By: Shapleigh S.B. No. 914

A BILL TO BE ENTITLED

AN ACT

relating to the continuation and functions of the Texas Real Estate Commission and the regulation of real estate brokers, salespersons, inspectors, appraisers, residential service companies, and timeshares; providing administrative penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 1101.006, Occupations Code, is amended to read as follows:

Sec. 1101.006. APPLICATION OF SUNSET ACT. The Texas Real Estate Commission is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, the commission is abolished and this chapter, [and] Chapter 1102, and Chapter 1303 of this code and Chapter 221, Property Code, expire September 1, 2019 [2007].

SECTION 2. Section 1101.053, Occupations Code, is amended to read as follows:

Sec. 1101.053. MEMBERSHIP AND EMPLOYEE RESTRICTIONS. (a) In this section, "Texas trade association" means a [nonprofit,] cooperative[,] and voluntarily joined statewide association of business or professional competitors in this state designed to assist its members and its industry or profession in dealing with mutual business or professional problems and in promoting their common interest.

(b) A person may not be a member of the commission and may not be a commission employee employed in a "bona fide executive, administrative, or professional capacity," as that phrase is used for purposes of establishing an exemption to the overtime provisions of the federal Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.) if:

(1) the person is an officer, [A state elected president, president-elect, vice president, or secretary-treasurer,] employee, or paid consultant of a Texas trade association in the real estate industry; or

(2) the person's spouse [may not be a commission member and may not be a commission employee who is exempt from the state's position classification plan or is compensated at or above the amount prescribed by the General Appropriations Act for step 1, salary group A17, of the position classification salary schedule.

[(c)A person who] is [the spouse of] an officer, manager, or paid consultant of a Texas trade association in the real estate industry [may not be a commission member and may not be a commission employee who is exempt from the state's position classification plan or is compensated at or above the amount prescribed by the General Appropriations Act for step 1, salary group A17, of the position classification salary schedule].

(c) [(d)] A person may not serve as a commission member or act as the general counsel to the commission if the person is required to register as a lobbyist under Chapter 305, Government Code, because of the person's activities for compensation on behalf of a profession related to the operation of the commission.

SECTION 3. Subsections (a) and (c), Section 1101.057, Occupations Code, are amended to read as follows:

(a) It is a ground for removal from the commission that a member:

(1) does not have at the time of appointment the qualifications required by Section 1101.051(a) or (b) or 1101.052;

(2) does not maintain during service on the commission the qualifications required by Section 1101.051(a) or (b) or 1101.052;

(3) is ineligible for membership under [violates a prohibition established by] Section 1101.053;

(4) cannot, because of illness or disability, discharge the member's duties for a substantial part of the member's term; or

(5) is absent from more than half of the regularly scheduled commission meetings that the member is eligible to attend during each calendar year, unless the absence is excused by majority vote of the commission.

(c) If the administrator has knowledge that a potential ground for removal [of a commission member] exists, the administrator shall notify the presiding officer of the commission of the potential ground. The presiding officer shall then notify the governor and the attorney general that a potential ground for removal exists. If the potential ground for removal involves the presiding officer, the administrator shall notify the next highest ranking officer of the commission, who shall then notify the governor and the attorney general that a potential ground for removal exists.

SECTION 4. Subchapter B, Chapter 1101, Occupations Code, is amended by adding Section 1101.059 to read as follows:

Sec. 1101.059. TRAINING. (a) A person who is appointed to and qualifies for office as a member of the commission may not vote, deliberate, or be counted as a member in attendance at a meeting of the commission until the person completes a training program that complies with this section.

(b) The training program must provide the person with information regarding:

(1) this chapter and other laws regulated by the commission;

(2) the programs, functions, rules, and budget of the commission;

(3) the results of the most recent formal audit of the commission;

(4) the requirements of laws relating to open meetings, public information, administrative procedure, and conflicts of interest; and

(5) any applicable ethics policies adopted by the commission or the Texas Ethics Commission.

(c) A person appointed to the commission is entitled to reimbursement, as provided by the General Appropriations Act, for the travel expenses incurred in attending the training program regardless of whether the attendance at the program occurs before or after the person qualifies for office.

SECTION 5. Subsection (a), Section 1101.101, Occupations Code, is amended to read as follows:

(a) The commission shall [may] appoint an administrator.

SECTION 6. Section 1101.102, Occupations Code, is amended to read as follows:

Sec. 1101.102. DIVISION OF RESPONSIBILITIES. The commission shall develop and implement policies that clearly separate the policymaking [define the respective] responsibilities of the commission and the management responsibilities of the administrator and the [commission] staff of the commission.

