By: Menéndez, Schwertner  S.B. No. 1577
         (In the Senate - Filed March 3, 2023; March 16, 2023, read
  first time and referred to Committee on Business & Commerce;
  April 6, 2023, reported adversely, with favorable Committee
  Substitute by the following vote:  Yeas 11, Nays 0; April 6, 2023,
  sent to printer.)
Click here to see the committee vote
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 1577 By:  Menéndez
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the Texas Real Estate Research Center, the Real Estate
  Research Advisory Committee, the Texas Real Estate Commission, and
  the Texas Appraiser Licensing and Certification Board; increasing a
  fee; authorizing a fee.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  The heading to Subchapter C, Chapter 86,
  Education Code, is amended to read as follows:
  SUBCHAPTER C. TEXAS REAL ESTATE RESEARCH CENTER
         SECTION 2.  Section 86.51, Education Code, is amended to
  read as follows:
         Sec. 86.51.  TEXAS REAL ESTATE RESEARCH CENTER. The Texas
  Real Estate Research Center [There] is established at Texas A&M
  University [a Real Estate Research Center, hereinafter referred to
  as the center]. The operating budget, staffing, and activities of
  the center shall be approved by the board of regents of The Texas
  A&M University System.
         SECTION 3.  Section 86.52, Education Code, is amended by
  amending Subsections (c), (d), (e), (f), (h), (i), (j), (k), and (l)
  and adding Subsection (m) to read as follows:
         (c)  Members [Except for the initial appointees, members] of
  the advisory committee hold office for staggered terms of six
  years, with the terms of three members expiring on January 31 of
  each odd-numbered year. [In making the initial appointments, the
  governor shall designate three members, including two
  representatives of the real estate industry and one representative
  of the general public, for terms expiring in 1973, three for terms
  expiring in 1975, and three for terms expiring in 1977.] Any
  vacancy shall be filled by appointment for the unexpired portion of
  the term. Each member shall serve until the member's [his]
  successor is qualified.
         (d)  The presiding officer [chairman] of the Texas Real
  Estate Commission, or a member of the commission designated by the
  presiding officer [him], shall serve as an ex officio, nonvoting
  member of the advisory committee.
         (e)  The advisory committee shall elect a presiding officer
  and an assistant presiding officer from the committee's [its]
  membership, and each officer shall serve for a term of one year.
         (f)  [The first meeting of the advisory committee shall be
  called by the president of Texas A & M University or his designated
  representative.] The advisory committee shall meet not less than
  semiannually, and in addition on call of the committee's presiding
  officer [its chairman], [or] on petition of any six of the
  committee's [its] members, or on call of the executive director of
  the center [president of Texas A & M University] or the executive
  director's [his] designated representative.
         (h)  The executive director of the center [president of Texas
  A & M University] or the executive director's [his] designated
  representative shall submit to the advisory committee in advance of
  each fiscal year a budget for expenditures of all funds provided for
  the center in a form that is related to the proposed schedule of
  activities for the review and approval of the advisory committee.
  The proposed budget approved by the advisory committee shall be
  forwarded with the comments of the committee to the board of
  directors of The Texas A&M [A & M] University System prior to its
  action on the proposed budget, and the board of directors of The
  Texas A&M [A & M] University System shall not authorize any
  expenditure that has not had the prior approval of the advisory
  committee.
         (i)  The president of Texas A&M [A & M] University or the
  president's [his] designated representative shall submit to the
  advisory committee for its review and approval a research agenda at
  the beginning of each fiscal year and shall continuously inform the
  advisory committee of changes in its substance and scheduling.
         (j)  Each member of the advisory committee [board] is
  entitled to a per diem as provided in the center's budget [set by
  legislative appropriation] for each day that the member engages in
  the business of the committee [board]. A member is entitled to [may
  not receive any] compensation for transportation and travel
  expenses, including expenses for meals and lodging[, other than
  transportation expenses. A member is entitled to compensation for
  transportation expenses] as provided in [prescribed by] the
  center's budget [General Appropriations Act].
