1-1     By:  Wentworth                                        S.B. No. 1016
 1-2           (In the Senate - Filed March 9, 1999; March 10, 1999, read
 1-3     first time and referred to Committee on State Affairs;
 1-4     April 12, 1999, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 9, Nays 0; April 12, 1999,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 1016               By:  Wentworth
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to the regulation of real estate brokers, salespersons,
1-11     and inspectors and to the administration of certain recovery funds;
1-12     providing administrative penalties.
1-13           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14           SECTION 1.  Subsection (a), Section 6, The Real Estate
1-15     License Act (Article 6573a, Vernon's Texas Civil Statutes), is
1-16     amended to read as follows:
1-17           (a)  A person desiring to act as a real estate broker in this
1-18     state shall file an application for a license with the commission
1-19     on a form prescribed by the commission.  A broker desiring to
1-20     engage a person to participate in real estate brokerage activity
1-21     may [shall] join the person in filing an application for an active
1-22     [a] salesperson license on a form prescribed by the commission.  [A
1-23     person previously licensed as a broker may apply for inactive
1-24     status.]  A person [previously licensed as a salesperson] may apply
1-25     for a salesperson license on inactive status without the
1-26     participation of a broker.  [The person must apply for inactive
1-27     status on a form prescribed by the commission not later than the
1-28     first anniversary of the date of the expiration of the broker or
1-29     salesperson license.]
1-30           SECTION 2.  Subsections (a), (b), and (e), Section 7, The
1-31     Real Estate License Act (Article 6573a, Vernon's Texas Civil
1-32     Statutes), are amended to read as follows:
1-33           (a)  Competency as referred to in Section 6 of this Act shall
1-34     be established by an examination prepared by or contracted for by
1-35     the commission.  The examination shall be given at such times and
1-36     at such places within the state as the commission shall prescribe.
1-37     The examination shall be of scope sufficient in the judgment of the
1-38     commission to determine that a person is competent to act as a real
1-39     estate broker or salesperson in a manner to protect the interest of
1-40     the public.  The examination for a salesperson license shall be
1-41     less exacting and less stringent than the examination for a broker
1-42     license.  The commission shall furnish each applicant with study
1-43     material and references on which the examination shall be based.
1-44     When an applicant for a real estate license fails a qualifying
1-45     examination, the applicant may apply for reexamination by filing a
1-46     request therefor together with the proper fee.  The examination
1-47     requirement must be satisfied not later than six months after the
1-48     date on which the application for a license is filed.  A license
1-49     applicant who fails the examination four consecutive times in
1-50     connection with the same application may not apply for
1-51     reexamination or submit a new license application before the 180th
1-52     day after the date the applicant failed the fourth examination.
1-53     Courses of study required for a license may include but are not
1-54     limited to the following, which shall be considered core real
1-55     estate courses for all purposes of this Act:
1-56                 (1)  Principles of Real Estate (or equivalent) shall
1-57     include but not be limited to an overview of licensing as a real
1-58     estate broker and salesperson, ethics of practice, titles to and
1-59     conveyancing of real estate, legal descriptions, deeds,
1-60     encumbrances and liens, distinctions between personal and real
1-61     property, appraisal, finance and regulations, closing procedures,
1-62     real estate mathematics, and at least three classroom hours of
1-63     instruction on federal, state, and local laws relating to housing
1-64     discrimination, housing credit discrimination, and community
 2-1     reinvestment.
 2-2                 (2)  Real Estate Appraisal (or equivalent) shall
 2-3     include but not be limited to the central purposes and functions of
 2-4     an appraisal, social and economic determinant of value, appraisal
 2-5     case studies, cost, market data and income approaches to value
 2-6     estimates, final correlations, and reporting.
 2-7                 (3)  Real Estate Law (or equivalent) shall include but
 2-8     not be limited to legal concepts of real estate, land description,
 2-9     real property rights and estates in land, contracts, conveyances,
2-10     encumbrances, foreclosures, recording procedures, and evidence of
2-11     titles.
2-12                 (4)  Real Estate Finance (or equivalent) shall include
2-13     but not be limited to monetary systems, primary and secondary money
2-14     markets, sources of mortgage loans, federal government programs,
2-15     loan applications, processes and procedures, closing costs,
2-16     alternative financial instruments, equal credit opportunity acts,
2-17     community reinvestment act, and state housing agency.
