Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 624

Introduced by Assembly Member Wilk

February 24, 2015

An act to amend begin delete Section end delete begin insert Sections 11302 and end insert 11319 of the Business and Professions Code, relating to real estate appraisers.

LEGISLATIVE COUNSEL’S DIGEST

AB 624, as amended, Wilk. Real estate begin delete appraisers. end delete begin insert appraisers: standards of conduct. end insert

Existing law, the Real Estate Appraisers’ Licensing and Certification Law, regulates the licensing of real estate begin delete appraisers. end delete begin insert appraisers and provides definitions of specified terms that govern the construction of that law. end insert begin delete That end delete begin insert Existing end insert law provides that the Uniform Standards of Professional Appraisal Practice sets forth the minimum standards of conduct and performance for real estate appraisers begin insert in any work or service performed that is addressed by those standards end insert .

begin delete

This bill would make nonsubstantive changes to these provisions.

end delete begin insert

This bill would instead provide that the Uniform Standards of Professional Appraisal Practice constitutes the minimum standard of conduct and performance for federally related real estate appraisal activity, as defined. The bill would revise existing, and additionally include new, definitions for specified terms for purposes of the Real Estate Appraisers’ Licensing and Certification Law. The bill would also authorize, if a licensee is performing a nonfederally related appraisal activity, a standard of valuation practice, as defined, for a licensee if that practice is disclosed to, and agreed upon, by the client, and if that practice is described in an appraisal, as provided.

end insert

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 11302 of the end insert begin insert Business and Professions
Code end insert begin insert is amended to read: end insert

11302.  

For the purpose of applying this part, the following
terms, unless otherwise expressly indicated, shall mean and have
the following definitions:

(a) “Department” means the Department of Consumer Affairs.

(b) “Appraisal” means a written statement independently and
impartially prepared by a qualified appraiser setting forth an
opinion begin delete in a federally related transaction end delete as to the market value of
an adequately described property as of a specific date, supported
by the presentation and analysis of relevant market information.

The term “appraisal” does not include an opinion given by a real
estate licensee or engineer or land surveyor in the ordinary course
of his or her business in connection with a function for which a
license is required under Chapter 7 (commencing with Section
6700) or Chapter 15 (commencing with Section 8700) of Division
3, or Chapter 3 (commencing with Section 10130) or Chapter 7
(commencing with Section 10500) and the opinion shall not be
referred to as an appraisal. This part does not apply to a probate
referee acting pursuant to Sections 400 to 408, inclusive, of the
Probate Code unless the appraised transaction is federally related.

(c) “Appraisal Foundation” means the Appraisal Foundation
that was incorporated as an Illinois not-for-profit corporation on
November 30, 1987.

(d) (1) “Appraisal management company” means any person
or entity that satisfies all of the following conditions:

(A) Maintains an approved list or lists, containing 11 or more
independent contractor appraisers licensed or certified pursuant
to this part, or employs 11 or more appraisers licensed or certified
pursuant to this part.

(B) Receives requests for appraisals from one or more clients.

(C) For a fee paid by one or more of its clients, delegates
appraisal assignments for completion by its independent contractor
or employee appraisers.

(2) “Appraisal management company” does not include any of
the following, when that person or entity directly contracts with
an independent appraiser:

(A) Any bank, credit union, trust company, savings and loan
association, or industrial loan company doing business under the
authority of, or in accordance with, a license, certificate, or charter
issued by the United States or any state, district, territory, or
commonwealth of the United States that is authorized to transact
business in this state.

(B) Any finance lender or finance broker licensed pursuant to
Division 9 (commencing with Section 22000) of the Financial
Code, when acting under the authority of that license.

(C) Any residential mortgage lender or residential mortgage
servicer licensed pursuant to Division 20 (commencing with
Section 50000) of the Financial Code, when acting under the
authority of that license.

(D) Any real estate broker licensed pursuant to Part 1
(commencing with Section 10000) of Division 4 of the Business
and Professions Code, when acting under the authority of that
license.

(3) “Appraisal management company” does not include any
person licensed to practice law in this state who is working with
or on behalf of a client of that person in connection with one or
more appraisals for that client.

