TITLE 22. EXAMINING BOARDS

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, 153.8, 153.9, 153.11, 153.15, 153.17, 153.20 - 153.24, 153.26, 153.28, 153.40

The Texas Appraiser Licensing and Certification Board (TALCB) proposes amendments to 22 TAC §§153.1, Definitions; 153.5, Fees; 153.8, Scope of Practice; 153.9, Applications; 153.11, Examinations; 153.15, Experience Required for Licensing; 153.17, License Renewal; 153.20, Guidelines for Revocation, Suspension, Denial of License; Probationary License; 153.21, Appraiser Trainees and Supervisory Appraisers; 153.22, Voluntary Appraiser Trainee Experience Reviews; 153.23, Inactive Status; 153.24, Complaint Processing; 153.26, Identity Theft; 153.28, Peer Investigative Committee Review; and 153.40, Approval of Continuing Education Providers and Courses. The proposed amendments are made following TALCB's quadrennial rule review for this Chapter, to better reflect current TALCB procedures, and to simplify and clarify where needed.

The proposed amendments to §153.1 move a definition from §153.40, align the language more closely with Appraisal Qualifications Board (AQB) definitions, and add a definition for the recently AQB adopted PAREA program. The proposed amendments to §153.5 remove outdated fees, clarify the applicability of application fees to reinstatements, increase the fee for voluntary experience reviews, and clarify the applicability of online convenience fee required by the Department of Information Resources.

The proposed amendment to §153.11 provides the examination provider additional discretion in determining the method of accommodation.

The proposed amendments to §153.15 consolidate redundant requirements for new applicants and existing license holders seeking to upgrade their license, add references to the PAREA program and instruct how this experience may be submitted to TALCB, and outline contingent approval may be granted upon completion of additional education, experience, or mentorship.

The proposed amendments to §153.17 remove sections now obsolete since the implementation of an online submission system.

The proposed amendments to §153.20 clarify the guidelines apply to disciplinary action and are not limited to revocation and suspension, remove a redundant section, and reflect changes to TALCB division names.

The proposed amendments to §153.21 alter the progress monitoring program required of supervisory appraisers with 4-5 trainees, in accordance with AQB Criteria. Trainees of supervisory appraisers that fall into this category no longer are required to submit their work product for review as specified in §153.22. TALCB will require the applicable supervisory appraisers to submit a progress monitoring plan for his or her trainees and keep progress monitoring reports subject to TALCB inspection for a specified period of time. The amendments also update references to distance education in accordance with updates to the AQB's Criteria.

The proposed amendments to §153.22 clarify that an interested applicant, not just trainees, may apply for an appraiser experience review.

The proposed amendment to §153.23 removes a reference to an outdated fee. The proposed amendments to §153.24 reflect changes to TALCB division names, remove references to former processes, and provide for the Commissioner to designate to sign an agreed resolution on his or her behalf. The proposed amendments to §153.26 reflect renumbered sections in §153.20.

In §153.28, the proposed amendments further reflect current investigative process.

The proposed amendments to §153.40 remove redundant definitions, and those moved to §153.1 remove surplus fee information and references to outdated processes.

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 rules' 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 are proposed under Texas Occupations Code §1103.151, which authorizes TALCB to adopt rules for certifying or licensing an appraiser or appraiser trainee and §1103.154, which authorizes TALCB to adopt rules relating to professional conduct.

The statute affected by these amendments are Chapter 1103 and 1104, 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) [(15)] Classroom hour--Fifty minutes of instruction out of each sixty-minute segment of actual classroom session time.

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

(18) [(17)] 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) [(18)] Commissioner--The commissioner of the Texas Appraiser Licensing and Certification Board.

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

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

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

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

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

(25) [(24)] 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. [that provides a reciprocal environment where the student has verbal or written communication with an instructor.].

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

(27) [(26)] 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) [(27)] 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) [(28)] Foundation--The Appraisal Foundation (TAF) or its successor.

[(29) Fundamental real estate appraisal course--Those courses approved by the Appraiser Qualifications Board as qualifying education.]

(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 [$250,000].

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

(46) [(44)] 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) [(45)] 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) [(46)] Real property--The interests, benefits, and rights inherent in the ownership of real estate.

(49) [(47)] 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) [(48)] 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) [(49)] Residential property--Property that consists of at least one but not more than four residential units.

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

(53) [(51)] 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) [(52)] 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

(C) that subscribes to a written code of professional conduct or ethics.

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

(56) [(54)] 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 Commissioner shall collect the following fees:

[(1) Effective January 1, 2020:]

[(A) a fee of $460 for an application for or timely renewal of a certified general appraiser license;]

[(B) a fee of $385 for an application for or timely renewal of a certified residential appraiser license;]

[(C) a fee of $345 for an application for or timely renewal of a licensed residential appraiser license; and]

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

(1) [(2)] Effective January 1, 2022:

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

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

(C) a fee of $400 for an application, reinstatement,[ for] or timely renewal of a licensed residential appraiser license; and

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

(2) [(3)] 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) [(4)] 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) [(5)] a fee of $250 for nonresident license;

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

(6) [(7)] 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) [(8)] a fee of $200 for an extension of time to complete required continuing education;

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

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

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

(11) [(12)] a fee of $100 [$75] to request a voluntary appraiser [trainee] experience review;

(12) [(13)] 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) [(14)] a base fee of $50 for approval of an ACE course;

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

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

(16) [(17)] 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) [(18)] a fee of $200 for an application for an ACE provider approval or subsequent approval; and

(18) [(19)] 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.

§153.8.Scope of Practice.

(a) License holders are bound by the USPAP edition in effect at the time of the appraisal.

(b) Certified General Real Estate Appraisers may appraise all types of real property without regard to transaction value or complexity.

(c) Certified Residential Real Estate Appraisers:

(1) may appraise one-to-four residential units without regard to transaction value or complexity;

(2) may appraise vacant or unimproved land for which the highest and best use is for one-to-four family purposes;

(3) may not appraise subdivisions; and

(4) may associate with a state certified general real estate appraiser, who shall sign the appraisal report, to appraise non-residential properties.

(d) State Licensed Real Estate Appraisers:

(1) may 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;

(2) may appraise vacant or unimproved land for which the highest and best use is for one-to-four [one to four] unit residential purposes;

(3) may not appraise subdivisions; and

(4) may associate with a state certified general real estate appraiser, who shall sign the appraisal report, to appraise non-residential properties.

(e) Appraiser Trainees may appraise those properties, under the active, personal and diligent supervision of their sponsoring appraiser, which the sponsoring appraiser is permitted to appraise.

(f) If an appraiser or appraiser trainee is a person with a disability (as defined in the Americans with Disabilities Act or regulations promulgated thereunder), an unlicensed assistant may perform certain services normally requiring a license for or on behalf of the appraiser or appraiser trainee, provided that:

(1) the services performed by the assistant do not include appraisal analysis;

(2) the assistant only provides such services as would constitute a reasonable accommodation;

(3) the assistant is under the direct control of the appraiser or appraiser trainee;

(4) the appraiser or appraiser trainee is as close in physical proximity as is practical to the activity;

(5) the assistant is not represented as being or having the authority to act as an appraiser or appraiser trainee; and

(6) if the assistant provides significant assistance, the appraisal report includes the name of the assistant.

§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 [ void and] 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.

§153.11.Examinations.

(a) Administration of Licensing Examinations.

(1) An examination required for any license issued by the Board will be conducted by the testing service with which the Board has contracted for the administration of examinations.

(A) The testing service shall schedule and conduct the examinations in the manner required by the contract between the Board and the testing service.

(B) Examinations shall be administered at locations designated by the exam administrator.

(C) The testing service administering the examinations is required to provide reasonable accommodations for any applicant with a verifiable disability. Applicants must contact the testing service to arrange an accommodation. The testing service shall determine the method of accommodation [ examination, whether oral or written,] based on the particular circumstances of each case.

(2) Each examination shall be consistent with the examination criteria and examination content outline of the AQB for the category of license sought. To become licensed, an applicant must achieve a passing score acceptable to the AQB on the examination.

(3) Successful completion of the examination is valid for a period of 24 months.

(4) An applicant who fails the examination three consecutive times may not apply for reexamination or submit a new license application unless the applicant submits evidence satisfactory to the Board that the applicant has completed 15 additional hours of qualifying education after the date the applicant failed the examination for the third time.

(b) Examination Fees.

(1) The examination fee must be paid each time the examination is taken.

(2) An applicant who is registered for an examination and fails to attend shall forfeit the examination fee.

(c) Exam Admission.

(1) To be admitted to an examination, applicants must present the following documents:

(A) exam registration paperwork as required by the testing service under contract with the Board; and

(B) official photo-bearing personal identification.

(2) The testing service shall deny entrance to the examination to any person who cannot provide adequate identification.

(3) The testing service may refuse to admit an applicant who arrives after the time the examination is scheduled to begin or whose conduct or demeanor would be disruptive to other persons taking examinations at the testing location.

(d) Confidentiality of Examination.

(1) The testing service may confiscate examination materials, dismiss an applicant, and fail the applicant for violating or attempting to violate the confidentiality of the contents of an examination.

