BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: AB 1381 Hearing Date: June 13,
2016
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|Author: |Weber |
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|Version: |June 1, 2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Mark Mendoza |
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Subject: Real estate appraisers
SUMMARY: Requires the Bureau of Real Estate Appraisers to provide
information on the Internet regarding the continuing education
courses taken by a licensee.
Existing law:
1) Establishes the Real Estate Appraisers' Licensing and
Certification Law (Act), administered by the Bureau of Real
Estate Appraisers (BREA) within the Department of Consumer
Affairs (DCA), which regulates the licensing of real estate
appraisers. (Business and Professions Code (BPC) § 11300 et
seq.)
2) Requires the BREA to provide on the Internet information
regarding, among other things, the status of every license
and registration issued by the BREA.
(BPC § 11317.2(a))
3) Requires the Director of the DCA to adopt regulations for
licensure which shall meet, at a minimum, the requirements
and standards established by the Appraisal Foundation and the
federal financial institutions regulatory agencies acting
pursuant to Section 1112 of the Financial Institutions Reform
Recovery and Enforcement Act of 1989, Public Law 101-73
(FIRREA). (BPC § 11340(c))
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4) Requires the director to adopt regulations governing the
process and procedures for renewal of a license, which shall
include, but not be limited to, continuing education
requirements, which shall be reported on the basis of
four-year continuing education cycles. (BPC § 11360)
This bill:
1) Requires the Bureau of Real Estate Appraisers to provide, on
the Internet, information regarding the continuing education
courses taken by a licensee.
2) Removes obsolete references to the Office of Real Estate
Appraisers and inserts the word "Bureau".
FISCAL EFFECT: Unknown for the current version of this bill.
The bill is keyed "fiscal" by Legislative Counsel but was
changed substantially since being heard by the Assembly
Committee on Appropriations in January.
COMMENTS:
1. Purpose. The Author is the sponsor of the bill. According
to the Author, "In San Diego, the Broadway Heights Community
Council raised concerns about recent appraisals in their
neighborhood. Many residents questioned whether this
appraiser was knowledgeable in renewable energy sources when
appraising residential homes. When searching online for
additional information about real estate appraisers, very
little information is publically available.
To attain a license in real estate appraising, every
applicant is required to meet certain educational
requirements for the type of license he or she is seeking.
Once an applicant becomes licensed, at least 56 hours of
continuing education is required during each four-year
continuing education cycle. The continuing education
requirement includes mandatory courses. For the remainder of
the hours required, an appraiser is free to choose from a
wide range of courses. This allows an appraiser to develop a
specialization for a certain type of appraising, such as
renewable energy."
Broadway Heights Community Council and the Author ultimately
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underscore, "AB 1381 would provide the public with additional
information on the continuing education courses taken when an
appraiser seeks to renew his or her license. By listing an
appraiser's continuing education courses, the public will
have a better understanding of who appraises their property.
In addition, businesses would be better able to evaluate
candidates and select appraisers with certain
specializations."
2. Background on the BREA. In 1989, Title XI of the federal
Financial Institutions Reform, Recovery and Enforcement Act
was adopted by congress mandating states to license and
certify real estate appraisers who appraise property for
federally related transactions. The federal law was enacted
as a result of the savings and loan crisis.
In response to the federal mandate, the California
Legislature enacted the Real Estate Appraisers Licensing and
Certification Law in 1990 ( AB 527, Chapter 491, Statutes of
1990). The OREA was established within the Business,
Transportation and Housing Agency, and charged with
developing and implementing a real estate appraiser licensing
and certification program compliant with the federal mandate.
In 2012, Governor Brown submitted a reorganization plan to
the Legislature. As a result, on July 1, 2013, OREA became
the BREA within DCA.
BREA, which is entirely funded by licensing fees, is a single
program comprised of two core components, licensing and
enforcement.
The Licensing Division implements the minimum requirements
for licensure, according to criteria established by the
federal government and California law, to ensure that only
qualified persons are licensed to conduct appraisals in
federally related real estate transactions. Applicants must
meet minimum education and experience requirements and
successfully complete a nationally approved examination. The
Licensing Division also registers Appraisal Management
Companies (AMC) in compliance with California law.
