspector,

 29-1    on the next renewal of the person's license, shall pay, in addition

 29-2    to the license renewal fee, a fee of $75, or a pro rata share of

 29-3    the amount necessary to bring the fund to $450,000, whichever is

 29-4    less, to be deposited in the inspection recovery fund.

 29-5          (c)  If on December 31 of any year the balance remaining in

 29-6    the inspection recovery fund is greater than $600,000, the amount

 29-7    of money in excess of $600,000 shall be transferred to a separate

 29-8    account in the general revenue fund to be known as the inspector

 29-9    regulation account.  The money in the inspector regulation account

29-10    may be used only for the payment of costs incurred by the board in

29-11    the regulation of inspectors.

29-12          Sec. 42.  RECOMMENDATIONS BY INTERESTED PARTIES.  The board

29-13    shall consider the recommendations of all interested parties

29-14    relating to the qualifications and licensing of inspectors to

29-15    assure the public of a quality professional inspection system in

29-16    real estate transactions in this state.

29-17          Sec. 43.  ADVERTISING.  (a)  The board may not adopt rules

29-18    restricting competitive bidding or advertising by a license holder

29-19    except to prohibit false, misleading, or deceptive practices.

29-20          (b)  In its rules to prohibit false, misleading, or deceptive

29-21    practices, the board may not include a rule that:

29-22                (1)  restricts the use of any medium for advertising;

29-23                (2)  restricts the use of a license holder's personal

29-24    appearance or voice in an advertisement;

29-25                (3)  relates to the size or duration of an

29-26    advertisement by a license holder; or

29-27                (4)  restricts a license holder's advertisement under a

 30-1    trade name.

 30-2          SECTION 2.  Section 23, The Real Estate License Act (Article

 30-3    6573a, Vernon's Texas Civil Statutes), is repealed.

 30-4          SECTION 3.  (a)  The initial members appointed to the Texas

 30-5    Real Estate Inspector Licensing Board under Article 6573a.3,

 30-6    Revised Statutes, as added by this Act, shall be appointed as

 30-7    follows:

 30-8                (1)  for public members:

 30-9                      (A)  one member for a term expiring February 1,

30-10    1999;

30-11                      (B)  one member for a term expiring February 1,

30-12    2001; and

30-13                      (C)  one member for a term expiring February 1,

30-14    2003;

30-15                (2)  for professional inspector members:

30-16                      (A)  one member for a term expiring February 1,

30-17    1999;

30-18                      (B)  two members for terms expiring February 1,

30-19    2001; and

30-20                      (C)  two members for terms expiring February 1,

30-21    2003; and

30-22                (3)  for the real estate broker member, a term expiring

30-23    February 1, 1999.

30-24          (b)  The initial professional inspector members of the Texas

30-25    Real Estate Inspector Licensing Board appointed under this section

30-26    must have been issued an inspector's license by the Texas Real

30-27    Estate Commission.

 31-1          SECTION 4.  (a)  The unobligated and unexpended balance of

 31-2    the appropriation made to the Texas Real Estate Commission for the

 31-3    regulation of real estate inspectors for the fiscal year ending

 31-4    August 31, 1997, is transferred to the Texas Real Estate Inspector

 31-5    Licensing Board for the purposes of implementing Article 6573a.3,

 31-6    Revised Statutes, as added by this Act.

 31-7          (b)  The administrator of the Texas Real Estate Commission

 31-8    shall identify the records and property in the custody of the

 31-9    commission relating to the licensing of real estate inspectors

31-10    under Section 23, The Real Estate License Act (Article 6573a,

31-11    Vernon's Texas Civil Statutes), as that section existed on the day

31-12    before the effective date of this Act, and those records and

31-13    property, including any money in the real estate inspector

31-14    regulation account and the real estate inspection recovery fund,

31-15    shall be transferred to the Texas Real Estate Inspector Licensing

31-16    Board.

31-17          (c)  The Texas Real Estate Inspector Committee is abolished

31-18    on the effective date of this Act.

31-19          (d)  A person licensed as an apprentice inspector, a real

31-20    estate inspector, or a professional inspector under Section 23, The

31-21    Real Estate License Act (Article 6573a, Vernon's Texas Civil

31-22    Statutes), on the day before the effective date of this Act shall

31-23    be issued an appropriate license under Article 6573a.3, Revised

31-24    Statutes, as added by this Act.  A person who receives a license

31-25    under this subsection is subject to Article 6573a.3, Revised

31-26    Statutes, as added by this Act, when applying for a real estate

31-27    inspector or professional inspector license.  A holder of a license

 32-1    issued under this subsection shall complete the continuing

 32-2    education requirements of Article 6573a.3, Revised Statutes, as

 32-3    added by this Act, before the initial renewal of a license under

 32-4    that article.

 32-5          (e)  The Texas Real Estate Inspector Licensing Board may

 32-6    adopt emergency rules under Chapter 2001, Government Code, as

 32-7    necessary to provide a smooth transition between the former law and

 32-8    Article 6573a.3, Revised Statutes, as added by this Act.

 32-9          SECTION 5.  (a)  The change in law made by this Act applies

32-10    only to an offense committed on or after the effective date of this

32-11    Act.  For purposes of this section, an offense is committed before

32-12    the effective date of this Act if any element of the offense occurs

32-13    before that date.

32-14          (b)  An offense committed before the effective date of this

32-15    Act is covered by the law in effect when the offense was committed,

32-16    and the former law is continued in effect for that purpose.

32-17          SECTION 6.  (a)  An investigation or disciplinary action by

32-18    the Texas Real Estate Commission pending on the effective date of

32-19    this Act shall be continued under Article 6573a.3, Revised

32-20    Statutes, as added by this Act, by the Texas Real Estate Inspector

32-21    Licensing Board.  The administration of a disciplinary matter

32-22    conducted under this subsection is to be conducted by the Texas

32-23    Real Estate Inspector Licensing Board.

32-24          (b)  A claim against the real estate inspection recovery fund

32-25    pending on the effective date of this Act is governed by the law in

32-26    effect on the date the claim arose, and the former law is continued

32-27    in effect for that purpose.

 33-1          SECTION 7.  This Act takes effect July 1, 1997.

 33-2          SECTION 8.  The importance of this legislation and the

 33-3    crowded condition of the calendars in both houses create an

 33-4    emergency and an imperative public necessity that the

 33-5    constitutional rule requiring bills to be read on three several

 33-6    days in each house be suspended, and this rule is hereby suspended,

 33-7    and that this Act take effect and be in force according to its

 33-8    terms, and it is so enacted.