(2) No credit shall be given to applicants who are dismissed from an examination, and dismissal may result in denial of an application.

(3) The Board, or the testing service under contract with the Board, may file theft charges against any person who removes or attempts to remove an examination or any portion thereof or any written material furnished with the examination whether by actual physical removal or by transcription.

(4) The Board may deny, suspend, or revoke a license for disclosing to another person the content of any portion of an examination.

§153.15.Experience Required for Licensing.

(a) Applicants for a license must meet all experience requirements established by the AQB.

(b) The Board awards experience credit in accordance with current criteria established by the AQB and in accordance with the provisions of the Act specifically relating to experience requirements. An hour of experience means 60 minutes expended in one or more of the acceptable appraisal experience areas. Calculation of the hours of experience is based solely on actual hours of experience. Hours may be treated as cumulative in order to achieve the necessary hours of appraisal experience. Any one or a [any] combination of the following categories may be acceptable for satisfying the applicable experience requirement[. Experience credit may be awarded for]:

(1) An appraisal or appraisal analysis when performed in accordance with Standards 1 and 2 and other provisions of the USPAP edition in effect at the time of the appraisal or appraisal analysis.

(2) Mass appraisal, including ad valorem tax appraisal that:

(A) conforms to USPAP Standards 5 and 6; and

(B) demonstrates proficiency in appraisal principles, techniques, or skills used by appraisers practicing under USPAP Standard 1.

(3) Appraisal review that:

(A) conforms to USPAP Standards 3 and 4; and

(B) demonstrates proficiency in appraisal principles, techniques, or skills used by appraisers practicing under USPAP Standard 1.

(4) Appraisal consulting services, including market analysis, cash flow and/or investment analysis, highest and best use analysis, and feasibility analysis when it demonstrates proficiency in appraisal principles, techniques, or skills used by appraisers practicing under USPAP Standards 1 and 2 and using appropriate methods and techniques applicable to appraisal consulting.

(5) "Practical Applications of Real Estate Appraisal" (PAREA) programs approved by the AQB.

(c) Experience credit may not be awarded for teaching appraisal courses.

[(d) Recency of Experience.]

[(1) The Appraisal Experience Log submitted by an applicant 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.]

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

(d) [(e)] 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 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) 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 Affidavit.

(1) The Experience Log must include:

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

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

(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) [Experience credit for first-time applicants. Each applicant must submit a Board-approved Appraisal Experience Log and Appraisal Experience Affidavit listing each appraisal assignment or other work for which the applicant is seeking experience credit.] 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.

[(g) Experience credit for current licensed residential or certified residential license holders who seek to upgrade their license.]

[(1) Applicants who currently hold a licensed residential or certified residential appraiser license issued by the Board and want to upgrade this license must:]

[(A) submit an application on a Board-approved form;]

[(B) submit a Board-approved Appraisal Experience Log and Appraisal Experience Affidavit listing each appraisal assignment or other work for which the applicant is seeking experience credit for the full amount of experience hours required for the license sought;]

[(C) pay the required application fee; and]

[(D) satisfy any other requirement for the license sought, including but not limited to:]

[(i) the incremental number of experience hours required;]

[(ii) the hours of experience required for each property type;]

[(iii) the minimum length of time over which the experience is claimed; and]

[(iv) the recency requirement in this section.]

[(2) Review of experience logs.]

[(A) An applicant who seeks to upgrade a current license issued by the Board must produce experience logs to document 100 percent of the experience hours required for the license sought.]

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

(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) that submit a valid certificate of completion from an AQB approved PAREA program.

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

(k) [(i)] 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) [(j)] 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.

§153.17.License Renewal.

(a) General Provisions.

(1) The Board will send a renewal notice to the license holder at least 90 days prior to the expiration of the license. It is the responsibility of the license holder to apply for renewal in accordance with this chapter, and failure to receive a renewal notice from the Board does not relieve the license holder of the responsibility to timely apply for renewal.

(2) A license holder renews the license by timely filing an application for renewal, paying the appropriate fees to the Board, and satisfying all applicable education, experience, fingerprint and criminal history check requirements.

[(3) To renew a license on active status, a license holder must complete the ACE report form approved by the Board and, within 20 days of filing the renewal application, submit course completion certificates for each course that was not already submitted by the education provider and reflected in the license holder's electronic license record.]

[(A) The Board may request additional verification of ACE submitted in connection with a renewal. If requested, such documentation must be provided within 20 days after the date of request.]

[(B) Knowingly or intentionally furnishing false or misleading ACE information in connection with a renewal is grounds for disciplinary action up to and including license revocation.]

(3) [(4)] An application for renewal received by the Board is timely and acceptable for processing if it is:

(A) complete;

(B) accompanied with payment of the required fees; and

(C) postmarked by the U.S. Postal Service, accepted by an overnight delivery service, or accepted by the Board's online processing system on or before the date of expiration.

(b) ACE Extensions.

(1) The Board may grant, at the time it issues a license renewal, an extension of time of up to 60 days after the expiration date of the previous license to complete ACE required to renew a license, subject to the following:

(A) The license holder must:

(i) timely submit the completed renewal form;

(ii) complete an extension request form; and

(iii) pay the required renewal and extension fees.

(B) ACE courses completed during the 60-day extension period apply only to the current renewal and may not be applied to any subsequent renewal of the license.

(C) A person whose license was renewed with a 60-day ACE extension:

(i) will be designated as non-AQB compliant on the National Registry and will not perform appraisals in a federally related transaction until verification is received by the Board that the ACE requirements have been met;

(ii) may continue to perform appraisals in non-federally related transactions under the renewed license;

(iii) must, within 60 days after the date of expiration of the previous license, complete the approved ACE report form and submit course completion certificates for each course that was not already submitted by the provider and reflected in the applicant's electronic license record; and

(iv) will have the renewed license placed in inactive status if, within 60 days of the previous expiration date, ACE is not completed and reported in the manner indicated in paragraph (2) of this subsection. The renewed license will remain on inactive status until satisfactory evidence of meeting the ACE requirements has been received by the Board and the fee to return to active status required by §153.5 of this title (relating to Fees) has been paid.

(2) Appraiser trainees may not obtain an extension of time to complete required continuing education.

(c) Renewal of Licenses for Persons on Active Duty. A person who is on active duty in the United States armed forces may renew an expired license without being subject to any increase in fee imposed in his or her absence, or any additional education or experience requirements if the person:

(1) did not provide appraisal services while on active duty;

(2) provides a copy of official orders or other documentation acceptable to the Board showing the person was on active duty during the last renewal period;

(3) applies for the renewal within two years after the person's active duty ends;

(4) pays the renewal application fees in effect when the previous license expired; and

(5) completes ACE requirements that would have been imposed for a timely renewal.

(d) Late Renewal. If an application is filed within six months of the expiration of a previous license, the applicant shall also provide satisfactory evidence of completion of any continuing education that would have been required for a timely renewal of the previous license.

(e) Denial of Renewal. The Board may deny an application for license renewal if the license holder is in violation of a Board order.

§153.20.Guidelines for Disciplinary Action [Revocation, Suspension], Denial of License; Probationary License.

(a) The Board may take disciplinary action [suspend or revoke a license] 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;

(C) grossly negligent misrepresentation in the performance of appraiser services;

(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) acts or holds himself or any other person out as a person licensed under this or another state's Act when not so licensed;]

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

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

21 [(22)] 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 [(23)] fails to comply with an agreed order or a final order of the Board;

23 [(24)] 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 [(25)] 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 [(26)] fails to approve, sign, and deliver to their appraiser trainee the appraisal experience log and affidavit required by §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) 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 appraisals or appraisal practice;

(2) the number of appraiser trainees or authority to sponsor appraiser trainees;

(3) requirements for additional education;

(4) monetary administrative penalties; and

(5) requirements for reporting real property appraisal activity to the Board.

(d) A person applying for a license after the Board has revoked or accepted the surrender in lieu of disciplinary action of a license previously held by that person must comply with all current license requirements. Such persons may not apply to reinstate a previously held license as provided in §153.16 of this title.

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

(f) The Board may not investigate a complaint submitted to the Board more than four years after the date on which the alleged violation occurred.

(g) Except as provided by Texas Government Code §402.031(b) and Texas Penal Code §32.32(d), there shall be no undercover or covert investigations conducted by authority of the Act.

(h) A license may be revoked or suspended by the Attorney General or other court of competent jurisdiction for failure to pay child support under the provisions of Chapter 232 of the Texas Family Code.

(i) If the Board determines that issuance of a probationary license is appropriate, the order entered by the Board with regard to the application must set forth the terms and conditions for the probationary license. Terms and conditions for a probationary license may include any of the following:

(1) that the probationary license holder comply with the Act and with the rules of the Texas Appraiser Licensing and Certification Board;

(2) that the probationary license holder fully cooperate with the TALCB Division [enforcement division] of the Board in the investigation of any complaint filed against the license holder or any other complaint in which the license holder may have relevant information;

(3) that the probationary license holder attend a prescribed number of classroom hours in specific areas of study during the probationary period;

(4) that the probationary license holder limit appraisal practice as prescribed in the order;

(5) that the probationary license holder work under the direct supervision of a certified general or certified residential appraiser who will review and sign each appraisal report completed;

(6) that the probationary license holder report regularly to the Board on any matter which is the basis of the probationary license; or

(7) that the probationary license holder comply with any other terms and conditions contained in the order which have been found to be reasonable and appropriate by the Board after due consideration of the circumstances involved in the particular application.