SECTION 7. Subsections (a) and (b), Section 1101.152, Occupations Code, are amended to read as follows:

(a) The commission shall adopt rules to charge and collect a fee for [the following fees]:

(1) [for] filing an original application for a broker license[, not more than $100];

(2) [for] annual renewal of a broker license[, not more than $100];

(3) [for] filing an original application for a salesperson license[, not more than $75];

(4) [for] annual renewal of a salesperson license[, not more than $50];

(5) [for] annual registration[, $80];

(6) filing [for] an application for a license examination[, not more than $100];

(7) [for] filing a request for a branch office license[, not more than $20];

(8) [for] filing a request for a change of place of business, change of name, return to active status, or change of sponsoring broker[, not more than $20];

(9) [for] filing a request to replace a lost or destroyed license or certificate of registration[, not more than $20];

(10) [for] filing an application for approval of an education program under Subchapter G[, not more than $400];

(11) [for] annual operation of an education program under Subchapter G[, not more than $200];

(12) [for] filing an application for approval of an instructor of core real estate courses[, not more than $40];

(13) [for] transcript evaluation[, $20];

(14) [for] preparing a license or registration history[, not more than $20]; and

(15) [for] filing an application for a moral character determination[, not more than $50].

(b) The commission shall adopt rules to [may] set and collect reasonable fees to implement the continuing education requirements for license holders, including a fee for [the following fees]:

(1) [for] an application for approval of a continuing education provider[, not more than $400];

(2) [for] an application for approval of a continuing education course of study[, not more than $100];

(3) [for] an application for approval of an instructor of continuing education courses[, not more than $40]; and

(4) [for] attendance at a program to train instructors of a continuing education course prescribed under Section 1101.455[, not more than $100].

SECTION 8. Subchapter D, Chapter 1101, Occupations Code, is amended by adding Sections 1101.158, 1101.159, and 1101.160 to read as follows:

Sec. 1101.158. ADVISORY COMMITTEES. (a) The commission may appoint advisory committees to perform the advisory functions assigned to the committees by the commission. An advisory committee under this section is subject to Section 2110, Government Code.

(b) A member of an advisory committee who is not a member of the commission may not receive compensation for service on the committee. The member may receive reimbursement for actual and necessary expenses incurred in performing committee functions as provided by Section 2110.004, Government Code.

(c) A member of an advisory committee serves at the will of the commission.

(d) An advisory committee may hold a meeting by telephone conference call or other video or broadcast technology.

(e) Advisory committee meetings are subject to Chapter 551, Government Code.

Sec. 1101.159. USE OF TECHNOLOGY. The commission shall implement a policy requiring the commission to use appropriate technological solutions to improve the commission's ability to perform its functions. The policy must ensure that the public is able to interact with the commission on the Internet.

Sec. 1101.160. NEGOTIATED RULEMAKING AND ALTERNATIVE DISPUTE RESOLUTION PROCEDURES. (a) The commission shall develop and implement a policy to encourage the use of:

(1) negotiated rulemaking procedures under Chapter 2008, Government Code, for the adoption of commission rules; and

(2) appropriate alternative dispute resolution procedures under Chapter 2009, Government Code, to assist in the resolution of internal and external disputes under the commission's jurisdiction.

(b) The commission's procedures relating to alternative dispute resolution must conform, to the extent possible, to any model guidelines issued by the State Office of Administrative Hearings for the use of alternative dispute resolution by state agencies.

(c) The commission shall designate a trained person to:

(1) coordinate the implementation of the policy adopted under Subsection (a);

(2) serve as a resource for any training needed to implement the procedures for negotiated rulemaking or alternative dispute resolution; and

(3) collect data concerning the effectiveness of those procedures, as implemented by the commission.

SECTION 9. Subsection (a), Section 1101.201, Occupations Code, is amended to read as follows:

(a) The commission shall prepare information of public interest describing the functions of the commission [and the procedures by which complaints are filed with and resolved by the commission].

SECTION 10. Section 1101.203, Occupations Code, is amended to read as follows:

Sec. 1101.203. COMPLAINT INFORMATION. (a) The commission shall maintain a system to promptly and efficiently act on complaints filed with the commission. The commission shall maintain a file on each complaint. The file must include:

(1) information relating to the parties to the complaint;

(2) the subject matter of the complaint;

(3) a summary of the results of the review or investigation of the complaint; and

(4) the disposition of the complaint [an information file about each complaint filed with the commission that the commission has authority to resolve].

(b) The commission shall make information available describing its procedures for complaint investigation and resolution.

(c) The [If a written complaint is filed with the commission that the commission has authority to resolve, the] commission[, at least quarterly and until final disposition of the complaint,] shall periodically notify the parties to the complaint of the status of the complaint until final disposition, unless the notice would jeopardize an undercover investigation authorized under Section 1101.204.

SECTION 11. Section 1101.204, Occupations Code, is amended by amending Subsection (a) and adding Subsection (h) to read as follows:

(a) The commission may file a complaint and conduct an investigation as necessary to enforce this chapter, Chapter 1102, or a rule adopted under those chapters[, on its own motion, investigate the actions and records of a license holder].

