BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 237
                                                                  Page  1

          Date of Hearing:   July 8, 2009

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                   SB 237 (Calderon) - As Amended:  June 17, 2009 

          Policy Committee:                              Business and  
          Professions  Vote:                            9 - 0 

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill requires appraisal management companies (AMCs) to  
          register with the Office of Real Estate Appraisers (OREA) and  
          subjects those companies to the provisions of the Real Estate  
          Appraisers Licensing and Certification law.  Specifically, this  
          bill: 

          1)Requires OREA to adopt regulations governing the registration  
            of AMCs.

          2)Requires OREA to establish fees to be paid by AMCs sufficient  
            to cover the costs incurred by the OREA.

          3)Requires fingerprinting and background checks by the  
            Department of Justice for any person with a 10 % or more  
            interest in an AMC. 

          4)Authorizes OREA to impose administrative fines of up to  
            $10,000 per violation and establishes related appeals  
            processes.

           FISCAL EFFECT  

          1)One-time special fund costs of approximately $60,000 in  
            addition to absorbable costs for promulgating regulation  
            changes, updating the existing database, developing  
            application and complaint forms, and staff training.  

          2)On-going special fund costs of approximately $120,000 which  
            under the provisions of the bill will be fully offset by fee  
            revenue.  








                                                                  SB 237
                                                                  Page  2


          3)Cost estimates are based on the assumption that 150 appraisal  
            management companies may be required to register, resulting in  
            annual fees of about $800 per AMC to cover all costs.

           COMMENTS  

           1)Purpose  . The intent of this legislation is to protect the  
            integrity of real property appraisals, by regulating the  
            practices of an entity called an appraisal management company  
            (AMC), whose role in the appraisal process has expanded  
            greatly in recent years.  

            SB 237 requires AMCs to register with the Office of Real  
            Estate Appraisers before they may transact business in  
            California, and restricts controlling interests in AMCs to  
            individuals who have not previously had licenses to perform  
            appraisals revoked.  The bill prohibits AMCs from improperly  
            influencing or attempting to improperly influence the  
            appraisers on their panels, lists examples of acts which would  
            represent improper influence, and prohibits AMCs from  
            altering, modifying, or otherwise changing appraisal reports  
            submitted to them by independent appraisers.

           2)Previous legislation  .  SB 223 (Machado; Chapter 291, Statutes  
            of 2007), an urgency statute enacted  October 2007, prohibited  
            any party with an interest in a real estate transaction from  
            improperly influencing, or attempting to improperly influence  
            an appraiser, through coercion, extortion, or bribery.


           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916)  
          319-2081