(j) Unless the order granting a probationary license specifies otherwise, a probationary license holder may renew the license after the probationary period by filing a renewal application, satisfying applicable renewal requirements, and paying the prescribed renewal fee.

(k) If a probationary license expires prior to the completion of a probationary term and the probationary license holder files a late renewal application, any remaining probationary period shall be reinstated effective as of the day following the renewal of the probationary license.

§153.21.Appraiser Trainees and Supervisory Appraisers.

(a) Supervision of appraiser trainees required.

(1) An appraiser trainee may perform appraisals or appraiser services only under the active, personal and diligent direction and supervision of a supervisory appraiser.

(2) An appraiser trainee may be supervised by more than one supervisory appraiser.

(3) Number of Appraiser Trainees Supervised.

(A) Supervisory appraisers may supervise no more than three appraiser trainees at one time unless the requirements in subsection (a)(3)(B) of this section, are met;

(B) Supervisory appraisers may supervise up to five appraiser trainees at one time if:

(i) the supervisory appraiser has been licensed as a certified appraiser for more than five years; [and]

(ii) the supervisory appraiser submits an application and a trainee supervision plan subject to approval by the Board. The supervision plan must include the supervisory appraiser's plan for progress monitoring of the trainees and detail how the supervisor intends to ensure active, personal, and diligent supervision of each trainee; and [all of the supervisory appraiser's appraiser trainees must submit requests for the Board to review the appraiser trainee's work product as specified in §153.22 of this title (relating to Voluntary Appraiser Trainee Experience Reviews), or satisfy the required progress monitoring as permitted in §153.16 of this title (relating to License Reinstatement).]

(iii) the supervisory appraiser shall prepare and maintain regular trainee progress reports and make them available to the Board upon request until the trainee becomes certified or licensed or after two years have lapsed since supervising the trainee.

(4) A supervisory appraiser may be added during the term of an appraiser trainee's license if:

(A) The supervisory appraiser and appraiser trainee have provided proof to the Board of completion of an approved Appraiser Trainee/Supervisory Appraiser course;

(B) an application to supervise has been received and approved by the Board; and

(C) the applicable fee has been paid.

(5) A licensed appraiser trainee who signs an appraisal report must include his or her license number and the word "Trainee" as part of the appraiser trainee's signature in the report.

(b) Eligibility requirements for appraiser trainee supervision.

(1) To be eligible to supervise an appraiser trainee, a certified appraiser must:

(A) be in good standing and not have had, within the last three years, disciplinary action affecting the certified appraiser's legal eligibility to engage in appraisal practice in any state including suspension, revocation, and surrender in lieu of discipline;

(B) complete an approved Appraiser Trainee/Supervisory Appraiser course; and

(C) submit proof of course completion to the Board.

(2) Before supervising an appraiser trainee, the supervisory appraiser must notify the appraiser trainee in writing of any disciplinary action taken against the supervisory appraiser within the last three years that did not affect the supervisory appraiser's eligibility to engage in appraisal practice.

(3) An application to supervise must be received and approved by the Board before supervision begins.

(c) Maintaining eligibility to supervise appraiser trainees.

(1) A supervisory appraiser who wishes to continue to supervise appraiser trainees upon renewal of his/her license must complete an approved Appraiser Trainee/Supervisory Appraiser course within four years before the expiration date of the supervisory appraiser's current license and provide proof of completion to the Board.

(2) If a supervisory appraiser has not provided proof of course completion at the time of renewal, but has met all other requirements for renewing the license the supervisory appraiser will no longer be eligible to supervise appraiser trainees; and the Board will take the following actions:

(A) the supervisory appraiser's license will be renewed on active status; and

(B) the license of any appraiser trainees supervised solely by that supervisory appraiser will be placed on inactive status.

(3) A certified appraiser may restore eligibility to supervise appraiser trainees by:

(A) completing the course required by this section; and

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

(4) The supervisory appraiser's supervision of previously supervised appraiser trainees may be reinstated by:

(A) submitting the required form to the Board; and

(B) payment of any applicable fees.

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

(1) Appraiser trainees must maintain an appraisal log and appraisal experience 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 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

(C) the appraiser trainee's relationship with any supervisory appraiser will be terminated.

(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;

(C) submitting an application to return to active status, including an application to add a supervisory appraiser; and

(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;

(C) communication with and accessibility to the appraiser trainee; and

(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

(C) pay any applicable fees no later than the 10th day after the date of termination.

(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 [method]; 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. [method. The delivery mechanism for distance education courses offered by a non-academic provider must be approved by an AQB-approved organization providing approval of course design and delivery.]

(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.

§153.22.Voluntary Appraiser [Trainee] Experience Reviews.

(a) Before applying for a license, a person [an appraiser trainee] may submit up to two requests for the Board to review the appraiser trainee's work product.

(b) A person [An appraiser trainee] may submit an application to the Board for review of his or her [the appraiser trainee's] work product after:

(1) accumulating between thirty to fifty percent of the hours of appraisal experience required by the AQB for category of appraiser license the person [appraiser trainee] will be applying for;

(2) accumulating between sixty to eighty percent of the hours of appraisal experience required by the AQB for category of appraiser license the person [appraiser trainee] will be applying for; or

(3) both.

(c) Work product submitted for review must fall within one of the approved categories of experience credit described in §153.15 [§153.15(e)] of this title and meet the definition of real estate appraisal experience in §153.1 of this title.

[(d) To begin the review process, an appraiser trainee must:]

[(1) submit an application for work product review on a form approved by the Board;]

[(2) pay the required fee; and]

[(3) submit a completed appraisal report and corresponding work file from a time period during which the appraiser trainee had legal authority to perform the work.]

(d) [(e)] The application for review of [an appraiser trainee's] work product is not complete until the completed report and workfile, [appraiser trainee submits] all required documentation and [pays] the required fee are received by the Board.

(e) [(f)] If a person [an appraiser trainee] provides inadequate documentation, the Board will notify [ contact] the person [appraiser trainee] in writing, and identify any deficiencies Unless the work product review applicant cures the deficiencies within twenty days of notification, the Board will terminate the application for work product review. [and provide the appraiser trainee twenty days to cure the noted deficiencies. If the appraiser trainee fails to cure the deficiencies timely, the Board will terminate the appraiser trainee's application for work product review.]

(f) [(g)] The Board will provide [the appraiser trainee with] a written report identifying deficiencies in the [appraiser trainee's] work product after the [application for] review is complete.

(g) [(h)] A review conducted under this provision:

(1) is for educational purposes only;

(2) does not constitute Board approval of the [appraiser trainee's] experience;

(3) does not preclude the Board from denying a license application submitted by the work product review applicant [appraiser trainee] in the future; and

(4) will not result in a complaint against the work product review applicant [appraiser trainee] unless the review [of the appraiser trainee's work product]reveals:

(A) knowing or intentional misrepresentation, fraud or criminal conduct; or

(B) serious deficiencies that constitute grossly negligent acts or omissions.

§153.23.Inactive Status.

(a) A license holder may request to be placed on inactive status by filing a request for inactive status on a form approved by the Board [and paying the required fee].

(b) A license holder whose license has expired may renew on inactive status within six months after the license expiration date by:

(1) filing an application for renewal on a form approved by the Board;

(2) indicating on the application that the license holder wishes to renew on inactive status;

(3) paying the required late renewal fees; and

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

(c) A license holder on inactive status:

(1) shall not appraise real property, engage in appraisal practice, or perform any activity for which a license is required; and

(2) must file the proper renewal application and pay all required fees, except for the national registry fee, in order to renew the license.

(d) To return to active status, a license holder who has been placed on inactive status must:

(1) request to return to active status on a form approved by the Board;

(2) pay the required fee;

(3) satisfy all ACE requirements that were not completed while on inactive status, except that the license holder is not required to complete the most current USPAP update course more than once in order to return to active status and shall substitute other approved courses to meet the required number of ACE hours; and

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

(e) A license holder who has been on inactive status may not resume practice until the Board issues an active license.

§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;

(C) Unlicensed activity;

(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;

(C) willfully; or

(D) with gross negligence.

(c) The Board or the 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 [Standards and Enforcement Services] 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 [or peer investigative committee] assigned to investigate a formal complaint shall prepare a report detailing its findings on a form approved by the Board. [Reports prepared by a peer investigative committee shall be reviewed by the Standards and Enforcement Services Division.]

(o) 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 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;

(C) A violation refers to a violation of any provision of the Act, Board rules or USPAP;

(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;

(C) If previously disciplined, the nature of the prior discipline, including:

(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 subsection 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 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;

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

(C) requiring additional reporting requirements; and

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

(p) 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.