         (k)  Except as provided by Subsection (l), the [The] advisory
  committee is subject to Chapter 551, Government Code, Chapter 2001,
  Government Code, and the provisions of Chapter 572, Government
  Code.
         (l)  The advisory committee may conduct a meeting by
  conference call or virtually through a third-party Internet
  application as long as members of the general public are able to
  participate in the meeting, and any discussions during the meeting,
  if the meeting is not permitted to be conducted as a closed meeting
  under Chapter 551, Government Code.
         (m)  The financial transactions of the center are subject to
  audit by the state auditor in accordance with Chapter 321,
  Government Code.
         SECTION 4.  Section 1101.0045, Occupations Code, is amended
  to read as follows:
         Sec. 1101.0045.  EQUITABLE INTERESTS IN REAL PROPERTY. (a)
  A person may acquire an option or an interest in a contract to
  purchase real property and then sell or offer to sell the option or
  assign or offer to assign the contract without holding a license
  issued under this chapter if the person:
               (1)  does not use the option or contract to purchase to
  engage in real estate brokerage; and
               (2)  discloses in writing the nature of the equitable
  interest to any seller or potential buyer.
         (b)  A person selling or offering to sell an option or
  assigning or offering to assign an interest in a contract to
  purchase real property without disclosing the nature of that
  interest as provided by Subsection (a)(2) [to a potential buyer] is
  engaging in real estate brokerage.
         SECTION 5.  Section 1101.054, Occupations Code, is amended
  to read as follows:
         Sec. 1101.054.  OFFICIAL OATH. Not later than the 15th
  calendar day after the date of appointment, each appointee must
  take the constitutional oath of office.
         SECTION 6.  Section 1101.152(a), Occupations Code, is
  amended to read as follows:
         (a)  The commission shall adopt rules to charge and collect
  fees in amounts reasonable and necessary to cover the costs of
  administering this chapter and the real estate recovery trust
  account as required by this chapter, including a fee for:
               (1)  filing an original application for a broker
  license;
               (2)  renewal of a broker license;
               (3)  filing an original application for a sales agent
  license;
               (4)  renewal of a sales agent license;
               (5)  registration as an easement or right-of-way agent;
               (6)  filing an application for a license examination;
               (7)  filing a request for a change of place of business,
  change of name, return to active status, or change of sponsoring
  broker;
               (8)  filing a request to replace a lost or destroyed
  license or certificate of registration;
               (9)  filing an application for approval of an education
  program under Subchapter G;
               (10)  annual operation of an education program under
  Subchapter G;
               (11)  transcript evaluation;
               (12)  preparing a license or registration history;
               (13)  filing a request for a determination of fitness
  to engage in a profession the commission regulates; [and]
               (14)  conducting a criminal history check for issuing
  or renewing a license; and
               (15)  registering as a business entity under Section
  1101.355(d).
         SECTION 7.  Section 1101.154(a), Occupations Code, is
  amended to read as follows:
         (a)  The fee for the issuance or renewal of a:
               (1)  broker license is the amount of the fee set under
  Section 1101.152 and an additional $70 fee for each year of the term
  for which the license is issued or renewed;
               (2)  sales agent license is the amount of the fee set
  under Section 1101.152 and an additional $20 fee for each year of
  the term for which the license is issued or renewed; and
               (3)  certificate of registration is the amount of the
  fee set under Section 1101.152 and an additional $20 fee for each
  year of the term for which the certificate is issued or renewed.
         SECTION 8.  The heading to Section 1101.355, Occupations
  Code, is amended to read as follows:
         Sec. 1101.355.  ADDITIONAL GENERAL ELIGIBILITY REQUIREMENTS
  FOR BUSINESS ENTITIES; REGISTRATION OF CERTAIN BUSINESS ENTITIES.
