Proposed Rules Title 22

TITLE 22. EXAMINING BOARDS

PART 3. TEXAS BOARD OF CHIROPRACTIC EXAMINERS

CHAPTER 72. BOARD FEES, LICENSE APPLICATIONS, AND RENEWALS

The Texas Board of Chiropractic Examiners (Board) proposes repealing 22 TAC §72.5 (Approved Schools and Colleges). The Board will propose a new §72.5 in a separate rulemaking. This rulemaking action will remove typographical errors in the current rule.

The Board's Executive Director, Patrick Fortner, has determined that for the first five-year period the proposed repeal is in effect there will be no fiscal implications for state or local government. There will be no adverse effect on small businesses or rural communities, micro-businesses, or local or state employment. There will be no additional economic costs to persons required to comply with the repeal as proposed. An Economic Impact Statement and Regulatory Flexibility Analysis are not required because the proposed repeal will not have an adverse economic effect on small businesses or rural communities as defined in Texas Government Code §2006.001(1-a) and (2).

Mr. Fortner has determined that for each year of the first five years the proposed repeal will be in effect the public benefit is to remove typographical errors in the current rule.

The Board provides this Government Growth Impact Statement, pursuant to Texas Government Code §2001.0221, for the proposed repeal of 22 TAC §72.5. For each year of the first five years the proposed repeal is in effect, Mr. Fortner has determined:

(1) The proposed repeal does not create or eliminate a government program.

(2) Implementation of the proposed repeal does not require the creation of new employee positions or the elimination of existing employee positions.

(3) Implementation of the proposed repeal does not require an increase or decrease in future legislative appropriations to the Board.

(4) The proposed repeal does not require a decrease or increase in fees paid to the Board.

(5) The proposed repeal does not create a new regulation.

(6) The proposal repeals existing Board rules for an administrative process.

(7) The proposed repeal does not decrease the number of individuals subject to the rule's applicability.

(8) The proposed repeal does not positively or adversely affect the state economy.

This proposed rulemaking will not impact private real property as defined by Texas Government Code §2007.003, so a takings impact assessment under Government Code §2001.043 is not required. Additionally, Government Code §2001.0045 (Requirement for Rule Increasing Costs to Regulated Persons) does not apply to this rulemaking as it will not increase costs to regulated persons.

Comments on the proposed repeal or a request for a public hearing may be submitted to Christopher Burnett, General Counsel, Texas Board of Chiropractic Examiners, 1801 North Congress Avenue, Suite 10.500, Austin, Texas 78701-1319, via email: rules@tbce.state.tx.us; or fax: (512) 305-6705, no later than 30 days from the date that this proposed repeal is published in the Texas Register. Please include the rule name and number in the subject line of any comments submitted by email.

The repeal is proposed under Texas Occupations Code §201.152 (which authorizes the Board to adopt rules necessary to perform the Board's duties and to regulate the practice of chiropractic), and 201.302 (which requires license applicants to present evidence to the Board of attendance at a recognized chiropractic school).

No other statutes or rules are affected by this proposed repeal.

§72.5.Approved Schools and Colleges.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 17, 2023.

TRD-202303019

Christopher Burnett

General Counsel

Texas Board of Chiropractic Examiners

Earliest possible date of adoption: October 1, 2023

For further information, please call: (512) 305-6700

22 TAC §72.5

The Texas Board of Chiropractic Examiners (Board) proposes new 22 TAC §72.5 (Approved Schools and Colleges). The current §72.5 is being repealed in a separate rulemaking action. This rulemaking action will correct typographical errors in the current rule; there are no substantive changes to the existing text proposed.

The Board's Executive Director, Patrick Fortner, has determined that for the first five-year period the proposed rule is in effect there will be no fiscal implications for state or local government. There will be no adverse effect on small businesses or rural communities, micro-businesses, or local or state employment. There will be no additional economic costs to persons required to comply with the rule as proposed. An Economic Impact Statement and Regulatory Flexibility Analysis are not required because the proposed rule will not have an adverse economic effect on small businesses or rural communities as defined in Texas Government Code §2006.001(1-a) and (2).

Mr. Fortner has determined that for each year of the first five years the proposed rule will be in effect the public benefit is to correct typographical errors in the current rule with no substantive changes to the text.

The Board provides this Government Growth Impact Statement, pursuant to Texas Government Code §2001.0221, for the proposed new 22 TAC §72.5. For each year of the first five years the proposed rule is in effect, Mr. Fortner has determined:

(1) The proposed rule does not create or eliminate a government program.

(2) Implementation of the proposed rule does not require the creation of new employee positions or the elimination of existing employee positions.

(3) Implementation of the proposed rule does not require an increase or decrease in future legislative appropriations to the Board.

(4) The proposed rule does not require a decrease or increase in fees paid to the Board.

(5) The proposed rule does not create a new regulation.

(6) The proposal does repeal existing Board rules for an administrative process.

(7) The proposed rule does not decrease the number of individuals subject to the rule's applicability.

(8) The proposed rule does not positively or adversely affect the state economy.

This proposed rulemaking will not impact private real property as defined by Texas Government Code §2007.003, so a takings impact assessment under §2001.043 is not required. Additionally, Government Code §2001.0045 (Requirement for Rule Increasing Costs to Regulated Persons) does not apply to this rulemaking as it will not increase costs to regulated persons.

Comments on the proposed rule or a request for a public hearing may be submitted to Christopher Burnett, General Counsel, Texas Board of Chiropractic Examiners, 1801 North Congress Avenue, Suite 10.500, Austin, Texas 78701, via email: rules@tbce.state.tx.us; or fax: (512) 305-6705, no later than 30 days from the date that this proposed rule is published in the Texas Register. Please include the rule name and number in the subject line of any comments submitted by email.

The rule is proposed under Texas Occupations Code §201.152 (which authorizes the Board to adopt rules necessary to perform the Board's duties and to regulate the practice of chiropractic), and 201.302 (which requires license applicants to present evidence to the Board of attendance at a recognized chiropractic school).

No other statutes or rules are affected by this proposed rule.

§72.5.Approved Schools and Colleges.

(a) A "chiropractic school" means a school accredited by an educational accrediting body that is a member of the Council on Chiropractic Education (CCE) or the Council on Chiropractic Education International (CCEI).

(b) The Board may annually review and approve chiropractic schools whose graduates are eligible for examination.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 17, 2023.

TRD-202303020

Christopher Burnett

General Counsel

Texas Board of Chiropractic Examiners

Earliest possible date of adoption: October 1, 2023

For further information, please call: (512) 305-6700

CHAPTER 73. CONTINUING EDUCATION

22 TAC §73.1

The Texas Board of Chiropractic Examiners (Board) proposes repealing 22 TAC §73.1 (Continuing Education Requirements for Licensees). The Board will propose a new §73.1 in a separate rulemaking. This rulemaking action will change incorrect references in subsection (d) to other subsections of the rule relating to exemptions; there are no substantive changes to the current text.

The Board's Executive Director, Patrick Fortner, has determined that for the first five-year period the proposed repeal is in effect there will be no fiscal implications for state or local government. There will be no adverse effect on small businesses or rural communities, micro-businesses, or local or state employment. There will be no additional economic costs to persons required to comply with the repeal as proposed. An Economic Impact Statement and Regulatory Flexibility Analysis is not required because the proposed repeal will not have an adverse economic effect on small businesses or rural communities as defined in Texas Government Code §2006.001(1-a) and (2).

Mr. Fortner has determined that for each year of the first five years the proposed repeal will be in effect the public benefit is to change incorrect references in subsection (d) to other subsections of the rule relating to exemptions with no substantive changes to the current text.

The Board provides this Government Growth Impact Statement, pursuant to Texas Government Code §2001.0221, for the proposed repeal of 22 TAC §73.1. For each year of the first five years the proposed repeal is in effect, Mr. Fortner has determined:

(1) The proposed repeal does not create or eliminate a government program.

(2) Implementation of the proposed repeal does not require the creation of new employee positions or the elimination of existing employee positions.

(3) Implementation of the proposed repeal does not require an increase or decrease in future legislative appropriations to the Board.

(4) The proposed repeal does not require a decrease or increase in fees paid to the Board.

(5) The proposed repeal does not create a new regulation.

(6) The proposal repeals existing Board rules for an administrative process.

(7) The proposed repeal does not decrease the number of individuals subject to the rule's applicability.

(8) The proposed repeal does not positively or adversely affect the state economy.

The repeal is proposed under Texas Occupations Code §201.152 (which authorizes the Board to adopt rules necessary to perform the Board's duties and to regulate the practice of chiropractic), and 201.356 (which authorizes the Board to adopt requirements for continuing education).

No other statutes or rules are affected by this proposed repeal.

§73.1.Continuing Education Requirements for Licensees.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 17, 2023.

TRD-202303021

Christopher Burnett

General Counsel

Texas Board of Chiropractic Examiners

Earliest possible date of adoption: October 1, 2023

For further information, please call: (512) 305-6700

22 TAC §73.1

The Texas Board of Chiropractic Examiners (Board) proposes new 22 TAC §73.1 (Continuing Education Requirements for Licensees). The current §73.1 is being repealed in a separate rulemaking action. This rulemaking action will change incorrect references in subsection (d) to other subsections of the rule relating to exemptions; there are no substantive changes to the current text.

The Board's Executive Director, Patrick Fortner, has determined that for the first five-year period the proposed rule is in effect there will be no fiscal implications for state or local government. There will be no adverse effect on small businesses or rural communities, micro-businesses, or local or state employment. There will be no additional economic costs to persons required to comply with the rule as proposed. An Economic Impact Statement and Regulatory Flexibility Analysis is not required because the proposed rule will not have an adverse economic effect on small businesses or rural communities as defined in Texas Government Code §2006.001(1-a) and (2).

Mr. Fortner has determined that for each year of the first five years the proposed rule will be in effect the public benefit is to change incorrect references in subsection (d) to other subsections of the rule relating to exemptions with no substantive changes to the current text.

The Board provides this Government Growth Impact Statement, pursuant to Texas Government Code §2001.0221, for the proposed new 22 TAC §73.1. For each year of the first five years the proposed rule is in effect, Mr. Fortner has determined:

(1) The proposed rule does not create or eliminate a government program.

(2) Implementation of the proposed rule does not require the creation of new employee positions or the elimination of existing employee positions.

(3) Implementation of the proposed rule does not require an increase or decrease in future legislative appropriations to the Board.

(4) The proposed rule does not require a decrease or increase in fees paid to the Board.

(5) The proposed rule does not create a new regulation.

(6) The proposal does repeal existing Board rules for an administrative process.

(7) The proposed rule does not decrease the number of individuals subject to the rule's applicability.

(8) The proposed rule does not positively or adversely affect the state economy.

The rule is proposed under Texas Occupations Code §201.152 (which authorizes the Board to adopt rules necessary to perform the Board's duties and to regulate the practice of chiropractic), and 201.356 (which authorizes the Board to adopt requirements for continuing education).

No other statutes or rules are affected by this proposed rule.

§73.1.Continuing Education Requirements for Licensees.

(a) "Live format" means any education course that is not pre-recorded and is presented in real time through an interactive medium such as a live webinar, an in-person training event, or telephone conference.

(b) "Online course" means any pre-recorded or live format education course that is delivered through the internet.

(d) A licensee shall complete 16 hours of continuing education each year unless a licensee is exempt under subsections (o) and (p) of this section.

(e) A licensee's reporting year shall begin on the first day of the month in which the licensee's birthday occurs.

(f) A licensee shall complete the 16 hours of continuing education through any Board-approved course or seminar elected by the licensee.

(g) A licensee shall attend any course designated as a "Board Required Course" in a live format.

(h) As part of the 16 annual required hours of continuing education, a licensee shall complete a minimum of 4 hours of Board-required courses, which include 3 hours relating to the Board's rules, code of ethics, and documenting.

(i) A licensee shall complete a minimum of 1 hour of the 16 annual required hours on chiropractic practice risk management.

(j) A licensee who was first licensed on or after September 1, 2012, shall complete at least 8 hours of continuing education in coding and documentation for Medicare claims no later than the licensee's second renewal period.

(k) A licensee may count the 8 hours in coding and documentation for Medicare claims as part of the 16 continuing education hours required during the year in which the 8 hours were completed.

(l) If a licensee is unable to take an online course, the licensee shall submit a request to the Board for special accommodations.

(m) At the Board's request, a licensee shall submit written verification from each continuing education course sponsor of the licensee's completion of each course used to fulfill the required hours for all years requested.

(n) The Board shall consider the failure to submit verification under subsection (n) of this section as failing to meet continuing education requirements.

(o) The following are exempt from the requirements of this section:

(1) a licensee who holds an inactive license;

(2) a licensee who is a military member or military spouse during part of the 12 months immediately preceding the annual license renewal date;

(3) a licensee who submits satisfactory proof that the licensee suffered an illness or disability which prevented the licensee from complying with this section during the 12 months immediately preceding the annual license renewal date; or

(4) a licensee who is in his first renewal period.

(p) A licensee who is a member of the military is entitled to two years of additional time to complete any continuing education requirements and any other requirement related to license renewal.

(q) A licensee who also holds a Board-issued permit to perform specialized techniques or procedures shall complete any continuing education required by the Board to obtain and maintain the permit.

(r) The Board shall make available a list of approved courses on the Board's website.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 17, 2023.