(q) 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 [Standards and Enforcement Services] Division; and

(4) the Commissioner or his or her designee.

§153.26.Identity Theft.

(a) For purposes of this section, "identity theft" shall mean any of the following activities occurring in connection with the rendition of real estate appraisal services:

(1) Unlawfully obtaining, possessing, transferring or using a license issued by the Board; and/or

(2) Unlawfully obtaining, possessing, transferring or using a person's electronic or handwritten signature.

(b) A license holder shall implement and maintain reasonable procedures to protect and safeguard themselves from identity theft.

(c) A license holder shall notify the Board if he or she is the victim of identity theft within 90 days of discovering such theft. Notice shall be effectuated by filing a signed, written complaint on a form prescribed by the Board.

(d) The Board may invalidate a current license and issue a new one to a person the Board determines is a victim of identity theft. Any person seeking the invalidation of a current license issuance of a new one shall submit a written, signed request on a form provided by the Board for the invalidation of a current license and issuance of a new one. The basis for the request must be identity theft, and the requestor must submit credible evidence that the person is a victim of identity theft. Without limiting the type of evidence a person may submit to the Board, a court order issued in accordance with Texas Business and Commerce Code Chapter 521, Subchapter C, declaring that the person is a victim of identity theft shall constitute credible evidence. Any such court order must relate to identity theft as defined in this section.

(e) Engaging in identity theft in order to perform appraisals constitutes a violation of §153.20(a)(7), (19) [(20)], and (21) [(22)] of this title. In addition to any action taken by the Board, persons engaging in identity theft may also be referred to the appropriate law enforcement agency for criminal prosecution.

§153.28.Peer Investigative Committee Review.

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

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

(1) an Appraiser Board Member;

(2) a Board Member who is a licensed or certified appraiser; and

(3) a TALCB Investigator [or a Peer Investigator. A Peer Investigator shall work in conjunction with a TALCB Investigator to ensure consistency in form, investigatory standards, and any other assistance as needed].

(c) The Board members serving on the Peer Investigative Committee shall serve on the committee on a rotating [quarterly] basis.

(d) During complaint intake, the TALCB [Enforcement ] Director or his or her designee shall assign a TALCB Investigator [or Peer Investigator working in conjunction with a TALCB Investigator] to investigate the complaint.

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

(f) No more than 7 days following the investigator's completion of an investigative report [Investigative Report], the investigator shall provide his or her findings, including the investigative report and the complaint file, to the Board members of the Peer 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.

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

(h) The Board delegates its authority to receive the written findings or determination of the Peer Investigative Committee to the 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 Commissioner or his or her designee on behalf of the Board. The determination shall serve as a recommendation to the TALCB [Enforcement ] 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 [Enforcement] 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.

§153.40.Approval of Continuing Education Providers and Courses.

(a) Definitions. The following words and terms shall have the following meanings in this section, unless the context clearly indicates otherwise.

(1) Applicant--A person seeking accreditation or approval to be an appraiser continuing education (ACE) provider.

[(2) ACE--Appraiser continuing education.]

(2) [(3)] ACE course--Any education course for which continuing education credit may be granted by the Board to a license holder.

(3) [(4)] ACE provider--Any person approved by the Board; or specifically exempt by the Act, Chapter 1103, Texas Occupation Code, or Board rule; that offers a course for which continuing education credit may be granted by the Board to a license holder.

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

(4) [(6)] Distance education course--A course offered in accordance with AQB criteria in which the instructor and students are geographically separated 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.

(5) [(7)] Severe weather--weather conditions, including but not limited to severe thunderstorms, tornados, hurricanes, snow and ice, that pose risks to life or property and require intervention by government authorities and office or school closures.

(b) Approval of ACE Providers.

(1) A person seeking to offer ACE courses must:

(A) file an application on the appropriate form approved by the Board, with all required documentation;

(B) pay the required fees under §153.5 of this title; and

(C) maintain a fixed office in the state of Texas or designate a resident of this state as attorney-in-fact to accept service of process and act as custodian of any records in Texas which the continuing education provider is required to maintain by this subchapter.

(2) The Board may:

(A) request additional information be provided to the Board relating to an application; and

(B) terminate an application without further notice if the applicant fails to provide the additional information within 60 days from the Board's request.

(3) Exempt Providers. A unit of federal, state or local government may submit ACE course approvals without becoming an approved ACE provider.

(4) Standards for approval. To be approved by the Board to offer ACE courses, an applicant must satisfy the Board as to the applicant's ability to administer courses with competency, honesty trustworthiness and integrity. If an applicant proposes to employ another person to manage the operation of the applicant, that person must meet this standard as if that person were the applicant.

(5) Approval notice. An applicant shall not act as or represent itself to be an approved ACE provider until the applicant has received written notice of the approval from the Board.

(6) Period of initial approval. The initial approval of a CE provider is valid for two years.

(7) Disapproval.

(A) If the Board determines that an applicant does not meet the standards for approval, the Board will provide written notice of disapproval to the applicant.

(B) The disapproval notice, applicant's request for a hearing on the disapproval, and any hearing are governed by the Administrative Procedure Act, Chapter 2001, Government Code, and Chapter 157 of this title. Venue for any hearing conducted under this section shall be in Travis County.

(8) Renewal.

(A) Not earlier than 90 days before the expiration of its current approval, an approved provider may apply for renewal for another two year period.

(B) Approval or disapproval of a renewal application shall be subject to the standards for initial applications for approval set out in this section.

(C) The Board may deny an application for renewal if the provider is in violation of a Board order.

(c) Application for approval of ACE courses. This subsection applies to appraiser education providers seeking to offer ACE courses.

(1) For each ACE course an applicant intends to offer, the applicant must:

(A) file an application on the appropriate form approved by the Board, with all required documentation; and

(B) pay the fees required by §153.5 of this title. [, including the:]

[(i) base fee; and]

[(ii) content review fee.]

(2) An ACE provider may file a single application for an ACE course offered through multiple delivery methods.

(3) An ACE provider who seeks approval of a new delivery method for a currently approved ACE course must submit a new application and pay all required fees.

(4) The Board may:

(A) request additional information be provided to the Board relating to an application; and

(B) terminate an application without further notice if the applicant fails to provide the additional information within 60 days from the Board's request.

(5) Standards for ACE course approval.

(A) To be approved as an ACE course by the Board, the course must:

(i) cover subject matter appropriate for appraiser continuing education as defined by the AQB;

(ii) submit a statement describing the objective of the course and the acceptable AQB topics covered;

(iii) be current and accurate; and

(iv) be at least two hours long.

(B) The course must be presented in full hourly units.

(C) The course must be delivered by one of the following delivery methods:

(i) classroom delivery; or

(ii) distance education.

(D) The course design and delivery mechanism for asynchronous [all] distance education courses, including the asynchronous portion of hybrid courses must be approved by an AQB approved organization.

(6) Approval notice.

(A) An ACE provider cannot offer an ACE course until the provider has received written notice of the approval from the Board.

(B) An ACE course expires two years from the date of approval. ACE providers must reapply and meet all current requirements of this section to offer the course for another two years.

(d) Approval of currently approved ACE course for a secondary provider.

(1) If an ACE provider wants to offer an ACE course currently approved for another provider, the secondary provider must:

(A) file an application on the appropriate form approved by the Board, with all required documentation;

(B) submit written authorization to the Board from the author or provider for whom the course was initially approved granting permission for the secondary provider to offer the course;and

(C) pay the fees required by §153.5 of this title. [, including the:]

[(i) base fee; and]

[(ii) content review fee.]

(2) If approved to offer the currently approved course, the secondary provider must:

(A) offer the course as originally approved;

(B) assume the original expiration date;

(C) include any approved revisions;

(D) use all materials required for the course; and

(E) meet the requirements of subsection (j) of this section.

(e) Approval of ACE courses currently approved by the AQB or another state appraiser regulatory agency.

(1) To obtain Board approval of an ACE course currently approved by the AQB or another state appraiser regulatory agency, an ACE provider must:

(A) be currently approved by the Board as an ACE provider;

(B) file an application on the appropriate form approved by the Board, with all required documentation; and

(C) pay the course approval fee required by §153.5 of this title.

(2) If approved to offer the ACE course, the ACE provider must offer the course as approved by the AQB or other state appraiser regulatory agency, using all materials required for the course.

(3) Any course approval issued under this subsection expires the earlier of two years from the date of Board approval or the remaining term of approval granted by the AQB or other state appraiser regulatory agency.

(f) Approval of ACE courses for a 2-hour in-person one-time offering.

(1) To obtain Board approval of a 2-hour ACE course for an in-person one-time offering, an ACE provider must:

(A) be currently approved by the Board as an ACE provider;

(B) file an application on the appropriate form approved by the Board, with all required documentation; and

(C) pay the one-time offering course approval fee required by §153.5 of this title.

(2) Any course approved under this subsection is limited to the scheduled presentation date stated on the written notice of course approval issued by the Board.

