BILL ANALYSIS �
AB 2519
Page 1
Date of Hearing: April 17, 2012
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 2519 (Bill Berryhill) - As Introduced: February 24, 2012
SUBJECT : Real estate appraisers: licensing.
SUMMARY : Specifies a number of required or discretionary
disciplinary actions to be taken by the Office of Real Estate
Appraisers (OREA) against its licensees, and makes other changes
to law governing real estate appraisers and appraisal management
companies (AMCs). Specifically, this bill :
1)Provides that a real estate appraiser's license shall not be
renewed prior to the satisfactory completion of an education
course imposed by a citation, unless the citation provides for
a completion date that is subsequent to the license renewal
date.
2)Provides that the suspension, expiration, or forfeiture of a
license or certificate of registration issued by OREA, or its
suspension, forfeiture, or cancellation by order of OREA or by
order of a court of law, or its surrender without the written
consent of OREA, shall not deprive OREA of its authority to
institute or continue a disciplinary proceeding against the
licensee or registrant, or to enter an order suspending or
revoking the license or certificate of registration, or
otherwise taking disciplinary action against the licensee or
registrant, as specified.
3)Repeals existing law providing that a holder of a valid real
estate broker license shall be deemed to have completed the
experience requirements for licensure upon proof of
accumulating 1,000 hours of experience in the valuation of
real property.
4)Deletes reference to the Resolution Trust Corporation.
5)Requires each real estate appraiser license applicant and each
controlling person of each applicant for registration as an
AMC to submit to the Department of Justice (DOJ)
fingerprinting images and information via LiveScan. If the
applicant is located out of state, the applicant shall include
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his or her fingerprint card with the application package and
OREA shall submit the fingerprint cards to DOJ.
6)Adds employee appraisers of AMCs to existing law requirements
that apply to AMC independent contractor appraisers, and makes
conforming changes.
7)Allows an appraiser to voluntarily provide his or her digital
signature or seal to another person only to the extent
permissible under the Uniform Standards of Professional
Appraiser Practice (USPAP).
8)Deletes a requirement that issuance-related fees be paid at
the time the issuance application is submitted, deletes a
provision allowing payment of fees by government purchase
order, and makes conforming changes.
9)Specifies that an applicant for licensure shall not be
eligible to have a license issued unless he or she notifies
OREA within one year of successful completion of a required
examination.
EXISTING LAW
1)Provides for the licensure and regulation of real estate
appraisers and the certification of AMCs by OREA within the
Business, Transportation and Housing Agency (BTH).
2)Authorizes the Director of OREA (Director) to adopt
regulations governing the process and procedure of licensing
and disciplining real estate appraisers, as specified.
3)Authorizes the Director to issue a citation to a licensee or
course provider that may impose a requirement to complete an
education course or courses, as specified. If the licensee
fails to satisfactorily or timely complete the required
education course, the license is automatically suspended.
4)Authorizes OREA to publish a summary of public disciplinary
actions against licensees and registrants, including
resignations while under investigation.
5)Provides that a holder of a valid real estate broker license
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shall be deemed to have completed the experience requirements
for licensure, upon proof that he or she has accumulated 1,000
hours of experience in the valuation of real property.
6)Requires fingerprinting and background checks by DOJ of
applicants for real estate appraiser licenses and each
controlling person of an applicant for registration as an AMC.
7)Requires AMCs to comply with specified standards regarding
appraisers who act as independent contractors, including
standards relating to licensure, performance of appraisal
services, and appraisal reports.
8)Prohibits a registered AMC from requiring an appraiser to
provide the AMC with the appraiser's digital signature or
seal. An appraiser may voluntarily provide his or her digital
signature or seal to another person.
9)Requires licensing and issuance-related fees to be paid to
OREA at the time of submitting the application and allows fees
to be paid, among other means, by government purchase order.
10)Requires applications for a license be submitted to OREA
within one year of the successful completion of a required
examination.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author, "AB 2519
proposes technical changes to the appraiser licensing law which
clarify enforcement powers, modernize the statutes and in some
cases are necessary to comply with federal law."