TRD-202303022

Christopher Burnett

General Counsel

Texas Board of Chiropractic Examiners

Earliest possible date of adoption: October 1, 2023

For further information, please call: (512) 305-6700

CHAPTER 78. SCOPE OF PRACTICE AND DELEGATION

22 TAC §78.4

The Texas Board of Chiropractic Examiners (Board) proposes repealing 22 TAC §78.4 (Delegation to Chiropractic Students and Recent Graduates). The Board will propose a new §78.4 (Delegation to Chiropractic Students) and a new §78.7 (Delegation to Recent Graduates) in separate rulemakings.

The overall purpose of these rulemakings is to split the current §78.4 into two separate rules. Licensees have suggested this to the Board because some have found the current rule confusing due to the slightly differing requirements for delegating to chiropractic students and recent graduates. The Board agrees that creating separate rules for students and graduates will make it easier for licensees to comply with the requirements. Therefore, the Board will also propose a new §78.7 (Delegation to Recent Graduates. There will be no substantive changes to the current requirements for delegating to chiropractic students and recent graduates.

The Board's Executive Director, Patrick Fortner, has determined that for the first five-year period the proposed repeal is in effect there will be no fiscal implications for state or local government. There will be no adverse effect on small businesses or rural communities, micro-businesses, or local or state employment. There will be no additional economic costs to persons required to comply with the repeal as proposed. An Economic Impact Statement and Regulatory Flexibility Analysis is not required because the proposed repeal will not have an adverse economic effect on small businesses or rural communities as defined in Texas Government Code §2006.001(1-a) and (2).

Mr. Fortner has determined that for each year of the first five years the proposed repeal will be in effect the public benefit is to make the requirements for licensees delegating to chiropractic students and recent graduates easier to follow by putting those requirements into separate rules.

The Board provides this Government Growth Impact Statement, pursuant to Texas Government Code §2001.0221, for the proposed repeal of 22 TAC §78.4. For each year of the first five years the proposed repeal is in effect, Mr. Fortner has determined:

(1) The proposed repeal does not create or eliminate a government program.

(2) Implementation of the proposed repeal does not require the creation of new employee positions or the elimination of existing employee positions.

(3) Implementation of the proposed repeal does not require an increase or decrease in future legislative appropriations to the Board.

(4) The proposed repeal does not require a decrease or increase in fees paid to the Board.

(5) The proposed repeal does not create a new regulation.

(6) The proposal repeals existing Board rules for an administrative process.

(7) The proposed repeal does not decrease the number of individuals subject to the rule's applicability.

(8) The proposed repeal does not positively or adversely affect the state economy.

The repeal is proposed under Texas Occupations Code §201.152 (which authorizes the Board to adopt rules necessary to perform the Board's duties and to regulate the practice of chiropractic), and 201.451 (which authorizes the Board to adopt rules relating to delegating chiropractic tasks to assistants).

No other statutes or rules are affected by this proposed repeal.

§78.4.Delegation to Chiropractic Students and Recent Graduates.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 17, 2023.

TRD-202303023

Christopher Burnett

General Counsel

Texas Board of Chiropractic Examiners

Earliest possible date of adoption: October 1, 2023

For further information, please call: (512) 305-6700

22 TAC §78.4

The Texas Board of Chiropractic Examiners (Board) proposes new 22 TAC §78.4 (Delegation to Chiropractic Students). The Board will propose the repeal of the current §78.4 (Delegation to Chiropractic Students and Recent Graduates) and propose a new §78.7 (Delegation to Recent Graduates) in separate rulemakings.

The overall purpose of these rulemakings is to split the current §78.4 into two separate rules. Licensees have suggested this to the Board because some have found the current rule confusing due to the slightly differing requirements for delegating to chiropractic students and recent graduates. The Board agrees that creating separate rules for students and graduates will make it easier for licensees to comply with the requirements. Therefore, the Board will also propose a new §78.7 (Delegation to Recent Graduates). There will be no substantive changes to the current requirements for delegating to chiropractic students and recent graduates.

The Board's Executive Director, Patrick Fortner, has determined that for the first five-year period the proposed rule is in effect there will be no fiscal implications for state or local government. There will be no adverse effect on small businesses or rural communities, micro-businesses, or local or state employment. There will be no additional economic costs to persons required to comply with the rule as proposed. An Economic Impact Statement and Regulatory Flexibility Analysis is not required because the proposed rule will not have an adverse economic effect on small businesses or rural communities as defined in Texas Government Code §2006.001(1-a) and (2).

Mr. Fortner has determined that for each year of the first five years the proposed rule will be in effect the public benefit is to make the requirements for licensees delegating to chiropractic students and recent graduates easier to follow by putting those requirements into separate rules.

The Board provides this Government Growth Impact Statement, pursuant to Texas Government Code §2001.0221, for the proposed new 22 TAC §78.4. For each year of the first five years the proposed rule is in effect, Mr. Fortner has determined:

(1) The proposed rule does not create or eliminate a government program.

(2) Implementation of the proposed rule does not require the creation of new employee positions or the elimination of existing employee positions.

(3) Implementation of the proposed rule does not require an increase or decrease in future legislative appropriations to the Board.

(4) The proposed rule does not require a decrease or increase in fees paid to the Board.

(5) The proposed rule does not create a new regulation.

(6) The proposal does repeal existing Board rules for an administrative process.

(7) The proposed rule does not decrease the number of individuals subject to the rule's applicability.

(8) The proposed rule does not positively or adversely affect the state economy.

The rule is proposed under Texas Occupations Code §201.152 (which authorizes the Board to adopt rules necessary to perform the Board's duties and to regulate the practice of chiropractic), and 201.451 (which authorizes the Board to adopt rules relating to delegating chiropractic tasks to assistants).

No other statutes or rules are affected by this proposed rule.

§78.4.Delegation to Chiropractic Students.

(a) A licensee may delegate responsibility to a chiropractic student under this section if:

(1) the licensee has held an active chiropractic license in good standing in Texas or another jurisdiction for five years; and

(2) the licensee has been licensed by the Board for at least one year.

(b) A licensee may delegate to a student currently enrolled in an accredited chiropractic college the performance of adjustments or manipulations if the student has qualified for admission to the college's outpatient clinic.

(c) A licensee shall be physically on-site, but need not be present, when a student performs an adjustment or manipulation.

(d) A chiropractic student performing adjustments or manipulations under this section may not represent to the public that the student is a licensed chiropractor.

(e) A licensee may not delegate responsibility to render a diagnosis or prescribe a treatment plan to a chiropractic student under this section.

(f) A licensee or chiropractic student who violates this section is subject to disciplinary action.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 17, 2023.

TRD-202303024

Christopher Burnett

General Counsel

Texas Board of Chiropractic Examiners

Earliest possible date of adoption: October 1, 2023

For further information, please call: (512) 305-6700

22 TAC §78.7

The Texas Board of Chiropractic Examiners (Board) proposes new 22 TAC §78.7 (Delegation to Recent Graduates). The Board will propose the repeal of the current §78.4 (Delegation to Chiropractic Students and Recent Graduates) and propose a new §78.4 (Delegation to Chiropractic Students) in separate rulemakings.

The overall purpose of these rulemakings is to split the current §78.4 into two separate rules (§78.4 for chiropractic students only and new §78.7 for recent graduates only). Licensees have suggested this to the Board because some have found the current rule confusing due to the slightly differing requirements for delegating to chiropractic students and recent graduates contained in the rule. The Board agrees that creating separate stand-alone rules for students and graduates will make it easier for licensees to comply with the requirements. There will be no substantive changes to the current requirements for delegating to chiropractic students and recent graduates.

The Board's Executive Director, Patrick Fortner, has determined that for the first five-year period the proposed rule is in effect there will be no fiscal implications for state or local government. There will be no adverse effect on small businesses or rural communities, micro-businesses, or local or state employment. There will be no additional economic costs to persons required to comply with the rule as proposed. An Economic Impact Statement and Regulatory Flexibility Analysis is not required because the proposed rule will not have an adverse economic effect on small businesses or rural communities as defined in Texas Government Code §2006.001(1-a) and (2).

The Board provides this Government Growth Impact Statement, pursuant to Texas Government Code §2001.0221, for the proposed new 22 TAC §78.7. For each year of the first five years the proposed rule is in effect, Mr. Fortner has determined:

(1) The proposed rule does not create or eliminate a government program.

(2) Implementation of the proposed rule does not require the creation of new employee positions or the elimination of existing employee positions.

(3) Implementation of the proposed rule does not require an increase or decrease in future legislative appropriations to the Board.

(4) The proposed rule does not require a decrease or increase in fees paid to the Board.

(5) The proposed rule does not create a new regulation.

(6) The proposal does repeal existing Board rules for an administrative process.

(7) The proposed rule does not decrease the number of individuals subject to the rule's applicability.

(8) The proposed rule does not positively or adversely affect the state economy.

The rule is proposed under Texas Occupations Code §201.152 (which authorizes the Board to adopt rules necessary to perform the Board's duties and to regulate the practice of chiropractic), and 201.451 (which authorizes the Board to adopt rules relating to delegating chiropractic tasks to assistants).

No other statutes or rules are affected by this proposed rule.

§78.7.Delegation to Recent Graduates.

(a) "Recent graduate" is an individual who has graduated within the previous 12 months from an accredited chiropractic college.

(b) A licensee may delegate responsibility to a recent graduate under this section if:

(1) the licensee has held an active chiropractic license in good standing in Texas or another jurisdiction for five years; and

(2) the licensee has been licensed by the Board for at least one year.

(c) A licensee may delegate to a recent graduate of an accredited chiropractic college the performance of adjustments or manipulations.

(d) A licensee shall be on-call and be available for voice consultation within 15 minutes from when a recent graduate performs an adjustment or manipulation.

(e) A licensee delegating responsibility to a recent graduate under subsection (c) of this section shall submit to the Board in writing the following within ten days of hiring the recent graduate:

(1) the graduate's name;

(2) the graduate's employment date;

(3) the name of the graduate's chiropractic college;

(4) the date of graduation;

(5) a copy of the graduate's diploma; and

(6) the name and license number of the licensee supervising the graduate.

(f) A licensee may not delegate the performance of adjustments or manipulations to a recent graduate under this section after the one year anniversary of the individual's graduation from a chiropractic college.

(g) A recent graduate performing adjustments or manipulations under this section may not represent to the public that the recent graduate is a licensed chiropractor.

(h) A licensee may not delegate responsibility to render a diagnosis or prescribe a treatment plan to a recent graduate under this section.

(i) A licensee or recent graduate who violates this section is subject to disciplinary action.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 17, 2023.

TRD-202303025

Christopher Burnett

General Counsel

Texas Board of Chiropractic Examiners

Earliest possible date of adoption: October 1, 2023

For further information, please call: (512) 305-6700

PART 8. TEXAS APPRAISER LICENSING AND CERTIFICATION BOARD

CHAPTER 153. RULES RELATING TO PROVISIONS OF THE TEXAS APPRAISER LICENSING AND CERTIFICATION ACT

22 TAC §§153.1, 153.5, 153.6, 153.9, 153.15, 153.20, 153.21, 153.24, 153.28, 153.241

The Texas Appraiser Licensing and Certification Board (TALCB) proposes new and amendments to 22 TAC §153.1, Definitions; §153.5, Fees; §153.6, Military Service Member, Veteran, or Military Spouse Applications; §153.9, Applications; §153.15, Experience Required for Licensing; §153.20, Guidelines for Disciplinary Action, Denial of License; Probationary License; §153.21, Appraiser Trainees and Supervisory Appraisers; §153.24, Complaint Processing; §153.28, Peer Investigative Committee Review; and §153.241, Sanctions Guidelines.

The proposed amendments to §§153.1, 153.5, 153.9, 153.24 and 153.28 implement statutory changes enacted by the 88th Legislature in SB 1577, which becomes effective on January 1, 2024, and which changes the title of the TALCB "Commissioner" to "Executive Director."

Proposed new §153.6 and amendments to §153.9 implement statutory changes enacted by the 88th Legislature in SB 422 and become effective on September 1, 2023. SB 422 expands out-of-state occupational license recognition to include military service members, as long as certain criteria are met. SB 422 also modifies the time period within which verification of good standing occurs, as well as issuance of a license after certain conditions are satisfied, from "as soon as practicable" to no later than 30 days. The bill also addresses the term of the license in situations of divorce or other events impacting the military spouse's status. The amendments reflect these statutory changes. Specifically, new rule 153.6 is intended to replace and consolidated language struck from §153.9 related specifically to applicants who are military service members, veterans, and military spouses for greater clarity and organization, in unison with the reciprocity process in Occupations Code 1103, requirements established by the Appraisal Qualifications Board, and Appraisal Subcommittee. The amendments eliminate references to a residency requirement and references to alternative methods of demonstrating competency inapplicable to appraiser applicants. Finally, a statement of purpose is being added to the rule to make clear that this rule addresses the requirements provided under Chapter 55, Occupations Code, and is not intended to alter or modify licensure requirements governed by federal law.

The proposed amendments to §§153.15, 153.20 and 153.21 implement statutory changes enacted by the 88th Legislature in SB 1222, which becomes effective on September 1, 2023, and which eliminates the requirement that experience required for licensing be submitted on an affidavit. As a result, references to this requirement are removed from TALCB rules and replaced by a certification.

The proposed amendments to §153.241 allow for greater flexibility in sanctions.

Kathleen Santos, General Counsel, has determined that for the first five-year period the proposed amendments are in effect, there will be no fiscal implications for the state or units of local government as a result of enforcing or administering the proposed amendments. There is no adverse economic impact anticipated for local or state employment, rural communities, small businesses, or micro businesses as a result of implementing the proposed amendments. There is no significant economic cost anticipated for persons who are required to comply with the proposed amendments. Accordingly, no Economic Impact statement or Regulatory Flexibility Analysis is required.