2-18                 (5)  Real Estate Marketing (or equivalent) shall
2-19     include but not be limited to real estate professionalism and
2-20     ethics, characteristics of successful salespersons, time
2-21     management, psychology of marketing, listing procedures,
2-22     advertising, negotiating and closing, financing, and the Deceptive
2-23     Trade Practices-Consumer Protection Act, as amended, Section 17.01
2-24     et seq., Business & Commerce Code.
2-25                 (6)  Real Estate Mathematics (or equivalent) shall
2-26     include but not be limited to basic arithmetic skills and review of
2-27     mathematical logic, percentages, interest, time-valued money,
2-28     depreciation, amortization, proration, and estimation of closing
2-29     statements.
2-30                 (7)  Real Estate Brokerage (or equivalent) shall
2-31     include but not be limited to law of agency, planning and
2-32     organization, operational policies and procedures, recruiting,
2-33     selection and training of personnel, records and control, and real
2-34     estate firm analysis and expansion criteria.
2-35                 (8)  Property Management (or equivalent) shall include
2-36     but not be limited to role of property manager, landlord policies,
2-37     operational guidelines, leases, lease negotiations, tenant
2-38     relations, maintenance, reports, habitability laws, and the Fair
2-39     Housing Act.
2-40                 (9)  Real Estate Investments (or equivalent) shall
2-41     include but not be limited to real estate investment
2-42     characteristics, techniques of investment analysis, time-valued
2-43     money, discounted and nondiscounted investment criteria, leverage,
2-44     tax shelters depreciation, and applications to property tax.
2-45                 (10)  Law of Agency (or equivalent) shall include but
2-46     not be limited to the principal-agent and master-servant
2-47     relationships, the authority of an agent, the termination of an
2-48     agent's authority, the fiduciary and other duties of an agent,
2-49     employment law, deceptive trade practices, listing or buying
2-50     representation procedures, and the disclosure of agency.
2-51                 (11)  Law of Contracts (or equivalent) shall include
2-52     the elements of a contract, offer and acceptance, the statute of
2-53     frauds, specific performance and remedies for breach, unauthorized
2-54     practice of law, commission rules relating to use of adopted forms,
2-55     and owner disclosure requirements.
2-56           (b)  The commission by rule may:
2-57                 (1)  prescribe the content of core real estate courses
2-58     listed in Subsection (a)  of this section; and
2-59                 (2)  establish the title and content of additional core
2-60     real estate courses.
2-61           (e)  Each applicant for a salesperson license shall furnish
2-62     the commission satisfactory evidence of having completed 12
2-63     semester hours, or equivalent classroom hours, of postsecondary
2-64     education, eight [six] hours of which must be completed in core
2-65     real estate courses, of which a minimum of two hours must be
2-66     completed in Principles of Real Estate as described in Subsection
2-67     (a)(1) of this section, a minimum of two hours must be completed in
2-68     Law of Agency as described in Subsection (a)(10) of this section,
2-69     and a minimum of two hours must be completed in Law of Contracts as
 3-1     described in Subsection (a)(11) of this section.  The remaining
 3-2     four [six] hours must [shall] be completed in core real estate
 3-3     courses or related courses.  As a condition for the first renewal
 3-4     of a salesperson license, the applicant shall furnish the
 3-5     commission satisfactory evidence of having completed a minimum of
 3-6     14 semester hours, or equivalent classroom hours, 10 [eight] hours
 3-7     of which must be completed in core real estate courses.  As a
 3-8     condition for the second renewal of a salesperson license, the
 3-9     applicant shall furnish the commission satisfactory evidence of
3-10     having completed a minimum of 16 semester hours, or equivalent
3-11     classroom hours, 12 [10] hours of which must be completed in core
3-12     real estate courses.  As a condition for the third renewal of a
3-13     salesperson license, the applicant shall furnish the commission
3-14     satisfactory evidence of having completed a minimum of 18 semester
3-15     hours, or equivalent classroom hours, 14 [12] hours of which must
3-16     be completed in core real estate courses.
