HOUSE BILL REPORT
EHB 1917
As Amended by the Senate
BYRepresentatives O'Brien, May, Gallagher, Wineberry, Nelson, Locke, Sayan, Patrick, Baugher, Ferguson and McLean
Establishing a certified real estate appraiser law.
House Committe on Commerce & Labor
Majority Report: Do pass with amendments. (10)
Signed by Representatives Vekich, Chair; Cole, Vice Chair; Patrick, Ranking Republican Member, Jones, R. King, Leonard, O'Brien, Prentice, Walker and Wolfe.
House Staff:Joan Elgee (786-7166)
Rereferred House Committee on Appropriations
Majority Report: Do pass as amended by Committee on Commerce & Labor. (24)
Signed by Representatives Locke, Chair; Grant, Vice Chair; H. Sommers, Vice Chair; Silver, Ranking Republican Member; Appelwick, Belcher, Bowman, Braddock, Brekke, Brough, Dorn, Ebersole, Hine, May, McLean, Nealey, Padden, Peery, Rust, Sayan, Spanel, Valle, Wang and Wineberry.
House Staff: Jack Daray (786-7136)
AS PASSED HOUSE MARCH 13, 1989
BACKGROUND:
By state law, real estate appraisers who perform appraisals for taxation purposes and for sales of certain public property must meet specified standards. Otherwise, the state does not regulate persons who conduct real estate appraisals.
In 1987 and again in 1988, the House of Representatives passed HB 1109, which authorized appraisals which met certain standards to be "certified." In both years, the bill died in the Senate.
Following the 1988 session, the House Commerce & Labor Committee requested the Department of Licensing to conduct a sunrise review of the regulation of appraisers. The department recommended that no certification or licensing be required. However, the department further recommended that if federal law were to require state certification of appraisers, the Legislature should provide only the minimal level of certification to meet the federal standards.
In November, 1988, the federal Office of Management and Budget issued a directive to federal agencies to require state certified appraisals for certain transactions by July 1, 1991. For Washington appraisers to perform such appraisals, a state certification program must be adopted.
SUMMARY:
The certified real estate appraiser act is adopted. The Department of Licensing shall administer the act.
Title protection of the terms "certified appraisal" and "state certified real estate appraiser" is granted. No person may use these terms unless he or she is certified by the state. A person who is not certified is not precluded from performing appraisals.
Two classes of certification are created: 1) A certified residential real estate appraiser may render certified appraisals of residential real property of one to four units; and 2) A certified general real estate appraiser may render certified appraisals of all types of real property.
To obtain certification, an appraiser must meet experience, education, and examination requirements. The requirements must not be less than minimum criteria established by the Appraisal Foundation (a private, non-profit corporation), unless the director of the department finds that the criteria are not appropriate. Prior to taking the exam, an applicant must have two years experience in real property appraisal within five years of the application. An applicant seeking certification as a residential real estate appraiser must have a baccalaureate degree from an accredited college or university or at least 60 hours of classroom study in real estate appraisal and 15 hours of classroom study in the standards of professional practice. The education requirement for applicants for general real estate appraiser certification is the same except that the applicant must have 150 hours of classroom study in real estate appraisal. The exam shall cover appropriate knowledge of English and technical terms, principals of the appraisal process, real estate law, misconduct for which disciplinary proceedings may be initiated, and other specified matters.
Certified appraisers must comply with standards of professional practice. The certificate number must be placed on appraisal documents.
A five member real estate appraiser certification board is established. One member shall be a public member and four shall be real estate appraisers with specified experience or be members of a real estate appraisal organization. Those appraiser members appointed after July 1, 1990 must be certified real estate appraisers. At least two shall be general real estate appraisers and at least one shall be a residential real estate appraiser. The board shall make recommendations to the director regarding the experience, education, and examination requirements, and may conduct administrative hearings in connection with disciplinary hearings, as requested by the director.
Continuing education requirements are imposed. Appraisers must complete at least 40 classroom hours of instruction within a two year period preceding renewal or participate other than as a student in educational processes and programs which relate to real property appraisal.
The director may impose sanctions, including revocation of certification and imposition of a fine, for negligence or incompetence in making an appraisal, other specified acts, or for violations of the chapter.
A reciprocity provision allows an applicant who is currently certified and in good standing under the laws of another state to obtain a certificate without passing the examination.
EFFECT OF SENATE AMENDMENTS: All references to the Appraisal Foundation are striken. Eliminated are: 1) the specification that the experience, education, and examination requirements not be less than minimum criteria established by the Foundation and 2) the requirement that certified appraisers comply with the standards of professional practice promulgated by the Foundation.
A number of other changes are made in the prerequisites to obtaining certification. The experience, education, and examination requirements are to be adopted by the Director of the Department of Licensing rather than set forth in statute. A grandfather clause is added which allows persons with more than five years' experience to obtain certification without examination.
The real estate certification board composition is modified. The number of members is raised from 5 to 7. The requirement that the first members appointed be members of a real estate appraisal organization meeting specified criteria is changed to require appointment from a cross-section of real estate appraisal organizations. The governor, rather than the board, shall choose the chairperson, who shall serve at the pleasure of the governor. The authority of the director to delegate the power to compel attendance of witnesses and other powers to the board is eliminated. The board's authority to review the examination questions and answers is deleted.
The continuing education requirement is eliminated.
The reciprocity provision is modified to allow reciprocity only if the other state has a written reciprocal agreement to provide similar treatment to Washington state certified appraisers.
The appropriation is eliminated and the provisions made null and void if specific funding is not provided in the budget.
Several other changes are made. The director's disciplinary authority is limited. The immunity granted to the director and board members does not apply to intentional or willful misconduct. The requirement that an applicant sign a pledge to comply with the standards in the chapter and that he or she understands the types of misconduct is modified. Certificates are specified to be for one year.
Appropriation: $450,000 from the general fund to the Department of Licensing to be repaid from fees imposed by June 30, 1993.
Fiscal Note: Requested February 20, 1989.
Effective Date:Sections 1, 4, 9 through 27, and 29 take effect July 1, 1990. Sections 2, 3, 5 through 8, 28, 30, and 31 contain an emergency clause and take effect July 1, 1989.
House Committee ‑ Testified For: (Commerce & Labor) Dick Schultz; Pam Barrett and Charles Anderson, American Institute of Real Estate Appraisers; Dick Warbrouck.
(Appropriations) None Presented.
House Committee - Testified Against: (Commerce & Labor) None Presented.
(Appropriations) None Presented.
House Committee - Testimony For: (Commerce & Labor) The motivating factor behind the bill is OMB's directive requiring state certified appraisers to conduct appraisals for FHA and VA loans, Department of Defense transactions, and other transactions. Currently, anyone can call themselves an appraiser. Incompetent appraisals can result in significant financial losses.
(Appropriations) None Presented.
House Committee - Testimony Against: (Commerce & Labor) None Presented.
(Appropriations) None Presented.
VOTE ON FINAL PASSAGE:
Yeas 97; Excused 1
Excused: Representative Appelwick