(h) The commission shall ensure that the commission gives priority to the investigation of a complaint filed by a consumer and an enforcement case resulting from the consumer complaint. The commission shall assign priorities and investigate complaints using a risk-based approach based on the:

(1) degree of potential harm to a consumer;

(2) potential for immediate harm to a consumer;

(3) overall severity of the allegations in the complaint;

(4) number of license holders potentially involved in the complaint;

(5) previous complaint history of the license holder; and

(6) number of potential violations in the complaint.

SECTION 12. Section 1101.301, Occupations Code, is amended by adding Subsection (c) to read as follows:

(c) In establishing accreditation standards for an educational program under Subsection (a), the commission shall adopt rules that require a program to establish that at least 55 percent of the program's graduates have passed a licensing exam the first time the exam has been taken by the graduates before the commission may renew the program's accreditation.

SECTION 13. Section 1101.303, Occupations Code, is amended to read as follows:

Sec. 1101.303. APPROVAL OF CONTINUING EDUCATION PROVIDER OR COURSE OF STUDY. (a) If the commission determines that an applicant for approval as a continuing education provider satisfies the requirements of this subchapter or Section 1102.205 and any rule adopted under this subchapter or Section 1102.205, the commission may authorize the applicant to offer continuing education for a two-year period.

(b) If the commission determines that an applicant for approval of a continuing education course of study satisfies the requirements of this subchapter or Section 1102.205 and any rule adopted under this subchapter or Section 1102.205, the commission may authorize the applicant to offer the course of study for a two-year period.

SECTION 14. Subchapter G, Chapter 1101, Occupations Code, is amended by adding Sections 1101.304 and 1101.305 to read as follows:

Sec. 1101.304. EXAMINATION PASSAGE RATE DATA. (a) The commission shall adopt rules regarding the collection and publication of data relating to examination passage rates for graduates of accredited educational programs.

(b) Rules adopted under this section must provide for a method to:

(1) calculate the examination passage rate;

(2) collect the relevant data from the examination administrator or the accredited program; and

(3) post the examination passage rate data on the commission's Internet website, in a manner aggregated by educational program and by license group.

(c) In determining the educational program a graduate is affiliated with for purposes of this section, the educational program is the program the graduate last attended.

Sec. 1101.305. REVIEW COMMITTEE. (a) The commission may appoint a committee to review the performance of an educational program performing below the standards set by the commission under Section 1101.301. The committee shall consist of:

(1) at least one commission member;

(2) at least one member of the commission staff;

(3) individuals licensed under this chapter or Chapter 1102; and

(4) a representative from the Texas Real Estate Research Center.

(b) A committee formed under this section shall review and evaluate any factor causing an educational program's poor performance and report findings and recommendations to improve performance to the program and to the commission.

(c) A committee formed under this section may not revoke the accreditation of an educational program. The commission may temporarily suspend a program in the same manner as a license under Subchapter N.

SECTION 15. Subsection (b), Section 1101.364, Occupations Code, is amended to read as follows:

(b) A person whose license application is denied under this section is entitled to a hearing under Section 1101.657 [Before the applicant may appeal under Section 1101.658, the applicant must file, not later than the 10th day after the date the applicant receives the notice, an appeal requesting a time and place for a hearing before the commission. If the applicant fails to request a hearing as provided by this subsection, the commission's decision becomes final and is not subject to judicial review].

SECTION 16. The heading to Section 1101.451, Occupations Code, is amended to read as follows:

Sec. 1101.451. LICENSE EXPIRATION AND RENEWAL.

SECTION 17. Section 1101.451, Occupations Code, is amended by adding Subsections (e) and (f) to read as follows:

(e) A person whose license has been expired for 90 days or less may renew the license by paying to the commission a fee equal to 1-1/2 times the required renewal fee. If a license has been expired for more than 90 days but less than one year, the person may renew the license by paying to the commission a fee equal to two times the required renewal fee.

(f) If a person's license has been expired for one year or longer, the person may not renew the license. The person may obtain a new license by submitting to reexamination and complying with the requirements and procedures for obtaining an original license.

SECTION 18. Subsection (b), Section 1101.457, Occupations Code, is amended to read as follows:

(b) The commission may require an applicant under this section to:

(1) pay a [an additional] fee, not to exceed $200, in addition to any fee for late renewal of a license under this chapter; and

(2) complete the required continuing education not later than the 60th day after the date the license is issued, renewed, or returned to active status.

SECTION 19. Subsection (a), Section 1101.657, Occupations Code, is amended to read as follows:

(a) If the commission proposes to deny, suspend, or revoke a person's license or certificate of registration, the person is entitled to a hearing conducted by the State Office of Administrative Hearings [before the commission or a hearings officer appointed by the commission].

SECTION 20. Subsection (a), Section 1101.658, Occupations Code, is amended to read as follows:

(a) A person aggrieved by a ruling, order, or decision under this subchapter [of the commission] is entitled to appeal to a district court in the county in which the administrative hearing was held.

