1-1 By: Wentworth S.B. No. 634
1-2 (In the Senate - Filed February 17, 1995; February 20, 1995,
1-3 read first time and referred to Committee on State Affairs;
1-4 May 1, 1995, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 7, Nays 0; May 1, 1995,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 634 By: Wentworth
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the regulation of real estate appraisers.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Section 3, Texas Appraiser Licensing and
1-13 Certification Act (Article 6573a.2, Vernon's Texas Civil Statutes),
1-14 is amended by amending Subdivision (1) and by adding Subdivisions
1-15 (15), (16), (17), (18), and (19) to read as follows:
1-16 (1) "Appraisal" means the act or process of estimating
1-17 value or an estimate of value <a written statement used in
1-18 connection with a federally related transaction that is
1-19 independently and impartially prepared by a licensed or certified
1-20 appraiser that states an opinion of the defined value of an
1-21 adequately described property as of a specific date that is
1-22 supported by the presentation and analysis of relevant market
1-23 information>.
1-24 (15) "Complete appraisal" means an appraisal performed
1-25 without invoking the departure provision.
1-26 (16) "Departure provision" means a limited departure
1-27 from a requirement of the Uniform Standards of Professional
1-28 Appraisal Practice that is:
1-29 (A) classified as a specific guideline rather
1-30 than a binding requirement; and
1-31 (B) permitted only if the result of the
1-32 departure is not confusing or misleading and the specific guideline
1-33 from which the appraiser departs is reported.
1-34 (17) "Evaluation" means an estimate of value that is
1-35 not more than a limited appraisal, may be presented in a format
1-36 that is less than a self-contained report, is prepared by a
1-37 certified or licensed real estate appraiser or other lawfully
1-38 authorized real estate professional, and includes an estimate of a
1-39 property's market value, a certification and limiting conditions,
1-40 and an analysis or the supporting information used in forming the
1-41 estimate of value.
1-42 (18) "Limited appraisal" means an appraisal in which
1-43 the departure provision is invoked.
1-44 (19) "Self-contained report" means a report that
1-45 includes sufficient information to indicate that the appraiser has
1-46 complied with the requirements of Standards 1 and 2 of the Uniform
1-47 Standards of Professional Appraiser Practice and that describes all
1-48 data necessary for the user of the appraisal to follow the
1-49 conclusions of the appraisal without referring to additional
1-50 materials.
1-51 SECTION 2. Subsection (a), Section 5, Texas Appraiser
1-52 Licensing and Certification Act (Article 6573a.2, Vernon's Texas
1-53 Civil Statutes), as amended by Chapters 416 and 980, Acts of the
1-54 73rd Legislature, 1993, is amended to read as follows:
1-55 (a) The board may:
1-56 (1) adopt rules for the licensing and certification of
1-57 real estate appraisers in this state in accordance with this Act
1-58 and consistent with, but no more stringent than, applicable federal
1-59 law;
1-60 (2) establish categories of appraiser certification
1-61 and appraiser licensing, consistent with the categories of
1-62 appraiser certification and appraiser licensing recognized by the
1-63 Appraiser Qualifications Board, the Appraisal Standards Board, and
1-64 the Appraisal Subcommittee, and prescribe qualifications for each
1-65 category that are no more stringent than the qualifications set
1-66 forth <required> by the Appraiser Qualifications Board, the
1-67 Appraisal Standards Board, and the Appraisal Subcommittee for each
1-68 category;
2-1 (3) adopt rules relating to the education and
2-2 experience requirements for certification and licensing as an
2-3 appraiser in a manner that is consistent with, but no more
2-4 stringent than, the guidelines recognized by <threshold
2-5 requirements adopted by the Appraiser Qualifications Board or> the
2-6 Appraisal Subcommittee;
2-7 (4) adopt rules relating to the qualifying examination
2-8 required for certification or licensing as an appraiser under this
2-9 Act;
2-10 (5) adopt rules requiring <establishing a code of
2-11 professional conduct and ethics for> a certified or licensed
2-12 appraiser to comply with <that meets the> standards of competency,
2-13 professional conduct, and ethics generally accepted by the
2-14 Appraisal Subcommittee and prescribed by the Uniform Standards of
2-15 Professional Appraisal Practice, as adopted by the Appraisal
2-16 Foundation;
2-17 (6) establish reasonable fees to implement this Act,
2-18 including an application fee for certification or licensing, an
2-19 examination fee, a renewal fee for a certificate or license, a
2-20 federal appraiser registry fee, and other appropriate fees;
