BILL ANALYSIS Ó
AB 1381
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Date of Hearing: January 21, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
1381 (Weber) - As Amended March 26, 2015
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill requires real estate appraisers to obtain education in
valuing sustainable real estate assets, including solar and wind
power generation installations, and energy efficiency measures,
for purposes of meeting educational background requirements and
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continuing education requirements. In addition, the bill
prohibits the renewal of a license unless the licensee provides
evidence of continuing education in valuing sustainable reals
estate assets.
FISCAL EFFECT:
Minor and absorbable costs to the Bureau of Real Estate
Appraisers (BREA).
COMMENTS:
1)Purpose. According to the author, "California has been at the
forefront of the expansion of the green economy and has
continued to make strides to support growth within the
renewables market. As this growth continues it is critical
that homeowners who make investments in renewable residential
retrofits with the reasonable expectation of adding value to
their homes are ensure to be assessed as such. Having
required education for the appraisal of sustainable real
estate assets makes sense as the way to make sure homeowners
have these changes adequately valued." This bill would build
upon current efforts to appropriately value green features by
requiring the BREA to require education in valuing sustainable
real estate assets.
2)Background. The BREA, within the Department of Consumer
Affairs, is responsible for regulating the practice of real
estate appraisers in California, by ensuring that only
qualified persons are licensed to conduct appraisals in
federally related real estate loan transactions and that all
real estate appraisers licensed by the state adhere to
applicable laws, regulations, and standards.
There are four levels of appraiser licensees: appraiser
trainee; appraiser licensee; certified residential; and
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certified general. Levels of licensure are distinguished by
increasing levels of education, experience, and scope of
practice (property type, transaction value and supervision
level). When a licensee wishes to move to a higher level of
licensure, she or he must meet the qualifications and apply to
upgrade the license.
3)Educational requirements. Education requirements for all
certifications are based upon national standards determined by
the Appraisal Qualifications Board (AQB), and require specific
modules to be covered, such as basic appraisal principles and
procedures and a 15 hour National Uniform Standards of
Professional Appraisal Practice (USPAP) course, or its
equivalent. Case studies relating to special energy efficient
items (i.e. "green buildings") may be used as a part of the
curriculum required under certain education modules for
certified residential and certified general licensees.
4)Continuing Education Requirements. The current term of a
California real estate appraiser
license is two years, and all licensed appraisers must meet
minimum continuing education requirements (CEs) before
renewing their license. A total of 56 hours of CEs are
required every four years, although proof of completion of the
seven hour National USPAP Update Course, or its equivalent, is
required every two years and must be submitted with each
renewal application. Currently, the AQB allows, and the BREA
may grant, CE credit for courses that cover topics including,
but not limited to, energy efficient items and "green
building" appraisals.
5)Arguments in Support. A local community group has noted,
"Renewable technologies are quickly becoming a fixture in
residential and commercial markets as a way to not only to
save on energy costs, but also to increase the value of a
property. Although the trend of retrofitting real estate with
green technology is a promising one, there have been a number
of complaints from those who received these updates that
additions are being undervalued or not taken into account at
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all. These situations are detrimental to those who have
invested a great deal in these green technologies, and if
issues with valuing persist over the long term, they have the
potential to hinder the ability of the renewable industry to
continue to grow."
6)Arguments in Opposition. Appraisers argue it is inappropriate
to impose a CE requirement on all appraisers when some may
specialize in types of appraisals, such as right of way or
drainage, where valuing sustainable real estate is not part of
their practice.
7)Prior Legislation.
a) AB 2519 (Berryhill) Chapter 683, Statutes of 2012, among
other things, prohibited the renewal of a license if the
licensee failed to satisfactorily complete the additional
education requirements imposed by a citation.
b) SB 706 (Price) Chapter 712, Statutes of 2011, required
licensees to take a four-hour course relating to federal
and state appraisal laws instead of certifying that they
have read and understand specified state and federal laws.
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081
AB 1381
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