Background . The OREA 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.
This bill, sponsored by the California Government Relations
Subcommittee of the Appraisal Institute, makes several
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non-controversial changes to law governing OREA and its
licensees.
This bill provides that a license will not be renewed if the
licensee has not completed continuing education mandated in an
enforcement citation. OREA has been advised by legal counsel
that OREA may not automatically suspend a license for failure to
comply with the terms of a final disciplinary order, although it
can refuse to renew a license if a fine is not paid. Adding
this provision will strengthen OREA's ability to enforce terms
of citations.
This bill provides that the suspension, expiration or forfeiture
of a license or certification does not deprive OREA of the power
to institute or continue disciplinary proceedings. OREA
indicates that this clarification is necessary to allow
discipline against licensees who voluntarily surrender a license
to avoid investigations.
This bill repeals language in current law that provides that
holders of a valid real estate broker's license may receive
credit for appraisal license application experience requirements
if they provide proof of 1,000 hours of experience in the
valuation of real property. This "broker credit" language has
been in the appraiser licensing law since its inception in the
early 1990s. It was intended to recognize experience in
preparing broker's opinions of value to qualify for the
appraiser license level. OREA reports that 69 individuals
possess an appraiser license based upon real estate broker
credit. However, federal law currently does not permit
individuals holding an appraiser license based upon broker
credit to perform appraisals for federally related transactions,
which are the only transactions for which a state appraisal
license or certificate is required. In other words, these 69
individuals may no longer perform appraisals for federally
related transactions. OREA further indicates that these
individuals will no longer be permitted to renew their licenses
at all after 2014, pursuant to the Dodd-Frank Wall Street Reform
and Consumer Protection Act. Thus, the change in this section
conforms to federal law.
This bill deletes a reference to the Resolution Trust
Corporation, as the entity ceased to exist 15 years ago.
This bill changes language relating to fingerprints, to clarify
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that in-state applicants must submit fingerprints via LiveScan,
while out-of-state applicants must submit fingerprint cards with
applications, which OREA then submits to DOJ.
This bill adds references to "employee appraiser" to existing
law regulating AMCs. AMCs emerged in the appraisal profession
after the appraiser licensing law was enacted in the early
1990s. Before the emergence of AMCs, banks and other lenders
maintained lists of approved appraisers and contracted directly
with appraisers for services. More frequently now, lenders
maintain contracts with AMCs, which in turn contract with
appraisers for these services. While most AMCs utilize
independent contractor appraisers for services, they may also
have employee appraisers on staff to appraise property or review
the appraisals submitted by others. OREA indicates that this
bill clarifies that employee appraisers of AMCs must comply with
the same standard as independent contractor appraisers.
This bill allows appraisers to voluntarily provide their digital
signature or seal to the extent permissible under USPAP. This
is a technical change, as state licensing law expressly
incorporates USPAP as the standards to which all appraisers must
comply.
This bill makes technical changes to sections relating to fees.
OREA indicates that the current language in the statutes has
proven very confusing to licensees, resulting in significant
staffing resources dedicated to processing reimbursements for
overpayments. These changes are intended to add clarity for
licensees, with no changes in the amounts that licensees must
pay.
Previous legislation .
SB 706 (Price) Chapter 712, Statutes of 2011, makes numerous
enforcement changes to the Department of Real Estate and the
OREA, requires specified licensing boards to post information
about licensees on the Internet, and makes updating and
conforming changes.
AB 33 (Nava) of 2009 proposed to consolidate the OREA with the
DRE. The bill also proposed a number of other changes,
including a complete reorganization of several departments in
BTH. This bill was amended to address a different subject.
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REGISTERED SUPPORT / OPPOSITION :
Support
California Government Relations Subcommittee of the Appraisal
Institute (sponsor)
Opposition
None on file.
Analysis Prepared by : Angela Mapp / B.,P. & C.P. / (916)
319-3301