Ms. Santos has also determined that for each year of the first five years the proposed amendments and rules are in effect the public benefits anticipated as a result of enforcing the proposed amendments will be requirements that are consistent with statutes and easier to understand, apply, and process.

Growth Impact Statement:

For each year of the first five years the proposed amendments and rules are in effect the amendments and rules will not:

--create or eliminate a government program;

--require the creation of new employee positions or the elimination of existing employee positions;

--require an increase or decrease in future legislative appropriations to the agency;

--require an increase or decrease in fees paid to the agency;

--create a new regulation;

--expand, limit or repeal an existing regulation; and

--increase the number of individuals subject to the rule's applicability.

For each year of the first five years the proposed amendments are in effect, there is no anticipated impact on the state's economy.

Comments on the proposed amendments may be submitted to Kathleen Santos, General Counsel, Texas Appraiser Licensing and Certification Board, P.O. Box 12188, Austin, Texas 78711-2188 or emailed to general.counsel@talcb.texas.gov. Comments may also be submitted electronically at https://www.talcb.texas.gov/agency-information/rules-and-laws/comment-on-proposed-rules. The deadline for comments is 30 days after publication in the Texas Register.

The amendments and new rule are proposed under Texas Occupations Code §1103.151, which authorizes TALCB to adopt rules related to certificates and licenses that are consistent with applicable federal law and guidelines adopted by the AQB; §1103.152, which authorizes TALCB to prescribe qualifications for appraisers that are consistent with the qualifications established by the Appraiser Qualifications Board; §1103.154, which authorizes TALCB to adopt rules relating to professional conduct; and §1103.156 which authorizes TALCB to establish reasonable fees to administer Chapter 1103, Texas Occupations Code.

The statute affected by these amendments is Chapter 1103, Texas Occupations Code. No other statute, code or article is affected by the proposed amendments.

§153.1.Definitions.

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) ACE--Appraiser Continuing Education.

(2) Act--The Texas Appraiser Licensing and Certification Act.

(3) Administrative Law Judge--A judge employed by the State Office of Administrative Hearings (SOAH).

(4) Analysis--The act or process of providing information, recommendations or conclusions on diversified problems in real estate other than estimating value.

(5) Applicant--A person seeking a certification, license, approval as an appraiser trainee, or registration as a temporary out-of-state appraiser from the Board.

(6) Appraisal practice--Valuation services performed by an individual acting as an appraiser, including but not limited to appraisal and appraisal review.

(7) Appraisal report--A report as defined by and prepared under the USPAP.

(8) Appraisal Standards Board--The Appraisal Standards Board (ASB) of the Appraisal Foundation, or its successor.

(9) Appraisal Subcommittee--The Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council or its successor.

(10) Appraiser Qualifications Board--The Appraiser Qualifications Board (AQB) of the Appraisal Foundation, or its successor.

(11) Appraiser trainee--A person approved by the Board to perform appraisals or appraiser services under the active, personal and diligent supervision and direction of the supervisory appraiser.

(12) Board--The Texas Appraiser Licensing and Certification Board.

(13) Certified General Appraiser--A certified appraiser who is authorized to appraise all types of real property.

(14) Certified Residential Appraiser--A certified appraiser who is authorized to appraise one-to-four unit residential properties without regard to value or complexity.

(15) Classroom course--A course in which the instructor and students interact face to face, in real time and in the same physical location.

(16) Classroom hour--Fifty minutes of instruction out of each sixty-minute segment of actual classroom session time.

(17) Client--Any party for whom an appraiser performs an assignment.

(18) College--Junior or community college, senior college, university, or any other postsecondary educational institution established by the Texas Legislature, which is accredited by the Commission on Colleges of the Southern Association of Colleges and Schools or like commissions of other regional accrediting associations, or is a candidate for such accreditation.

(19) Executive Director [~~Commissioner~~]--The Executive Director [~~commissioner~~] of the Texas Appraiser Licensing and Certification Board.

(20) Complainant--Any person who has made a written complaint to the Board against any person subject to the jurisdiction of the Board.

(21) Complex appraisal--An appraisal in which the property to be appraised, the form of ownership, market conditions, or any combination thereof are atypical.

(22) Continuing education cycle--the period in which a license holder must complete continuing education as required by the AQB.

(23) Council--The Federal Financial Institutions Examination Council (FFIEC) or its successor.

(24) Day--A calendar day unless clearly indicated otherwise.

(25) Distance education--Any educational process based on the geographical separation of student and instructor, as defined by the AQB. Distance education includes synchronous delivery, when the instructor and student interact simultaneously online; asynchronous delivery, when the instructor and student interaction is non-simultaneous; and hybrid or blended course delivery that allows for both in-person and online interaction, either synchronous or asynchronous.

(26) Feasibility analysis--A study of the cost-benefit relationship of an economic endeavor.

(27) Federal financial institution regulatory agency--The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the National Credit Union Administration, or the successors of any of those agencies.

(28) Federally related transaction--Any real estate-related transaction that requires the services of an appraiser and that is engaged in, contracted for, or regulated by a federal financial institution regulatory agency.

(29) Foundation--The Appraisal Foundation (TAF) or its successor.

(30) Inactive certificate or license--A general certification, residential certification, or state license which has been placed on inactive status by the Board.

(31) License--The whole or a part of any Board permit, certificate, approval, registration or similar form of permission required by law.

(32) License holder--A person certified, licensed, approved, authorized or registered by the Board under the Texas Appraiser Licensing and Certification Act.

(33) Licensed Residential Appraiser--A licensed appraiser who is authorized to appraise non-complex one-to-four residential units having a transaction value less than $1 million and complex one-to-four residential units having a transaction value less than $400,000.

(34) Licensing--Includes the Board processes respecting the granting, disapproval, denial, renewal, certification, revocation, suspension, annulment, withdrawal or amendment of a license.

(35) Market analysis--A study of market conditions for a specific type of property.

(36) Nonresidential real estate appraisal course--A course with emphasis on the appraisal of nonresidential real estate properties which include, but are not limited to, income capitalization, income property, commercial appraisal, rural appraisal, agricultural property appraisal, discounted cash flow analysis, subdivision analysis and valuation, or other courses specifically determined by the Board.

(37) Nonresidential property--A property which does not conform to the definition of residential property.

(38) Party--The Board and each person or other entity named or admitted as a party.

(39) Person--Any individual, partnership, corporation, or other legal entity.

(40) Personal property--Identifiable tangible objects and chattels that are considered by the general public as being "personal," for example, furnishings, artwork, antiques, gems and jewelry collectibles, machinery and equipment; all tangible property that is not classified as real estate.

(41) Petitioner--The person or other entity seeking an advisory ruling, the person petitioning for the adoption of a rule, or the party seeking affirmative relief in a proceeding before the Board.

(42) Pleading--A written document, submitted by a party or a person seeking to participate in a case as a party, that requests procedural or substantive relief, makes claims, alleges facts, makes a legal argument, or otherwise addresses matters involved in the case.

(43) Practical Applications of Real Estate Appraisal (PAREA)--Training Programs approved by the AQB that utilize simulated experience training and serve as an alternative to the traditional Supervisor/Trainee experience model.

(44) Qualifying real estate appraisal course--Those courses approved by the Appraiser Qualifications Board as qualifying education.

(45) Real estate--An identified parcel or tract of land, including improvements, if any.

(46) Real estate appraisal experience--Valuation services performed as an appraiser or appraiser trainee by the person claiming experience credit. Significant real property appraisal experience requires active participation; mere observation of another appraiser's work is not real estate appraisal experience.

(47) Real estate-related financial transaction--Any transaction involving: the sale, lease, purchase, investment in, or exchange of real property, including an interest in property or the financing of property; the financing of real property or an interest in real property; or the use of real property or an interest in real property as security for a loan or investment including a mortgage-backed security.

(48) Real property--The interests, benefits, and rights inherent in the ownership of real estate.

(49) Record--All notices, pleadings, motions and intermediate orders; questions and offers of proof; objections and rulings on them; any decision, opinion or report by the Board; and all staff memoranda submitted to or considered by the Board.

(50) Report--Any communication, written or oral, of an appraisal, review, or analysis; the document that is transmitted to the client upon completion of an assignment.

(51) Residential property--Property that consists of at least one but not more than four residential units.

(52) Respondent--Any person subject to the jurisdiction of the Board, licensed or unlicensed, against whom any complaint has been made.

(53) Supervisory Appraiser--A certified general or residential appraiser who is designated as a supervisory appraiser, as defined by the AQB, for an appraiser trainee. The supervisory appraiser is responsible for providing active, personal and diligent supervision and direction of the appraiser trainee.

(54) Trade Association--A nonprofit voluntary member association or organization:

(A) whose membership consists primarily of persons who are licensed as appraisers and pay membership dues to the association or organization;

(B) that is governed by a board of directors elected by the members; and

(55) USPAP--Uniform Standards of Professional Appraisal Practice adopted by the Appraisal Standards Board of the Appraisal Foundation.

(56) Workfile--Documentation necessary to support an appraiser's analysis, opinions, and conclusions, and in compliance with the record keeping provisions of USPAP.

§153.5.Fees.

(a) The Board shall charge and the Executive Director [~~Commissioner~~] shall collect the following fees:

(1) Effective January 1, 2022:

(A) a fee of $560 for an application, reinstatement, or timely renewal of a certified general appraiser license;

(B) a fee of $460 for an application, reinstatement, or timely renewal of a certified residential appraiser license;

(D) a fee of $250 for an application, reinstatement, or timely renewal of an appraiser trainee license;

(2) a fee equal to 1-1/2 times the timely renewal fee for the late renewal of a license within 90 days of expiration;

(3) a fee equal to two times the timely renewal fee for the late renewal of a license more than 90 days but less than six months after expiration;

(4) a fee of $250 for nonresident license;

(5) the national registry fee in the amount charged by the Appraisal Subcommittee;

(6) an application fee for licensure by reciprocity in the same amount as the fee charged for a similar license issued to a Texas resident;

(7) a fee of $200 for an extension of time to complete required continuing education;

(8) a fee of $50 to request a return to active status;

(9) a fee of $50 for evaluation of an applicant's fitness;

(10) an examination fee as provided in the Board's current examination administration agreement;

(11) a fee of $100 to request a voluntary appraiser experience review;

(12) the fee charged by the Federal Bureau of Investigation, the Texas Department of Public Safety or other authorized entity for fingerprinting or other service for a national or state criminal history check in connection with a license application;

(13) a base fee of $50 for approval of an ACE course;

(14) a content review fee of $5 per classroom hour for approval of an ACE course;

(15) a course approval fee of $50 for approval of an ACE course currently approved by the AQB or another state appraiser regulatory agency;

(16) a one-time offering course approval fee of $25 for approval of a 2-hour ACE course to be offered in-person only one time;

(17) a fee of $200 for an application for an ACE provider approval or subsequent approval; and

(18) any fee required by the Department of Information Resources for establishing and maintaining online applications or as a subscription or convenience fee for use of an online payment system.

(b) Fees must be submitted in U.S. funds payable to the order of the Texas Appraiser Licensing and Certification Board. Fees are not refundable once an application has been accepted for filing. Persons who have submitted a payment that has been dishonored, and who have not made good on that payment within 30 days, for whatever reason, must submit all replacement fees in the form of a cashier's check, money order, or online credit card payment.

(c) Licensing fees are waived for members of the Board staff who must maintain a license for employment with the Board only and are not also using the license for outside employment.

§153.6.Military Service Member, Veteran, or Military Spouse Applications.

(a) Definitions.

(1) "Military service member" means a person who is on current full-time military service in the armed forces of the United States or active duty military service as a member of the Texas military forces, as defined by Section 437.001, Government Code, or similar military service of another state.

(2) "Military spouse" means a person who is married to a military service member.

(3) "Veteran" means a person who has served as a military service member and who was discharged or released from active duty.

(b) The purpose of this section is to establish procedures authorized or required by Texas Occupations Code Chapter 55 and is not intended to modify or alter rights or legal requirements that may be provided under federal law, Chapter 1103 of the Occupations Code, or requirements established by the AQB.

(1) The Board will process an application for a military service member, veteran, or military spouse on an expedited basis.

(2) If an applicant under this section holds a current license issued by another state or jurisdiction that has licensing requirements that are substantially equivalent to the requirements for the license or certification issued in this state, the Board will issue the license not later than the 30th day after receipt of the application.

(d) Waiver of fees.

(1) The Board will waive the license application fee and examination fees for an applicant who is:

(A) a military service member or veteran whose military service, training, or education substantially meets all of the requirements for a license; and

(B) a military service member, veteran, or military spouse who holds a current license issued by another jurisdiction that has licensing requirements that are substantially equivalent to the requirements for the same license in this state.

(2) The executive director or his or her designee may waive the application fee of a military service member, veteran, or military spouse who is not currently licensed, but within the five years preceding the application date held a license in this state and applies for reinstatement in accordance with subsection (f)(2) of this section.

(e) Credit for military experience.

(1) For an applicant who is a military service member or veteran, the Board shall credit any verifiable military service, training, or education toward the licensing requirements, other than an examination requirement.

(2) The Board shall award credit under this subsection consistent with the criteria adopted by the AQB and any exceptions to those criteria as authorized by the AQB.

(3) This subsection does not apply to an applicant who holds a restricted license issued by another jurisdiction

(f) Reciprocity and reinstatement.