(3) If a course approved under this subsection must be rescheduled due to circumstances beyond the provider's control, including severe weather or instructor illness, the Board may approve the revised course date if the provider:

(A) submits a request for revised course date on a form acceptable to the Board; and

(B) offers the course on the revised date in the same manner as it was originally approved.

(g) Application for approval to offer a 7-Hour National USPAP Update course.

(1) To obtain approval to offer a 7-Hour National USPAP Update course, the provider must:

(A) be approved by the Board as an ACE provider;

(B) file an application on the appropriate form approved by the Board, with all required documentation;

(C) submit written documentation to the Board demonstrating that the course and instructor are currently approved by the AQB;

(D) pay the course approval fee required by §153.5 of this title;

(E) use the current version of the USPAP; and

(F) ensure each student has access to his or her own electronic or paper copy of the current version of USPAP.

(2) Approved ACE providers of the 7-Hour National USPAP Update course may include up to one additional classroom credit hour of supplemental Texas specific information. This may include topics such as the Act, Board rules, processes and procedures, enforcement issues or other topics deemed appropriate by the Board.

(h) Application for ACE course approval for a presentation by current Board members or staff. As authorized by law, current members of the Board and Board staff may teach or guest lecture as part of an approved ACE course. To obtain ACE course approval for a presentation by a Board member or staff, the provider must:

(1) file an application on the appropriate form approved by the Board, with all required documentation; and

(2) pay the fees required by §153.5 of this title.

(i) Responsibilities and Operations of ACE providers.

(1) ACE course examinations or course mechanism to demonstrate knowledge of the subject matter:

(A) are required for ACE distance education courses; and

(B) must comply with AQB requirements.

(2) Course evaluations. A provider shall provide each student enrolled in an ACE course a course evaluation form approved by the Board and a link to an online version of the evaluation form that a student may complete and submit to the provider after course completion.

(3) Course completion rosters.

(A) Classroom courses. Upon successful completion of an ACE classroom course, a provider shall submit to the Board a course completion roster in a format approved by the Board no later than the 10th day after the date a course is completed. The roster shall include:

(i) the provider's name and license number;

(ii) the instructor's name;

(iii) the course title;

(iv) the course approval number;

(v) the number of credit hours;

(vi) the date of issuance; and

(vii) the date the student started and completed the course. [; and]

[(viii) the signature of an authorized representative of the provider who was in attendance and for whom an authorized signature is on file with the Board.]

(B) Distance education courses. A provider shall maintain a Distance Education Reporting Form and submit information contained in that form by electronic means acceptable to the Board for each student completing the course not earlier than the number of hours for course credit after a student starts the course and not later than the 10th day after the student completes the course.

[(C) The Board will not accept unsigned course completion rosters.]

(4) An ACE provider may withhold any official course completion documentation required by this subsection from a student until the student has fulfilled all financial obligations to the provider.

(5) Security and Maintenance of Records.

(A) An ACE provider shall maintain:

(i) adequate security against forgery for official completion documentation required by this subsection;

(ii) records of each student enrolled in a course for a minimum of four years following completion of the course, including course and instructor evaluations and student enrollment agreements; and

(iii) any comments made by the provider's management relevant to instructor or course evaluations with the provider's records.

(B) All records may be maintained electronically but must be in a common format that is legible and easily printed or viewed without additional manipulation or special software.

(C) Upon request, an ACE provider shall produce instructor and course evaluation forms for inspection by Board staff.

(6) Changes in Ownership or Operation of an approved ACE provider.

(A) An approved ACE provider shall obtain approval of the Board at least 30 days in advance of any material change in the operation of the provider, including but not limited to changes in:

(i) ownership;

(ii) management; and

(iii) the location of main office and any other locations where courses are offered.

(B) An approved provider requesting approval of a change in ownership shall provide a Principal Application Form for each proposed new owner who would hold at least a 10% interest in the provider to the Board.

(j) Non-compliance.

(1) If the Board determines that an ACE course or provider no longer complies with the requirements for approval, the Board may suspend or revoke approval for the ACE course or provider.

(2) Proceedings to suspend or revoke approval of an ACE course or provider shall be conducted in accordance with §153.41 of this title.

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 May 6, 2022.

TRD-202201807

Kathleen Santos

General Counsel

Texas Appraiser Licensing and Certification Board

Earliest possible date of adoption: June 19, 2022

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


PART 23. TEXAS REAL ESTATE COMMISSION

CHAPTER 537. PROFESSIONAL AGREEMENTS AND STANDARD CONTRACTS

22 TAC §§537.20 - 537.23, 537.28, 537.30 - 537.33, 537.35, 537.37, 537.39 - 537.41, 537.43 - 537.48, 537.51, 537.52, 537.54 -537.60, 537.62 - 537.65

The Texas Real Estate Commission (TREC) proposes amendments to 22 TAC §537.20, Standard Contract Form TREC No. 9-15; §537.21, Standard Contract Form TREC No. 10-6; §537.22, Standard Contract Form TREC No. 11-7; §537.23, Standard Contract Form TREC No. 12-3; §537.28, Standard Contract Form TREC No. 20-16; §537.30, Standard Contract Form TREC No. 23-17; §537.31, Standard Contract Form TREC No. 24-17; §537.32, Standard Contract Form TREC No. 25-14; §537.33, Standard Contract Form TREC No. 26-7; §537.35, Standard Contract Form TREC No. 28-2; §537.37, Standard Contract Form TREC No. 30-15; §537.39, Standard Contract Form TREC No. 32-4; §537.40, Standard Contract Form TREC No. 33-2; §537.41, Standard Contract Form TREC No. 34-4; §537.43, Standard Contract Form TREC No. 36-9; §537.44, Standard Contract Form TREC No. 37-5; §537.45, Standard Contract Form TREC No. 38-7; §537.46, Standard Contract Form TREC No. 39-8; §537.47, Standard Contract Form TREC No. 40-9; §537.48, Standard Contract Form TREC No. 41-2; §537.51, Standard Contract Form TREC No. 44-2; §537.52, Standard Contract Form TREC No. 45-2; §537.54, Standard Contract Form TREC No. 47-0; §537.55, Standard Contract Form TREC No. 48-1; §537.56, Standard Contract Form TREC No. 49-1; §537.57, Standard Contract Form TREC No. 50-0; §537.58, Standard Contract Form TREC No. 51-0; §537.59, Standard Contract Form TREC No. 52-0; §537.60, Standard Contract Form TREC No. 53-0; and new §537.62, Standard Contract Form TREC No. OP-H, Seller's Disclosure Notice; §537.63, Standard Contract Form TREC No. OP-L, Addendum for Seller's Disclosure of Information on Lead-Based Paint and Lead-Based Paint Hazards as Required by Federal Law; §537.64, Standard Contract Form TREC No. OP-M, Non-Realty Items Addendum; and §537.65, Standard Contract Form TREC No. OP-C, Notice to Prospective Buyer in Chapter 537, Professional Agreements and Standard Contracts.

The proposed amendments and new rules to Chapter 537 are made as a result of the Commission's quadrennial rule review. Texas real estate license holders are generally required to use forms promulgated by TREC when negotiating contacts for the sale of real property. The proposed changes to the existing rules add the title of the form adopted by reference in each rule to the rule title and add clarifying language to specify which forms are for mandatory versus voluntary use by license holders. The new rules pair previously existing forms that were available for voluntary use by license holders with a rule to provide greater clarity about the forms purpose and use.

Abby Lee, Deputy 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 for units of local government as a result of enforcing or administering the sections. There is no adverse economic effect anticipated for small businesses, micro-businesses, rural communities, or local or state employment 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. Lee also has determined that for each year of the first five years the sections as proposed are in effect, the public benefits anticipated as a result of enforcing the sections as proposed will be improved clarity and greater transparency for members of the public and license holders.

For each year of the first five years the proposed amendments and new rules are in effect, the amendments 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;

-- increase or decrease the number of individuals subject to the rules' applicability; or

-- positively or adversely affect the state's economy.

Comments on the proposal may be submitted through the online comment submission form at https://www.trec.texas.gov/rules-and-laws/comment-on-proposed-rules, to Abby Lee, Deputy General Counsel, Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188, or via email to general.counsel@trec.texas.gov. The deadline for comments is 30 days after publication in the Texas Register.

The amendments and new rules are proposed under Texas Occupations Code, §1101.151, which authorizes the Texas Real Estate Commission to adopt and enforce rules necessary to administer Chapters 1101 and 1102; and to establish standards of conduct and ethics for its license holders to fulfill the purposes of Chapters 1101 and 1102 and ensure compliance with Chapters 1101 and 1102.

The statute affected by these amendments and new rules is Texas Occupations Code, Chapter 1101. No other statute, code or article is affected by the amendments and new rules.

§537.20.Standard Contract Form TREC No. 9-15, Unimproved Property Contract.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 9-15 approved by the Commission in 2021 for mandatory use in the sale of unimproved property where the intended use is for one to four family residences.

§537.21.Standard Contract Form TREC No. 10-6, Addendum for Sale of Other Property by Buyer.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 10-6 approved by the Commission in 2012 for mandatory use as an addendum concerning sale of other property by a buyer to be attached to promulgated forms of contracts.

