BILL ANALYSIS S.B. 634 By: Wentworth (Counts) 5-16-95 Committee Report (Unamended) BACKGROUND Guidelines that are amended and adopted by the Appraiser Qualifications Board and recognized by the Appraisal Subcommittee necessitate that current Texas statutes be amended to comply with the revised guidelines regulating real estate appraisers. PURPOSE S.B. 634 sets forth regulatory provisions of real estate appraisers. RULEMAKING AUTHORITY It is the committee's opinion that rulemaking authority is granted to the Texas Appraiser Licensing and Certification Board under SECTION 2, and SECTION 4 of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 3, Article 6573a.2, V.T.C.S. (Texas Appraiser Licensing and Certification Act), by amending Subdivision (1) and adding Subdivisions (15), (16), (17), (18), and (19), to redefine "appraisal," and to define "complete appraisal," "departure provision," "evaluation," "limited appraisal," and "self-contained report." SECTION 2. Amends Section 5(a), Article 6573a.2, V.T.C.S., to set forth authorizations for the Texas Appraiser Licensing and Certification Board (board). SECTION 3. Amends Section 6, Article 6573a.2, V.T.C.S., by adding Subsection (l) to require the board to be subject to Chapter 325, Government Code (Texas Sunset Act), and be subject to sunset review in the next regular session of the legislature following the date of the federal government's action, if the federal government removes the requirements for the preparation or use of an appraisal by federally regulated financial institutions. Provides that the board is abolished and this Act expires on the 90th day after the last day of the regular session of that legislature unless continued in existence by that legislature as provided by that chapter. SECTION 4. Amends Sections 9(a), (c) and (e)-(g), Article 6573a.2, V.T.C.S., as follows: (a) Sets forth requirements for a person to become a state certified real estate appraiser. (c) Provides that acceptable appraisal experience includes the categories recognized by the guidelines of the Appraisal Subcommittee, rather than various appraisals and analyses. Authorizes any combination of the categories to be acceptable for completion of the experience requirement, rather than 1,000 hours of credit each year. Deletes a provision prohibiting an applicant from receiving more than 500 hours of credit each year. Makes a nonsubstantive change. (e) Requires the board to adopt a reliable method to verify the evidence of education submitted by an applicant for certification or licensing. (f) Requires the board to adopt a reliable method to verify the evidence of acceptable appraisal experience submitted by an applicant for certification or licensing by relying on appropriate sampling techniques applied to not more than five percent of the applications received by the board. Provides that the applicant has at least 60 days after the date of selection to prepare any records, if an application is selected to be verified. Prohibits the information required by the board from being more than the information the board may obtain under Subsections (h)(1) and (2) of this section. (g) Requires an applicant for certification or licensing to furnish under oath a statement that the applicant has the required number, rather than the 2,000, hours of experience in performing appraisals as set out in the guidelines recognized by the Appraisal Subcommittee. (h) Authorizes the board to obtain information, if a consumer complaint or peer complaint that is brought against an applicant alleging fraud, incompetency, or malpractice and the board finds the complaint is reasonable or if the board determines other just cause exists for requiring further information. Makes conforming changes. (i) and (j) Redesignate Subdivisions (f) and (g). Makes conforming changes. SECTION 5. Amends Article 6573a.2, V.T.C.S., by adding Section 9A, as follows: Sec. 9A. ALTERNATIVE METHODS OF LICENSING. (a) Authorizes an applicant to apply to the board to take the examination under Section 10 of this Act, if an applicant for appraiser trainee classification can demonstrate to the board that the applicant has, after completing the applicant's classroom education requirements, failed to secure sponsorship from at least two certified appraisers to obtain the 2,000 hours of acceptable experience required for licensing. (b) Requires an applicant under this section who passes the examination required under Section 10 of this Act and who meets any other requirements for licensing, except for the actual appraisal experience requirement, to be licensed by the board. (c) Requires an applicant receiving a license under Subsection (b) of this section to complete the actual appraisal experience requirement not later than the 60th month after the date the license was issued. Provides that failure to complete the appraisal experience requirement by that date or to report completion of a portion of the person's appraisal experience requirement each renewal period constitutes grounds for the automatic revocation of the license. SECTION 6. Amends Sections 13(c) and (d), Article 6573a.2, V.T.C.S., as follows: (c) Deletes a requirement that the board collect from each licensed or certified appraiser an annual registry fee established by the board in an amount not to exceed $25 or the maximum amount required by the Appraisal Subcommittee. Requires the fee to be transmitted to the Appraisal Subcommittee regularly as required by federal law, rather than the Federal Financial Institutions Examination Council (council), on an annual basis. (d) Deletes a requirement that the board sent the fees to the council as required by federal law. SECTION 7. Amends Section 14(b), Article 6573a.2, V.T.C.S., to require the board to accept as continuing education any educational offering that complies with the guidelines recognized by the Appraisal Subcommittee that a licensed or certified appraiser was awarded by a national appraiser organization. Makes conforming changes. SECTION 8. Amends Sections 15(c), (d), and (f), Article 6573a.2, V.T.C.S., as follows: (c) Deletes real property being appraised as part of a federally related transaction from the types of real property a registered person is authorized to appraise without holding a license. (d) Authorizes an applicant who is certified or licensed under the laws of another state, of which the Appraisal Subcommittee has not disapproved the certification or licensure requirements, to obtain certification as a state certified or licensed real estate appraiser. Requires the terms and conditions to comply with the minimum criteria for certification or licensure recognized by the Appraisal Subcommittee, rather than the Appraiser Qualifications Board of the Appraisal Foundation. (f) Prohibits acceptance of an application from an applicant from a state that refuses to offer reciprocal treatment to residents of this state who are certified or licensed real estate appraisers. SECTION 9. Amends Section 18(b), Article 6573a.2, V.T.C.S., to provide that this Act does not prohibit a person duly authorized by law from performing or providing an evaluation of real property for another. SECTION 10. Amends Section 21(a), Article 6573a.2, V.T.C.S., to provide that a person commits an offense if the person violates Section 4(c) or furnished false information in connection with an affidavit filed under Section 9 of this Act. SECTION 11. Effective date: September 1, 1995. SECTION 12. Emergency clause. SUMMARY OF COMMITTEE ACTION SB 634 was considered in a Formal Meeting on May 16, 1995. The Chair laid out SB 634, and explained the bill. There was no objection. Rep. Jones moved that the full committee adopt SB 634, and that it be reported favorably to the full House with the recommendation that it do pass and be printed and placed on the Local and Consent Calendar. The motion prevailed by the following vote: AYES: 7, NAYS: 0, ABSENT: 2.