SECTION 21. Subchapter N, Chapter 1101, Occupations Code, is amended by adding Sections 1101.659 through 1101.662 to read as follows:

Sec. 1101.659. REFUND. (a) Subject to Subsection (b), the commission may order a person regulated by the commission to pay a refund to a consumer as provided in an agreement resulting from an informal settlement conference or an enforcement order instead of or in addition to imposing an administrative penalty or other sanctions.

(b) The amount of a refund ordered as provided in an agreement resulting from an informal settlement conference or an enforcement order may not exceed the amount the consumer paid to the person for a service or accommodation regulated by this commission. The commission may not require payment of other damages or estimate harm in a refund order.

Sec. 1101.660. INFORMAL PROCEEDINGS. (a) The commission by rule shall adopt procedures governing informal disposition of a contested case.

(b) Rules adopted under this section must:

(1) provide the complainant and the license holder, certificate holder, or regulated entity an opportunity to be heard; and

(2) require the presence of:

(A) a public member of the commission for a case involving a consumer complaint; and

(B) at least two staff members of the commission with experience in the regulatory area that is the subject of the proceeding.

Sec. 1101.661. FINAL ORDER. The commission may issue a final order in a proceeding under this subchapter or Subchapter O regarding a person whose license has expired during the course of an investigation or administrative proceeding.

Sec. 1101.662. TEMPORARY SUSPENSION. (a) The presiding officer of the commission shall appoint a disciplinary panel consisting of three commission members to determine whether a person's license to practice under this chapter should be temporarily suspended.

(b) If the disciplinary panel determines from the information presented to the panel that a person licensed to practice under this chapter would, by the person's continued practice, constitute a continuing threat to the public welfare, the panel shall temporarily suspend the license of that person.

(c) A license may be suspended under this section without notice or hearing on the complaint if:

(1) institution of proceedings for a hearing before the commission is initiated simultaneously with the temporary suspension; and

(2) a hearing is held under Chapter 2001, Government Code, and this chapter as soon as possible.

(d) Notwithstanding Chapter 551, Government Code, the disciplinary panel may hold a meeting by telephone conference call if immediate action is required and convening the panel at one location is inconvenient for any member of the panel.

SECTION 22. Section 1101.701, Occupations Code, is amended to read as follows:

Sec. 1101.701. IMPOSITION OF ADMINISTRATIVE PENALTY. (a) The commission may impose an administrative penalty on a person who violates this chapter or a rule adopted or order issued by the commission under this chapter.

(b) The commission shall periodically review the commission's enforcement procedures and ensure that administrative penalty and disciplinary proceedings are combined into a single enforcement procedure.

(c) The commission may combine a proceeding to impose an administrative penalty with another disciplinary proceeding, including a proceeding to suspend or revoke a license.

SECTION 23. Section 1101.702, Occupations Code, is amended by amending Subsection (a) and adding Subsection (c) to read as follows:

(a) The amount of an administrative penalty may not exceed $5,000 [$1,000] for each violation. Each day a violation continues or occurs may be considered a separate violation for purposes of imposing a penalty if the commission determines that the person charged:

(1) engaged in an activity for which a broker or salesperson license is required without holding a license; and

(2) was not licensed by the commission as a broker or salesperson at any time in the four years preceding the date of the violation.

(c) The commission by rule shall adopt a schedule of administrative penalties based on the criteria listed in Subsection (b) for violations subject to an administrative penalty under this section to ensure that the amount of a penalty imposed is appropriate to the violation. The rules adopted under this subsection must provide authority for the commission to suspend or revoke a license in addition to or instead of imposing an administrative penalty.

SECTION 24. The heading to Section 1101.703, Occupations Code, is amended to read as follows:

Sec. 1101.703. [REPORT AND] NOTICE OF VIOLATION AND PENALTY.

SECTION 25. Subsection (a), Section 1101.703, Occupations Code, is amended to read as follows:

(a) If, after investigation of a possible violation and the facts relating to that violation, the administrator determines that a violation has occurred, the administrator may issue a notice of violation [report] stating:

(1) a brief summary of the alleged violation [the facts on which the determination is based]; [and]

(2) the administrator's recommendation on the imposition of the administrative penalty or another disciplinary sanction, including a recommendation on the amount of the penalty; and

(3) that the respondent has the right to a hearing to contest the alleged violation, the recommended penalty, or both.

SECTION 26. Section 1101.704, Occupations Code, is amended to read as follows:

Sec. 1101.704. PENALTY TO BE PAID OR HEARING REQUESTED. (a) Not later than the 20th day after the date the person receives the notice under Section 1101.703, the person may:

(1) accept the administrator's determination, including the recommended administrative penalty; or

(2) request in writing a hearing on the occurrence of the violation, the amount of the penalty, or both [determination].

