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The 2019 Legislative Session concluded on May 27. With over 7,000 bills filed by legislators, this session was a busy one.  While the Agency’s primary focus this session was on our Sunset legislation, we did keep our eye on the progress of several bills that could have impacted the Agency in one way or another.

Below is a list the bills that passed and a brief summary of their impact the regulatory authority of the Agency. In case you missed it, we hosted a Facebook LIVE session where we discussed these bills and more. Check out the video below: 

SB 624 (Nichols)

The Agency Sunset bill.  This bill implements several of the recommendations made by the Agency’s Sunset Commission Report.  The Commission and the Board are currently working on implementing the necessary rule amendments and process changes resulting from this bill, including:

  • elimination of real estate branch office licenses;
  • elimination of education instructor approval;
  • repeal of the Texas residency requirement for licensure;
  • the Commission’s ability to dismiss a complaint determined to be inappropriate or without merit;
  • maintaining the confidentiality of a complainant in a complaint notice;
  • consideration of geographic competency in disciplinary actions;
  • authority to deny a renewal if a license holder is in violation of a disciplinary order;  and
  • new formal reporting requirements.

SB 646 (Birdwell)

Given the unique nature of agencies with SDSI status, the legislature established a process by which an SDSI agency seeking to purchase real property or begin a construction project must obtain approval from the governor before allocating any funds for any such project. This bill details the steps in that process.

HB 3815 (Morrison)/ SB 339 (Huffman)

Both of these bills amend the requirements of the Seller’s Disclosure Notice in the same way. 

As of September 1, 2019, any notice provided by the seller to the buyer as required by state law must include specific information regarding the location of the property within a 100-year flood plain and provide notice of prior flood damage and flood insurance. The notice must also disclose a seller’s knowledge of water damage not due to a flood event and requires a seller to disclose whether a prior flood-related insurance claim was filed with an insurance provider or the seller received aid from FEMA.  

The Broker/Lawyer Committee is reviewing the changes needed to implement these new requirements on the TREC Sellers’s Disclosure Form for use by September 1. 

HB 1342 (Leach)

This bill prohibits a state agency from denying or revoking a license based on a criminal conviction unless the conviction is based on a crime directly related to duties and responsibilities of the licensed occupation.

In doing so it requires a state agency to consider any correlation between the elements of the crime and the duties of the license and evidence of the person's compliance with any conditions of community supervision, parole, or mandatory supervision. If a state agency does take action based on a criminal conviction, the bill requires the agency to provide written notice to the applicant or license holder that the denial is based on a previous conviction and makes it an obligation of the applicant or license holder to provide information to counter the determination by the agency.

Both TREC and TALCB Enforcement Committees are reviewing our enforcement rules to recommend any changes necessary to conform to this new statutory language.

SB 37 (Zaffirini)

As a result of this bill, a state agency no longer has the authority to deny or revoke a license or deny renewal of a license based solely on the default or delinquent status of a student loan.

Prior to this legislation, an application for an initial or renewal license could be denied if the applicant was delinquent in repaying their student loan.

Both TREC and TALCB Enforcement Committees are reviewing our enforcement rules to recommend any changes necessary to conform to this new statutory language.

SB 1995 (Birdwell)

This bill requires the governor’s office to create a division to review all proposed rules that affect market competition before a rule can be adopted or implemented by a state agency and defines “affecting market competition” as creating a barrier to participation or resulting in higher prices or reduced competition for a product or service. 

State agencies are also required to submit any rules that affect market competition that an agency is amending, repealing or readopting as a result of an agency’s quadrennial rule review.  This division in the Governor’s office will review the rules, either approve or reject them, and instruct the agency on how to revise the rule, within 90 days from the date the agency submits the rule.  The bill also authorizes the division to solicit public comments and conduct a public hearing regarding any rule under review, if necessary, and a state agency is prohibited from adopting any rule until it has approval from this division of the Governor’s office.

The Governor’s office has not yet established the division to review the rule. Once it does, the Agency will comply with these requirements. 

SB 1200 (Campbell)

This bill authorizes a spouse of an active member of the military practice in Texas without a Texas license if they are currently licensed in good standing by another jurisdiction that has licensing requirements substantially equivalent to the requirements in Texas. The bill limits the amount of time the person may practice in Texas without a license to the same period of time in which the spouse is stationed in Texas but no more than 3 years. The bill also authorizes a state agency to issue a license to the spouse of an active member of the military who meets the requirements above.

TREC will consider rules to implement this statutory provision at its next quarterly meeting in August.  Federal law already accomplishes the objective of this statutory change for TALCB through the “License by Reciprocity” application process.

SB 1217 (Alvarado)

This bill prohibits a state agency from considering an arrest that did not result in a conviction or did not result in a placement of deferred adjudication community service, in determining a person’s fitness to be licensed. 

The Agency is already in compliance with this legislation.

SB 27 (Hughes)

This bill authorizes a person subject to a regulatory action by a state agency to recover up to $1,000,000 in attorney's fees and costs incurred defending against the action if it is determined by a court or administrative law judge that the regulatory action is frivolous.