3-17           SECTION 3.  Subsections (c) and (f), Section 8, The Real
3-18     Estate License Act (Article 6573a, Vernon's Texas Civil Statutes),
3-19     are amended to read as follows:
3-20           (c)  If the commission determines at any time that [on
3-21     December 31 of any year] the balance remaining in the real estate
3-22     recovery trust account [fund] is less than $1 million, each real
3-23     estate broker and each real estate salesperson, on the next renewal
3-24     of the license, shall pay, in addition to the license renewal fee,
3-25     a fee of $10, which shall be deposited in the real estate recovery
3-26     trust account [fund], or a pro rata share of the amount necessary
3-27     to bring the trust account [fund] to $1.7 million, whichever is
3-28     less.  If on December 31 of any year the balance remaining in the
3-29     real estate recovery trust account [fund] is more than $3.5 million
3-30     or more than the total amount of claims paid from the trust account
3-31     [fund] during the previous four fiscal years, whichever is greater,
3-32     the amount of money in excess of the greater amount shall be
3-33     transferred to the general revenue fund.  Notwithstanding any other
3-34     provision of this Act, to ensure that sufficient money is available
3-35     to pay anticipated claims on the trust account, the commission may
3-36     provide by rule for the collection of assessments at times and
3-37     under conditions other than those specified by this Act.
3-38           (f)  The court shall proceed on the application forthwith.
3-39     On the hearing on the application, the aggrieved person is required
3-40     to show that:
3-41                 (1)  the judgment is based on facts allowing recovery
3-42     under Subsection (a)  of this section;
3-43                 (2)  the person is not a spouse of the debtor, or the
3-44     personal representative of the spouse; and the person is not a
3-45     registrant under Section 9A of this Act or a real estate broker or
3-46     salesperson, as defined by this Act, who is seeking to recover a
3-47     real estate commission or any compensation in the transaction or
3-48     transactions for which the application for payment is made;
3-49                 (3)  [the person has obtained a judgment under
3-50     Subsection (e) of this section that is not subject to a stay or
3-51     discharge in bankruptcy, stating the amount of the judgment and the
3-52     amount owing on the judgment at the date of the application;]
3-53                 [(4)]  based on the best available information, the
3-54     judgment debtor lacks sufficient attachable assets in this state or
3-55     any other state to satisfy the judgment; and
3-56                 (4) [(5)]  the amount that may be realized from the
3-57     sale of real or personal property or other assets liable to be sold
3-58     or applied in satisfaction of the judgment and the balance
3-59     remaining due on the judgment after application of the amount that
3-60     may be realized.
3-61           SECTION 4.  Section 11, The Real Estate License Act (Article
3-62     6573a, Vernon's Texas Civil Statutes), is amended to read as
3-63     follows:
3-64           Sec. 11.  The commission shall charge and collect the
3-65     following fees:
3-66                 (1)  a fee not to exceed $100 for the filing of an
3-67     original application for a real estate broker license;
3-68                 (2)  a fee not to exceed $100 for annual renewal of a
3-69     real estate broker license;
 4-1                 (3)  a fee not to exceed $50 for the filing of an
 4-2     original application for a real estate salesperson license;
 4-3                 (4)  a fee not to exceed $50 for annual renewal of a
 4-4     real estate salesperson license;
 4-5                 (5)  a fee not to exceed $50 for an application for a
 4-6     license examination;
 4-7                 (6)  a fee not to exceed $20 for filing a request for a
 4-8     license for each additional office or place of business;
 4-9                 (7)  a fee not to exceed $20 for filing a request for a
4-10     license or certificate of registration for a change of place of
4-11     business, change of name, return to active status, or change of
4-12     sponsoring broker;
4-13                 (8)  a fee not to exceed $20 for filing a request to
4-14     replace a license or certificate of registration lost or destroyed;
4-15                 (9)  a fee not to exceed $400 for filing an application
4-16     for approval of an education program under Section 7(f) of this
4-17     Act;
4-18                 (10)  a fee not to exceed $200 a year for operation of
4-19     an education program under Section 7(f) of this Act;
4-20                 (11)  a fee of $20 [$15] for transcript evaluation;
4-21                 (12)  a fee not to exceed $10 for preparing a license
4-22     or registration history;
4-23                 (13)  a fee not to exceed $50 for the filing of an
4-24     application for a moral character determination;
4-25                 (14)  an annual fee of $20 from each real estate broker
4-26     and each registrant under Section 9A of this Act to be transmitted
4-27     to Texas A&M University for the Texas Real Estate Research Center
4-28     as provided by Section 5(m) of this Act;
4-29                 (15)  an annual fee of $17.50 from each real estate
4-30     salesperson to be transmitted to Texas A&M University for the Texas
4-31     Real Estate Research Center as provided by Section 5(m) of this
4-32     Act;
4-33                 (16)  an annual fee of $80 from each registrant under
4-34     Section 9A of this Act; and
4-35                 (17)  any fee authorized under Section 8 of this Act
4-36     for the real estate recovery trust account [fund].