(1) For a military service member, veteran, or military spouse who holds a current license issued by another jurisdiction that has licensing requirements that are substantially equivalent to the requirements for the license in this state may apply by submitting an application for license by reciprocity and any required supplemental documents for military service members, military veterans, or military spouses.

(2) For a military service member, veteran, or military spouse who is not currently licensed, but within the five years preceding the application date held a license in this state may submit an application for reinstatement and any required supplemental documents for military service members, military veterans, or military spouses.

(3) For a military service member and military spouse who wants to practice in Texas in accordance with 55.0041, Occupations Code:

(A) the Board will issue a license by reciprocity if:

(i) the applicant submits:

(I) notice to the Board of the applicant's intent to practice in Texas by submitting an application for reciprocity and any supplemental document for military service members or military spouses; and

(II) a copy of the member's military identification card; and

(ii) no later than 30 days upon receipt of the documents required under subparagraph (A) of this paragraph, the Board verifies that the member or spouse is currently licensed and in good standing with the other state or jurisdiction.

(B) a person authorized to practice in this state under this subsection must comply with all other laws and regulations applicable to the license.

(C) The event of a divorce or similar event that affects a person's status as a military spouse shall not affect the validity of a license issued under this subsection.

§153.9.Applications.

(a) A person desiring to be licensed as an appraiser or appraiser trainee shall file an application using forms prescribed by the Board or the Board's online application system, if available. The Board may decline to accept for filing an application that is materially incomplete or that is not accompanied by the appropriate fee. Except as provided by the Act, the Board may not grant a license to an applicant who has not:

(1) paid the required fees;

(2) submitted a complete and legible set of fingerprints as required in §153.12 of this title (relating to Criminal History Checks);

(3) satisfied any experience and education requirements established by the Act, Board rules, and the AQB;

(4) successfully completed any qualifying examination prescribed by the Board;

(5) provided all supporting documentation or information requested by the Board in connection with the application;

(6) satisfied all unresolved enforcement matters and requirements with the Board; and

(7) met any additional or superseding requirements established by the Appraisal Qualifications Board.

(b) Termination of application. An application is subject to no further evaluation or processing if within one year from the date an application is filed, an applicant fails to satisfy:

(1) a current education, experience or exam requirement; or

(2) the fingerprint and criminal history check requirements in §153.12 of this title.

(c) A license is valid for the term for which it is issued by the Board unless suspended or revoked for cause and unless revoked, may be renewed in accordance with the requirements of §153.17 of this title (relating to License Renewal).

(d) The Board may deny a license to an applicant who fails to satisfy the Board as to the applicant's honesty, trustworthiness, and integrity.

(e) The Board may deny a license to an applicant who submits incomplete, false, or misleading information on the application or supporting documentation.

(f) When an application is denied by the Board, no subsequent application will be accepted within two years after the date of the Board's notice of denial as required in §157.7 of this title (Denial of a License, Renewal or Reinstatement; Adverse Action Against a License Holder).

~~[(g) The following terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise:]~~

[(1) "Military service member" means a person who is on current full-time military service in the armed forces of the United States or active duty military service as a member of the Texas military forces, as defined by Section 437.001, Government Code, or similar military service of another state.]

~~[(2) "Military spouse" means a person who is married to a military service member.]~~

~~[(3) "Veteran" means a person who has served as a military service member and who was discharged or released from active duty.]~~

~~[(h) This subsection applies to an applicant who is a military service member, veteran, or military spouse.]~~

~~[(1) The Board will process an application under this subsection on an expedited basis.]~~

[(2) If an applicant under this subsection holds a current license issued by another state or jurisdiction that has licensing requirements that are substantially equivalent to the requirements for the license issued in this state, the Board will:]

~~[(A) Waive the license application and examination fees; and]~~

~~[(B) Issue the license as soon as practicable after receipt of the application.]~~

~~[(3) The Board may reinstate a license previously held by an applicant, if the applicant satisfies the requirements in §153.16 of this chapter (relating to License Reinstatement).]~~

[(4) The Board may allow an applicant to demonstrate competency by alternative methods in order to meet the requirements for obtaining a particular license issued by the Board. For purposes of this subsection, the standard method of demonstrating competency is the specific examination, education, and/or experience required to obtain a particular license.]

[(5) In lieu of the standard method(s) of demonstrating competency for a particular license and based on the applicant's circumstances, the alternative methods for demonstrating competency may include any combination of the following as determined by the Board:]

~~[(A) education;]~~

~~[(B) continuing education;]~~

~~[(C) examinations (written and/or practical);]~~

~~[(D) letters of good standing;]~~

~~[(E) letters of recommendation;]~~

~~[(F) work experience; or]~~

~~[(G) other methods required by the commissioner.]~~

~~[(i) This subsection applies to an applicant who is a military service member or veteran.]~~

[(1) The Board will waive the license application and examination fees for an applicant under this subsection whose military service, training or education substantially meets all of the requirements for a license.]

~~[(2) The Board will credit any verifiable military service, training or education obtained by an applicant that is relevant to a license toward the requirements of a license.]~~

~~[(3) This subsection does not apply to an applicant who holds a restricted license issued by another jurisdiction.]~~

~~[(4) The applicant must pass the qualifying examination, if any, for the type of license sought.]~~

~~[(5) The Board will evaluate applications filed under this subsection consistent with the criteria adopted by the AQB and any exceptions to those criteria as authorized by the AQB.]~~

[(j) This subsection applies to an applicant who is a military spouse. The Board will waive the license application fee and issue a license by reciprocity to an applicant who wants to practice in Texas in accordance with 55.0041, Occupations Code, if:]

~~[(1) the applicant submits:]~~

~~[(A) an application to practice in Texas on a form approved by the Board;]~~

~~[(B) proof of the applicant's Texas residency; and]~~

~~[(C) a copy of the applicant's military identification card; and]~~

~~[(2) the Board verifies that the military spouse is currently licensed and in good standing with the other state or jurisdiction.]~~

~~[(k) Except as otherwise provided in this section, a person applying for license under subsection (h), (i) or (j) of this section must also:]~~

~~[(1) submit the Board's approved application form for the type of license sought;]~~

~~[(2) pay the required fee for that application; and]~~

~~[(3) submit the supplemental form approved by the Board applicable to subsection (h), (i) or (j) of this section.]~~

~~[(l) The commissioner may waive any prerequisite to obtaining a license for an applicant as allowed by the AQB.]~~

§153.15.Experience Required for Licensing.

(a) - (c) (No change.)

(d) Public Information Act. All information and documentation submitted to the Board in support of an application for license or application to upgrade an existing license, including an applicant's experience log, experience certification [~~affidavit~~], copies of appraisals and work files, may be subject to disclosure under the Public Information Act, Chapter 552, Texas Government Code, unless an exception to disclosure applies.

(e) Applicants claiming experience credit under subsection (b)(1) - (4) of this section must submit a Board-approved Appraisal Experience Log that lists each appraisal assignment or other work for which the applicant is seeking credit and an Appraisal Experience Certification [~~Affidavit~~]. The Experience Log must include:

~~[(1) The Experience Log must include:]~~

(1) [~~(A)~~] the full amount of experience hours required for the license type sought, as required by the AQB;

(2) [~~(B)~~] the required number of hours of experience required for each property type as required by the AQB; and

(3) [~~(C)~~] the minimum length of time over which the experience is claimed, as required by the AQB.

~~[(2) The Experience Log must also include Recent Experience.]~~

[(A) The Log must include a minimum of 10 appraisal reports representing at least 10 percent of the hours and property type of experience required for each license category and for which an applicant seeks experience credit that have been performed within 5 years before the date an application is accepted for filing by the Board.]

~~[(B) This requirement does not eliminate an applicant's responsibility to comply with the 5-year records retention requirement in USPAP.]~~

(f) The Board may grant experience credit for work listed on an applicant's Appraisal Experience Log that:

(1) complies with the USPAP edition in effect at the time of the appraisal;

(2) is verifiable and supported by:

(A) work files in which the applicant is identified as participating in the appraisal process; or

(B) appraisal reports that:

(i) name the applicant in the certification as providing significant real property appraisal assistance; or

(ii) the applicant has signed;

(3) was performed when the applicant had legal authority to do so; and

(4) complies with the acceptable categories of experience established by the AQB and stated in subsection (b) of this section.

(g) Consistent with this chapter, upon review of the applicant's real estate appraisal experience, the Board may grant a license or certification contingent upon completion of additional education, experience or mentorship.

(h) Upon review of an applicant's Appraisal Experience Log, the Board may, at its sole discretion, grant experience credit for the hours shown on an applicant's log even if some work files have been destroyed because of the 5-year records retention period in USPAP has passed.

(i) The Board may grant experience credit for applicants claiming experience credit under subsection (b)(5) of this section that submit a valid certificate of completion from an AQB approved PAREA program.

(j) The Board may, at its sole discretion, accept evidence other than an applicant's Appraisal Experience Log and Appraisal Experience Certification [~~Affidavit~~] to demonstrate experience claimed by an applicant.

(k) The Board must verify the experience claimed by each applicant generally complies with USPAP.

(1) Verification may be obtained by:

(A) requesting copies of appraisals and all supporting documentation, including the work files; and

(B) engaging in other investigative research determined to be appropriate by the Board.

(2) If the Board requests documentation from an applicant to verify experience claimed by an applicant, the applicant has 60 days to provide the requested documentation to the Board.

(A) In response to an initial request for documentation to verify experience, an applicant must submit a copy of the relevant appraisals, but is not required to submit the associated work files at that time.

(B) If in the course of reviewing the submitted appraisals, the Board determines additional documentation is necessary to verify general compliance with USPAP, the Board may make additional requests for supporting documentation.

(3) Experience involved in pending litigation.

(A) The Board will not request work files from an applicant to verify claimed experience if the appraisal assignments are identified on the experience log submitted to the Board as being involved in pending litigation.

(B) If all appraisal assignments listed on an applicant's experience log are identified as being involved in pending litigation, the Board may audit any of the appraisal assignments on the applicant's experience log, regardless of litigation status, with the written consent of the applicant and the applicant's supervisory appraiser.

(4) Failure to comply with a request for documentation to verify experience, or submission of experience that is found not to comply with the requirements for experience credit, may result in denial of a license application.

(5) A license holder who applies to upgrade an existing license and submits experience that does not comply with USPAP may also be subject to disciplinary action up to and including revocation.

(l) Unless prohibited by Tex. Occ. Code §1103.460, applicable confidentiality statutes, privacy laws, or other legal requirements, or in matters involving alleged fraud, Board staff shall use reasonable means to inform supervisory appraisers of Board communications with their respective trainees.

§153.20.Guidelines for Disciplinary Action, Denial of License; Probationary License.

(a) The Board may take disciplinary action or deny issuing a license to an applicant at any time the Board determines that the applicant or license holder:

(1) disregards or violates a provision of the Act or the Board rules;

(2) is convicted of a felony;

(3) fails to notify the Board not later than the 30th day after the date of the final conviction if the person, in a court of this or another state or in a federal court, has been convicted of or entered a plea of guilty or nolo contendere to a felony or a criminal offense involving fraud or moral turpitude;

(4) fails to notify the Board not later than the 30th day after the date of incarceration if the person, in this or another state, has been incarcerated for a criminal offense involving fraud or moral turpitude;

(5) fails to notify the Board not later than the 30th day after the date disciplinary action becomes final against the person with regard to any occupational license the person holds in Texas or any other jurisdiction;

(6) fails to comply with the USPAP edition in effect at the time of the appraiser service;

(7) acts or holds himself or herself or any other person out as a person licensed under the Act or by another jurisdiction when not so licensed;

(8) accepts payment for appraiser services but fails to deliver the agreed service in the agreed upon manner;

(9) refuses to refund payment received for appraiser services when he or she has failed to deliver the appraiser service in the agreed upon manner;

(10) accepts payment for services contingent upon a minimum, maximum, or pre-agreed value estimate except when such action would not interfere with the appraiser's obligation to provide an independent and impartial opinion of value and full disclosure of the contingency is made in writing to the client;

(11) offers to perform appraiser services or agrees to perform such services when employment to perform such services is contingent upon a minimum, maximum, or pre-agreed value estimate except when such action would not interfere with the appraiser's obligation to provide an independent and impartial opinion of value and full disclosure of the contingency is made in writing to the client;

(12) makes a material misrepresentation or omission of material fact;

(13) has had a license as an appraiser revoked, suspended, or otherwise acted against by any other jurisdiction for an act which is a crime under Texas law;

(14) procures, or attempts to procure, a license by making false, misleading, or fraudulent representation;

(15) fails to actively, personally, and diligently supervise an appraiser trainee or any person not licensed under the Act who assists the license holder in performing real estate appraiser services;

(16) has had a final civil judgment entered against him or her on any one of the following grounds:

(A) fraud;

(B) intentional or knowing misrepresentation;

(17) fails to make good on a payment issued to the Board within thirty days after the Board has mailed a request for payment by certified mail to the license holder's last known business address as reflected by the Board's records;

(18) knowingly or willfully engages in false or misleading conduct or advertising with respect to client solicitation;

(19) misuses or misrepresents the type of classification or category of license number;

(20) engages in any other act relating to the business of appraising that the Board, in its discretion, believes warrants a suspension or revocation;

(21) uses any title, designation, initial or other insignia or identification that would mislead the public as to that person's credentials, qualifications, competency, or ability to perform licensed appraisal services;

(22) fails to comply with an agreed order or a final order of the Board;

(23) fails to answer all inquiries concerning matters under the jurisdiction of the Board within 20 days of notice to said individual's address of record, or within the time period allowed if granted a written extension by the Board; or

(24) after conducting reasonable due diligence, knowingly accepts an assignment from an appraisal management company that is not exempt from registration under the Act which:

(A) has not registered with the Board; or

(B) is registered with the Board but has not placed the appraiser on its panel of appraisers maintained with the Board; or

(25) fails to approve, sign, and deliver to their appraiser trainee the appraisal experience log and certification [~~affidavit~~ ] required by §153.15[~~§153.15(f)(1) and §153.17(c)(1)~~] of this title for all experience actually and lawfully acquired by the trainee while under the appraiser's sponsorship.