§537.22.Standard Contract Form TREC No. 11-7, Addendum for "Back-Up" Contract.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 11-7 approved by the Commission in 2012 for mandatory use as an addendum to be attached to promulgated forms of contracts which are second or "back-up" contracts.

§537.23.Standard Contract Form TREC No. 12-3, Addendum for Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 12-3 approved by the Commission in 2012 for mandatory use as an addendum to be attached to promulgated forms of contracts where there is a Veterans Administration release of liability or restoration entitlement.

§537.28.Standard Contract Form TREC No. 20-16, One to Four Family Residential Contract (Resale).

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 20-16 approved by the Commission in 2021 for mandatory use in the resale of residential real estate.

§537.30.Standard Contract Form TREC No. 23-17, New Home Contract (Incomplete Construction).

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 23-17 approved by the Commission in 2021 for mandatory use in the sale of a new home where construction is incomplete.

§537.31.Standard Contract Form TREC No. 24-17, New Home Contract (Completed Construction).

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 24-17 approved by the Commission in 2021 for mandatory use in the sale of a new home where construction is completed.

§537.32.Standard Contract Form TREC No. 25-14, Farm and Ranch Contract.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 25-14 approved by the Commission in 2021 for mandatory use in the sale of a farm or ranch.

§537.33.Standard Contract Form TREC No. 26-7, Seller Financing Addendum.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 26-7 approved by the Commission in 2015 for mandatory use as an addendum concerning seller financing.

§537.35.Standard Contract Form TREC No. 28-2, Environmental Assessment, Threatened of Endangered Species, and Wetlands Addendum.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 28-2 approved by the Commission in 2012 for mandatory use as an addendum to be attached to promulgated forms of contracts where reports are to be obtained relating to environmental assessments, threatened or endangered species, or wetlands.

§537.37.Standard Contract Form TREC No. 30-15, Residential Condominium Contract (Resale).

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 30-15 approved by the Commission in 2021 for mandatory use in the resale of a residential condominium unit.

§537.39.Standard Contract Form TREC No. 32-4, Condominium Resale Certificate.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 32-4 approved by the Commission in 2015 for voluntary use as a condominium resale certificate.

§537.40.Standard Contract Form TREC No. 33-2, Addendum for Coastal Area Property.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 33-2 approved by the Commission in 2012 for mandatory use as an addendum to be added to promulgated forms of contracts in the sale of property adjoining and sharing a common boundary with the tidally influenced submerged lands of the state.

§537.41.Standard Contract Form TREC No. 34-4, Addendum for Property Located Seaward of the Gulf Intercoastal Waterway.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form, TREC No. 34-4 approved by the Commission in 2012 for mandatory use as an addendum to be added to promulgated forms of contracts in the sale of property located seaward of the Gulf Intracoastal Waterway.

§537.43.Standard Contract Form TREC No. 36-9, Addendum for Property Subject to Mandatory Membership in a Property Owners Association.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 36-9 approved by the Commission in 2020 for mandatory use as an addendum to be added to promulgated forms in the sale of property subject to mandatory membership in an owners' association.

§537.44.Standard Contract Form TREC No. 37-5, Subdivision Information, Including Resale Certificate for Property Subject to Mandatory Membership in a Property Owners' Association.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 37-5 approved by the Commission in 2014 for voluntary use as a resale certificate when the property is subject to mandatory membership in an owners' association.

§537.45.Standard Contract Form TREC No. 38-7, Notice of Buyer's Termination of Contract.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 38-7 approved by the Commission in 2021 for mandatory use as a buyer's notice of termination of contract.

§537.46.Standard Contract Form TREC No. 39-8, Amendment to Contract.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 39-8 approved by the Commission in 2015 for mandatory use as an amendment to promulgated forms of contracts.

§537.47.Standard Contract Form TREC No. 40-9, Third Party Financing Addendum.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form, TREC No. 40-9 approved by the Commission in 2019 for mandatory use as an addendum to be added to promulgated forms of contracts when there is a condition for third party financing.

§537.48.Standard Contract Form TREC No. 41-2, Loan Assumption Addendum.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 41-2 approved by the Commission in 2012 for mandatory use as an addendum to be added to promulgated forms of contracts when there is an assumption of a loan.

§537.51.Standard Contract Form TREC No. 44-2, Addendum for Reservation of Oil, Gas, and Other Minerals.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 44-2 approved by the Commission in 2014 for mandatory use as an addendum to be added to promulgated forms of contracts for the reservation of oil, gas, and other minerals.

§537.52.Standard Contract Form TREC No. 45-2, Short Sale Addendum.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 45-2 approved by the Commission in 2021 for mandatory use as an addendum to be added to promulgated forms of contracts in the short sale of property.

§537.54.Standard Contract Form TREC No. 47-0, Addendum for Property in a Propane Gas System Service Area.

The Texas Real Estate Commission (Commission) adopts by reference standard contract Form TREC No. 47-0 approved by the Commission in 2014 for mandatory use when a property is located in a propane gas system service area.

§537.55.Standard Contract Form TREC No. 48-1, Addendum for Authorizing Hydrostatic Testing.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 48-1 approved by the Commission in 2019 for mandatory use as an addendum to be added to promulgated forms if the parties agree to hydrostatic testing.

§537.56.Standard Contract Form TREC No. 49-1, Addendum Concerning Right to Terminate Due to Lender's Appraisal.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 49-1 approved by the Commission in 2018 for mandatory use as an addendum to be added to promulgated forms concerning the right to terminate due to lender's appraisal.

§537.57.Standard Contract Form TREC No. 50-0, Seller's Notice of Termination of Contract.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 50-0 approved by the Commission in 2018 for mandatory use as a seller's notice of termination of contract.

§537.58.Standard Contract Form TREC No. 51-0, Addendum Regarding Residential Leases.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 51-0 approved by the Commission in 2020 for mandatory use as an addendum to be added to promulgated forms of contracts as related to lease agreements.

§537.59.Standard Contract Form TREC No. 52-0, Addendum Regarding Fixture Leases.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 52-0 approved by the Commission in 2020 for mandatory use as an addendum to be added to promulgated forms as related to fixture leases.

§537.60.Standard Contract Form TREC No. 53-0, Addendum containing Notice of Obligation to Pay Improvement District Assessment.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 53-0 approved by the Commission in 2021 for voluntary use when the property is located in a public improvement district.

§537.62.Standard Contract Form TREC No. OP-H, Seller's Disclosure Notice.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. OP-H approved by the Commission in 2019 for voluntary use to fulfill the disclosure requirements of Texas Property Code § 5.008.

§537.63.Standard Contract Form TREC No. OP-L, Addendum for Seller's Disclosure of Information on Lead-Based Paint and Lead-Based Paint Hazards as Required by Federal Law.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. OP-L approved by the Commission in 2011 for voluntary use to comply with federal regulation to furnish a lead paint disclosure in properties constructed prior to 1978.

§537.64.Standard Contract Form TREC No. OP-M, Non-Realty Items Addendum.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. OP-M approved by the Commission in 2011 for voluntary use when the parties need to convey items of personal property not already listed in Paragraph 2, Property, of the contracts.

§537.65.Standard Contract Form TREC No. OP-C, Notice to Prospective Buyer.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. OP-C approved by the Commission in 2011 for voluntary use when the parties use a contract of sale that has not been approved for mandatory use by the Commission.

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 May 6, 2022.

TRD-202201795

Abby Lee

Deputy General Counsel

Texas Real Estate Commission

Earliest possible date of adoption: June 19, 2022

For further information, please call: (512) 936-3057


22 TAC §§537.26, 537.27, 537.61

The Texas Real Estate Commission (TREC) proposes amendments to 22 TAC §537.26. Standard Contract Form TREC No. 15-5; §537.27. Standard Contract Form TREC No. 16-5; and new §537.61, Standard Contract Form TREC No. 54-0, Landlord's Floodplain and Flood Notice in Chapter 537, Professional Agreements and Standard Contracts.

Texas real estate license holders are generally required to use forms promulgated by TREC when negotiating contacts for the sale of real property. These forms are drafted and recommended for proposal by the Texas Real Estate Broker-Lawyer Committee, an advisory body consisting of six attorneys appointed by the President of the State Bar of Texas, six brokers appointed by TREC, and one public member appointed by the governor. The Texas Real Estate Broker-Lawyer Committee recommended revisions to the contract forms adopted by reference under the proposed amendments and new rule to Chapter 537 to comply with statutory changes enacted by the 87th Legislature in HB 531.

HB 531 requires a landlord to disclose, in certain situations, whether the landlord is aware that the dwelling is located in a 100-year floodplain or that the dwelling has flooded within the last five years. Because landlords of temporary residential leases are not exempted, the proposed changes create a new flood disclosure notice form and add a new paragraph referencing the notice in the Seller's Temporary Residential Lease (TREC No. 15-5) and the Buyer's Temporary Residential Lease (TREC No. 1605).

