Bill Caption

Fiscal Notes

Bill Analysis

Summary: HB 2911 makes several changes to the already substantially regulated profession of real estate inspectors. Several of the changes include:

• Requiring criminal background checks for new applicants and renewal applicants
• Removing 8 hours of classroom requirements for real estate related courses and adding 10 more hours of core real estate inspection courses
• Clarifying the proof of Errors and Omissions Insurance and allowing the inspector the option of taking out a bond instead of the insurance coverage
• Allows inspectors whose licenses have expired to renew them within 90 days (at 1.5 times the normal renewal fee) or between 90-180 days (at 2 times the normal renewal fee). Currently Inspectors are not allowed to renew expired licenses

Analysis: HB 2911 makes several good policy changes but also includes provisions that TPPA cannot support. Neither the legislation's author nor the Texas Real Estate Commission has provided data demonstrating a need for background checks for Real Estate Inspectors. The movement within occupational licensing to require background checks as a condition of licensure, and in some cases as a condition to even apply for a license, is a menace to free markets and individual liberty. The widespread background check requirement may serve as a basis to prevent a significant number of otherwise qualified Texans from being gainfully employed in the field of their choice. This leads to the general over criminalization and stigmatization of society and makes it more difficult for people to earn a living wage or care for their families.

While some people may have criminal backgrounds that necessitate their disqualification from working in a field that has them routinely spending time in other peoples' homes, this law provides no threshold for what information discovered in a criminal background check would result in disqualification. There is no distinction between misdemeanor and felony, or between violent crime and nonviolent crime. If background checks are to be made a precondition for licensure, the line should be clearly drawn as to what types of offenses will disqualify an otherwise qualified applicant.

This bill does contain some provisions that we find useful, such as the modification of the training requirement to better focus training on job related curriculum as well as clarifying the language for the insurance requirement in order to protect both Inspectors and homeowners. Also, it is a step in the right direction to allow Inspectors with expired licenses to renew them. This provision would allow for Inspectors whose license has expired to renew the license without having to start the licensure process over from the beginning.

On balance, the regulatory burdens this bill places on real estate inspectors are bad for free markets, individual liberty, and personal responsibility. We oppose HB 2911.

Amendment Recommendation: We would support an amendment to strip the background check requirement or specify which type of offenses revealed in a criminal background check could be grounds for denying a license. Should such an amendment be offered and adopted, we would reevaluate our position on the bill.