BILL ANALYSIS                                                                                                                                                                                                    

                                                                    AB 1381

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          Date of Hearing:   January 21, 2016


                                 Jimmy Gomez, Chair

          1381 (Weber) - As Amended March 26, 2015

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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          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).


          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)  


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