By: Wentworth S.B. No. 634
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the regulation of real estate appraisers.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Section 3, Texas Appraiser Licensing and
1-4 Certification Act (Article 6573a.2, Vernon's Texas Civil Statutes),
1-5 is amended by amending Subdivision (1) and by adding Subdivisions
1-6 (15), (16), (17), (18), and (19) to read as follows:
1-7 (1) "Appraisal" means the act or process of estimating
1-8 value or an estimate of value <a written statement used in
1-9 connection with a federally related transaction that is
1-10 independently and impartially prepared by a licensed or certified
1-11 appraiser that states an opinion of the defined value of an
1-12 adequately described property as of a specific date that is
1-13 supported by the presentation and analysis of relevant market
1-14 information>.
1-15 (15) "Complete appraisal" means an appraisal performed
1-16 without invoking the departure provision.
1-17 (16) "Departure provision" means a limited departure
1-18 from a requirement of the Uniform Standards of Professional
1-19 Appraisal Practice that is:
1-20 (A) classified as a specific guideline rather
1-21 than a binding requirement; and
1-22 (B) permitted only if the result of the
1-23 departure is not confusing or misleading and the specific guideline
1-24 from which the appraiser departs is reported.
2-1 (17) "Evaluation" means an estimate of value that is
2-2 not more than a limited appraisal, may be presented in a format
2-3 that is less than a self-contained report, is prepared by a
2-4 certified or licensed real estate appraiser or other lawfully
2-5 authorized real estate professional, and includes an estimate of a
2-6 property's market value, a certification and limiting conditions,
2-7 and an analysis or the supporting information used in forming the
2-8 estimate of value.
2-9 (18) "Limited appraisal" means an appraisal in which
2-10 the departure provision is invoked.
2-11 (19) "Self-contained report" means a report that
2-12 includes sufficient information to indicate that the appraiser has
2-13 complied with the requirements of Standards 1 and 2 of the Uniform
2-14 Standards of Professional Appraiser Practice and that describes all
2-15 data necessary for the user of the appraisal to follow the
2-16 conclusions of the appraisal without referring to additional
2-17 materials.
2-18 SECTION 2. Subsection (a), Section 5, Texas Appraiser
2-19 Licensing and Certification Act (Article 6573a.2, Vernon's Texas
2-20 Civil Statutes), as amended by Chapters 416 and 980, Acts of the
2-21 73rd Legislature, 1993, is amended to read as follows:
2-22 (a) The board may:
2-23 (1) adopt rules for the licensing and certification of
2-24 real estate appraisers in this state in accordance with this Act
2-25 and consistent with, but no more stringent than, applicable federal
2-26 law;
2-27 (2) establish categories of appraiser certification
3-1 and appraiser licensing, consistent with the categories of
3-2 appraiser certification and appraiser licensing recognized by the
3-3 Appraiser Qualifications Board, the Appraisal Standards Board, and
3-4 the Appraisal Subcommittee, and prescribe qualifications for each
3-5 category that are no more stringent than the qualifications set
3-6 forth <required> by the Appraiser Qualifications Board, the
3-7 Appraisal Standards Board, and the Appraisal Subcommittee for each
3-8 category;
3-9 (3) adopt rules relating to the education and
3-10 experience requirements for certification and licensing as an
3-11 appraiser in a manner that is consistent with, but no more
3-12 stringent than, the guidelines recognized by <threshold
3-13 requirements adopted by the Appraiser Qualifications Board or> the
3-14 Appraisal Subcommittee;
3-15 (4) adopt rules relating to the qualifying examination
3-16 required for certification or licensing as an appraiser under this
3-17 Act;
3-18 (5) adopt rules requiring <establishing a code of
3-19 professional conduct and ethics for> a certified or licensed
3-20 appraiser to comply with <that meets the> standards of competency,
3-21 professional conduct, and ethics generally accepted by the
3-22 Appraisal Subcommittee and prescribed by the Uniform Standards of
3-23 Professional Appraisal Practice, as adopted by the Appraisal
3-24 Foundation;
3-25 (6) establish reasonable fees to implement this Act,
3-26 including an application fee for certification or licensing, an
3-27 examination fee, a renewal fee for a certificate or license, a
4-1 federal appraiser registry fee, and other appropriate fees;
4-2 (7) adopt rules relating to continuing education
4-3 requirements for a licensed or certified appraiser;
4-4 (8) adopt rules relating to the standards for the
4-5 development of an <a written> appraisal and the conveyance of an
4-6 appraisal report by a certified or licensed appraiser that are
4-7 consistent with <the appraisal regulations adopted by a federal
4-8 financial institution regulatory agency or> the Uniform Standards
4-9 of Professional Appraisal Practice;
4-10 (9) grant or deny an application for the certification
4-11 and licensing of a real estate appraiser; <and>
4-12 (10) request and, if necessary, compel by subpoena the
4-13 attendance of witnesses for examination under oath and the
4-14 production for inspection and copying of books, accounts, records,
4-15 papers, correspondence, documents, and other evidence relevant to
4-16 the investigation of alleged violations of this Act;<.>
4-17 (11) <(10)> institute an action in its own name in a
4-18 district court of Travis County against a person, firm,
4-19 corporation, partnership, or any other group or combination of
4-20 persons to enjoin a violation of this Act or a rule adopted by the
4-21 board under this Act with the attorney general as legal advisor to
4-22 the board to provide any necessary legal assistance;
4-23 (12) <(11)> adopt rules as necessary to conform with
4-24 the minimum written standards of the Appraisal Subcommittee by
4-25 incorporating the Uniform Standards of Professional Appraisal
4-26 Practice; and
4-27 (13) <(12)> conduct disciplinary proceedings with
5-1 regard to appraisers in this state <except in circumstances when an
5-2 appraiser is required to be licensed or certified by another state
5-3 agency to perform property appraisals>.