The Enforcement Division investigates the background of
applicants, licensees, and AMC registrants to ensure they
meet the standards for licensure. The Enforcement Division
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also investigates complaints of violations of California law
and national appraisal standards filed against licensed
appraisers and registered AMCs.
BREA is responsible for the accreditation of educational
courses and providers for real estate appraisers. BREA has
reviewed and approved over 1,800 pre-licensing and continuing
education courses. In addition to the real estate appraisal
related
3 courses offered by California's community colleges and
universities, over 70 proprietary schools provide appraisal
education.
3. Continuing Education for Licensees. The term of a California
real estate appraiser's license is two years. All licensed
appraisers must meet minimum continuing education
requirements before renewing their license. A total of 56
hours of continuing education is required during the
four-year continuing education cycle including the following
mandatory courses for all license categories.
7-hour National Uniform Standards of Professional
Appraisal Practice (USPAP) course-required every two
years.
4-hour Bureau approved course entitled "Federal
and State Laws and Regulations"- required every four
years. This 4-hour course is an addition since the last
sunset review. (California Code of Regulations, Title
10, § 3543)
In practical terms, this requires a renewal of the 7-hour
USPAP course every two years on its own, and a full
continuing education (56 hours) renewal every four years.
Generally the requirement is a full CE 56 hour renewal every
other two year cycle, with a reduced 7 hour CE renewal cycle
in between.
Continuing education courses or seminars must cover appraisal
related topics including subjects such as land use planning,
appraisal computer applications, cost estimating, and green
building appraisals.
1. BREA Continuing Education Course Approval. Continuing
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education courses, both classroom and online, must meet the
requirements of the Appraisal Qualifications Board (AQB). The
AQB is within the Appraisal Foundation, a non-profit
organization that works to advance professionalism for
appraisers through the promulgation of standards, appraiser
qualifications, and guidance regarding appraisal methods and
techniques. The AQB establishes the minimum education and
experience requirements as well as the examination
requirements for appraisers.
The requirements for BREA approval of continuing education
courses are:
Courses must be a minimum of two classroom hours
long (classroom hour means 50 minutes within a one-hour
period actually spent in presenting the course content).
Participants must have been present for at least 90%
of the course hours to obtain credit for the course.
Continuing education courses that BREA has already approved
allow for faster processing of renewal applications. Courses
offered by providers that are private vocational schools or
professional organizations are assigned a BREA course
approval number. In addition, some college and university
courses may be acceptable if the courses cover one of the
topics listed below.
The AQB allows, and BREA may grant, continuing education
credit for courses that cover topics including but not
limited to:
a) Ad Valorem Taxation
b) Arbitration-Dispute Resolution
c) Practice of Real Estate Appraisal
d) Development Cost Estimating
e) Ethics and Standards of Practice
f) Land use Planning-Zoning
g) Property Management-Leasing-Timesharing
h) Property Development-Partial Interests
i) Real estate law-Easements-Legal Interests
j) Real Estate Litigation-Damages-Condemnation
aa) Real Estate Financing and Investment
bb) Real Estate Appraisal Computer Applications
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cc) Real Estate Securities and Syndication
dd) Real Property Appraisals-Personal Property-Business
Valuation
ee) Seller Concession Impact on Value
ff) Energy Efficient-Green Building Appraisal
1. Policy Issue : Do continuing education courses demonstrate
expertise in a specific area of appraising? The Author's
office underscores that, "By listing an appraiser's
continuing education courses, the public will have a better
understanding of who appraises their property. In addition,
businesses would be better able to evaluate candidates and
select appraisers with certain specializations."
Representing a continuing education course as equitable with
a "specialty" may be questionable. The Author may wish to
clarify to the committee how posting these courses outweigh
the fiscal costs of this program (posting courses for 11,278
licensees) and the aforementioned issue.
SUPPORT AND OPPOSITION:
Support:
Broadway Heights Community Council
Opposition:
None on file as of June 7, 2016.
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