(b) - (k) (No change.)

§153.21.Appraiser Trainee and Supervisory Appraisers.

(a) - (c) (No change.)

(d) Maintaining eligibility to act as an appraiser trainee.

(1) Appraiser trainees must maintain an appraisal log and appraisal experience certifications [~~affidavits~~] on forms approved by the Board, for the license period being renewed. It is the responsibility of both the appraiser trainee and the supervisory appraiser to ensure the appraisal log is accurate, complete and signed by both parties at least quarterly or upon change in supervisory appraiser. The appraiser trainee will promptly provide copies of the experience logs and certifications [~~affidavits~~] to the Board upon request.

(2) An appraiser trainee must complete an approved Appraiser Trainee/Supervisory Appraiser course within four years before the expiration date of the appraiser trainee's current license and provide proof of completion to the Board.

(3) If an appraiser trainee has not provided proof of course completion at the time of renewal, but has met all other requirements for renewing the license:

(A) the Board will renew the appraiser trainee's license on inactive status;

(B) the appraiser trainee will no longer be eligible to perform appraisals or appraisal services; and

(4) An appraiser trainee may return the appraiser trainee's license to active status by:

(A) completing the course required by this section;

(B) submitting proof of course completion to the Board;

(D) paying any required fees.

(e) Duties of the supervisory appraiser.

(1) Supervisory appraisers are responsible to the public and to the Board for the conduct of the appraiser trainee under the Act.

(2) The supervisory appraiser assumes all the duties, responsibilities, and obligations of a supervisory appraiser as specified in these rules and must diligently supervise the appraiser trainee. Diligent supervision includes, but is not limited to, the following:

(A) direct supervision and training as necessary;

(B) ongoing training and supervision as necessary after the supervisory appraiser determines that the appraiser trainee no longer requires direct supervision;

(D) review and quality control of the appraiser trainee's work.

(3) Supervisory appraisers must approve and sign the appraiser trainee's appraisal log [~~and experience affidavit~~] at least quarterly and provide appraiser trainees with access to any appraisals and work files completed under the supervisory appraiser.

(4) After notice and hearing, the Board may reprimand a supervisory appraiser or may suspend or revoke a supervisory appraiser's license based on conduct by the appraiser trainee constituting a violation of the Act or Board rules.

(f) Termination of supervision.

(1) Supervision may be terminated by the supervisory appraiser or the appraiser trainee.

(2) If supervision is terminated, the terminating party must:

(A) immediately notify the Board on a form approved by the Board; and

(B) notify the non-terminating party in writing no later than the 10th day after the date of termination; and

(3) If an appraiser trainee is no longer under the supervision of a supervisory appraiser:

(A) the appraiser trainee may no longer perform the duties of an appraiser trainee; and

(B) is not eligible to perform those duties until:

(i) an application to supervise the trainee has been filed;

(ii) any required fees have been paid; and

(iii) the Board has approved the application.

(g) Course approval.

(1) To obtain Board approval of an Appraiser Trainee/Supervisory Appraiser course, a course provider must:

(A) submit form ATS-0, Appraiser Trainee/Supervisory Appraiser Course Approval, adopted herein by reference; and

(B) satisfy the Board that all required content set out in form ATS-0 is adequately covered.

(2) Approval of an Appraiser Trainee/Supervisory Appraiser course shall expire two years from the date of Board approval.

(3) An Appraiser Trainee/Supervisory Appraiser course may be delivered through:

(A) classroom delivery; or

(B) synchronous, asynchronous or hybrid distance education delivery. The course design and delivery mechanism for asynchronous distance education courses, including the asynchronous portion of hybrid courses must be approved by an AQB approved organization.

(h) ACE credit.

(1) Supervisory appraisers who complete the Appraiser Trainee/Supervisory Appraiser course may receive ACE credit for the course.

(2) Appraiser Trainees may not receive qualifying or ACE credit for completing the Appraiser Trainee/Supervisory Appraiser course.

§153.24.Complaint Processing.

(a) Receipt of a Complaint Intake Form by the Board does not constitute the filing of a formal complaint by the Board against the individual named on the Complaint Intake Form. Upon receipt of a signed Complaint Intake Form, staff shall:

(1) assign the complaint a case number in the complaint tracking system; and

(2) send written acknowledgement of receipt to the Complainant.

(b) Priority of complaint investigations. The Board prioritizes and investigates complaints based on the risk of harm each complaint poses to the public. Complaints that pose a high risk of public harm include violations of the Act, Board rules, or USPAP that:

(1) evidence serious deficiencies, including:

(A) Fraud;

(B) Identity theft;

(D) Ethical violations;

(E) Failure to properly supervise an appraiser trainee; or

(F) Other conduct determined by the Board that poses a significant risk of public harm; and

(2) were done:

(A) with knowledge;

(B) deliberately;

(D) with gross negligence.

(c) The Board or the Executive Director [~~Commissioner~~ ] may delegate to staff the duty to dismiss complaints. The complaint shall be dismissed with no further processing if the staff determines at any time that:

(1) the complaint is not within the Board's jurisdiction;

(2) no violation exists; or

(3) an allegation or formal complaint is inappropriate or without merit.

(d) A determination that an allegation or complaint is inappropriate or without merit includes a determination that the allegation or complaint:

(1) was made in bad faith;

(2) filed for the purpose of harassment;

(3) to gain a competitive or economic advantage; or

(4) lacks sufficient basis in fact or evidence.

(e) Staff shall conduct a preliminary inquiry to determine if dismissal is required under subsection (d) of this section.

(f) A complaint alleging mortgage fraud or in which mortgage fraud is suspected:

(1) may be investigated covertly; and

(2) shall be referred to the appropriate prosecutorial authorities.

(g) Staff may request additional information from any person, if necessary, to determine how to proceed with the complaint.

(h) As part of a preliminary investigative review, a copy of the Complaint Intake Form and all supporting documentation shall be sent to the Respondent unless the complaint qualifies for covert investigation and the TALCB Division deems covert investigation appropriate.

(i) The Board will:

(1) protect the complainant's identity to the extent possible by excluding the complainant's identifying information from a complaint notice sent to a respondent.

(2) periodically send written notice to the complainant and each respondent of the status of the complaint until final disposition. For purposes of this subsection, "periodically" means at least once every 90 days.

(j) The Respondent shall submit a response within 20 days of receiving a copy of the Complaint Intake Form. The 20-day period may be extended for good cause upon request in writing or by e-mail. The response shall include the following:

(1) a copy of the appraisal report that is the subject of the complaint;

(2) a copy of the Respondent's work file associated with the appraisal(s) listed in the complaint, with the following signed statement attached to the work file(s): I SWEAR AND AFFIRM THAT EXCEPT AS SPECIFICALLY SET FORTH HEREIN, THE COPY OF EACH AND EVERY APPRAISAL WORK FILE ACCOMPANYING THIS RESPONSE IS A TRUE AND CORRECT COPY OF THE ACTUAL WORK FILE, AND NOTHING HAS BEEN ADDED TO OR REMOVED FROM THIS WORK FILE OR ALTERED AFTER PLACEMENT IN THE WORK FILE.(SIGNATURE OF RESPONDENT);

(3) a narrative response to the complaint, addressing each and every item in the complaint;

(4) a list of any and all persons known to the Respondent to have actual knowledge of any of the matters made the subject of the complaint and, if in the Respondent's possession, contact information;

(5) any documentation that supports Respondent's position that was not in the work file, as long as it is conspicuously labeled as non-work file documentation and kept separate from the work file. The Respondent may also address other matters not raised in the complaint that the Respondent believes need explanation; and

(6) a signed, dated and completed copy of any questionnaire sent by Board staff.

(k) Staff will evaluate the complaint within three months after receipt of the response from Respondent to determine whether sufficient evidence of a potential violation of the Act, Board rules, or the USPAP exists to pursue investigation and possible formal disciplinary action. If the staff determines that there is no jurisdiction, no violation exists, there is insufficient evidence to prove a violation, or the complaint warrants dismissal, including contingent dismissal, under subsection (m) of this section, the complaint shall be dismissed with no further processing.

(l) A formal complaint will be opened and investigated by a staff investigator or peer investigative committee, as appropriate, if:

(1) the informal complaint is not dismissed under subsection (i) of this section; or

(2) staff opens a formal complaint on its own motion.

(m) Written notice that a formal complaint has been opened will be sent to the Complainant and Respondent.

(n) The staff investigator assigned to investigate a formal complaint shall prepare a report detailing its findings on a form approved by the Board.

(o) The Board may order a person regulated by the Board to refund the amount paid by a consumer to the person for a service regulated by the Board.

(p) Agreed resolutions of complaint matters pursuant to Texas Occupations Code §1103.458 or §1103.459 must be signed by:

(1) the Board Chair or if the Board Chair is unavailable or must recuse him or herself, the Board Chair's designee, whom shall be (in priority order) the Board Vice Chair, the Board Secretary, or another Board member;

(2) Respondent;

(3) a representative of the TALCB Division; and

(4) the Executive Director [~~Commissioner~~] or his or her designee.

§153.28.Peer Investigative Committee Review.

(a) - (g) (No change.)

(h) The Board delegates its authority to receive the written findings or determination of the Peer Investigative Committee to the Executive Director [~~Commissioner~~].

(i) No more than five business days after the review of the investigator's findings, the Board members of Committee shall render a determination agreeing or disagreeing with the investigator's finding of alleged violations and submit a copy of their determination to the Executive Director [~~Commissioner~~] or his or her designee on behalf of the Board. The determination shall serve as a recommendation to the TALCB Division as to whether to pursue adverse action against a respondent. A copy of the Board members' determination shall be included in the complaint file. The Board Chair may request statistical data related to the investigator's recommendations, Board members' determination, and adverse action pursued by the Division.

(j) Board members who participate in the Peer Investigative Committee Review of a complaint are disqualified from participating in any future adjudication of the same complaint.

§153.241.Sanctions Guidelines.

In determining the proper disposition of a formal complaint pending as of or filed after the effective date of this rule, and subject to the maximum penalties authorized under Texas Occupations Code §1103.552, staff, the administrative law judge in a contested case hearing, and the Board shall consider the following sanctions guidelines and list of non-exclusive factors as demonstrated by the evidence in the record of a contested case proceeding.

(1) For the purposes of these sanctions guidelines:

(A) A person will not be considered to have had a prior warning letter, contingent dismissal or discipline if that prior warning letter, contingent dismissal or discipline was issued by the Board more than seven years before the current alleged violation occurred;

(B) Prior discipline is defined as any sanction (including administrative penalty) received under a Board final or agreed order;

(D) "Minor deficiencies" is defined as violations of the Act, Board rules or USPAP which do not impact the credibility of the appraisal assignment results, the assignment results themselves and do not impact the license holder's honesty, integrity, or trustworthiness to the Board, the license holder's clients, or intended users of the appraisal service provided;

(E) "Serious deficiencies" is defined as violations of the Act, Board rules or USPAP that:

(i) impact the credibility of the appraisal assignment results, the assignment results themselves or do impact the license holder's honesty, trustworthiness or integrity to the Board, the license holder's clients, or intended users of the appraisal service provided; or

(ii) are deficiencies done with knowledge, deliberate or willful disregard, or gross negligence that would otherwise be classified as "minor deficiencies";

(F) "Remedial measures" include, but are not limited to, training, mentorship, education, reexamination, or any combination thereof; and

(G) The terms of a contingent dismissal agreement will be in writing and agreed to by all parties. Staff may dismiss the complaint with a non-disciplinary warning upon written agreement that the Respondent will complete all remedial measures within the agreed-upon timeframe. If the Respondent fails to meet the deadlines in the agreement, the Respondent's license or certification will be automatically set to inactive status until the Respondent completes the remedial measures set forth in the agreement.

(2) List of factors to consider in determining proper disposition of a formal complaint:

(A) Whether the Respondent has previously received a warning letter or contingent dismissal and, if so, the similarity of facts or violations in that previous complaint to the facts or violations in the instant complaint matter;

(B) Whether the Respondent has previously been disciplined;

(i) Whether prior discipline concerned the same or similar violations or facts;

(ii) The nature of the disciplinary sanctions previously imposed; and

(iii) The length of time since the prior discipline;

(D) The difficulty or complexity of the appraisal assignment(s) at issue;

(E) Whether the violations found were of a negligent, grossly negligent or a knowing or intentional nature;

(F) Whether the violations found involved a single appraisal/instance of conduct or multiple appraisals/instances of conduct;

(G) To whom were the appraisal report(s) or the conduct directed, with greater weight placed upon appraisal report(s) or conduct directed at:

(i) A financial institution or their agent, contemplating a lending decision based, in part, on the appraisal report(s) or conduct at issue;

(ii) The Board;

(iii) A matter which is actively being litigated in a state or federal court or before a regulatory body of a state or the federal government;

(iv) Another government agency or government sponsored entity, including, but not limited to, the United States Department of Veteran's Administration, the United States Department of Housing and Urban Development, the State of Texas, Fannie Mae, and Freddie Mac; or

(v) A consumer contemplating a real property transaction involving the consumer's principal residence;

(H) Whether Respondent's violations caused any harm, including financial harm, and the extent or amount of such harm;

(I) Whether Respondent acknowledged or admitted to violations and cooperated with the Board's investigation prior to any contested case hearing;

(J) The level of experience Respondent had in the appraisal profession at the time of the violations, including:

(i) The level of appraisal credential Respondent held;

(ii) The length of time Respondent had been an appraiser;

(iii) The nature and extent of any education Respondent had received related to the areas in which violations were found; and

(iv) Any other real estate or appraisal related background or experience Respondent had;

(K) Whether Respondent can improve appraisal skills and reports through the use of remedial measures;

(3) The following sanctions guidelines shall be employed in conjunction with the factors listed in paragraph (2) of this rule to assist in reaching the proper disposition of a formal complaint:

(A) 1st Time Discipline Level 1--violations of the Act, Board rules, or USPAP which evidence minor deficiencies will result in one of the following outcomes:

(i) Dismissal;

(ii) Dismissal with non-disciplinary warning letter; or

(iii) Contingent dismissal with remedial measures.