5-4 SECTION 3. Section 6, Texas Appraiser Licensing and
5-5 Certification Act (Article 6573a.2, Vernon's Texas Civil Statutes),
5-6 is amended by adding Subsection (l) to read as follows:
5-7 (l) If the federal government removes the requirements for
5-8 the preparation or use of an appraisal by federally regulated
5-9 financial institutions, the board shall be subject to Chapter 325,
5-10 Government Code (Texas Sunset Act), and be subject to sunset review
5-11 in the next regular session of the legislature following the date
5-12 of the federal government's action. Unless continued in existence
5-13 by that legislature as provided by that chapter, the board is
5-14 abolished and this Act expires on the 90th day after the last day
5-15 of the regular session of that legislature.
5-16 SECTION 4. Subsections (a), (c), (e), (f), and (g), Section
5-17 9, Texas Appraiser Licensing and Certification Act (Article
5-18 6573a.2, Vernon's Texas Civil Statutes), are amended to read as
5-19 follows:
5-20 (a) To become a state certified real estate appraiser, a
5-21 person must:
5-22 (1) pass the real estate appraiser certification
5-23 examination required under Section 10 of this Act;
5-24 (2) successfully complete the number and type of
5-25 classroom hours required by the guidelines of the Appraisal
5-26 Subcommittee <Appraiser Qualifications Board for the levels of
5-27 certification that may from time to time be approved>; and
6-1 (3) present evidence satisfactory to the board that
6-2 the applicant has at least the minimum number of <2,000> hours of
6-3 experience in appraisals over the specified number <a minimum> of
6-4 <two> calendar years as required by the guidelines of the Appraisal
6-5 Subcommittee.
6-6 (c) Acceptable appraisal experience for the purposes of the
6-7 determination of the qualifications of an applicant for
6-8 certification or licensing under this Act includes the categories
6-9 recognized by the guidelines of the Appraisal Subcommittee <a fee
6-10 and staff appraisal, an ad valorem tax appraisal, an appraisal
6-11 review, an appraisal analysis, real estate counseling, a highest
6-12 and best use analysis, a feasibility analysis, a feasibility study,
6-13 or teaching of appraisal courses>. Any one or any combination of
6-14 these categories may be acceptable for the completion of the
6-15 experience requirement <1,000 hours of credit each year. An
6-16 applicant may receive not more than 500 hours of credit each year
6-17 from the teaching of appraisal courses>. Experience as a real
6-18 estate lending officer of a financial institution or as a real
6-19 estate broker is acceptable experience if the experience includes
6-20 the actual performance or technical <professional> review of real
6-21 estate appraisals. An hour of experience means 60 minutes expended
6-22 in one or more of the acceptable appraisal experience areas
6-23 recognized <designated> by this Act. Calculation of the hours of
6-24 experience must be based solely on actual hours of experience.
6-25 (e) The board shall adopt a reliable method to verify the
6-26 evidence of education submitted by an applicant for certification
6-27 or licensing.
7-1 (f) The board shall adopt a reliable method to verify the
7-2 evidence of acceptable appraisal experience submitted by an
7-3 applicant for certification or licensing by relying on appropriate
7-4 sampling techniques applied to not more than five percent of the
7-5 applications received by the board. If an application is selected
7-6 to be verified, the applicant has at least 60 days after the date
7-7 of selection to prepare any records. The information required by
7-8 the board may not be more than the information the board may obtain
7-9 under Subsections (h)(1) and (2) of this section.