         SECTION 9.  Section 1101.355, Occupations Code, is amended
  by adding Subsections (d) and (e) to read as follows:
         (d)  Notwithstanding Subsection (c) or any other law, a
  business entity is not required to be licensed under this chapter if
  the business entity:
               (1)  receives compensation on behalf of a broker or
  sales agent licensed under this chapter that is earned by the
  license holder while engaged in real estate brokerage; 
               (2)  performs no other acts of a broker; 
               (3)  is:
                     (A)  a limited liability company as defined by
  Section 101.001, Business Organizations Code; or 
                     (B)  an S corporation as defined by 26 U.S.C.
  Section 1361; 
               (4)  is registered with the commission; and
               (5)  is at least 51 percent owned by the license holder
  on whose behalf the entity receives compensation.
         (e)  The commission shall adopt rules providing for the
  registration of a business entity described by Subsection (d).
         SECTION 10.  Sections 1101.356(a) and (b-1), Occupations
  Code, are amended to read as follows:
         (a)  An applicant for a broker license must provide to the
  commission satisfactory evidence that the applicant:
               (1)  has had at least four years of active experience
  [in this state] as a license holder during the 60 months preceding
  the date the application is filed; and
               (2)  has successfully completed the number of hours of
  qualifying real estate and related courses required by commission
  rule, not to exceed [at least] 60 semester hours[,] or equivalent
  classroom hours[, of postsecondary education, including:
                     [(A)  at least 18 semester hours or equivalent
  classroom hours of qualifying real estate courses, two semester
  hours of which must consist of a real estate brokerage course
  completed not more than two years before the application date; and
                     [(B)  at least 42 semester hours of qualifying
  real estate courses or related courses accepted by the commission].
         (b-1)  The commission by rule shall establish what
  constitutes active experience for purposes of this section [and
  Section 1101.357].
         SECTION 11.  Section 1101.358(a), Occupations Code, is
  amended to read as follows:
         (a)  An applicant for a sales agent license must provide to
  the commission satisfactory evidence that the applicant has
  completed at least 12 semester hours, or equivalent classroom
  hours, of [postsecondary] education consisting of:
               (1)  at least four semester hours of qualifying real
  estate courses on principles of real estate; and
               (2)  at least two semester hours of each of the
  following qualifying real estate courses:
                     (A)  agency law;
                     (B)  contract law;
                     (C)  contract forms and addendums; and
                     (D)  real estate finance.
         SECTION 12.  Section 1101.451(d), Occupations Code, is
  amended to read as follows:
         (d)  Except as provided by Subsection (e), a renewal fee for
  a license under this chapter may not exceed, calculated on an annual
  basis, the amount of the sum of the fees established under Sections
  1101.152 and[,] 1101.154[, and 1101.603].
         SECTION 13.  Section 1101.603(f), Occupations Code, is
  amended to read as follows:
         (f)  To ensure the availability of a sufficient amount to pay
  anticipated claims on the trust account, the commission by rule may
  provide for the collection of fees or assessments from an applicant
  for an original license or certificate of registration or from a
  license or certificate holder at the next renewal to credit to the
  trust account [at different times and under conditions other than
  those specified by this chapter].
         SECTION 14.  Sections 1101.610(a) and (b), Occupations Code,
  are amended to read as follows:
         (a)  Payments from the trust account for claims, including
  attorney's fees, interest, and court costs, arising out of a single
  transaction may not exceed a total of $125,000 [$50,000],
  regardless of the number of claimants.
         (b)  Payments from the trust account for claims based on
  judgments against a single license or certificate holder may not
  exceed a total of $250,000 [$100,000] until the license or
  certificate holder has reimbursed the trust account for all amounts
  paid.
         SECTION 15.  Section 1103.003(6), Occupations Code, is
  amended to read as follows:
               (6)  "Executive director" ["Commissioner"] means the
  executive director [commissioner] of the board [Texas Appraiser
  Licensing and Certification Board].
         SECTION 16.  Section 1103.0545(d), Occupations Code, is
  amended to read as follows:
         (d)  The executive director [commissioner] shall create a
  training manual that includes the information required by
  Subsection (b).  The executive director [commissioner] shall
  distribute a copy of the training manual annually to each member of
  the board.  Each member of the board shall sign and submit to the
  executive director [commissioner] a statement acknowledging that
  the member received and has reviewed the training manual.