(b) If the person accepts the administrator's determination, or fails to respond in a timely manner to the notice, the commission by order shall approve the determination and order payment of the recommended penalty.

SECTION 27. The heading to Section 1101.705, Occupations Code, is amended to read as follows:

Sec. 1101.705. HEARING; DECISION [BY COMMISSION].

SECTION 28. Subsections (a), (b), (c), and (e), Section 1101.705, Occupations Code, are amended to read as follows:

(a) If the person requests a hearing [or fails to timely respond to the notice], the administrator shall set a hearing and give notice of the hearing to the person.

(b) An administrative law judge of the State Office of Administrative Hearings [A hearings examiner designated by the administrator] shall conduct the hearing. The administrative law judge [hearings examiner] shall:

(1) make findings of fact and conclusions of law; and

(2) promptly issue to the commission a proposal for decision regarding the occurrence of the violation and the amount of any proposed administrative penalty.

(c) Based on the findings of fact, conclusions of law, and proposal for decision of the administrative law judge [hearings examiner], the commission by order may determine that:

(1) a violation occurred and impose an administrative penalty; or

(2) a violation did not occur.

(e) The notice of the commission's order given to the person under Chapter 2001, Government Code, must include a statement of the person's right to judicial review of the order [The commission may authorize the hearings examiner to conduct the hearing and enter a final decision].

SECTION 29. Section 1101.707, Occupations Code, is amended to read as follows:

Sec. 1101.707. OPTIONS FOLLOWING DECISION: PAY OR APPEAL. (a) Not later than the 30th day after the date the commission's order becomes final, the person shall:

(1) pay the administrative penalty; or

(2) file a petition for judicial review [with a district court in Travis County] contesting the occurrence [fact] of the violation, the amount of the penalty, or both.

(b) Within the 30-day period prescribed by Subsection (a), a person who files a petition for judicial review [acts under Subsection (a)(2)] may:

(1) stay enforcement of the penalty by:

(A) [(1)] paying the penalty to the court [administrator] for placement in an escrow account; or

(B) [(2)] giving the court [administrator] a supersedeas bond in a form approved by the court [administrator] that:

(i) [(A)] is for the amount of the penalty; and

(ii) [(B)] is effective until judicial review of the order is final; or

(2) request the court to stay enforcement by:

(A) [(3)] filing with the court [administrator] an affidavit of the person stating that the person is financially unable to pay the penalty and is financially unable to give the supersedeas bond; and

(B) giving a copy of the affidavit to the administrator by certified mail.

(c) If the administrator receives a copy of an affidavit under Subsection (b)(2), the administrator may file with the court, within five days after the date the copy is received, a contest to the affidavit [A person who fails to take action as provided by this section waives the right to judicial review of the commission's order].

(d) The court shall hold a hearing on the facts alleged in the affidavit as soon as practicable and shall stay the enforcement of the penalty on finding that the alleged facts are true. The person who files an affidavit has the burden of proving that the person is financially unable to pay the penalty and to give a supersedeas bond.

SECTION 30. Subchapter O, Chapter 1101, Occupations Code, is amended by adding Section 1101.7085 to read as follows:

Sec. 1101.7085. DETERMINATION BY COURT. (a) If the court sustains the determination that a violation occurred, the court may uphold or reduce the amount of the administrative penalty and order the person to pay the full or reduced amount of the penalty.

(b) If the court does not sustain the finding that a violation occurred, the court shall order that a penalty is not owed.

SECTION 31. Section 1101.709, Occupations Code, is amended to read as follows:

Sec. 1101.709. REMITTANCE OF PENALTY AND INTEREST. (a) If after judicial review the administrative penalty is reduced or is not upheld by the court, the court [administrator] shall[:

[(1)] remit the appropriate amount, plus accrued interest, to the person if the person paid the penalty[; or

[(2) execute a release of the bond if the person gave a supersedeas bond].

(b) The interest [Interest] accrues [under Subsection (a)(1)] at the rate charged on loans to depository institutions by the New York Federal Reserve Bank.

(c) The interest shall be paid for the period beginning on the date the penalty is paid and ending on the date the penalty is remitted.

(d) If the person gave a supersedeas bond and the penalty is not upheld by the court, the court shall order, when the court's judgment becomes final, the release of the bond.

(e) If the person gave a supersedeas bond and the amount of the penalty is reduced, the court shall order the release of the bond after the person pays the reduced amount.

SECTION 32. Subchapter O, Chapter 1101, Occupations Code, is amended by adding Section 1101.710 to read as follows:

Sec. 1101.710. ADMINISTRATIVE PROCEDURE. A proceeding under this subchapter is subject to Chapter 2001, Government Code.

SECTION 33. Subchapter P, Chapter 1101, Occupations Code, is amended by adding Section 1101.759 to read as follows:

Sec. 1101.759. CEASE AND DESIST ORDER. (a) If it appears to the commission that a person is violating this chapter or Chapter 1102 or a rule adopted under this chapter or Chapter 1102, the commission, after notice and opportunity for a hearing, may issue a cease and desist order prohibiting the person from engaging in the activity.