(B) 1st Time Discipline Level 2--violations of the Act, Board rules, or USPAP which evidence serious deficiencies will result in one of the following outcomes:

(i) Contingent dismissal with remedial measures; or

(ii) A final order which imposes one or more of the following:

(I) Remedial measures;

(II) Required promulgation, adoption and implementation of written, preventative policies or procedures addressing specific areas of professional practice;

(III) A probationary period with provisions for monitoring the Respondent's practice;

(IV) Restrictions on the Respondent's ability to sponsor any appraiser trainees;

(V) Restrictions on the scope of practice the Respondent is allowed to engage in for a specified time period or until specified conditions are satisfied; or

(VI) Up to $250 in administrative penalties per act or omission which constitutes a violation(s) of the Act, Board rules, or USPAP, not to exceed $3,000 in the aggregate.

(C) 1st Time Discipline Level 3--violations of the Act, Board rules, or USPAP which evidence serious deficiencies and were done with knowledge, deliberately, willfully, or with gross negligence will result in a final order which imposes one or more of the following:

(i) A period of suspension;

(ii) A revocation;

(iii) Remedial measures;

(iv) Required promulgation, adoption and implementation of written, preventative policies or procedures addressing specific areas of professional practice;

(v) A probationary period with provisions for monitoring the Respondent's practice;

(vi) Restrictions on the Respondent's ability to sponsor any appraiser trainees;

(vii) Restrictions on the scope of practice the Respondent is allowed to engage in for a specified time period or until specified conditions are satisfied; or

(viii) Up to $1,500 in administrative penalties per act or omission which constitutes a violation(s) of the Act, Board rules, or USPAP, up to the maximum $5,000 statutory limit per complaint matter.

(D) 2nd Time Discipline Level 1--violations of the Act, Board rules, or USPAP which evidence minor deficiencies will result in one of the following outcomes:

(i) Dismissal;

(ii) Dismissal with non-disciplinary warning letter;

(iii) Contingent dismissal with remedial measures; or

(iv) A final order which imposes one or more of the following:

(I) Remedial measures;

(II) Required promulgation, adoption and implementation of written, preventative policies or procedures addressing specific areas of professional practice;

(III) A probationary period with provisions for monitoring the Respondent's practice;

(IV) Restrictions on the Respondent's ability to sponsor any appraiser trainees;

(V) Restrictions on the scope of practice the Respondent is allowed to engage in for a specified time period or until specified conditions are satisfied; or

(VI) Up to $250 in administrative penalties per act or omission which constitutes a violation(s) of the Act, Board rules, or USPAP, up to the maximum $5,000 statutory limit per complaint matter.

(E) 2nd Time Discipline Level 2--violations of the Act, Board rules, or USPAP which evidence serious deficiencies will result in a final order which imposes one or more of the following:

(i) A period of suspension;

(ii) A revocation;

(iii) Remedial measures;

(iv) Required promulgation, adoption and implementation of written, preventative policies or procedures addressing specific areas of professional practice;

(v) A probationary period with provisions for monitoring the Respondent's practice;

(vi) Restrictions on the Respondent's ability to sponsor any appraiser trainees;

(vii) Restrictions on the scope of practice the Respondent is allowed to engage in for a specified time period or until specified conditions are satisfied; or

(viii) Up to $1,500 in administrative penalties per act or omission which constitutes a violation(s) of the Act, Board rules, or USPAP, up to the maximum $5,000 statutory limit per complaint matter.

(F) 2nd Time Discipline Level 3--violations of the Act, Board rules, or USPAP which evidence serious deficiencies and were done with knowledge, deliberately, willfully, or with gross negligence will result in a final order which imposes one or more of the following:

(i) A period of suspension;

(ii) A revocation;

(iii) Remedial measures;

(iv) Required promulgation, adoption and implementation of written, preventative policies or procedures addressing specific areas of professional practice;

(v) A probationary period with provisions for monitoring the Respondent's practice;

(vi) Restrictions on the Respondent's ability to sponsor any appraiser trainees;

(vii) Restrictions on the scope of practice the Respondent is allowed to engage in for a specified time period or until specified conditions are satisfied; or

(viii) Up to $1,500 in administrative penalties per act or omission which constitutes a violation(s) of the Act, Board rules, or USPAP, up to the maximum $5,000 statutory limit per complaint matter.

(G) 3rd Time Discipline Level 1--violations of the Act, Board rules, or USPAP which evidence minor deficiencies will result in a final order which imposes one or more of the following:

(i) A period of suspension;

(ii) A revocation;

(iii) Remedial measures;

(iv) Required promulgation, adoption and implementation of written, preventative policies or procedures addressing specific areas of professional practice;

(v) A probationary period with provisions for monitoring the Respondent's practice;

(vi) Restrictions on the Respondent's ability to sponsor any appraiser trainees;

(vii) Restrictions on the scope of practice the Respondent is allowed to engage in for a specified time period or until specified conditions are satisfied; or

(viii) $1,000 to $1,500 in administrative penalties per act or omission which constitutes a violation(s) of the Act, Board rules, or USPAP, up to the maximum $5,000 statutory limit per complaint matter.

(H) 3rd Time Discipline Level 2--violations of the Act, Board rules, or USPAP which evidence serious deficiencies will result in a final order which imposes one or more of the following:

(i) A period of suspension;

(ii) A revocation;

(iii) Remedial measures;

(iv) Required promulgation, adoption and implementation of written, preventative policies or procedures addressing specific areas of professional practice;

(v) A probationary period with provisions for monitoring the Respondent's practice;

(vi) Restrictions on the Respondent's ability to sponsor any appraiser trainees;

(vii) Restrictions on the scope of practice the Respondent is allowed to engage in for a specified time period or until specified conditions are satisfied; or

(viii) $1,500 in administrative penalties per act or omission which constitutes a violation(s) of the Act, Board rules, or USPAP, up to the maximum $5,000 statutory limit per complaint matter.

(I) 3rd Time Discipline Level 3--violations of the Act, Board Rules, or USPAP which evidence serious deficiencies and were done with knowledge, deliberately, willfully, or with gross negligence will result in a final order which imposes one or more of the following:

(i) A revocation; or

(ii) $1,500 in administrative penalties per act or omission which constitutes a violation(s) of the Act, Board rules, or USPAP, up to the maximum $5,000 statutory limit per complaint matter.

(J) 4th Time Discipline--violations of the Act, Board rules, or USPAP will result in a final order which imposes one or more of the following:

(i) A revocation; and

(ii) $1,500 in administrative penalties per act or omission which constitutes a violation(s) of USPAP, Board rules, or the Act, up to the maximum $5,000 statutory limit per complaint matter.

(K) Unlicensed appraisal activity will result in a final order which imposes a $1,500 in administrative penalties per unlicensed appraisal activity, up to the maximum $5,000 statutory limit per complaint matter.

(4) In addition, staff may recommend any or all of the following:

(A) reducing or increasing the recommended sanction or administrative penalty for a complaint based on documented factors that support the deviation, including but not limited to those factors articulated under paragraph (2) of this subsection [~~rule~~];

(B) probating all or a portion of any sanction or administrative penalty for a period not to exceed five years;

(D) such other recommendations, with documented support, as will achieve the purposes of the Act, Board rules, or USPAP.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 21, 2023.

TRD-202303061

Kathleen Santos

General Counsel

Texas Appraiser Licensing and Certification Board

Earliest possible date of adoption: October 1, 2023

For further information, please call: (512) 936-3652

CHAPTER 157. RULES RELATING TO PRACTICE AND PROCEDURE

SUBCHAPTER A. GENERAL PROVISIONS

22 TAC §157.6

The Texas Appraiser Licensing and Certification Board (TALCB) proposes amendments to 22 TAC §157.6, Request for Advisory Opinions.

The proposed amendments to §157.6 add language to the rule to reflect a process for Advisory Opinions issued by TALCB to be reviewed and determine whether to be withdrawn or superseded.

Growth Impact Statement:

For each year of the first five years the proposed amendments and rules are in effect the amendments and rules will not:

- create or eliminate a government program;

- require the creation of new employee positions or the elimination of existing employee positions;

- require an increase or decrease in future legislative appropriations to the agency;

- require an increase or decrease in fees paid to the agency;

- create a new regulation;

- expand, limit or repeal an existing regulation; and

- increase the number of individuals subject to the rule's applicability.

For each year of the first five years the proposed amendments are in effect, there is no anticipated impact on the state's economy.

The amendments are proposed under Texas Occupations Code 1103.151, Rules Relating to Certificates and Licenses and §1103.154, which authorizes TALCB to adopt rules related to professional conduct.

The statute affected by these amendments is Chapter 1103, Texas Occupations Code. No other statute, code or article is affected by the proposed amendments.

§157.6.Request for Advisory Opinions.

Upon written request and in accordance with the Texas Open Meetings Act, the Board may issue advisory opinions. Such opinions are not binding on the Board or on the person making the request, and may not be relied upon as an official Board ruling. The Board shall maintain a record of each advisory opinion, identifying the person to whom it was issued. The Board shall review issued opinions on a periodic basis to determine whether they should be withdrawn or superseded.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 21, 2023.

TRD-202303059

Kathleen Santos

General Counsel

Texas Appraiser Licensing and Certification Board

Earliest possible date of adoption: October 1, 2023

For further information, please call: (512) 936-3652

SUBCHAPTER F. RULEMAKING

22 TAC §157.50

The Texas Appraiser Licensing and Certification Board (TALCB) proposes amendments to 22 TAC §157.50, Negotiated Rulemaking.

The proposed amendments to §157.50 implement statutory changes enacted by the 88th Legislature in SB 1577, which becomes effective on January 1, 2024, and which changes the title of the TALCB "Commissioner" to "Executive Director."

Growth Impact Statement:

For each year of the first five years the proposed amendments and rules are in effect the amendments and rules will not:

--create or eliminate a government program;

--require the creation of new employee positions or the elimination of existing employee positions;

--require an increase or decrease in future legislative appropriations to the agency;

--require an increase or decrease in fees paid to the agency;

--create a new regulation;

--expand, limit or repeal an existing regulation; and

--increase the number of individuals subject to the rule's applicability.

For each year of the first five years the proposed amendments are in effect, there is no anticipated impact on the state's economy.

The amendments are proposed under Texas Occupations Code §1103.162, which required the Board to develop a policy to encourage the use of negotiated rulemaking.

The statute affected by these amendments is Chapter 1103, Texas Occupations Code. No other statute, code or article is affected by the proposed amendments.

§157.50.Negotiated Rulemaking.

(a) It is the Board's policy to employ negotiated rulemaking procedures when appropriate. When the Board is of the opinion that proposed rules are likely to be complex, or controversial, or to affect disparate groups, negotiated rulemaking will be considered.

(b) When negotiated rulemaking is to be considered, the Board will appoint a convener to assist it in determining whether it is advisable to proceed. The convener shall have the duties described in Government Code §2008.052 and shall make a recommendation to the Executive Director [~~Commissioner~~] to proceed or to defer negotiated rulemaking. The recommendation shall be made after the convener, at a minimum, has considered all of the items enumerated in Government Code §2008.052(c).

(c) Upon the convener's recommendation to proceed, the Board shall initiate negotiated rulemaking according to the provisions of Chapter 2008, Government Code.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 21, 2023.

TRD-202303060

Kathleen Santos

General Counsel

Texas Appraiser Licensing and Certification Board

Earliest possible date of adoption: October 1, 2023

For further information, please call: (512) 936-3652

CHAPTER 159. RULES RELATING TO THE PROVISIONS OF THE TEXAS APPRAISAL MANAGEMENT COMPANY REGISTRATION AND REGULATION ACT

22 TAC §§159.1, 159.52, 159.104, 159.105, 159.155, 159.201, 159.202, 159.204

The Texas Appraiser Licensing and Certification Board (TALCB) proposes new and amendments to 22 TAC §159.1, Definitions; §159.52, Fees; §159.104, Primary Contact; Appraiser Contact; Controlling Person; Contact Information; §159.105, Denial of Registration or Renewal of Registration; §159.155, Periodic Review of Appraisals; §159.201, Guidelines for Disciplinary Action; §159.202, AMC Investigative Committee; and §159.204, Complaint Processing.

The proposed amendments to §§159.1, 159.52, 159.104, 159.105 and 159.204 implement statutory changes enacted by the 88th Legislature in SB 1577, which becomes effective on January 1, 2024, and which changes the title of the TALCB "Commissioner" to "Executive Director."

