Amended in Senate June 22, 2015

Amended in Assembly April 22, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 624


Introduced by Assembly Member Wilk

February 24, 2015


An act to amend Sections 11302 and 11319 of the Business and Professions Code, relating to real estate appraisers.

LEGISLATIVE COUNSEL’S DIGEST

AB 624, as amended, Wilk. Real estate appraisers: standards of conduct.

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

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.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

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SECTION 1.  

Section 11302 of the Business and Professions
2Code
is amended to read:

3

11302.  

For the purpose of applying this part, the following
4terms, unless otherwise expressly indicated, shall mean and have
5the following definitions:

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

7(b) “Appraisal” means a written statement independently and
8impartially prepared by a qualified appraiser setting forth an
9opinion in a federally related transaction as to the market value of
10an adequately described property as of a specific date, supported
11by the presentation and analysis of relevant market information.

12The term “appraisal” does not include an opinion given by a real
13estate licensee or engineer or land surveyor in the ordinary course
14of his or her business in connection with a function for which a
15license is required under Chapter 7 (commencing with Section
166700) or Chapter 15 (commencing with Section 8700) of Division
173, or Chapter 3 (commencing with Section 10130) or Chapter 7
18(commencing with Section 10500) and the opinion shall not be
19referred to as an appraisal. This part does not apply to a probate
20referee acting pursuant to Sections 400 to 408, inclusive, of the
21Probate Code unless the appraised transaction is federally related.

22(c) “Appraisal Foundation” means the Appraisal Foundation
23that was incorporated as an Illinois not-for-profit corporation on
24November 30, 1987.

25(d) (1) “Appraisal management company” means any person
26or entity that satisfies all of the following conditions:

27(A) Maintains an approved list or lists, containing 11 or more
28independent contractor appraisers licensed or certified pursuant
29to this part, or employs 11 or more appraisers licensed or certified
30pursuant to this part.

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

P3    1(C) For a fee paid by one or more of its clients, delegates
2appraisal assignments for completion by its independent contractor
3or employee appraisers.

4(2) “Appraisal management company” does not include any of
5the following, when that person or entity directly contracts with
6an independent appraiser:

7(A) Any bank, credit union, trust company, savings and loan
8association, or industrial loan company doing business under the
9authority of, or in accordance with, a license, certificate, or charter
10issued by the United States or any state, district, territory, or
11commonwealth of the United States that is authorized to transact
12business in this state.

13(B) Any finance lender or finance broker licensed pursuant to
14Division 9 (commencing with Section 22000) of the Financial
15Code, when acting under the authority of that license.

16(C) Any residential mortgage lender or residential mortgage
17servicer licensed pursuant to Division 20 (commencing with
18Section 50000) of the Financial Code, when acting under the
19authority of that license.

20(D) Any real estate broker licensed pursuant to Part 1
21(commencing with Section 10000) of Division 4 of the Business
22and Professions Code, when acting under the authority of that
23license.

24(3) “Appraisal management company” does not include any
25person licensed to practice law in this state who is working with
26or on behalf of a client of that person in connection with one or
27more appraisals for that client.

28(e) “Appraisal Subcommittee” means the Appraisal
29Subcommittee of the Federal Financial Institutions Examination
30Council.

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

32(1) An officer or director of an appraisal management company,
33or an individual who holds a 10 percent or greater ownership
34interest in an appraisal management company.

35(2) An individual employed, appointed, or authorized by an
36appraisal management company that has the authority to enter into
37a contractual relationship with clients for the performance of
38appraisal services and that has the authority to enter into
39agreements with independent appraisers for the completion of
40appraisals.

P4    1(3) An individual who possesses the power to direct or cause
2the direction of the management or policies of an appraisal
3management company.

4(g) “Director” or “chief” means the Chief of the Bureau of Real
5Estate Appraisers.

6(h) “Federal financial institutions regulatory agency” means the
7Federal Reserve Board, Federal Deposit Insurance Corporation,
8Office of the Comptroller of the Currency, Federal Home Loan
9Bank System, National Credit Union Administration, Consumer
10Financial Protection Bureau, and any other agency determined by
11the director to have jurisdiction over transactions subject to this
12part.

13(i) “Federally related real estate appraisal activity” means the
14act or process of making or performing an appraisal on real estate
15or real property in a federally related transaction and preparing an
16appraisal as a result of that activity.

17(j) “Federally related transaction” means any real estate-related
18financial transaction which a federal financial institutions
19regulatory agency engages in, contracts for or regulates and which
20requires the services of a state licensed real estate appraiser
21regulated by this part. This term also includes any transaction
22identified as such by a federal financial institutions regulatory
23agency.

24(k) “License” means any license, certificate, permit, registration,
25or other means issued by the bureau authorizing the person to
26whom it is issued to act pursuant to this part within this state.

27(l) “Licensure” means the procedures and requirements a person
28shall comply with in order to qualify for issuance of a license and
29includes the issuance of the license.

30(m) “Office” or “bureau” means the Bureau of Real Estate
31Appraisers.

32(n) “Registration” means the procedures and requirements with
33which a person or entity shall comply in order to qualify to conduct
34business as an appraisal management company.

35(o) “State licensed real estate appraiser” is a person who is
36issued and holds a current valid license under this part.

37(p) “Uniform Standards of Professional Appraisal Practice” are
38the standards of professional appraisal practice established by the
39Appraisal Foundation for use in a federally related transaction.

P5    1(q) “Course provider” means a person or entity that provides
2educational courses related to professional appraisal practice.

3(r) “Nonfederally related real estate appraisal activity” means
4the act or process of making or performing an appraisal on real
5estate or real property for any purpose other than a federally related
6transaction.

7(s) “Standard of valuation practice” means any nationally or
8internationally recognized valuation standardbegin delete addressing the
9credibility of an appraisal or an appraisal review.end delete
begin insert approved by the
10bureau.end insert

11

SEC. 2.  

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

13

11319.  

Notwithstanding any other provision of this code, the
14following shall apply:

15(a) The Uniform Standards of Professional Appraisal Practice
16constitute the minimum standard of conduct and performance for
17 federally related real estate appraisal activity.

18(b) If a licensee also is certified by the Board of Equalization,
19the licensee shall follow the standards established by the Board of
20Equalization when fulfilling the licensee’s responsibilities for
21assessment purposes.

22(c) If a licensee is performing a nonfederally related appraisal
23activity, a standard of valuation practice may be utilized if that
24practice is disclosed to, and agreed upon, by the client, and if that
25practice is described in the appraisal. If a licensee utilizes a
26standard of valuation practice other than the Uniform Standards
27of Professional Appraisal Practice pursuant to this subdivision,
28the licensee shall comply with the Ethics, Record Keeping,
29Competency, and Scope of Work rules of the Uniform Standards
30of Professional Appraisal Practice contained in thebegin delete 2014-2015end delete
31begin insert 2014-end insertbegin insert15end insert edition of the Uniform Standards of Professional
32Appraisal Practice.



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