(b) A violation of an order under this section constitutes grounds for imposing an administrative penalty under Subchapter O.

SECTION 34. Subsection (a), Section 1102.051, Occupations Code, is amended to read as follows:

(a) The Texas Real Estate Inspector Committee is an advisory committee [consists of nine members] appointed by the commission.

SECTION 35. Section 1102.205, Occupations Code, is amended to read as follows:

Sec. 1102.205. CONTINUING EDUCATION REQUIREMENTS. (a) The commission shall approve, recognize, prepare, or administer a continuing education program for inspectors.

(b) As a prerequisite for renewal of a real estate inspector license, professional inspector license, or apprentice inspector license, the inspector must participate in the continuing education program and submit evidence satisfactory to the commission of successful completion of at least 16 classroom hours of core real estate inspection courses or continuing education courses for each year of the license period preceding the renewal.

SECTION 36. The heading to Subchapter I, Chapter 1102, Occupations Code, is amended to read as follows:

SUBCHAPTER I. DISCIPLINARY PROCEEDINGS, PENALTIES, AND

ENFORCEMENT PROVISIONS

SECTION 37. Subchapter I, Chapter 1102, Occupations Code, is amended by adding Section 1102.408 to read as follows:

Sec. 1102.408. TEMPORARY SUSPENSION. (a) The presiding officer of the commission shall appoint a disciplinary panel consisting of three commission members to determine whether a person's license to practice under this chapter should be temporarily suspended.

(b) If the disciplinary panel determines from the information presented to the panel that a person licensed to practice under this chapter would, by the person's continued practice, constitute a continuing threat to the public welfare, the panel shall temporarily suspend the license of that person.

(c) A license may be suspended under this section without notice or hearing on the complaint if:

(1) institution of proceedings for a hearing before the commission is initiated simultaneously with the temporary suspension; and

(2) a hearing is held under Chapter 2001, Government Code, and this chapter as soon as possible.

(d) Notwithstanding Chapter 551, Government Code, the disciplinary panel may hold a meeting by telephone conference call if immediate action is required and convening the panel at one location is inconvenient for any member of the panel.

SECTION 38. Subsection (a), Section 1103.101, Occupations Code, is amended to read as follows:

(a) The administrator of the Texas Real Estate Commission shall serve as [board shall employ a] commissioner.

SECTION 39. Subsection (a), Section 1103.103, Occupations Code, is amended to read as follows:

(a) The board shall determine the salaries of the [commissioner,] officers[,] and employees of the board.

SECTION 40. Section 1103.104, Occupations Code, is amended to read as follows:

Sec. 1103.104. DUTIES OF COMMISSIONER. The commissioner shall:

(1) disseminate information;

(2) administer rules adopted by the board under this chapter;

(3) review each application for a certificate or license and make a recommendation for final action to the board;

(4) review and make recommendations to the board regarding the adoption of rules relating to:

(A) the examination required by Subchapter F;

(B) education and experience requirements for issuance of certificates and licenses;

(C) continuing education for a certified or licensed appraiser;

(D) standards of professional practice and ethics for a certified or licensed appraiser;

(E) standards for a real estate appraisal performed by a certified or licensed appraiser; and

(F) the fees established by the board under Section 1103.156;

(5) collect fees established by the board; [and]

(6) manage the staff and employees of the board; and

(7) perform any other duty prescribed by the board under this chapter.

SECTION 41. Section 1103.504, Occupations Code, is amended to read as follows:

Sec. 1103.504. ATTORNEY GENERAL REPRESENTATION. The attorney general shall provide legal representation for the public interest in all proceedings before the administrative law judge of the State Office of Administrative Hearings [board] and may not represent the board in a contested case before the State Office of Administrative Hearings [board].

SECTION 42. Subsections (a) and (d), Section 1103.508, Occupations Code, are amended to read as follows:

(a) A contested case hearing shall [may] be conducted before an administrative law judge of the State Office of Administrative Hearings [a majority of the board members].

(d) The administrative law judge [designated presiding officer] shall control the proceedings and may:

(1) administer oaths;

(2) admit or exclude testimony or other evidence; and

(3) rule on all motions and objections.

SECTION 43. Subsection (a), Section 1103.510, Occupations Code, is amended to read as follows:

(a) If an appraiser or appraiser trainee receives proper notice of a contested case hearing but does not appear in person at the hearing, the administrative law judge [board and presiding officer] may conduct the hearing or enter an order, as the judge [board] determines appropriate.

SECTION 44. Subsection (c), Section 1103.512, Occupations Code, is amended to read as follows:

(c) Before testimony may be presented, the record must:

(1) show the identities of:

(A) any [the] board members present;

(B) the administrative law judge [presiding officer]; and

(C) the parties and their representatives; and

(2) state that all testimony is being recorded.

