| TO: | Honorable John Carona, Chair, Senate Committee on Business & Commerce |
| FROM: | John S O'Brien, Director, Legislative Budget Board |
| IN RE: | SB734 by Carona (Relating to the registration and regulation of appraisal management companies; providing administrative penalties.), As Introduced |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2012 | $0 |
| 2013 | $0 |
| 2014 | $0 |
| 2015 | $0 |
| 2016 | $0 |
| Fiscal Year | Probable (Cost) from General Revenue Fund 1 |
Probable Revenue Gain from General Revenue Fund 1 |
Change in Number of State Employees from FY 2011 |
|---|---|---|---|
| 2012 | ($454,579) | $454,579 | 5.0 |
| 2013 | ($376,628) | $376,628 | 5.0 |
| 2014 | ($376,637) | $376,637 | 5.0 |
| 2015 | ($376,646) | $376,646 | 5.0 |
| 2016 | ($376,655) | $376,655 | 5.0 |
The bill amends the Occupations Code relating to the registration and regulation of appraisal management companies; providing administrative penalties.
The bill would establish the Texas Appraiser Licensing and Certification Board (TALCB) to oversee appraisal management companies, which the bill defines as a party, authorized either by a creditor of a loan secured by a consumer's principal dwelling or by an underwriter or other principal in the secondary mortgage markets, that performs appraisal management services in connection with valuing properties collateralizing mortgage loans or mortgages incorporated in a securitization. The TALCB would register and regulate appraisal management companies; levy and collect a registration or renewal application fee sufficient to cover administrative costs but not more than $2,500; and collect a national registry fee annually from each registered company, deposit the fees to new GR Account—Appraiser Registry, and send the fees to the appraisal subcommittee of the Federal Financial Institutions Examination Council. The bill would require the agency to issue a unique registration number to each appraisal management company and publish annually a list of the registered companies. The bill would allow the agency to assess an administrative penalty not to exceed $25,000 per violation.
The bill would also require the Texas Appraiser Licensing and Certification Board to adopt rules, fees, and forms no later than January 1, 2012. The bill would take effect September 1, 2011. Section 1104.101 and Subchapter F, Chapter 1104, Occupations Code would take effect March 1, 2012 under the provisions of the bill.
For the purposes of this analysis, TALCB estimates that 180 appraisal management companies (AMCs) would be registered in Texas. The agency estimates that the base registration fee for each AMC to cover costs of administering the program would be approximately $2,081 in FY2012 and $2,065 in subsequent years. In addition, companies would pay a $20 fee for each panelist. This analysis assumes that 4,000 panelists will be registered in FY2012 and that 250 additional panelists would added in each subsequent year.
To implement the provisions of the bill TALCB estimates it would need five additional FTEs which include: 1 Attorney IV, 2 Appraiser III, 1 Legal Assistant and 1 Administrative Assistant IV, totaling $279,715 in salaries in fiscal years 2012-16. Additional operating costs would total $174,864 in fiscal year 2012 and $96,913 in fiscal years 2013-16 for professional fees, equipment, and employee benefits. Based on the analysis of the agency, it is assumed that the TALCB would adjust license fees to cover any additional costs associated with the implementation of this bill.
Based on the analysis of the State Office of Administrative Hearings and the Office of the Attorney General, duties and responsibilities associated with implementing the provisions of the bill could be accomplished by utilizing existing resources.
| Source Agencies: | 302 Office of the Attorney General, 304 Comptroller of Public Accounts, 329 Real Estate Commission, 360 State Office of Administrative Hearings
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| LBB Staff: | JOB, NV, AG, MW
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