Additionally, the proposed amendments to §537.26, Standard Contract Form TREC No. 15-5, and §537.27, Standard Contract Form TREC No. 16-5, contain proposed changes made as a result of the Commission's quadrennial rule review. Those changes add the corresponding standard contract form title to the rule title and add clarifying language to specify that both of the forms adopted by reference in these rules are for mandatory use by license holders.

Abby Lee, Deputy 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 for units of local government as a result of enforcing or administering the sections. There is no adverse economic effect anticipated for small businesses, micro-businesses, rural communities, or local or state employment 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. Lee also has determined that for each year of the first five years the sections as proposed are in effect, the public benefits anticipated as a result of enforcing the sections as proposed will improved clarity and greater transparency for members of the public, as well as requirements that are consistent with the statute.

Except as noted below, for each year of the first five years the proposed amendments and new rule are in effect the amendments 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;

- increase or decrease the number of individuals subject to the rule's applicability; or

- positively or adversely affect the state's economy.

Proposed new §537.61 will create a new regulation as a result of the requirements of HB 531.

Comments on the proposal may be submitted through the online comment submission form at https://www.trec.texas.gov/rules-and-laws/comment-on-proposed-rules, to Abby Lee, Deputy General Counsel, Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188, or via email to general.counsel@trec.texas.gov. The deadline for comments is 30 days after publication in the Texas Register.

The amendments and new rules are proposed under Texas Occupations Code, §1101.151, which authorizes the Texas Real Estate Commission to adopt and enforce rules necessary to administer Chapters 1101 and 1102; and to establish standards of conduct and ethics for its license holders to fulfill the purposes of Chapters 1101 and 1102 and ensure compliance with Chapters 1101 and 1102. The amendments and new rules are also proposed under Texas Occupations Code, §1101.155, which authorizes the Texas Real Estate Commission to adopt rules in the public's best interest that require license holders to use contract forms prepared by the Texas Real Estate Broker-Lawyer Committee and adopted by the Commission.

The statute affected by these amendments and new rules is Texas Occupations Code, Chapter 1101. No other statute, code or article is affected by the amendments and new rules.

§537.26.Standard Contract Form TREC No. 15-6, Seller's Temporary Residential Lease [15-5].

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 15-6 [15-5] approved by the Commission in 2022 [2012] for mandatory use as a residential lease when a seller temporarily occupies property after closing.

§537.27.Standard Contract Form TREC No. 16-6, Buyer's Temporary Residential Lease [16-5].

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 16-6 [16-5] approved by the Commission in 2022 [2012] for mandatory use as a residential lease when a buyer temporarily occupies property before closing.

§537.61.Standard Contract Form TREC No. 54-0, Landlord's Floodplain and Flood Notice.

The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 54-0 approved by the Commission in 2022 for voluntary use as an addendum to be added to a residential lease, including a promulgated temporary residential lease form, to fulfill the disclosure requirements of §92.0135, Texas Property 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 May 6, 2022.

TRD-202201794

Abby Lee

Deputy General Counsel

Texas Real Estate Commission

Earliest possible date of adoption: June 19, 2022

For further information, please call: (512) 936-3057


CHAPTER 543. RULES RELATING TO THE PROVISIONS OF THE TEXAS TIMESHARE ACT

22 TAC §§543.1 - 543.13

The Texas Real Estate Commission (TREC) proposes the repeal of 22 TAC §543.1, Registration; §543.2, Amendments; §543.3, Fees; §543.4, Forms; §543.5, Violations; §543.6, Complaints and Disciplinary Proceedings; §543.7, Contract Requirements; §543.8, Disclosure Requirement; §543.9, Exemptions; §543.10, Escrow Requirements; §543.11, Maintenance of Registration; §543.12, Renewal of Registration; and §543.13, Assumed Names, in Chapter 543, Rules Relating to the Provisions of the Texas Timeshare Act. The proposed repeal of these sections is made as a result of the Commission's quadrennial rule review, and more specifically, is the result of a proposed new definitions section in this chapter, which will require the renumbering of these sections. TREC will renumber and replace these rules, with some proposed changes.

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

Ms. Lee also has determined that for each year of the first five years the repeal as proposed is in effect, the public benefit anticipated as a result of enforcing the repeal as proposed will be greater clarity in the rules.

For each year of the first five years the proposed repeal is in effect the repeal 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 an existing regulation;

--increase or decrease the number of individuals subject to the rule's applicability;

--positively or adversely affect the state's economy.

Comments on the proposal may be submitted through the online comment submission form at https://www.trec.texas.gov/rules-and-laws/comment-on-proposed-rules, to Abby Lee, Deputy General Counsel, Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188, or via email to general.counsel@trec.texas.gov. The deadline for comments is 30 days after publication in the Texas Register.

The repeal is proposed under the Texas Property Code, §221.024, which authorizes the Texas Real Estate Commission to prescribe and publish forms and adopt rules necessary to carry out the provisions of The Texas Timeshare Act.

The statute affected by this proposal is Chapter 221, Property Code. No other statute, code or article is affected by the proposed repeal.

§543.1.Registration.

§543.2.Amendments.

§543.3.Fees.

§543.4.Forms.

§543.5.Violations.

§543.6.Complaints and Disciplinary Proceedings.

§543.7.Contract Requirements.

§543.8.Disclosure Requirement.

§543.9.Exemptions.

§543.10.Escrow Requirements.

§543.11.Maintenance of Registration.

§543.12.Renewal of Registration.

§543.13.Assumed Names.

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 May 6, 2022.

TRD-202201792

Abby Lee

Deputy General Counsel

Texas Real Estate Commission

Earliest possible date of adoption: June 19, 2022

For further information, please call: (512) 936-3057


22 TAC §§543.1 - 543.14

The Texas Real Estate Commission (TREC) proposes new 22 TAC §543.1, Definitions; §543.2, Registration; §543.3, Amendments; §543.4, Fees; §543.5, Forms; §543.6, Violations; §543.7, Complaints and Disciplinary Proceedings; §543.8, Contract Requirements; §543.9, Disclosure Requirement; §543.10, Exemptions; §543.11, Escrow Requirements; §543.12, Maintenance of Registration; §543.13, Renewal of Registration; and §543.14, Assumed Names, in Chapter 543, Rules Relating to the Provisions of the Texas Timeshare Act.

The proposed new rules to Chapter 543 are made as a result of the Commission's quadrennial rule review. The proposed changes add a new definitions section for ease of reading and update terminology for consistency throughout the chapter. Additionally, proposed new §543.5, Forms, and §543.13, Renewal of Registration, correct a reference to a Commission form.

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

Ms. Lee also has determined that for each year of the first five years the sections as proposed are in effect, the public benefit anticipated as a result of enforcing the sections will be greater clarity in the rules.

For each year of the first five years the proposed new rules are in effect the new 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;

--increase or decrease the number of individuals subject to the rule's applicability;

--positively or adversely affect the state's economy.

Comments on the proposal may be submitted through the online comment submission form at https://www.trec.texas.gov/rules-and-laws/comment-on-proposed-rules, to Abby Lee, Deputy General Counsel, Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188, or via email to general.counsel@trec.texas.gov. The deadline for comments is 30 days after publication in the Texas Register.

The new rules are proposed under the Texas Property Code, §221.024, which authorizes the Texas Real Estate Commission to prescribe and publish forms and adopt rules necessary to carry out the provisions of The Texas Timeshare Act.

The statute affected by this proposal is Chapter 221, Property Code. No other statute, code or article is affected by the proposed new rules.

§543.1.Definitions.

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

(1) Commission--The Texas Real Estate Commission.

(2) Texas Timeshare Act --Chapter 221, Texas Property Code.

§543.2.Registration.

(a) A developer who wishes to register a timeshare plan shall submit an application for registration using forms approved by the Commission. The Commission may not accept for filing an application submitted without a completed application form and the appropriate filing fee.

(b) If the Commission determines that an application for registration of a timeshare plan satisfies all requirements for registration, the Commission shall promptly register the timeshare plan. The Commission shall notify the applicant in writing that the timeshare plan has been registered, specifying the anniversary date of the registration, and shall assign a registration number to the timeshare plan.

(c) If the Commission determines that an application for registration of a timeshare plan fails to satisfy any requirement for registration, the Commission shall promptly notify the applicant of any deficiency in writing. The Commission may require an applicant to revise and resubmit written documents filed with the application or to provide additional information if the Commission determines that the application is incomplete or inaccurate. Upon submission by an applicant of a response sufficient in the opinion of the Commission to cure any deficiency in the application, the Commission shall promptly register the timeshare plan and provide the applicant with the written notice required by these rules. An application will be terminated and the Commission shall take no further action if the applicant fails to submit a response to the Commission within three months after the Commission mails a request to the applicant for curative action.

§543.3.Amendments.

(a) A person who wishes to amend the registration of a timeshare plan shall submit an application to amend the registration using forms approved by the Commission. A developer may file an application to amend a registration before the occurrence of the change. The Commission may not accept for filing an application submitted without a completed application form and the appropriate filing fee.

(b) For the purposes of §221.023 and subsections (b)(26), (c)(9) and (d)(32) of §221.032 of the Texas Timeshare Act, a developer shall file amendments to the registration reporting to the Commission any material or materially adverse change in any document contained in a registration.