SECTION 45. Section 1103.513, Occupations Code, is amended to read as follows:

Sec. 1103.513. ORDER OF PROCEEDINGS. A contested case hearing shall be conducted in the following order, subject to modification at the discretion of the administrative law judge [board]:

(1) the administrative law judge [presiding officer] shall read a summary of the charges and answers to the charges and other responsive pleadings filed by the appraiser or appraiser trainee before the hearing;

(2) the attorney representing the board shall make a brief opening statement, including a summary of the charges and a list of the witnesses and documents to support the charges;

(3) the appraiser or appraiser trainee may make an opening statement, including the names of any witnesses the appraiser or appraiser trainee may call;

(4) the attorney representing the board shall present evidence, concluding with a summary of the evidence for the state;

(5) the appraiser or appraiser trainee shall present evidence;

(6) the attorney representing the board may present rebuttal evidence;

(7) the appraiser or appraiser trainee may present rebuttal evidence; and

(8) the closing arguments shall be made in the following order:

(A) the attorney representing the board;

(B) the appraiser or appraiser trainee; and

(C) the attorney representing the board on rebuttal.

SECTION 46. Section 1103.516, Occupations Code, is amended to read as follows:

Sec. 1103.516. DIRECT EXAMINATION. In a contested case hearing, the administrative law judge [presiding officer] may conduct a direct examination of a witness at any stage of the witness's testimony.

SECTION 47. Section 1103.518, Occupations Code, is amended to read as follows:

Sec. 1103.518. [BOARD] ACTION AFTER HEARING. On conclusion of a contested case hearing and on submission of all written responses allowed under Section 1103.515, the administrative law judge shall [board]:

(1) [shall] make findings of fact and conclusions of law; and

(2) issue to the board a proposal for decision that the board [may] take one or more of the following actions:

(A) dismiss the charges, including issuing an order declaring that the case file is confidential;

(B) suspend or revoke the appraiser's certificate or license or the appraiser trainee's approval;

(C) impose a period of probation with or without conditions;

(D) require the appraiser to submit to reexamination for a certificate or license;

(E) require the appraiser or appraiser trainee to participate in additional professional education or continuing education;

(F) issue a public or private reprimand or a warning;

(G) issue a consent order; or

(H) impose an administrative penalty as prescribed by Section 1103.552.

SECTION 48. Subsection (c), Section 1103.520, Occupations Code, is amended to read as follows:

(c) On rehearing, the administrative law judge [board] shall consider facts not presented in the original hearing if:

(1) the facts arose after the original hearing was concluded;

(2) the party offering the evidence could not reasonably have provided the evidence at the original hearing; or

(3) the party offering the evidence was misled by a party regarding the necessity for offering the evidence at the original hearing.

SECTION 49. Subsection (a), Section 1103.521, Occupations Code, is amended to read as follows:

(a) The administrative law judge [board] shall file the judge's [its] final decision in a contested case hearing with the commissioner.

SECTION 50. Subchapter H, Chapter 1303, Occupations Code, is amended by adding Sections 1303.355 and 1303.356 to read as follows:

Sec. 1303.355. ADMINISTRATIVE PENALTY. (a) The commission may impose an administrative penalty as provided by Subchapter O, Chapter 1101, on a person who violates this chapter or a rule adopted or order issued by the commission under this chapter.

(b) The amount of an administrative penalty may not exceed $5,000 for each violation. Each day a violation continues or occurs may be considered a separate violation for purposes of imposing a penalty.

(c) In determining the amount of the penalty, the administrator shall consider:

(1) the seriousness of the violation, including the nature, circumstances, extent, and gravity of the violation;

(2) the economic harm caused by the violation;

(3) the history of previous violations;

(4) the amount necessary to deter a future violation;

(5) efforts to correct the violation; and

(6) any other matter that justice may require.

(d) The commission by rule shall adopt a schedule of administrative penalties based on the criteria listed in Subsection (c) for violations subject to an administrative penalty under this section to ensure that the amount of a penalty imposed is appropriate to the violation.

Sec. 1303.356. TEMPORARY SUSPENSION. (a) The presiding officer of the commission shall appoint a disciplinary panel consisting of three commission members to determine whether a person's license to practice under this chapter should be temporarily suspended.

(b) If the disciplinary panel determines from the information presented to the panel that a person licensed to practice under this chapter would, by the person's continued practice, constitute a continuing threat to the public welfare, the panel shall temporarily suspend the license of that person.

(c) A license may be suspended under this section without notice or hearing on the complaint if:

(1) institution of proceedings for a hearing before the commission is initiated simultaneously with the temporary suspension; and

(2) a hearing is held under Chapter 2001, Government Code, and this chapter as soon as possible.

(d) Notwithstanding Chapter 551, Government Code, the disciplinary panel may hold a meeting by telephone conference call if immediate action is required and convening the panel at one location is inconvenient for any member of the panel.