7-10 (g) An applicant for certification or licensing must furnish
7-11 under oath, on an affidavit form prescribed by the board, a
7-12 statement that the applicant has the required number <equivalent>
7-13 of <2,000> hours of experience in performing appraisals as set out
7-14 in the guidelines recognized by the Appraisal Subcommittee.
7-15 (h) If a consumer complaint or peer complaint is brought
7-16 against the applicant alleging fraud, incompetency, or malpractice
7-17 and the board finds the complaint is reasonable or if the board
7-18 determines other just cause exists for requiring further
7-19 information, the board may obtain the additional information or
7-20 documentation requested by:
7-21 (1) requiring the applicant to complete a form,
7-22 prescribed by the board, that includes detailed listings of
7-23 appraisal experience showing, for each appraisal claimed by the
7-24 applicant, the city or county where the appraisal was performed,
7-25 the type and description of the building or property appraised, the
7-26 approaches to value utilized in the appraisal, the actual number of
7-27 hours expended on the appraisal, and other information determined
8-1 to be appropriate by the board; or
8-2 (2) engaging in other investigative research
8-3 determined to be appropriate by the board.
8-4 (i) <(f)> An applicant for licensing or certification must
8-5 satisfy the board as to the applicant's honesty, trustworthiness,
8-6 and integrity.
8-7 (j) <(g)> An applicant for licensing or certification shall
8-8 be given credit toward fulfilling the requirements of Subsections
8-9 (a)(2) and (b)(2) of this section for classroom hours taken in the
8-10 course of becoming licensed as a real estate broker or salesman or
8-11 for taking professional development or continuing education
8-12 courses, whether as a real estate broker or salesman or as an
8-13 employee of a financial institution engaged in real estate-related
8-14 financial transactions, if the classroom hours satisfy the
8-15 requirements set forth by the guidelines recognized by the
8-16 Appraisal Subcommittee <of the Appraiser Qualifications Board>.
8-17 SECTION 5. The Texas Appraiser Licensing and Certification
8-18 Act (Article 6573a.2, Vernon's Texas Civil Statutes) is amended by
8-19 adding Section 9A to read as follows:
8-20 Sec. 9A. ALTERNATIVE METHODS OF LICENSING. (a) If an
8-21 applicant for appraiser trainee classification can demonstrate to
8-22 the board that the applicant has, after completing the applicant's
8-23 classroom education requirements, failed to secure sponsorship from
8-24 at least two certified appraisers to obtain the 2,000 hours of
8-25 acceptable experience required for licensing, the applicant may
8-26 apply to the board to take the examination under Section 10 of this
8-27 Act.
9-1 (b) An applicant under this section who passes the
9-2 examination required under Section 10 of this Act and who meets any
9-3 other requirements for licensing, except for the actual appraisal
9-4 experience requirement, shall be licensed by the board.
9-5 (c) An applicant receiving a license under Subsection (b) of
9-6 this section must complete the actual appraisal experience
9-7 requirement not later than the 60th month after the date the
9-8 license was issued. Failure to complete the appraisal experience
9-9 requirement by that date or to report completion of a portion of
9-10 the person's appraisal experience requirement each renewal period
9-11 constitutes grounds for the automatic revocation of the license.
9-12 SECTION 6. Subsections (c) and (d), Section 13, Texas
9-13 Appraiser Licensing and Certification Act (Article 6573a.2,
9-14 Vernon's Texas Civil Statutes), are amended to read as follows:
9-15 (c) The board shall collect from each licensed or certified
9-16 appraiser an annual registry fee established by the board in an
9-17 amount not to exceed <$25 or> the <maximum> amount required by the
9-18 Appraisal Subcommittee. The fee shall be transmitted to the
9-19 Appraisal Subcommittee regularly as required by federal law
9-20 <council on an annual basis>.