4-37           SECTION 5.  Subsection (a), Section 15, The Real Estate
4-38     License Act (Article 6573a, Vernon's Texas Civil Statutes), is
4-39     amended to read as follows:
4-40           (a)  The commission may, on its own motion, and shall, on the
4-41     signed complaint in writing of any person [a consumer or service
4-42     recipient], provided the complaint, or the complaint together with
4-43     evidence, documentary or otherwise, presented in connection with
4-44     the complaint, provides reasonable cause, investigate the actions
4-45     and records of a real estate broker or real estate salesperson.
4-46     The commission may suspend or revoke a license issued under the
4-47     provisions of this Act or take other disciplinary action authorized
4-48     by this Act at any time when it has been determined that:
4-49                 (1)  the licensee has entered a plea of guilty or nolo
4-50     contendere to, or been found guilty of, or been convicted of, a
4-51     felony, in which fraud is an essential element, and the time for
4-52     appeal has elapsed or the judgment or conviction has been affirmed
4-53     on appeal, irrespective of an order granting probation following
4-54     such conviction, suspending the imposition of sentence;
4-55                 (2)  the licensee has procured, or attempted to
4-56     procure, a real estate license, for the licensee or a salesperson,
4-57     by fraud, misrepresentation or deceit, or by making a material
4-58     misstatement of fact in an application for a real estate license;
4-59                 (3)  the licensee, when selling, buying, trading, or
4-60     renting real property in the licensee's own name, engaged in
4-61     misrepresentation or dishonest or fraudulent action;
4-62                 (4)  the licensee has failed within a reasonable time
4-63     to make good a check issued to the commission after the commission
4-64     has mailed a request for payment by certified mail to the
4-65     licensee's last known business address as reflected by the
4-66     commission's records;
4-67                 (5)  the licensee has disregarded or violated a
4-68     provision of this Act;
4-69                 (6)  the licensee, while performing an act constituting
 5-1     an act of a broker or salesperson, as defined by this Act, has been
 5-2     guilty of:
 5-3                       (A)  making a material misrepresentation, or
 5-4     failing to disclose to a potential purchaser any latent structural
 5-5     defect or any other defect known to the broker or salesperson.
 5-6     Latent structural defects and other defects do not refer to trivial
 5-7     or insignificant defects but refer to those defects that would be a
 5-8     significant factor to a reasonable and prudent purchaser in making
 5-9     a decision to purchase;
5-10                       (B)  making a false promise of a character likely
5-11     to influence, persuade, or induce any person to enter into a
5-12     contract or agreement when the licensee could not or did not intend
5-13     to keep such promise;
5-14                       (C)  pursuing a continued and flagrant course of
5-15     misrepresentation or making of false promises through agents,
5-16     salespersons, advertising, or otherwise;
5-17                       (D)  failing to make clear, to all parties to a
5-18     transaction, which party the licensee is acting for, or receiving
5-19     compensation from more than one party except with the full
5-20     knowledge and consent of all parties;
5-21                       (E)  failing within a reasonable time properly to
5-22     account for or remit money coming into the licensee's possession
5-23     which belongs to others, or commingling money belonging to others
5-24     with the licensee's own funds;
5-25                       (F)  paying a commission or fees to or dividing a
5-26     commission or fees with anyone not licensed as a real estate broker
5-27     or salesperson in this state or in any other state for compensation
5-28     for services as a real estate agent;
5-29                       (G)  failing to specify a definite termination
5-30     date that is not subject to prior notice in a contract, other than
5-31     a contract to perform property management services, in which the
5-32     licensee agrees to perform services for which a license is required
5-33     under this Act;
5-34                       (H)  accepting, receiving, or charging an
5-35     undisclosed commission, rebate, or direct profit on expenditures
5-36     made for a principal;
5-37                       (I)  soliciting, selling, or offering for sale
5-38     real property under a scheme or program that constitutes a lottery
5-39     or deceptive practice;
5-40                       (J)  acting in the dual capacity of broker and
5-41     undisclosed principal in a transaction;
5-42                       (K)  guaranteeing, authorizing, or permitting a
5-43     person to guarantee that future profits will result from a resale
5-44     of real property;