SECTION 51. Subchapter C, Chapter 221, Property Code, is amended by adding Section 221.027 to read as follows:

Sec. 221.027. TEMPORARY SUSPENSION. (a) The presiding officer of the commission shall appoint a disciplinary panel consisting of three commission members to determine whether the registration for a timeshare plan under this chapter should be temporarily suspended.

(b) If the disciplinary panel determines from the information presented to the panel that a timeshare plan registered under this chapter would, by the continued disposition of the timeshare property, constitute a continuing threat to the public welfare, the panel shall temporarily suspend the registration of the timeshare plan.

(c) A registration may be suspended under this section without notice or hearing on the complaint if:

(1) institution of proceedings for a hearing before the commission is initiated simultaneously with the temporary suspension; and

(2) a hearing is held under Chapter 2001, Government Code, and this chapter as soon as possible.

(d) Notwithstanding Chapter 551, Government Code, the disciplinary panel may hold a meeting by telephone conference call if immediate action is required and convening the panel at one location is inconvenient for any member of the panel.

SECTION 52. The following provisions of the Occupations Code are repealed:

(1) Subsection (g), Section 1101.204;

(2) Subsections (c), (d), and (e), Section 1101.364;

(3) Subsections (b), (c), and (d), Section 1101.657;

(4) Subsection (b), Section 1101.703;

(5) Subsections (b), (c), and (d), Section 1102.051;

(6) Section 1102.052;

(7) Section 1102.053;

(8) Section 1102.054;

(9) Section 1102.055;

(10) Section 1102.056;

(11) Section 1102.057;

(12) Subsection (a), Section 1102.058;

(13) Section 1102.059;

(14) Section 1102.061;

(15) Section 1102.062; and

(16) Subsection (c), Section 1103.508.

SECTION 53. (a) Not later than January 1, 2008, the Texas Real Estate Commission shall:

(1) adopt the policies required by Sections 1101.159 and 1101.160, Occupations Code, as added by this Act; and

(2) adopt the rules required by Chapter 1101, Occupations Code, as amended by this Act.

(b) As soon as practicable after the effective date of this Act, the commissioner of the Texas Real Estate Commission shall assume the administrative and management duties over the Texas Appraiser Licensing and Certification Board, as required by Section 1103.104, Occupations Code, as amended by this Act.

SECTION 54. (a) The changes in law made by this Act to Section 1101.053, Occupations Code, regarding the prohibitions on or qualifications of members of the Texas Real Estate Commission do not affect the entitlement of a member serving on the commission immediately before September 1, 2007, to continue to serve and function as a member of the commission for the remainder of the member's term. The changes in law made by that section apply only to a member appointed on or after September 1, 2007.

(b) The changes in law made by this Act regarding the filing, investigation, or resolution of a complaint under Chapter 1101, Occupations Code, as amended by this Act, apply only to a complaint filed with the Texas Real Estate Commission on or after the effective date of this Act. A complaint filed before the effective date of this Act is governed by the law as it existed immediately before that date, and the former law is continued in effect for that purpose.

(c) The change in law made by this Act regarding conduct that is grounds for imposition of a disciplinary sanction, including a refund, temporary license suspension, or cease and desist order, applies only to conduct that occurs on or after the effective date of this Act. Conduct that occurs before the effective date of this Act is governed by the law in effect on the date the conduct occurred, and the former law is continued in effect for that purpose.

(d) The changes in law made by this Act regarding the procedure for an administrative penalty apply only to a proceeding commenced on or after the effective date of this Act. A proceeding commenced before the effective date of this Act is governed by the law in effect on the date the proceeding commenced, and the former law is continued in effect for that purpose.

(e) The change in law made by this Act regarding the renewal of an expired license applies only to a license that expires on or after the effective date of this Act. A license that expires before the effective date of this Act is governed by the law in effect on the date the license expired, and the former law is continued in effect for that purpose.

(f) The change in law made by this Act regarding accreditation standards for educational programs under Chapter 1101, Occupations Code, as amended by this Act, applies only to an accreditation granted or renewed on or after September 1, 2009. An educational program renewing an accreditation on or after the effective date of this Act but before September 1, 2009, should strive to meet the new accreditation standards under Chapter 1101, Occupations Code, as amended by this Act, but an accreditation granted or renewed before September 1, 2009, is governed by the law in effect on the date the accreditation expired, and the former law is continued in effect for that purpose.

(g) The change in law made by this Act to the authority of the Texas Real Estate Inspector Committee to develop and recommend rules under Chapter 1102, Occupations Code, as amended by this Act, applies only to a rule proposed for adoption on or after the effective date of this Act. A rule proposed for adoption before the effective date of this Act is governed by the law in effect on the date the rule was proposed for adoption, and the former law is continued in effect for that purpose.

SECTION 55. This Act takes effect September 1, 2007.