(e) “Appraisal Subcommittee” means the Appraisal
Subcommittee of the Federal Financial Institutions Examination
Council.

(f) “Controlling person” means one or more of the following:

(1) An officer or director of an appraisal management company,
or an individual who holds a 10 percent or greater ownership
interest in an appraisal management company.

(2) An individual employed, appointed, or authorized by an
appraisal management company that has the authority to enter into
a contractual relationship with clients for the performance of
appraisal services and that has the authority to enter into
agreements with independent appraisers for the completion of
appraisals.

(3) An individual who possesses the power to direct or cause
the direction of the management or policies of an appraisal
management company.

(g) “Director” or “chief” means the Chief of the Bureau of Real
Estate Appraisers.

(h) “Federal financial institutions regulatory agency” means the
Federal Reserve Board, Federal Deposit Insurance Corporation,
Office of the Comptroller of the Currency, Federal Home Loan
Bank System, National Credit Union Administration, begin insert Consumer
Financial Protection Bureau, end insert and any other agency determined
by the director to have jurisdiction over transactions subject to this
part.

(i) “Federally related real estate appraisal activity” means the
act or process of making or performing an appraisal on real estate
or real property in a federally related transaction and preparing an
appraisal as a result of that activity.

(j) “Federally related transaction” means any real estate-related
financial transaction which a federal financial institutions
regulatory agency engages in, contracts for or regulates and which
requires the services of a state licensed real estate appraiser
regulated by this part. This term also includes any transaction
identified as such by a federal financial institutions regulatory
agency.

(k) “License” means any license, certificate, permit, registration,
or other means issued by the bureau authorizing the person to
whom it is issued to act pursuant to this part within this state.

(l) “Licensure” means the procedures and requirements a person
shall comply with in order to qualify for issuance of a license and
includes the issuance of the license.

(m) “Office” or “bureau” means the Bureau of Real Estate
Appraisers.

(n) “Registration” means the procedures and requirements with
which a person or entity shall comply in order to qualify to conduct
business as an appraisal management company.

(o) “State licensed real estate appraiser” is a person who is
issued and holds a current valid license under this part.

(p) “Uniform Standards of Professional Appraisal Practice” are
the standards of professional appraisal practice established by the
Appraisal Foundation begin insert for use in a federally related transaction end insert .

(q) “Course provider” means a person or entity that provides
educational courses related to professional appraisal practice.

begin insert

(r) “Nonfederally related real estate appraisal activity” means
the act or process of making or performing an appraisal on real
estate or real property for any purpose other than a federally
related transaction.

end insert begin insert

(s) “Standard of valuation practice” means any nationally or
internationally recognized valuation standard addressing the
credibility of an appraisal or an appraisal review.

end insert

begin delete SECTION 1. end delete
begin insert SEC. 2. end insert   

Section 11319 of the Business and Professions Code
is amended to read:

11319.  

Notwithstanding any other provision of this code, the
begin insert following shall apply: end insert begin delete Uniform end delete

begin insert (a) end insert begin insert   end insert begin insert The Uniform end insert Standards of Professional Appraisal Practice
constitute the minimum standard of conduct and performance for
begin delete a licensee in any work or service performed that is addressed by
those standards. If end delete begin insert federally related real estate appraisal activity. end insert

begin insert (b) end insert begin insert   end insert begin insert If end insert a licensee also is certified by the Board of Equalization,
the licensee shall follow the standards established by the Board of
Equalization when fulfilling the licensee’s responsibilities for
assessment purposes.

begin insert

(c) If a licensee is performing a nonfederally related appraisal
activity, a standard of valuation practice may be utilized if that
practice is disclosed to, and agreed upon, by the client, and if that
practice is described in the appraisal. If a licensee utilizes a
standard of valuation practice other than the Uniform Standards
of Professional Appraisal Practice pursuant to this subdivision,
the licensee shall comply with the Ethics, Record Keeping,
Competency, and Scope of Work rules of the Uniform Standards
of Professional Appraisal Practice contained in the 2014-2015
edition of the Uniform Standards of Professional Appraisal
Practice.

end insert