2-21 (7) adopt rules relating to continuing education
2-22 requirements for a licensed or certified appraiser;
2-23 (8) adopt rules relating to the standards for the
2-24 development of an <a written> appraisal and the conveyance of an
2-25 appraisal report by a certified or licensed appraiser that are
2-26 consistent with <the appraisal regulations adopted by a federal
2-27 financial institution regulatory agency or> the Uniform Standards
2-28 of Professional Appraisal Practice;
2-29 (9) grant or deny an application for the certification
2-30 and licensing of a real estate appraiser; <and>
2-31 (10) request and, if necessary, compel by subpoena the
2-32 attendance of witnesses for examination under oath and the
2-33 production for inspection and copying of books, accounts, records,
2-34 papers, correspondence, documents, and other evidence relevant to
2-35 the investigation of alleged violations of this Act;<.>
2-36 (11) <(10)> institute an action in its own name in a
2-37 district court of Travis County against a person, firm,
2-38 corporation, partnership, or any other group or combination of
2-39 persons to enjoin a violation of this Act or a rule adopted by the
2-40 board under this Act with the attorney general as legal advisor to
2-41 the board to provide any necessary legal assistance;
2-42 (12) <(11)> adopt rules as necessary to conform with
2-43 the minimum written standards of the Appraisal Subcommittee by
2-44 incorporating the Uniform Standards of Professional Appraisal
2-45 Practice; and
2-46 (13) <(12)> conduct disciplinary proceedings with
2-47 regard to appraisers in this state <except in circumstances when an
2-48 appraiser is required to be licensed or certified by another state
2-49 agency to perform property appraisals>.
2-50 SECTION 3. Section 6, Texas Appraiser Licensing and
2-51 Certification Act (Article 6573a.2, Vernon's Texas Civil Statutes),
2-52 is amended by adding Subsection (l) to read as follows:
2-53 (l) If the federal government removes the requirements for
2-54 the preparation or use of an appraisal by federally regulated
2-55 financial institutions, the board shall be subject to Chapter 325,
2-56 Government Code (Texas Sunset Act), and be subject to sunset review
2-57 in the next regular session of the legislature following the date
2-58 of the federal government's action. Unless continued in existence
2-59 by that legislature as provided by that chapter, the board is
2-60 abolished and this Act expires on the 90th day after the last day
2-61 of the regular session of that legislature.
2-62 SECTION 4. Subsections (a), (c), (e), (f), and (g), Section
2-63 9, Texas Appraiser Licensing and Certification Act (Article
2-64 6573a.2, Vernon's Texas Civil Statutes), are amended to read as
2-65 follows:
2-66 (a) To become a state certified real estate appraiser, a
2-67 person must:
2-68 (1) pass the real estate appraiser certification
2-69 examination required under Section 10 of this Act;
2-70 (2) successfully complete the number and type of
3-1 classroom hours required by the guidelines of the Appraisal
3-2 Subcommittee <Appraiser Qualifications Board for the levels of
3-3 certification that may from time to time be approved>; and
3-4 (3) present evidence satisfactory to the board that
3-5 the applicant has at least the minimum number of <2,000> hours of
3-6 experience in appraisals over the specified number <a minimum> of
3-7 <two> calendar years as required by the guidelines of the Appraisal
3-8 Subcommittee.
3-9 (c) Acceptable appraisal experience for the purposes of the
3-10 determination of the qualifications of an applicant for
3-11 certification or licensing under this Act includes the categories
3-12 recognized by the guidelines of the Appraisal Subcommittee <a fee
3-13 and staff appraisal, an ad valorem tax appraisal, an appraisal
3-14 review, an appraisal analysis, real estate counseling, a highest
3-15 and best use analysis, a feasibility analysis, a feasibility study,
3-16 or teaching of appraisal courses>. Any one or any combination of
3-17 these categories may be acceptable for the completion of the
3-18 experience requirement <1,000 hours of credit each year. An
3-19 applicant may receive not more than 500 hours of credit each year
3-20 from the teaching of appraisal courses>. Experience as a real
3-21 estate lending officer of a financial institution or as a real
3-22 estate broker is acceptable experience if the experience includes
3-23 the actual performance or technical <professional> review of real
3-24 estate appraisals. An hour of experience means 60 minutes expended
3-25 in one or more of the acceptable appraisal experience areas
3-26 recognized <designated> by this Act. Calculation of the hours of
3-27 experience must be based solely on actual hours of experience.
3-28 (e) The board shall adopt a reliable method to verify the
3-29 evidence of education submitted by an applicant for certification
3-30 or licensing.