The proposed new rule 159.202, AMC Investigative Committee is proposed to implement statutory changes enacted by the 88th Legislature in SB 1222, which becomes effective on September 1, 2023, and which authorizes a process for a committee to review of complaints received under chapter 1104 of the Occupations Code, involving AMCs. The proposed new rule identifies who may serve on the committee, delineates functions of the committee members and TALCB staff in the review process, and establishes process deadlines. The proposed rule also specifies the types of complaints that are subject or not subject to the review of the AMC Investigative Committee, and the manner committee members and staff may communicate during the review process. The process outlined in the proposed rule is modeled after an existing process on governing the committee review of complaints under 1103 of the Occupations Code, involving appraisers.

The proposed amendments to §159.155 remove a specified percentage requirement for the periodic review of appraisal that AMCs perform on appraisers performing appraisal services. The proposed amendments would require AMCs to have a written policy in place for conducting periodic reviews and make the policy and documentation demonstrating compliance with the policy available upon request by the Board.

The proposed amendments to §159.201 and §159.204 clarify the applicability of USPAP as it relates to AMCs and the obligation to submit certain information to the ASC. The proposed amendments to §159.204 also update language related to the statute of limitations to align with statute and allow greater flexibility in sanctions.

Growth Impact Statement:

For each year of the first five years the proposed amendments and rules are in effect the amendments and rules will not:

--create or eliminate a government program;

--require the creation of new employee positions or the elimination of existing employee positions;

--require an increase or decrease in future legislative appropriations to the agency;

--require an increase or decrease in fees paid to the agency;

--create a new regulation;

--expand, limit or repeal an existing regulation; and

--increase the number of individuals subject to the rule’s applicability.

For each year of the first five years the proposed amendments are in effect, there is no anticipated impact on the state’s economy.

The new rule and amendments are proposed under Texas Occupations Code §1104.151, which authorizes TALCB to adopt rules necessary to administer the provisions of Chapter 1104, Texas Occupations Code.

The statute affected by the new rule and amendments is Chapter 1104, Texas Occupations Code. No other statute, code or article is affected by the proposed new rule and amendments.

§159.1.Definitions.

(a) - (h) (No change.)

(i) Executive Director [~~Commissioner~~]--The Executive Director [~~Commissioner~~] of the Board.

(j) - (s) (No change.)

§159.52.Fees.

(a) The Board will charge and the Executive Director [~~Commissioner~~] will collect the following fees:

(1) a fee of $3,300 for an application for a two-year registration;

(2) a fee of $3,000 for a timely renewal of a two-year registration;

(3) a fee equal to 1-1/2 times the timely renewal fee for the late renewal of a registration within 90 days of expiration; a fee equal to two times the timely renewal fee for the late renewal of a registration more than 90 days but less than six months after expiration;

(4) the national registry fee in the amount charged by the Appraisal Subcommittee for the AMC registry;

(5) a fee of $500 for untimely payment of the AMC national registry fee;

(6) a fee of $10 for each appraiser on a panel at the time of renewal of a registration;

(7) a fee of $5 to add an appraiser to a panel in the Board's records;

(8) a fee of $5 for the termination of an appraiser from a panel;

(9) a fee of $50 to return to active status;

(10) a fee of $50 for evaluation of an owner or primary contact's background history not submitted with an original application or renewal;

(11) any fee required by the Department of Information Resources for establishing and maintaining online applications or as a subscription or convenience fee for use of an online payment system; and

(12) a fee in the amount necessary to administer section 1104.052(c) of the AMC Act.

(c) AMCs registered with the Board must pay any annual registry fee as required under federal law. All registry fees collected by the Board will be deposited to the credit of the appraiser registry account in the general revenue fund. The Board will send the fees to the Appraisal Subcommittee as required by federal law.

§159.104.Primary Contact; Appraiser Contact; Controlling Person; Contact Information.

(a) - (e) (No change.)

(f) A primary contact who assumes that role during the term of the registration must provide the Board written consent to a criminal history background check, as required by §1104.102 of the AMC Act. If the person does not satisfy the Board's moral character requirements, the Board will remove the person from its records and the license holder will be placed on inactive status. Such a decision by the Board may be reviewed and reconsidered by the Executive Director [~~Commissioner~~] if the license holder submits a written request for reconsideration within 10 days of notice that the person does not qualify to serve as primary contact. The license holder will remain on inactive status while the request for reconsideration is pending.

(g) - (i) (No change.)

§159.105.Denial of Registration or Renewal of Registration.

(a) - (j) (No change.)

(k) An application for registration or renewal of registration that is denied by TALCB Division staff may be reviewed and reconsidered by the Executive Director [~~Commissioner~~] if the applicant submits a written request for reconsideration within 10 days of notice of the denial. The right to request reconsideration is distinct from, and in addition to, an applicant's right to appeal an application denial before SOAH.

§159.155.Periodic Review of Appraisals.

(a) A license holder must have a written policy reflecting a process and controls in place to periodically review the work of appraisers performing appraisal services on 1-4 family unit properties collateralizing mortgage obligations by performing a review in accordance with Standards 3 and 4 of USPAP. [~~of:~~]

~~[(1) one of the first five appraisals performed for the license holder by each appraiser, prior to making a sixth assignment; and]~~

~~[(2) a total of two percent, randomly selected, of the appraisals performed for the AMC for each twelve-month period following the date of the AMC's registration.]~~

~~[(b) Appraisal reviews performed pursuant to subsection (a)(1) of this section will be counted toward the calculation of two percent for the purposes of subsection (a)(2) of this section.]~~

[(c) An appraisal review pursuant to subsection (a)(1) of this section is not required if the first five appraisals by an appraiser were completed before the AMC was required by the AMC Act to be registered with the Board.]

(b) In accordance with 1104.156 of the Occupations Code, upon request by the Board, a license holder shall produce a copy of the written policy and information demonstrating compliance with the policy.

(c) [~~(d)~~] An appraiser is qualified to perform an appraisal review within the meaning of §1104.153 of the AMC Act if the appraiser conducting the review:

(1) is licensed or certified to act as an appraiser in Texas or another jurisdiction;

(2) holds the appropriate credential to have performed the appraisal being reviewed; and

(3) does not develop an opinion of value. If the reviewer elects to develop an opinion of value within the review, the reviewer must be licensed or certified to act as an appraiser in Texas.

(d) [~~(e)~~] To satisfy the requirements of the AMC Act and this rule, a license holder performing an appraisal review must perform a scope of work that is sufficient to ensure that methods, assumptions, data sources, and conclusions of the appraisal subject to review comply with USPAP.

[(f) If the reviewer elects to develop an opinion of value or review opinion, the review must comply with the additional provisions of Standards 3 and 4 of USPAP governing the development of an opinion of value or review opinion.]

§159.201.Guidelines for Disciplinary Action.

(a) The Board may take disciplinary action, or deny issuing or renewing a license to an applicant, any time it is determined that the person applying for, renewing, or holding the license or the AMC's primary contact:

(1) disregards or violates a provision of the AMC Act or Board rules;

(2) is convicted of a felony;

(5) fails to notify the Board of the following with regard to any professional or occupational license held by the person in Texas or another jurisdiction not later than the 30th day after the date:

(A) disciplinary action becomes final against the person; or

(B) the person voluntarily surrenders any professional or occupational license;

(6) fails to require appraisal assignments be completed in compliance [~~comply~~] with the USPAP edition in effect at the time of the appraisal or appraisal practice;

(7) acts or holds any person out as a registered AMC under the AMC Act or another state's act when not so licensed or certified;

(8) accepts payment for appraisal management services but fails to deliver the agreed service in the agreed upon manner;

(9) refuses to refund payment received for appraisal management services when he or she has failed to deliver the appraiser service in the agreed upon manner;

(10) accepts payment for services contingent upon a minimum, maximum, or pre-agreed value estimate;

(11) offers to perform appraisal management services or agrees to perform such services when employment to perform such services is contingent upon a minimum, maximum, or pre-agreed value estimate;

(12) makes a material misrepresentation or omission of material fact;

(13) has had a registration as an AMC revoked, suspended, or otherwise acted against by any other jurisdiction for an act which is an offense under Texas law;

(14) procures a registration pursuant to the AMC Act by making false, misleading, or fraudulent representation;

(15) has had a final civil judgment entered against him or her on any one of the following grounds:

(A) fraud;

(B) intentional or knowing misrepresentation; or

(16) fails to make good on a payment issued to the Board within 30 days after the Board has mailed a request for payment by certified mail to the license holder's primary contact as reflected in the Board's records;

(17) knowingly or willfully engages in false or misleading conduct or advertising with respect to client solicitation;

(18) uses any title, designation, initial or other insignia or identification that would mislead the public as to that person's credentials, qualifications, competency, or ability to provide appraisal management services;

(19) requires an appraiser to pay for or reimburse the AMC for a criminal history check;

(20) fails to comply with a final order of the Board; or

(21) fails to answer all inquiries concerning matters under the jurisdiction of the Board within 20 days of notice to said person's or primary contact's address of record, or within the time period allowed if granted a written extension by the Board.

(b) The Board has discretion in determining the appropriate penalty for any violation under subsection (a) of this section.

(c) The Board may probate a penalty or sanction, and may impose conditions of the probation, including, but not limited to:

(1) the type and scope of appraisal management practice;

(2) requirements for additional education by the AMC's controlling persons;

(3) monetary administrative penalties; and

(4) requirements for reporting appraisal management activity to the Board.

(d) A person applying for reinstatement after revocation or surrender of a registration must comply with all requirements that would apply if the registration had instead expired.

(e) The provisions of this section do not relieve a person from civil liability or from criminal prosecution under the AMC Act or under the laws of this State.

(f) The Board may not investigate under this section a complaint submitted [~~either~~] more than four [~~two~~] years after the date on which the alleged violation occurred [~~of discovery or more than two years after the completion of any litigation involving the incident, whichever event occurs later,~~] involving the AMC that is the subject of the complaint.

(g) Except as provided by Texas Penal Code §32.32(d), there will be no undercover or covert investigations conducted by authority of the AMC Act.

(h) The Board reports [~~may report~~] to the Appraisal Subcommittee any disciplinary action taken by the Board against an AMC required to register under the AMC Act.

§159.202.AMC Investigative Committee.

(a) The Board Chair, with the advice and consent of the Executive Committee, may appoint an Investigative Committee pool at least every two years.

(b) A panel of the Investigative Committee shall consist of:

(1) one or two Board members;

(2) a member of the AMC Advisory Committee; and

(3) a TALCB Investigator.

(c) During complaint intake, the TALCB Director or his or her designee shall assign a TALCB Investigator to investigate the complaint.

(d) Complaints in which adverse action or contingent dismissals is recommended by an investigator are subject to review by the Investigative Committee. Complaints that result in dismissals, defaults, or warning letters are not subject to review by the Investigative Committee.

(e) No more than 7 days following the investigator's completion of an investigative report, the investigator shall provide his or her findings, including the investigative report and the complaint file, to the members of the Investigative Committee. The investigative report must include:

(1) a statement of facts;

(2) the investigator's recommendations; and

(3) the position or defense of the respondent.

(f) the Investigative Committee and staff may elect to confer in person, via e-mail, or video conference prior to the members' determination.

(g) The Board delegates its authority to receive the written findings or determination of the Investigative Committee to the Executive Director.

(h) No more than five business days after the review of the investigator's findings, the committee shall render a determination agreeing or disagreeing with the investigator's finding of alleged violations and submit a copy of their determination to the Executive Director or his or her designee on behalf of the Board. The determination shall serve as a recommendation to the TALCB Division as to whether to pursue adverse action against a respondent. A copy of the determination shall be included in the complaint file. The Board Chair may request statistical data related to the investigator's recommendations, members' determination, and adverse action pursued by the Division.

(i) Board members who participate in the Investigative Committee Review of a complaint are disqualified from participating in any future adjudication of the same complaint.

§159.204.Complaint Processing.

(a) Receipt of a Complaint Intake Form by the Board does not constitute the filing of a formal complaint by the Board against the AMC named on the Complaint Intake Form. Upon receipt of a signed Complaint Intake Form, staff will:

(1) assign the complaint a case number in the complaint tracking system; and

(2) send written acknowledgement of receipt to the complainant.

(1) evidence serious deficiencies, including:

(A) Fraud;

(B) Identity theft;

(D) Ethical violations;

(E) Violations of appraiser independence; or

(F) Other conduct determined by the Board that poses a significant risk of public harm; and

(2) were done:

(A) with knowledge;

(B) deliberately;

(D) with gross negligence.

(c) If the staff determines at any time that the complaint is not within the Board's jurisdiction, or that no violation exists, the complaint will be dismissed with no further processing. The Board or the Executive Director [~~Commissioner~~] may delegate to staff the duty to dismiss complaints.

(d) A complaint alleging mortgage fraud or in which mortgage fraud is suspected:

(1) may be investigated covertly; and

(2) will be referred to the appropriate prosecutorial authorities.

(e) Staff may request additional information necessary to determine how to proceed with the complaint from any person.

(f) As part of a preliminary investigative review, a copy of the Complaint Intake Form and all supporting documentation will be sent to the Respondent unless the complaint qualifies for covert investigation and the TALCB Division deems covert investigation appropriate.

(g) The Board will:

(1) protect the complainant's identity to the extent possible by excluding the complainant's identifying information from a complaint notice sent to a respondent.