9-21 (d) All registry fees collected by the board shall be
9-22 deposited in the state treasury to the credit of a special fund to
9-23 be known as the appraiser registry fund. <The board shall send the
9-24 fees to the council as required by federal law.>
9-25 SECTION 7. Subsection (b), Section 14, Texas Appraiser
9-26 Licensing and Certification Act (Article 6573a.2, Vernon's Texas
9-27 Civil Statutes), is amended to read as follows:
10-1 (b) A license or certification may be renewed on payment of
10-2 a renewal fee prescribed by the board and on furnishing evidence
10-3 satisfactory to the board <and the Appraiser Qualifications Board>
10-4 that the holder of the license or certification has completed <any>
10-5 continuing education requirements that comply with the guidelines
10-6 recognized by the Appraisal Subcommittee and are imposed by rule
10-7 under this Act<, met the experience requirements of this Act, and
10-8 complied with any minimum or maximum requirements of the Appraiser
10-9 Qualifications Board>. The board shall accept as continuing
10-10 education any educational offering that complies with the
10-11 guidelines recognized by the Appraisal Subcommittee that
10-12 <continuing education> a licensed or certified appraiser was
10-13 awarded by a national appraiser organization approved by the board
10-14 as a provider of qualifying appraisal education.
10-15 SECTION 8. Subsections (c), (d), and (f), Section 15, Texas
10-16 Appraiser Licensing and Certification Act (Article 6573a.2,
10-17 Vernon's Texas Civil Statutes), are amended to read as follows:
10-18 (c) A person registered with the board under this section
10-19 may appraise real property in this state without holding a license
10-20 or certification issued under this Act if:
10-21 (1) the state, commonwealth, or territory licensing
10-22 and certification program under which the person holds a license or
10-23 certification has not been disapproved by the Appraisal
10-24 Subcommittee; and
10-25 (2) <the real property being appraised is part of a
10-26 federally related transaction; and>
10-27 <(3)> the appraiser's business in this state is of a
11-1 temporary nature not to exceed 60 days.
11-2 (d) If the board determines that another state has
11-3 <substantially equivalent> certification or licensure requirements
11-4 that have not been disapproved by the Appraisal Subcommittee <to
11-5 those of this state>, an applicant who is certified or licensed
11-6 under the laws of that state may obtain certification as a state
11-7 certified real estate appraiser or licensure as a state licensed
11-8 real estate appraiser in this state under terms and conditions set
11-9 <determined> by the board. The terms and conditions must comply
11-10 with the minimum criteria for certification or licensure recognized
11-11 <issued> by the Appraisal Subcommittee <Appraiser Qualifications
11-12 Board of the Appraisal Foundation>. The fee charged to an
11-13 appraiser from another state and the form submitted by the
11-14 appraiser for reciprocity must be comparable to the fee and form
11-15 required by the state where the appraiser is certified or licensed.
11-16 (f) An application may not be accepted from <for> an
11-17 applicant from a state that refuses to offer reciprocal treatment
11-18 to residents of this state who are certified or licensed real
11-19 estate appraisers.
11-20 SECTION 9. Subsection (b), Section 18, Texas Appraiser
11-21 Licensing and Certification Act (Article 6573a.2, Vernon's Texas
11-22 Civil Statutes), is amended to read as follows:
11-23 (b) This Act does not prohibit:
11-24 (1) a real estate broker or salesman licensed under
11-25 The Real Estate License Act (Article 6573a, Vernon's Texas Civil
11-26 Statutes) but not licensed or certified under this Act from
11-27 performing an appraisal in a nonfederally related transaction;
12-1 (2) the requirement of a real estate broker's or
12-2 salesman's license for an appraisal in nonfederally related
12-3 transactions by a person not licensed or certified under this Act;
12-4 <or>
12-5 (3) a real estate broker or salesman licensed under
12-6 The Real Estate License Act (Article 6573a, Vernon's Texas Civil
12-7 Statutes) <and its subsequent amendments> from giving an opinion in
12-8 the ordinary course of the broker's or salesman's business to a
12-9 potential seller or third party as to the recommended listing price
12-10 of real estate or to a potential purchaser or third party as to the
12-11 recommended purchase price of real estate if the opinion given
12-12 under this subdivision is not referred to as an appraisal; or
12-13 (4) a person duly authorized by law from performing or
12-14 providing an evaluation of real property for another.
12-15 SECTION 10. Subsection (a), Section 21, Texas Appraiser
12-16 Licensing and Certification Act (Article 6573a.2, Vernon's Texas
12-17 Civil Statutes), is amended to read as follows:
12-18 (a) A person commits an offense if the person knowingly or
12-19 intentionally violates Section 4(c) of this Act or knowingly or
12-20 intentionally furnishes false information in connection with an
12-21 affidavit filed under Section 9 <9(e)> of this Act.
12-22 SECTION 11. This Act takes effect September 1, 1995.
12-23 SECTION 12. The importance of this legislation and the
12-24 crowded condition of the calendars in both houses create an
12-25 emergency and an imperative public necessity that the
12-26 constitutional rule requiring bills to be read on three several
12-27 days in each house be suspended, and this rule is hereby suspended.