3-31 (f) The board shall adopt a reliable method to verify the
3-32 evidence of acceptable appraisal experience submitted by an
3-33 applicant for certification or licensing by relying on appropriate
3-34 sampling techniques applied to not more than five percent of the
3-35 applications received by the board. If an application is selected
3-36 to be verified, the applicant has at least 60 days after the date
3-37 of selection to prepare any records. The information required by
3-38 the board may not be more than the information the board may obtain
3-39 under Subsections (h)(1) and (2) of this section.
3-40 (g) An applicant for certification or licensing must furnish
3-41 under oath, on an affidavit form prescribed by the board, a
3-42 statement that the applicant has the required number <equivalent>
3-43 of <2,000> hours of experience in performing appraisals as set out
3-44 in the guidelines recognized by the Appraisal Subcommittee.
3-45 (h) If a consumer complaint or peer complaint is brought
3-46 against the applicant alleging fraud, incompetency, or malpractice
3-47 and the board finds the complaint is reasonable or if the board
3-48 determines other just cause exists for requiring further
3-49 information, the board may obtain the additional information or
3-50 documentation requested by:
3-51 (1) requiring the applicant to complete a form,
3-52 prescribed by the board, that includes detailed listings of
3-53 appraisal experience showing, for each appraisal claimed by the
3-54 applicant, the city or county where the appraisal was performed,
3-55 the type and description of the building or property appraised, the
3-56 approaches to value utilized in the appraisal, the actual number of
3-57 hours expended on the appraisal, and other information determined
3-58 to be appropriate by the board; or
3-59 (2) engaging in other investigative research
3-60 determined to be appropriate by the board.
3-61 (i) <(f)> An applicant for licensing or certification must
3-62 satisfy the board as to the applicant's honesty, trustworthiness,
3-63 and integrity.
3-64 (j) <(g)> An applicant for licensing or certification shall
3-65 be given credit toward fulfilling the requirements of Subsections
3-66 (a)(2) and (b)(2) of this section for classroom hours taken in the
3-67 course of becoming licensed as a real estate broker or salesman or
3-68 for taking professional development or continuing education
3-69 courses, whether as a real estate broker or salesman or as an
3-70 employee of a financial institution engaged in real estate-related
4-1 financial transactions, if the classroom hours satisfy the
4-2 requirements set forth by the guidelines recognized by the
4-3 Appraisal Subcommittee <of the Appraiser Qualifications Board>.
4-4 SECTION 5. The Texas Appraiser Licensing and Certification
4-5 Act (Article 6573a.2, Vernon's Texas Civil Statutes) is amended by
4-6 adding Section 9A to read as follows:
4-7 Sec. 9A. ALTERNATIVE METHODS OF LICENSING. (a) If an
4-8 applicant for appraiser trainee classification can demonstrate to
4-9 the board that the applicant has, after completing the applicant's
4-10 classroom education requirements, failed to secure sponsorship from
4-11 at least two certified appraisers to obtain the 2,000 hours of
4-12 acceptable experience required for licensing, the applicant may
4-13 apply to the board to take the examination under Section 10 of this
4-14 Act.
4-15 (b) An applicant under this section who passes the
4-16 examination required under Section 10 of this Act and who meets any
4-17 other requirements for licensing, except for the actual appraisal
4-18 experience requirement, shall be licensed by the board.
4-19 (c) An applicant receiving a license under Subsection (b) of
4-20 this section must complete the actual appraisal experience
4-21 requirement not later than the 60th month after the date the
4-22 license was issued. Failure to complete the appraisal experience
4-23 requirement by that date or to report completion of a portion of
4-24 the person's appraisal experience requirement each renewal period
4-25 constitutes grounds for the automatic revocation of the license.
4-26 SECTION 6. Subsections (c) and (d), Section 13, Texas
4-27 Appraiser Licensing and Certification Act (Article 6573a.2,
4-28 Vernon's Texas Civil Statutes), are amended to read as follows:
4-29 (c) The board shall collect from each licensed or certified
4-30 appraiser an annual registry fee established by the board in an
4-31 amount not to exceed <$25 or> the <maximum> amount required by the
4-32 Appraisal Subcommittee. The fee shall be transmitted to the
4-33 Appraisal Subcommittee regularly as required by federal law
4-34 <council on an annual basis>.