(h) The Respondent must submit a response within 20 days of receiving a copy of the Complaint Intake Form. The 20-day period may be extended for good cause upon request in writing or by e-mail. The response must include the following:

(1) A copy of the appraisal report(s), if any, that is (are) the subject of the complaint;

(2) A copy of the documents or other business records associated with the appraisal report(s), incident(s), or conduct listed in the complaint, with the following signed statement attached to the response: I SWEAR AND AFFIRM THAT EXCEPT AS SPECIFICALLY SET FORTH HEREIN, THE COPY OF EACH AND EVERY BUSINESS RECORD ACCOMPANYING THIS RESPONSE IS A TRUE AND CORRECT COPY OF THE ACTUAL BUSINESS RECORD, AND NOTHING HAS BEEN ADDED TO OR REMOVED FROM THIS BUSINESS RECORD OR ALTERED. (SIGNATURE OF RESPONDENT);

(3) A narrative response to the complaint, addressing each and every item in the complaint;

(4) A list of any and all persons known to the Respondent to have actual knowledge of any of the matters made the subject of the complaint and, if in the Respondent's possession, contact information;

(5) Any documentation that supports Respondent's position that was not in the original documentation, as long as it is conspicuously labeled as additional documentation and kept separate from the original documentation. The Respondent may also address other matters not raised in the complaint that the Respondent believes need explanation; and

(6) a signed, dated and completed copy of any questionnaire sent by Board staff.

(i) Staff will evaluate the complaint within three months of receipt of the response from Respondent to determine whether sufficient evidence of a potential violation of the AMC Act or[,] Board rules [~~or USPAP~~] exists to pursue investigation and possible formal disciplinary action. If staff determines there is no jurisdiction, no violation exists, or there is insufficient evidence to prove a violation, or the complaint warrants dismissal, including contingent dismissal, under subsection (m) of this section, the complaint will be dismissed with no further processing.

(j) A formal complaint will be opened and investigated by a staff investigator or [~~peer~~] investigative committee if:

(1) the informal complaint is not dismissed under subsection (i) of this section; or

(2) staff opens a formal complaint on its own motion.

(k) Written notice that a formal complaint has been opened will be sent to the Complainant and Respondent.

(l) The staff investigator or [~~peer~~] investigative committee assigned to investigate a formal complaint will prepare a report detailing all findings.

(m) In determining the proper disposition of a formal complaint pending as of or filed after the effective date of this subsection, and subject to the maximum penalties authorized under Chapter 1104, Texas Occupations Code, staff, the administrative law judge in a contested case hearing and the Board shall consider the following sanctions guidelines and list of non-exclusive factors as demonstrated by the evidence in the record of a contested case proceeding.

(1) For the purposes of these sanctions guidelines:

(A) An AMC will not be considered to have had a prior warning letter, contingent dismissal or discipline if that prior warning letter, contingent dismissal or discipline occurred more than ten years ago;

(B) A prior warning letter, contingent dismissal or discipline given less than ten years ago will not be considered unless the Board took final action against the AMC before the date of the incident that led to the subsequent disciplinary action;

(C) Prior discipline is defined as any sanction, including an administrative penalty, received under a Board final or agreed order;

(D) A violation refers to a violation of any provision of the AMC Act or[,] Board rules[~~, or USPAP~~];

(E) "Minor deficiencies" is defined as violations of the AMC Act or[,] Board rules[~~, or USPAP~~] which do not call into question the qualification of the AMC for licensure in Texas;

(F) "Serious deficiencies" is defined as violations of the Act or[,] Board rules [~~or USPAP~~ ]which do call into question the qualification of the AMC for licensure inTexas;

(G) "Remedial measures" include training, auditing, or any combination thereof; and

(H) The terms of a contingent dismissal agreement will be in writing and agreed to by all parties. Staff may dismiss the complaint with a non-disciplinary warning upon written agreement that the Respondent will complete all remedial measures within the agreed-upon timeframe. If the Respondent fails to meet the deadlines in the agreement, the Respondent's license or certification will be automatically set to inactive status until the Respondent completes the remedial measures set forth in the agreement.

(2) List of factors to consider in determining proper disposition of a formal complaint:

(A) Whether the Respondent has previously received a warning letter or contingent dismissal, and if so, the similarity of facts or violations in that previous complaint to the facts or violations in the instant complaint matter;

(B) Whether the Respondent has previously been disciplined;

(i) Whether it concerned the same or similar violations or facts;

(ii) The nature of the disciplinary sanctions imposed;

(iii) The length of time since the previous discipline;

(D) The difficulty or complexity of the incident at issue;

(E) Whether the violations found were of a negligent, grossly negligent or a knowing or intentional nature;

(F) Whether the violations found involved a single appraisal or instance of conduct or multiple appraisals or instances of conduct;

(G) To whom were the appraisal report(s) or the conduct directed, with greater weight placed upon appraisal report(s) or conduct directed at:

(i) A financial institution or their agent, contemplating a lending decision based, in part, on the appraisal report(s) or conduct at issue;

(ii) The Board;

(iii) A matter which is actively being litigated in a state or federal court or before a regulatory body of a state or the federal government;

(v) A consumer contemplating a real property transaction involving the consumer's principal residence;

(H) Whether Respondent's violations caused any harm, including financial harm, and the amount of such harm;

(I) Whether Respondent acknowledged or admitted to violations and cooperated with the Board's investigation prior to any contested case hearing;

(J) The business operating history of the AMC, including:

(i) The size of the AMC's appraiser panel;

(ii) The length of time Respondent has been licensed as an AMC in Texas;

(iii) The length of time the AMC has been conducting business operations, in any jurisdiction;

(iv) The nature and extent of any remedial measures and sanctions the Respondent had received related to the areas in which violations were found; and

(v) Respondent's affiliation with other business entities;

(K) Whether Respondent can improve the AMC's practice through the use of remedial measures; and

(L) Whether Respondent has voluntarily completed remedial measures prior to the resolution of the complaint.

(3) The sanctions guidelines contained herein shall be employed in conjunction with the factors listed in paragraph (2) of this subsection to assist in reaching the proper disposition of a formal complaint:

(A) 1st Time Discipline Level 1--violations of the AMC Act or[,] Board rules[~~, or USPAP~~] which evidence minor deficiencies will result in one of the following outcomes:

(i) Dismissal;

(ii) Dismissal with non-disciplinary warning letter;

(iii) Contingent dismissal with remedial measures.

(B) 1st Time Discipline Level 2--violations of the AMC Act or[,] Board rules[~~, or USPAP~~] which evidence serious deficiencies will result in one of the following outcomes:

(i) Contingent dismissal with remedial measures;

(ii) A final order which imposes one or more of the following:

(I) Remedial measures;

(II) Required adoption and implementation of written, preventative policies or procedures;

(III) A probationary period with provisions for monitoring the AMC;

(IV) Monitoring and/or preapproval of AMC panel removals for a specified period of time;

(V) Monitoring and/or preapproval of the licensed activities of the AMC for a specified time period or until specified conditions are satisfied;

(VI) Minimum of $1,000 in administrative penalties per act or omission which constitutes a violation(s) of the AMC Act or[,] Board rules[~~, or USPAP~~]; each day of a continuing violation is a separate violation.

(C) 1st Time Discipline Level 3--violations of the AMC Act or[,] Board rules[~~, or USPAP~~] which evidence serious deficiencies and were done with knowledge, deliberately, willfully, or with gross negligence will result in a final order which imposes one or more of the following:

(i) A period of suspension;

(ii) A revocation;

(iii) Remedial measures;

(iv) Required adoption and implementation of written, preventative policies or procedures;

(v) A probationary period with provisions for monitoring the AMC;

(vi) Monitoring and/or preapproval of AMC panel removals for a specified period of time;

(vii) Monitoring and/or preapproval of the licensed activities of the AMC for a specified time period or until specified conditions are satisfied;

(viii) Minimum of $2,500 in administrative penalties per act or omission which constitutes a violation(s) of the AMC Act or[,] Board rules[~~, or USPAP~~]; each day of a continuing violation is a separate violation.

(D) 2nd Time Discipline Level 1--violations of the AMC Act or[,] Board rules[~~, or USPAP~~] which evidence minor deficiencies will result in one of the following outcomes:

(i) Dismissal;

(ii) Dismissal with non-disciplinary warning letter;

(iii) Contingent dismissal with remedial measures;

(iv) A final order which imposes one or more of the following:

(I) Remedial measures;

(II) Required adoption and implementation of written, preventative policies or procedures;

(III) A probationary period with provisions for monitoring the AMC;

(IV) Monitoring and/or preapproval of AMC panel removals for a specified period of time;

(V) Monitoring and/or preapproval of the licensed activities of the AMC for a specified time period or until specified conditions are satisfied;

(E) 2nd Time Discipline Level 2--violations of the AMC Act or[,] Board rules[~~, or USPAP~~] which evidence serious deficiencies will result in a final order which imposes one or more of the following:

(i) A period of suspension;

(ii) A revocation;

(iii) Remedial measures;

(iv) Required adoption and implementation of written, preventative policies or procedures;

(v) A probationary period with provisions for monitoring the AMC;

(vi) Monitoring and/or preapproval of AMC panel removals for a specified period of time;

(vii) Monitoring and/or preapproval of the licensed activities of the AMC for a specified time period or until specified conditions are satisfied;

(viii) Minimum of $2,500 in administrative penalties per act or omission which constitutes a violation(s) of AMC Act or[,] Board rules[~~, or USPAP~~]; each day of a continuing violation is a separate violation.

(F) 2nd Time Discipline Level 3--violations of the AMC Act or[,] Board rules[~~, or USPAP~~] which evidence serious deficiencies and were done with knowledge, deliberately, willfully, or with gross negligence will result in a final order which imposes one or more of the following:

(i) A period of suspension;

(ii) A revocation;

(iii) Remedial measures;

(iv) Required adoption and implementation of written, preventative policies or procedures;

(v) A probationary period with provisions for monitoring the AMC;

(vi) Monitoring and/or preapproval of AMC panel removals for a specified period of time;

(vii) Monitoring and/or preapproval of the licensed activities of the AMC for a specified time period or until specified conditions are satisfied;

(viii) Minimum of $4,000 in administrative penalties per act or omission which constitutes a violation(s) of the AMC Act or[,] Board rules[~~, or USPAP~~]; each day of a continuing violation is a separate violation.

(G) 3rd Time Discipline Level 1--violations of the AMC Act or[,] Board rules[~~, or USPAP~~] which evidence minor deficiencies will result in a final order which imposes one or more of the following:

(i) A period of suspension;

(ii) A revocation;

(iii) Remedial measures;

(iv) Required adoption and implementation of written, preventative policies or procedures;

(v) A probationary period with provisions for monitoring the AMC;

(vi) Monitoring and/or preapproval of AMC panel removals for a specified period of time;

(vii) Monitoring and/or preapproval of the licensed activities of the AMC for a specified time period or until specified conditions are satisfied;

(H) 3rd Time Discipline Level 2--violations of the AMC Act or[,] Board rules[~~, or USPAP~~] which evidence serious deficiencies will result in a final order which imposes one or more of the following:

(i) A period of suspension;

(ii) A revocation;

(iii) Remedial measures;

(iv) Required adoption and implementation of written, preventative policies or procedures;

(v) A probationary period with provisions for monitoring the AMC;

(vi) Monitoring and/or preapproval of AMC panel removals for a specified period of time;

(vii) Monitoring and/or preapproval of the licensed activities of the AMC for a specified time period or until specified conditions are satisfied;

(I) 3rd Time Discipline Level 3--violations of the AMC Act or[,] Board rules[~~, or USPAP~~] which evidence serious deficiencies and were done with knowledge, deliberately, willfully, or with gross negligence will result in a final order which imposes one or more of the following:

(i) A revocation; and

(ii) Minimum of $7,000 in administrative penalties per act or omission which constitutes a violation(s) of [~~USPAP,~~] Board Rules, or the AMC Act; each day of a continuing violation is a separate violation.

(J) 4th Time Discipline--violations of the AMC Act or [,] Board rules [~~or USPAP~~] will result in a final order which imposes one or more of the following:

(i) A revocation; and

(ii) $10,000 in administrative penalties per act or omission which constitutes a violation(s) of the AMC Act or[,] Board rules[~~, or USPAP~~]; each day of a continuing violation is a separate violation.

(K) Unlicensed AMC activity will result in a final order which imposes a $10,000 in administrative penalties per unlicensed AMC activity; each day of a continuing violation is a separate violation.

(4) In addition, staff may recommend any or all of the following:

(A) Reducing or increasing the recommended sanction or administrative penalty for a complaint based on documented factors that support the deviation, including but not limited to those factors articulated under paragraph (2) of this subsection;

(B) Probating all or a portion of any remedial measure, sanction, or administrative penalty for a period not to exceed three years;

(D) Payment of costs expended by the Board associated with the investigation, and if applicable, a contested case, including legal fees and administrative costs; and

(E) Such other recommendations, with documented support, as will achieve the purposes of the AMC Act or[,] Board rules[, ~~or USPAP~~].

(n) The Board may order a person regulated by the Board to refund the amount paid by a consumer to the person for a service regulated by the Board.

(o) Agreed resolutions of complaint matters pursuant to Texas Occupations Code §1104.2081 must be signed by:

(1) The Board Chair or if the Board Chair is unavailable or must recuse him or herself, the Board Chair's designee, whom shall be (in priority order) the Board Vice Chair, the Board Secretary, or another Board member;

(2) Respondent;

(3) A representative of the TALCB Division; and

(4) The Executive Director [~~Commissioner~~] or his or her designee.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 21, 2023.

TRD-202303062

Kathleen Santos

General Counsel

Texas Appraiser Licensing and Certification Board

Earliest possible date of adoption: October 1, 2023

For further information, please call: (512) 936-3652