         SECTION 17.  Section 1103.057(c), Occupations Code, is
  amended to read as follows:
         (c)  If the executive director [commissioner] has knowledge
  that a potential ground for removal of an appointed board member
  exists, the executive director [commissioner] shall notify the
  presiding officer of the board of the potential ground.  The
  presiding officer shall immediately 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
  executive director [commissioner] shall notify the next highest
  ranking officer of the board, who shall immediately notify the
  governor and the attorney general that a potential ground for
  removal exists.
         SECTION 18.  Subchapter C, Chapter 1103, Occupations Code,
  is amended to read as follows:
  SUBCHAPTER C.  EXECUTIVE DIRECTOR [COMMISSIONER] AND OTHER BOARD
  PERSONNEL
         Sec. 1103.101.  EXECUTIVE DIRECTOR [COMMISSIONER]. (a) The
  administrator of the Texas Real Estate Commission shall serve as
  executive director [commissioner].
         (b)  The board may delegate to the executive director
  [commissioner] the responsibility for administering this chapter
  and Chapter 1104, including the approval of consent orders and
  agreements.
         Sec. 1103.102.  OTHER BOARD PERSONNEL. In addition to the
  executive director [commissioner], the board may employ other
  officers and employees as necessary to administer this chapter and
  Chapter 1104.
         Sec. 1103.103.  SALARIES. The executive director
  [commissioner] shall determine the salaries of the officers and
  employees of the board.
         Sec. 1103.104.  DUTIES OF EXECUTIVE DIRECTOR
  [COMMISSIONER]. The executive director [commissioner] shall:
               (1)  disseminate information;
               (2)  administer rules adopted by the board under this
  chapter or Chapter 1104;
               (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 or Section 1104.052;
               (5)  collect fees established by the board;
               (6)  manage the staff and employees of the board; and
               (7)  perform any other duty prescribed by the board
  under this chapter or Chapter 1104.
         Sec. 1103.105.  DIVISION OF RESPONSIBILITIES. The board
  shall develop and implement policies that clearly separate the
  policymaking responsibilities of the board and the management
  responsibilities of the executive director [commissioner] and the
  staff of the board.
         SECTION 19.  Section 1103.209(e), Occupations Code, is
  amended to read as follows:
         (e)  An applicant for a certificate or license under this
  chapter who is not a resident of this state must submit with the
  application an irrevocable consent that states that service of
  process in an action against the applicant arising out of the
  applicant's activities as a certified or licensed appraiser in this
  state may be made by delivery of the process to the executive
  director [commissioner] if the plaintiff in the action, using due
  diligence, cannot obtain personal service on the applicant.  If
  process is served as provided by this subsection, the executive
  director [commissioner] shall immediately send a copy of the
  material served on the executive director [commissioner] to the
  certified or licensed appraiser at the appraiser's address of
  record.
         SECTION 20.  Sections 1103.452(b) and (c), Occupations Code,
  are amended to read as follows:
         (b)  An investigator designated by the executive director
  [commissioner] shall investigate each allegation or formal
  complaint.
         (c)  If the board determines at any time that an allegation
  or formal complaint is inappropriate or without merit, the board or
  the executive director [commissioner] shall dismiss the complaint
  and may not take further action.
         SECTION 21.  Section 1103.458(c), Occupations Code, is
  amended to read as follows:
         (c)  A consent order must be:
               (1)  approved by the board; and
               (2)  signed by the executive director [commissioner]
  and the appraiser or appraiser trainee who is the subject of the
  complaint.
         SECTION 22.  Section 1103.459(c), Occupations Code, is
  amended to read as follows:
         (c)  A consent agreement must be:
               (1)  approved by the board; and
               (2)  signed by the executive director [commissioner]
  and the appraiser or appraiser trainee who is the subject of the
  complaint.