5-45                       (L)  placing a sign on real property offering it
5-46     for sale, lease, or rent without the written consent of the owner
5-47     or the owner's authorized agent;
5-48                       (M)  inducing or attempting to induce a party to
5-49     a contract of sale or lease to break the contract for the purpose
5-50     of substituting in lieu thereof a new contract;
5-51                       (N)  negotiating or attempting to negotiate the
5-52     sale, exchange, lease, or rental of real property with an owner,
5-53     lessor, buyer, or tenant, knowing that the owner, lessor, buyer, or
5-54     tenant had a written outstanding contract, granting exclusive
5-55     agency in connection with the transaction to another real estate
5-56     broker;
5-57                       (O)  offering real property for sale or for lease
5-58     without the knowledge and consent of the owner or the owner's
5-59     authorized agent, or on terms other than those authorized by the
5-60     owner or the owner's authorized agent;
5-61                       (P)  publishing, or causing to be published, an
5-62     advertisement including, but not limited to, advertising by
5-63     newspaper, radio, television, Internet, or other display which is
5-64     misleading, or which is likely to deceive the public, or which in
5-65     any manner tends to create a misleading impression, or which fails
5-66     to identify the person causing the advertisement to be published as
5-67     a licensed real estate broker or agent;
5-68                       (Q)  having knowingly withheld from or inserted
5-69     in a statement of account or invoice, a statement that made it
 6-1     inaccurate in a material particular;
 6-2                       (R)  publishing or circulating an unjustified or
 6-3     unwarranted threat of legal proceedings, or other action;
 6-4                       (S)  establishing an association, by employment
 6-5     or otherwise, with an unlicensed person who is expected or required
 6-6     to act as a real estate licensee, or aiding or abetting or
 6-7     conspiring with a person to circumvent the requirements of this
 6-8     Act;
 6-9                       (T)  failing or refusing on demand to furnish
6-10     copies of a document pertaining to a transaction dealing with real
6-11     estate to a person whose signature is affixed to the document;
6-12                       (U)  failing to advise a purchaser in writing
6-13     before the closing of a transaction that the purchaser should
6-14     either have the abstract covering the real estate which is the
6-15     subject of the contract examined by an attorney of the purchaser's
6-16     own selection, or be furnished with or obtain a policy of title
6-17     insurance;
6-18                       (V)  conduct which constitutes dishonest
6-19     dealings, bad faith, or untrustworthiness;
6-20                       (W)  acting negligently or incompetently in
6-21     performing an act for which a person is required to hold a real
6-22     estate license;
6-23                       (X)  disregarding or violating a provision of
6-24     this Act;
6-25                       (Y)  failing within a reasonable time to deposit
6-26     money received as escrow agent in a real estate transaction, either
6-27     in trust with a title company authorized to do business in this
6-28     state, or in a custodial, trust, or escrow account maintained for
6-29     that purpose in a banking institution authorized to do business in
6-30     this state;
6-31                       (Z)  disbursing money deposited in a custodial,
6-32     trust, or escrow account, as provided in Subsection (Y) before the
6-33     transaction concerned has been consummated or finally otherwise
6-34     terminated; or
6-35                       (AA)  discriminating against an owner, potential
6-36     purchaser, lessor, or potential lessee on the basis of race, color,
6-37     religion, sex, national origin, or ancestry, including directing
6-38     prospective home buyers or lessees interested in equivalent
6-39     properties to different areas according to the race, color,
6-40     religion, sex, national origin, or ancestry of the potential owner
6-41     or lessee;
6-42                 (7)  the licensee has failed or refused on demand to
6-43     produce a document, book, or record in the licensee's possession
6-44     concerning a real estate transaction conducted by the licensee for
6-45     inspection by the commission or its authorized personnel or
6-46     representative;
6-47                 (8)  the licensee has failed within a reasonable time
6-48     to provide information requested by the commission as a result of a
6-49     formal or informal complaint to the commission which would indicate
6-50     a violation of this Act; or
6-51                 (9)  the licensee has failed without just cause to
6-52     surrender to the rightful owner, on demand, a document or
6-53     instrument coming into the licensee's possession.
