LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session May 3, 2001 TO: Honorable David Sibley, Chair, Senate Committee on Business & Commerce FROM: John Keel, Director, Legislative Budget Board IN RE: HB695 by Reyna, Arthur (Relating to the regulation of certain occupations by the Texas Real Estate Commission; providing penalties.), Committee Report 2nd House, Substituted ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB695, Committee Report 2nd House, Substituted: positive impact * * of $446,000 through the biennium ending August 31, 2003. * * * * The bill would make no appropriation but could provide the legal * * basis for an appropriation of funds to implement the provisions of * * the bill. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2002 $223,000 * * 2003 223,000 * * 2004 223,000 * * 2005 223,000 * * 2006 223,000 * **************************************************** All Funds, Five-Year Impact: ***************************************************** * Fiscal Year Probable Revenue Gain/(Loss) from * * General Revenue Fund * * 0001 * * 2002 $223,000 * * 2003 223,000 * * 2004 223,000 * * 2005 223,000 * * 2006 223,000 * ***************************************************** Fiscal Analysis The bill would amend the Texas Real Estate License Act and the Residential Service Company Act. The bill would permit a person to apply for an inactive salesperson license without a sponsoring broker. The bill would give the Texas Real Estate Commission (TREC) authority to prescribe the content of core real estate courses for license application and continuing education courses for license renewal. The total numnber of required education hours would remain the same. The bill would increase the maximum fee for requesting the real estate examination from $50 to $100, and the transcript evaluation fee from $15 to $20. The bill also would allow TREC staff to file complaints against licensees not complying with continuing education provisions, and would increase the criminal offense of acting as a real estate broker, salesperson, easement or right-of-way agent, a residential rental locator, or real estate inspector to a Class A misdemeanor. The bill would also extend TREC's authorization for assessing administrative penalties to include a fine not to exceed $1,000 per violation. The bill would remove a specific date for evaluating the real estate recovery fund and the real estate inspection recovery fund and would increase the maximum payment to be made from these funds. This bill would take effect on September 1, 2001, with continuing education requirements for brokers and salespersons with renewal of licenses expiring December 31, 2001 and licensure applications filed after January 1, 2002. Methodology The Texas Real Estate Commission (TREC) estimates a total increase to general revenue of $223,000 per year would occur. An estimated 7,500 salesperson licenses going from inactive to active status are issued annually which would result in $20 per applicant or $150,000 per year. An estimated 14,000 transcript evaluations are performed annually which, with the increased fee from $15 to $20, would generate an additional $70,000 per year. A new fee of $20 for inspector license name change, return to active status or change in sponsoring professional inspector would bring approximately $3,000 per year for an estimated 150 requests. TREC indicates that no additional revenue from the increase in the examination fee would occur. The current fee charged is $35 and TREC does not anticipate increasing the fee. TREC indicates the maximum fee increase is warranted to allow room in negotiating with future vendors. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: 329 Texas Real Estate Commission LBB Staff: JK, JO, DB, RT, KM