         SECTION 23.  Section 1103.5011, Occupations Code, is amended
  to read as follows:
         Sec. 1103.5011.  NOTICE OF VIOLATION AND PENALTY. (a) The
  executive director [commissioner] may send an appraiser against
  whom a complaint has been filed a notice of violation including:
               (1)  a summary of the alleged violation;
               (2)  the recommended sanction, including the amount of
  any administrative penalty sought; and
               (3)  a conspicuous notice that the respondent has the
  right to a hearing to contest the alleged violation, the
  recommended sanction, or both.
         (b)  Not later than the 20th day after the date the person
  receives the notice under Subsection (a), the person may:
               (1)  accept the executive director's [commissioner's]
  determination, including the recommended sanction; or
               (2)  request in writing a hearing, to be held under
  Chapter 2001, Government Code, on the occurrence of the violation,
  the sanction, or both.
         SECTION 24.  Section 1103.5012, Occupations Code, is amended
  to read as follows:
         Sec. 1103.5012.  PENALTY TO BE PAID OR HEARING REQUESTED. If
  the person accepts the executive director's [commissioner's]
  determination, or fails to respond in a timely manner to the notice,
  the board by order shall approve the determination and order
  payment of the recommended penalty, impose the recommended
  sanction, or both.
         SECTION 25.  Section 1103.507(a), Occupations Code, is
  amended to read as follows:
         (a)  The executive director [commissioner] shall issue a
  subpoena to compel the attendance of a witness or the production of
  records or other evidence if:
               (1)  a party to the proceeding requests the subpoena
  orally or in writing;
               (2)  the request specifies each item of evidence sought
  and the full name and address of each witness sought; and
               (3)  the party shows reasonable cause.
         SECTION 26.  Section 1103.521(a), Occupations Code, is
  amended to read as follows:
         (a)  The administrative law judge shall file the judge's
  final decision in a contested case hearing with the executive
  director [commissioner].
         SECTION 27.  Section 5.086, Property Code, is transferred to
  Subchapter A, Chapter 5, Property Code, redesignated as Section
  5.0205, Property Code, and amended to read as follows:
         Sec. 5.0205  [5.086].  EQUITABLE INTEREST DISCLOSURE.  
  Before entering into a contract to sell an option or assign an
  interest in a contract to purchase real property, a person [selling
  an option or assigning an interest in a contract to purchase real
  property] must disclose in writing to:
               (1)  any potential buyer that the person is selling
  only an option or assigning an interest in a contract and that the
  person does not have legal title to the real property; and
               (2)  the owner of the real property that the person
  intends to sell an option or assign an interest in a contract.
         SECTION 28.  The following provisions of the Occupations
  Code are repealed:
               (1)  Section 1101.357;
               (2)  Section 1101.360(a);
               (3)  Section 1101.361;
               (4)  Section 1101.406;
               (5)  Sections 1101.603(a) and (e);
               (6)  Section 1101.604(d); and
               (7)  Section 1103.259.
         SECTION 29.  Section 1101.154(a), Occupations Code, as
  amended by this Act, applies only to the issuance or renewal of a
  license or certificate of registration under Chapter 1101,
  Occupations Code, on or after the effective date of this Act.
         SECTION 30.  Sections 1101.356(a) and 1101.358(a),
  Occupations Code, as amended by this Act, apply only to an
  application for a license under Chapter 1101, Occupations Code,
  submitted on or after the effective date of this Act.  An
  application submitted before the effective date of this Act is
  governed by the law in effect on the date the application was
  submitted, and the former law is continued in effect for that
  purpose.
         SECTION 31.  Section 1101.451(d), Occupations Code, as
  amended by this Act, applies only to the renewal of a license under
  Chapter 1101, Occupations Code, on or after the effective date of
  this Act. A license renewed before the effective date of this Act
  is governed by the law in effect on the date the license was
  renewed, and the former law is continued in effect for that purpose.
         SECTION 32.  This Act takes effect January 1, 2024.
 
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