6-54           SECTION 6.  Subsection (e), Section 15B, The Real Estate
6-55     License Act (Article 6573a, Vernon's Texas Civil Statutes), is
6-56     amended to read as follows:
6-57           (e)  The commission may authorize a commission employee to
6-58     file a signed written complaint against a licensee and to conduct
6-59     an investigation if:
6-60                 (1)  a judgment against the licensee has been paid from
6-61     a recovery fund established under this Act;
6-62                 (2)  the licensee is convicted of a criminal offense
6-63     that may constitute grounds for the suspension or revocation of the
6-64     licensee's license; [or]
6-65                 (3)  the licensee fails to make good a check issued to
6-66     the commission;
6-67                 (4)  the licensee fails to comply with a commission
6-68     rule adopted under Section 7A(g) of this Act; or
6-69                 (5)  the licensee fails to provide, within a reasonable
 7-1     time, information requested by the commission in connection with an
 7-2     application for the renewal of a license.
 7-3           SECTION 7.  Subsections (a), (b), (d), (h), (j), (m), and
 7-4     (o), Section 19A, The Real Estate License Act (Article 6573a,
 7-5     Vernon's Texas Civil Statutes), are amended to read as follows:
 7-6           (a)  If a person [licensed under this Act] violates this Act
 7-7     or a rule or order adopted by the commission under this Act, the
 7-8     commission may assess an administrative penalty against the person
 7-9     as provided by this section.
7-10           (b)  The penalty for each violation shall be set in an amount
7-11     not to exceed $1,000 a day.  Each day a violation continues or
7-12     occurs may be considered a separate violation for the purpose of
7-13     the assessment of a penalty.
7-14           (d)  If, after investigation of a possible violation and the
7-15     facts surrounding that possible violation, the administrator
7-16     determines that a violation has occurred, the administrator may
7-17     issue a violation report stating the facts on which the conclusion
7-18     that a violation occurred is based, recommending that an
7-19     administrative penalty under this section be imposed on the person
7-20     charged, and recommending the amount of that proposed penalty.  The
7-21     administrator shall base the recommended amount of the proposed
7-22     penalty on the seriousness of the violation determined by the
7-23     consideration of the factors set forth in Subsection (c) of this
7-24     section.  The commission may authorize the administrator to
7-25     delegate to another employee of the commission the administrator's
7-26     authority to act under this section.
7-27           (h)  If the person charged requests a hearing or fails to
7-28     timely respond to the notice, the administrator shall set a hearing
7-29     and give notice of the hearing.  The hearing shall be held by a
7-30     hearing examiner designated by the administrator.  The hearing
7-31     examiner shall make findings of fact and conclusions of law and
7-32     promptly issue to the commission a proposal for decision as to the
7-33     occurrence of the violation, including a recommendation as to the
7-34     amount of the proposed penalty if a penalty is warranted.  Based on
7-35     the findings of fact, conclusions of law, and recommendations of
7-36     the hearing examiner, the commission by order may find a violation
7-37     has occurred and may assess a penalty or may find that no violation
7-38     has occurred.  All proceedings under this subsection are subject to
7-39     Chapter 2001, Government Code.  The commission may authorize the
7-40     hearing examiner to conduct the hearing and to enter a final
7-41     decision [the Administrative Procedure and Texas Register Act
7-42     (Article 6252-13a, Vernon's Texas Civil Statutes)].
7-43           (j)  Within the 30-day period immediately following the date
7-44     on which the order becomes final as provided by Chapter 2001,
7-45     Government Code [Subsection (c), Section 16, Administrative
7-46     Procedure and Texas Register Act (Article 6252-13a, Vernon's Texas
7-47     Civil Statutes)], the person charged with the penalty shall:
7-48                 (1)  pay the penalty in full; or
7-49                 (2)  if the person files a petition for judicial review
7-50     contesting either the amount of the penalty or the fact of the
7-51     violation or contesting both the fact of the violation and the
7-52     amount of the penalty:
7-53                       (A)  forward the amount to the administrator for
7-54     placement in an escrow account; or
7-55                       (B)  in lieu of payment into escrow, post with
7-56     the administrator a supersedeas bond in a form approved by the
7-57     administrator for the amount of the penalty, the bond to be
7-58     effective until all judicial review of the order or decision is
7-59     final.
7-60           (m)  Judicial review of the order or decision of the
7-61     commission assessing the penalty shall be under the substantial
7-62     evidence rule and shall be instituted by filing a petition with a
7-63     district court in Travis County, as provided by Chapter 2001,
7-64     Government Code [Section 19, Administrative Procedure and Texas
7-65     Register Act (Article 6252-13a, Vernon's Texas Civil Statutes)].