4-35 (d) All registry fees collected by the board shall be
4-36 deposited in the state treasury to the credit of a special fund to
4-37 be known as the appraiser registry fund. <The board shall send the
4-38 fees to the council as required by federal law.>
4-39 SECTION 7. Subsection (b), Section 14, Texas Appraiser
4-40 Licensing and Certification Act (Article 6573a.2, Vernon's Texas
4-41 Civil Statutes), is amended to read as follows:
4-42 (b) A license or certification may be renewed on payment of
4-43 a renewal fee prescribed by the board and on furnishing evidence
4-44 satisfactory to the board <and the Appraiser Qualifications Board>
4-45 that the holder of the license or certification has completed <any>
4-46 continuing education requirements that comply with the guidelines
4-47 recognized by the Appraisal Subcommittee and are imposed by rule
4-48 under this Act<, met the experience requirements of this Act, and
4-49 complied with any minimum or maximum requirements of the Appraiser
4-50 Qualifications Board>. The board shall accept as continuing
4-51 education any educational offering that complies with the
4-52 guidelines recognized by the Appraisal Subcommittee that
4-53 <continuing education> a licensed or certified appraiser was
4-54 awarded by a national appraiser organization approved by the board
4-55 as a provider of qualifying appraisal education.
4-56 SECTION 8. Subsections (c), (d), and (f), Section 15, Texas
4-57 Appraiser Licensing and Certification Act (Article 6573a.2,
4-58 Vernon's Texas Civil Statutes), are amended to read as follows:
4-59 (c) A person registered with the board under this section
4-60 may appraise real property in this state without holding a license
4-61 or certification issued under this Act if:
4-62 (1) the state, commonwealth, or territory licensing
4-63 and certification program under which the person holds a license or
4-64 certification has not been disapproved by the Appraisal
4-65 Subcommittee; and
4-66 (2) <the real property being appraised is part of a
4-67 federally related transaction; and>
4-68 <(3)> the appraiser's business in this state is of a
4-69 temporary nature not to exceed 60 days.
4-70 (d) If the board determines that another state has
5-1 <substantially equivalent> certification or licensure requirements
5-2 that have not been disapproved by the Appraisal Subcommittee <to
5-3 those of this state>, an applicant who is certified or licensed
5-4 under the laws of that state may obtain certification as a state
5-5 certified real estate appraiser or licensure as a state licensed
5-6 real estate appraiser in this state under terms and conditions set
5-7 <determined> by the board. The terms and conditions must comply
5-8 with the minimum criteria for certification or licensure recognized
5-9 <issued> by the Appraisal Subcommittee <Appraiser Qualifications
5-10 Board of the Appraisal Foundation>. The fee charged to an
5-11 appraiser from another state and the form submitted by the
5-12 appraiser for reciprocity must be comparable to the fee and form
5-13 required by the state where the appraiser is certified or licensed.
5-14 (f) An application may not be accepted from <for> an
5-15 applicant from a state that refuses to offer reciprocal treatment
5-16 to residents of this state who are certified or licensed real
5-17 estate appraisers.
5-18 SECTION 9. Subsection (b), Section 18, Texas Appraiser
5-19 Licensing and Certification Act (Article 6573a.2, Vernon's Texas
5-20 Civil Statutes), is amended to read as follows:
5-21 (b) This Act does not prohibit:
5-22 (1) a real estate broker or salesman licensed under
5-23 The Real Estate License Act (Article 6573a, Vernon's Texas Civil
5-24 Statutes) but not licensed or certified under this Act from
5-25 performing an appraisal in a nonfederally related transaction;
5-26 (2) the requirement of a real estate broker's or
5-27 salesman's license for an appraisal in nonfederally related
5-28 transactions by a person not licensed or certified under this Act;
5-29 <or>
5-30 (3) a real estate broker or salesman licensed under
5-31 The Real Estate License Act (Article 6573a, Vernon's Texas Civil
5-32 Statutes) <and its subsequent amendments> from giving an opinion in
5-33 the ordinary course of the broker's or salesman's business to a
5-34 potential seller or third party as to the recommended listing price
5-35 of real estate or to a potential purchaser or third party as to the
5-36 recommended purchase price of real estate if the opinion given
5-37 under this subdivision is not referred to as an appraisal; or
5-38 (4) a person duly authorized by law from performing or
5-39 providing an evaluation of real property for another.
5-40 SECTION 10. Subsection (a), Section 21, Texas Appraiser
5-41 Licensing and Certification Act (Article 6573a.2, Vernon's Texas
5-42 Civil Statutes), is amended to read as follows:
5-43 (a) A person commits an offense if the person knowingly or
5-44 intentionally violates Section 4(c) of this Act or knowingly or
5-45 intentionally furnishes false information in connection with an
5-46 affidavit filed under Section 9 <9(e)> of this Act.
5-47 SECTION 11. This Act takes effect September 1, 1995.
5-48 SECTION 12. The importance of this legislation and the
5-49 crowded condition of the calendars in both houses create an
5-50 emergency and an imperative public necessity that the
5-51 constitutional rule requiring bills to be read on three several
5-52 days in each house be suspended, and this rule is hereby suspended.
5-53 * * * * *