BILL ANALYSIS Ó
AB 1381
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CONCURRENCE IN SENATE AMENDMENTS
AB
1381 (Weber)
As Amended August 26, 2016
Majority vote
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|ASSEMBLY: | |(January 27, |SENATE: | 36-0 |(August 30, |
| | |2016) | | |2016) |
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(vote not relevant)
Original Committee Reference: B. & P.
SUMMARY: Requires the Bureau of Real Estate Appraisers (BREA)
to provide information on the Internet regarding continuing
education courses taken by a licensee, in addition to other
specified reporting requirements pursuant to the California
Public Records Act.
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Exclude from the definition of "real estate broker" persons
acting in the capacity of an outdoor advertising
representative in connection with a specified transaction.
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2)Define an "outdoor advertising representative" as an employee
of a corporation or a limited liability company or a general
partner of a partnership that holds a license issued by the
Department of Transportation to engage in the business of
outdoor advertising, arranging for the lease or transfer of
real property by his or her employer, or an interest in real
property solely for the placement of, access to, or operation
of, an advertising display and appurtenances thereto, as
defined.
3)Require in every transaction involving the transfer, lease, or
use of real property for the operation of an advertising
display negotiated by an outdoor advertising representative,
the owner or operator of the advertising display to maintain
liability insurance coverage for death, bodily injury, and
property damage arising out of, or in connection with, its
acts, omissions, or operations on the real property, as
specified.
4)Require the BREA to provide, on the Internet, information
regarding continuing education courses taken by a licensee.
5)Replace obsolete references to the Office of Real Estate
Appraisers with the word "Bureau".
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, this bill will result
in negligible state costs.
COMMENTS:
Purpose. This bill is sponsored by the author. According to
the author, "[This bill] would provide the public with
additional information on the continuing education courses
taken when an appraiser seeks to renew his or her license. By
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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.
Additionally, [this bill] clarifies that employees of outdoor
advertising companies can continue to conduct business
negotiations related to the placement and operation of outdoor
advertising displays without seeking licensure as a real
estate broker for specific transactions related to the
placement, access, and operation of an outdoor advertising
display. This bill takes a measured approach explicitly
detailing the types of transactions that outdoor advertising
representatives may negotiate and further requires that the
outdoor advertising company maintain appropriate liability
insurance - a model that has served the film industry well."
Background. In 1989, Congress adopted the Federal Financial
Institutions Reform, Recovery and Enforcement Act (FIRREA),
which requires states to license and certify real estate
appraisers who appraise property for federally related
transactions (FRTs), as a result of the savings and loan
disaster. In short, FRTs are transactions involving loans
made, guaranteed, or insured by federally supervised financial
institutions. The FIRREA, and rules promulgated pursuant to
that act, require that real estate appraisals be performed in
accordance with generally accepted uniform standards as
promulgated by the Appraisal Standards Board (ASB) of the
Appraisal Foundation.
The Appraisal Foundation also has an Appraisal Qualifications
Board (AQB) that establishes the qualification criteria for
state licensing, certification, and recertification of
appraisers. FIRREA mandates that all state certified
appraisers must meet the minimum education, experience, and
examination requirements promulgated by the AQB. These
criteria, among other things, establish four levels of real
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property appraiser classifications, which are reflected under
California law, and have different education, experience, and
scope of practice requirements.
Background Education Requirements. Educational requirements for
all certifications are based upon national standards
determined by the 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. Among other
things, the qualifications specifically provide that 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. It is unclear
the extent to which these foundational courses incorporate
energy efficiency items.
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. Of the remaining
hours, proof of completion of a four hour BREA approved course
covering federal and state laws and regulations and remaining
CE courses is required every four years. Currently, the AQB
allows, CE credit for courses that cover topics including, but
not limited to, energy efficient items and "green building"
appraisals.
Valuing Sustainable Real Estate Assets. According to the
author, there have been concerns raised regarding the consistent
assessment of solar and other renewable technologies when added
to a home. While these retrofits are often relatively costly,
they are worthwhile, considering the savings found in energy
bills and a perceived increase in the value of the home, and
research shows that sustainable real estate assets do indeed add
value to a home. However, according to "The Challenges of
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Valuing Green," published in the Winter 2015 issue of the
Appraisal Journal, an industry publication, valuation
professionals, real estate agents, and homebuyers face
challenges in the process of valuing, selling, and purchasing
green and energy efficient homes due to a lack of comparable
properties and lack of data. When applied to homes, the term
"green" can take a variety of meanings, which creates difficulty
in the marketplace when valuing a home that has been classified
as green or has energy efficient or high performance features.
Outdoor Advertising. According to the author, "Outdoor
advertising companies have operated within the State of
California for nearly 100 years. These businesses must comply
with federal and state laws, as well as municipal ordinances
that mandate permitting processes, spacing and size requirements
for the placement of outdoor advertising displays.
Municipalities throughout the state have opted to negotiate
agreements with outdoor advertising companies to generate
important local revenue."
Recently, a member of the public made a complaint about a
negotiation that had taken place between two outdoor advertising
companies and a private property owner at a CalBRE forum. The
complaint raised the question of whether employees of outdoor
advertising companies were required to be licensed real estate
brokers under existing state law.
Under current law, any person or company wishing to display
advertising, other than a display on a building within 660 feet
of a highway right of way, must comply with federal and state
law relating to display size, distance between displays, and
certain content limitations. The person or company must be
licensed by the State Office of Outdoor Advertising, within the
Department of Transportation, obtain a permit from the state
Office of Outdoor Advertising, and comply with all local
permitting requirements. The State license and permit must be
renewed each year.
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The Department of Transportation is responsible for enforcing
compliance with federal and state laws governing outdoor
advertising. If the state fails to properly administer the
federal program, the state shall lose 10% of its federal highway
funding. Given the level of regulation already placed on the
outdoor advertising industry, the Department of Consumer Affairs
does not believe an additional real estate license for outdoor
advertising representatives is needed.
The proposed language is modeled after an existing exemption for
film industry employees who negotiate lease agreements for
filming and are not required to obtain licensure as real estate
brokers.
Analysis Prepared by:
Gabby Nepomuceno / B. & P. / (916) 319-3301 FN:
0004973