7-66           (o)  A penalty collected under this section for a violation
7-67     by a person licensed as a real estate broker or salesperson shall
7-68     be deposited in the real estate recovery trust account [fund].  A
7-69     penalty collected under this section for a violation by a person
 8-1     licensed or registered as a real estate inspector shall be
 8-2     deposited in the real estate inspection recovery trust fund.  A
 8-3     penalty collected under this section for a violation by a person
 8-4     who is not licensed under this Act shall be deposited either in the
 8-5     real estate recovery trust account or in the real estate inspection
 8-6     recovery trust fund.
 8-7           SECTION 8.  Subdivision (1), Subsection (h), Section 23, The
 8-8     Real Estate License Act (Article 6573a, Vernon's Texas Civil
 8-9     Statutes), is amended to read as follows:
8-10                 (1)  The commission shall charge and collect reasonable
8-11     and necessary fees to recover the cost of administering this
8-12     section as follows:
8-13                       (A)  a fee not to exceed $75 for the filing of an
8-14     original application for a license as an apprentice inspector;
8-15                       (B)  a fee not to exceed $125 for the filing of
8-16     an original application for a license as a real estate inspector;
8-17                       (C)  a fee not to exceed $150 for the filing of
8-18     an original application for a license as a professional inspector;
8-19                       (D)  a fee not to exceed $125 for the annual
8-20     license renewal of an apprentice inspector;
8-21                       (E)  a fee not to exceed $175 for the annual
8-22     license renewal of a real estate inspector;
8-23                       (F)  a fee not to exceed $200 for the annual
8-24     license renewal of a professional inspector;
8-25                       (G)  a fee not to exceed $100 for taking a
8-26     license examination; [and]
8-27                       (H)  a fee not to exceed $20 for a request for a
8-28     change of place of business or to replace a lost or destroyed
8-29     license; and
8-30                       (I)  a fee not to exceed $20 for filing a request
8-31     for a change of name on a license, return to active status, or
8-32     change in sponsoring professional inspector.
8-33           SECTION 9.  Subdivision (1), Subsection (i), Section 23, The
8-34     Real Estate License Act (Article 6573a, Vernon's Texas Civil
8-35     Statutes), is amended to read as follows:
8-36                 (1)  The commission shall prescribe the licensing
8-37     examinations, which shall be prepared by or contracted for by the
8-38     commission.  A licensing examination shall evaluate competency in
8-39     the subject matter of all required core real estate inspection
8-40     courses.  The licensing examination shall be offered not less often
8-41     than once every two months in Austin.  If a license applicant fails
8-42     the examination, the applicant may apply for reexamination by
8-43     filing a request with the commission and paying the examination
8-44     fee.  Each license applicant must satisfy the examination
8-45     requirement not later than six months after the date on which the
8-46     license application is filed.  A license applicant who fails to
8-47     satisfy the examination requirement within six months after the
8-48     date on which the license application is filed must submit a new
8-49     license application with the commission and pay the examination fee
8-50     to be eligible for examination.  If a license applicant fails the
8-51     examination four [three] consecutive times in connection with the
8-52     same application, the applicant may not apply for reexamination or
8-53     submit a new license application with the commission for six months
8-54     from the date the applicant [he] failed the last examination.
8-55           SECTION 10.  Subsection (k), Section 23, The Real Estate
8-56     License Act (Article 6573a, Vernon's Texas Civil Statutes), is
8-57     amended to read as follows:
8-58           (k)  Continuing education programs.  The commission shall
8-59     recognize, prepare, or administer continuing education programs for
8-60     inspectors.  Participation in the programs is mandatory.  A real
8-61     estate inspector must submit satisfactory evidence to the
8-62     commission of successful completion of at least eight [four]
8-63     classroom hours of core real estate inspection courses annually
8-64     before a licensed renewal is issued.  A professional inspector must
8-65     submit satisfactory evidence to the commission of successful
8-66     completion of at least 16 [eight] classroom hours of core [related]
8-67     real estate inspection courses annually before a license renewal is
8-68     issued.
8-69           SECTION 11.  Subdivisions (3), (7), and (15), Subsection (o),
 9-1     Section 23 The Real Estate License Act (Article 6573a, Vernon's
 9-2     Texas Civil Statutes), are amended to read as follows:
 9-3                 (3)  If at any time [on December 31 of any year] the
 9-4     balance remaining in the real estate inspection recovery trust fund
 9-5     is less than $300,000, each inspector, on the next renewal of the
 9-6     person's license, shall pay, in addition to the license renewal
 9-7     fee, a fee of $75, or a pro rata share of the amount necessary to
 9-8     bring the fund to $450,000, whichever is less, which shall be
 9-9     deposited in the real estate inspection recovery trust fund.