(c) "Material" includes, but is not limited to:

(1) a change of developer;

(2) a change of exchange company or association with an additional exchange company;

(3) an increase in assessments of 15% or more;

(4) any substantial change in the accommodations that are part of the timeshare plan;

(5) an increase or decrease in the number of timeshare interests in the timeshare plan registered by the Commission;

(6) a change of escrow agent or type of escrow or other financial assurance;

(7) if applicable, an increase of more than 20% in an original alternative assurance as defined by §221.063(a) of the Texas Timeshare Act;

(8) a change to a substantive provision of the escrow agreement between the escrow agent and the developer;

(9) a change of management company; or

(10) a change to a substantive provision of the management agreement.

(d) "Materially adverse" means any material change to the timeshare plan that substantially reduces the benefits or increases the costs to purchasers.

(e) Material or materially adverse does not include the correction of any typographical or other nonsubstantive changes.

(f) If the Commission determines that a registration, if amended in the manner indicated in an application to amend a registration, would continue to satisfy all requirements for registration, the Commission shall promptly notify the applicant in writing that the registration has been amended, specifying the effective date of the amendment.

(g) If the Commission determines that a registration, if amended in the manner indicated in an application to amend a registration, would fail to satisfy a requirement for registration, the Commission shall promptly notify the applicant of any deficiency. The Commission may require the applicant to revise and resubmit written documents filed with the application or to provide additional information if the Commission determines that the application or written material filed with the application is incomplete or inaccurate. Upon submission by an applicant of a response sufficient in the opinion of the Commission to cure any deficiency in the application, the Commission shall promptly notify the applicant that the registration has been amended, specifying the effective date of the amendment.

§543.4.Fees.

(a) An applicant for registration of a timeshare plan or an applicant for abbreviated registration of a timeshare plan shall pay a filing fee of $2.00 for each seven days of annual use availability in each accommodation that is a part of the timeshare plan, provided, however, that the Commission shall charge and collect a minimum filing fee of $500.00 and that no registration filing fee shall exceed $3,500.00.

(b) An applicant for amendment of the registration of a timeshare plan shall pay a minimum filing fee of $100.00, provided, however, that the filing fee for an amendment that increases the number of timeshare interests to be sold from the number that existed or were proposed for sale in the original registration shall be $2.00 for each seven days of annual use availability in each timeshare unit that is being added to the timeshare plan and that no filing fee shall exceed $2,000.00.

(c) An applicant for pre-sale authorization shall pay a filing fee of $100.00 in addition to the filing fee due under subsection (a) of this section.

(d) A filing fee is not refundable once an application is accepted for filing by the Commission.

(e) A developer of a registered timeshare plan shall pay a fee of $100 to renew a registration.

(f) To reinstate an expired registration of the timeshare plan, a developer shall pay, in addition to the fee of $100 to renew a timeshare plan, an additional fee of $25 for each month the registration has been expired.

§543.5.Forms.

(a) The Commission adopts by reference the following forms to be used in connection with the registration, amendment, or renewal of a timeshare plan:

(1) Application to Register a Timeshare Plan, Form TSR 1-6;

(2) Application to Amend a Timeshare Registration, Form TSR 2-6;

(3) Application for Abbreviated Registration of a Timeshare Plan, Form TSR 3-4;

(4) Application for Pre-sale Authorization, Form TSR 4-0;

(5) Escrow Surety Bond, Form TSR 5-1;

(6) Construction Surety Bond, Form TSR 6-1;

(7) Consent to Service of Process, Form TSR 7-0; and

(8) Application to Renew the Registration of a Timeshare Plan, Form TSR 8-2.

(b) Forms approved or promulgated by the Commission must be submitted on copies obtained from the Commission, whether in printed format or electronically completed from the forms available on the Commission's website.

(c) Forms adopted by reference in this section are published by and available from the Texas Real Estate Commission at P.O. Box 12188, Austin, Texas 78711-2188, or www.trec.texas.gov.

§543.6.Violations.

(a) It is a material violation of the Texas Timeshare Act for a person to engage in any of the acts described in §221.071(a) of the Texas Timeshare Act.

(b) It is a material violation of the Texas Timeshare Act for a developer to represent to a potential purchaser of a timeshare interest by advertising or any other means that a timeshare plan has been approved by the State of Texas or the Commission or to represent that the State of Texas or the Commission has passed upon the merits of a timeshare plan. It is not a material violation of the Texas Timeshare Act for a registrant to represent that a timeshare plan has been registered if the registrant discloses at the same time and in the same manner that the State of Texas and the Commission have not approved the timeshare plan or passed upon the merits of the timeshare plan.

(c) It is a material violation of the Texas Timeshare Act for a developer to fail to file an application to amend a registration within one month of the occurrence of a material or materially adverse change in any document contained in the registration or to fail to submit a response together with any related material in a good faith effort to cure a deficient application to amend a registration within three months after the Commission has mailed to the applicant a request for curative action.

(d) It is a material violation of the Texas Timeshare Act for a person to procure or attempt to procure a registration or amendment to a registration by fraud, misrepresentation, or deceit or by making a material misstatement of fact in an application filed with the Commission.

(e) It is a material violation of the Texas Timeshare Act for a person to disregard or violate a rule of the Commission.

(f) It is a material violation of the Texas Timeshare Act for a developer to fail to make good a check issued to the Commission one month after the Commission has mailed a request for payment by certified mail to the developer's last known mailing address as reflected by the Commission's records.

(g) It is a material violation of the Texas Timeshare Act for a developer to fail, not later than the 14th day after the date of a request, to provide information or documents requested by the Commission or a Commission representative in the course of the investigation of a complaint.

(h) It is a material violation of the Texas Timeshare Act for a developer to fail to properly file an assumed name as required by §221.037(b) of the Texas Timeshare Act or to fail to give the Commission timely written notice of the developer's use of an assumed name.

§543.7.Complaints and Disciplinary Proceedings.

(a) Complaints regarding registered timeshare plans shall be in writing and signed by the person filing the complaint.

(b) The Commission shall not investigate a complaint submitted more than four years after the date of the transaction that is the subject of the complaint.

(c) Disciplinary proceedings, including appeals, shall be conducted in accordance with the provisions of §221.024 of the Texas Timeshare Act, Chapter 533 of this title, and the Administrative Procedure Act, Chapter 2001, Government Code.

§543.8.Contract Requirements.

(a) For purposes of §221.043(a) of the Texas Timeshare Act, "conspicuous manner" means that:

(1) The type of the upper and lower case letters used shall be two point sizes larger than the largest non-conspicuous type, exclusive of heading, on the page on which it appears but in at least 10-point type; or

(2) Where the use of 10-point type would be impractical or impossible, a different style of type or print may be used, so long as the print remains conspicuous under the circumstances.

(b) For purposes of subsection (a) of this section, any conspicuous type utilized shall be separated on all sides from other type and print and may be utilized only where required by the Texas Timeshare Act or authorized by the Commission.

§543.9.Disclosure Requirement.

A developer may provide the disclosures required by §221.032 and §221.033 of the Texas Timeshare Act in an alternate format with the written agreement of the purchaser, provided the developer obtains a signed receipt evidencing that consent from the purchaser.

§543.10.Exemptions.

For purposes of §221.034(b) of the Texas Timeshare Act, the term "developer" shall include any entity in which the developer, or any affiliate of the developer, has at least a 25% interest.

§543.11.Escrow Requirements.

(a) For purposes of §221.063(a) of the Texas Timeshare Act, the alternative financial assurance from another state or jurisdiction must be for the same timeshare plan as the timeshare plan being registered or registration being amended.

(b) A timeshare developer shall, not later than the 10th day after the date of the change, provide the Commission with written notice of any increase or decrease in the original surety bond as provided for in §221.063(a) of the Texas Timeshare Act.

§543.12.Maintenance of Registration.

A developer shall give the Commission written notice of a change of the developer's mailing address not later than the 10th day after the date of the change.

§543.13.Renewal of Registration.

(a) The registration of a timeshare plan expires on the last day of the month two years after the date the plan was registered.

(b) A developer of a timeshare plan may renew the registration for a two-year period by completing an Application to Renew the Registration of a Timeshare Plan, Form TSR 8-2, and paying the appropriate filing fee.

(c) Three months before the expiration of a registration, the Commission shall mail a renewal application form to the developer's last known mailing address as shown in the Commission's records.

(d) An application to renew a timeshare plan is considered void and is subject to no further evaluation or processing when the developer fails to provide information or documentation within two months after the Commission makes written request for correct or additional information or documentation.

(e) Denial of Renewal. The Commission may deny an application for renewal of a registration if the developer of a timeshare plan is in violation of the terms of a Commission order.

§543.14.Assumed Names.

A developer who uses an assumed name under §221.037(b) of the Texas Timeshare Act instead of using the full name of the developer shall notify the Commission in writing at least 10 days before using the assumed name.

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 May 6, 2022.

TRD-202201793

Abby Lee

Deputy General Counsel

Texas Real Estate Commission

Earliest possible date of adoption: June 19, 2022

For further information, please call: (512) 936-3057