9-10     Notwithstanding any other provision of this Act, to ensure that
9-11     sufficient money is available to pay anticipated claims on the
9-12     fund, the commission may provide by rule for the collection of
9-13     assessments at times and under conditions other than those
9-14     specified by this Act.
9-15                 (7)  The court shall proceed on the application
9-16     forthwith.  On the hearing on the application, the aggrieved person
9-17     is required to show:
9-18                       (A)  that the judgment is based on facts allowing
9-19     recovery under Subdivision (1) of this subsection;
9-20                       (B)  that the person is not a spouse of the
9-21     debtor or the personal representative of the spouse and the person
9-22     is not an inspector, as defined by this section;
9-23                       (C)  [that the person has obtained a judgment
9-24     under Subdivision (6) of this subsection that is not subject to a
9-25     stay or discharge in bankruptcy, stating the amount of the judgment
9-26     and the amount owing on the judgment at the date of the
9-27     application;]
9-28                       [(D)]  that based on the best information
9-29     available, the judgment debtor lacks sufficient attachable assets
9-30     in this state or any other state to satisfy the judgment; and
9-31                       (D) [(E)]  the amount that may be realized from
9-32     the sale of real or personal property or other assets liable to be
9-33     sold or applied in satisfaction of the judgment and the balance
9-34     remaining due on the judgment after application of the amount that
9-35     may be realized.
9-36                 (15)  Notwithstanding any other provision, payments
9-37     from the real estate inspection recovery trust fund are subject to
9-38     the following conditions and limitations:
9-39                       (A)  payments may be made only pursuant to an
9-40     order of a court of competent jurisdiction, as provided by
9-41     Subdivision (6) of this subsection, and in the manner prescribed by
9-42     this subsection;
9-43                       (B)  payments for claims, including attorney
9-44     fees, interest, and court costs, arising out of the same
9-45     transaction shall be limited in the aggregate to $10,000 [$7,500]
9-46     regardless of the number of claimants; and
9-47                       (C)  payments for claims based on judgments
9-48     against a licensed inspector may not exceed in the aggregate
9-49     $30,000 [$15,000] until the fund has been reimbursed by the
9-50     licensee for all amounts paid.
9-51           SECTION 12.  (a)  Except as otherwise provided by this
9-52     section, this Act takes effect September 1, 1999.
9-53           (b)  Subsection (e), Section 7, The Real Estate License Act
9-54     (Article 6573a, Vernon's Texas Civil Statutes), as amended by this
9-55     Act, applies only to an application filed on or after January 1,
9-56     2000.  An application filed before January 1, 2000, is governed by
9-57     the law existing immediately before this Act takes effect.
9-58           (c)  Subsection (k), Section 23, The Real Estate License Act
9-59     (Article 6573a, Vernon's Texas Civil Statutes), as amended by this
9-60     Act, applies only to continuing education requirements for the
9-61     renewal of an inspector license on or after December 31, 1999.
9-62           (d)  Subdivision (15), Subsection (o), Section 23, The Real
9-63     Estate License Act (Article 6573a, Vernon's Texas Civil Statutes),
9-64     as amended by this Act, applies only to a cause of action that
9-65     accrues on or after the effective date of this Act.  A cause of
9-66     action that accrues before the effective date of this Act is
9-67     governed by the law in effect on the date the cause of action
9-68     accrued, and that law is continued in effect for that purpose.
9-69           SECTION 13.  Section 11, The Real Estate License Act (Article
 10-1    6573a, Vernon's Texas Civil Statutes), as amended by this Act,
 10-2    applies only to a fee for a transcript that is evaluated on or
 10-3    after the effective date of this Act.  A fee for a transcript
 10-4    evaluated before the effective date of this Act is governed by the
 10-5    law in effect on the date the transcript was evaluated, and that
 10-6    law is continued in effect for that purpose.
 10-7          SECTION 14.  Subsection (a), Section 19A, The Real Estate
 10-8    License Act (Article 6573a, Vernon's Texas Civil Statutes), as
 10-9    amended by this Act, applies only to a violation  that occurs on or
10-10    after the effective date of this Act.  A violation that occurs
10-11    before the effective date of this Act is governed by the law in
10-12    effect on the date the violation occurred, and that law is
10-13    continued in effect for that purpose.
10-14                                 * * * * *