AN ACT Relating to the licensing and certification of real estate appraisers; adding a new chapter to Title 18 RCW; creating a new section; making an appropriation; providing effective dates; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. It is the intent of the legislature that only individuals who meet and maintain minimum standards of competence and conduct may provide certified appraisal services to the public.

NEW SECTION. Sec. 2. This chapter may be known and cited as the certified real estate appraiser act.

NEW SECTION. Sec. 3. As used in this chapter, the following terms have the meanings indicated unless the context cleary requires otherwise.

(1) "Appraisal" or "real estate appraisal" means an analysis, opinion, or conclusion relating to the nature, quality, value, or utility of specified interests in, or aspects of, identified real estate, for or in expectation of compensation. An appraisal may be classified by subject matter into either a valuation or an analysis. A "valuation" is an estimate of the value of real estate or real property. An "analysis" is a study of real estate or real property other than estimating value.

(2) "Appraisal foundation" means the organization qualified under section 501(c)(3) of the internal revenue code of 1986 that was incorporated as an Illinois not-for-profit corporation on November 30, 1987. The purposes of the appraisal foundation are to:

(a) Establish and improve uniform appraisal standards by defining, issuing, and promoting such standards;

(b) Establish appropriate criteria for the certification and recertification of qualified appraisers by defining, issuing, and disseminating such qualification criteria to states, governmental entities, and others and assisting them in establishing and maintaining an appropriate system for the certification and recertification of qualified appraisers; and

(3) "Appraisal report" means any communication, written or oral, of an appraisal.

(4) "Appraisal assignment" means an engagement for which an appraiser is employed or retained to act, or would be perceived by third parties or the public as acting, as a disinterested third party in rendering an unbiased analysis, opinion, or conclusion relating to the nature, quality, value, or utility of specified interests in, or aspects of, identified real estate. The term "appraisal assignment" may apply to valuation work and analysis work.

(5) "Board" means the certified real estate appraiser certification board.

(6) "Certified appraisal" means an appraisal prepared or signed by a state-certified real estate appraiser. A certified appraisal represents to the public that it meets the appraisal standards defined in this chapter.

(7) "Department" means the department of licensing.

(8) "Director" means the director of the department of licensing.

(9) "Real estate" means an identified parcel or tract of land, including improvements, if any.

(10) "Real property" means one or more defined interests, benefits, or rights inherent in the ownership of real estate.

(11) "Specialized appraisal services" means all appraisal services which do not fall within the definition of appraisal assignment. The term "specialized appraisal service" may apply to valuation work and to analysis work. Regardless of the intention of the client or employer, if the appraiser would be perceived by third parties or the public as acting as a disinterested third party in rendering an unbiased analysis, opinion, or conclusion, the work is classified as an appraisal assignment and not a specialized appraisal service.

(12) "State-certified real estate appraiser" means a person who develops and communicates real estate appraisals and who holds a valid certificate issued to him or her for either general or residential real estate under this chapter. A state-certificated real estate appraiser may designate or identify an appraisal rendered by him or her as a "certified appraisal" and indicate which type of certification is held.

NEW SECTION. Sec. 4. (1) No person, other that a state-certified real estate appraiser, may assume or use that title or any title, designation, or abbreviation likely to create the impression of certification as a real estate appraiser by this state. A person who is not certified under this chapter shall not describe or refer to any appraisal or real estate located in this state by the term "certified."

(2) This section does not preclude a person who is not certified as a state-certified real estate appraiser from appraising real estate in this state for compensation.

NEW SECTION. Sec. 5. There is established a real estate appraiser certification board which shall consist of five members, one of whom is a public member and four of whom are real estate appraisers.

The governor shall appoint the members of the real estate appraiser certification board.

Each of the real estate appraiser members first appointed to the board shall possess a minimum of ten years of active experience as a real estate appraiser, or shall be a designated member in good standing of a real estate appraisal organization that, as of July 1, 1989, required appraisal experience, appraisal education, and testing to become a designated member and require adherence to generally accepted standards of professional appraisal practice in order to retain such designation.

Each real estate appraiser member of the board appointed after July 1, 1990, must be a state-certified real estate appraiser under this chapter at the time of appointment and during the entire term. At least two members of the board shall be state-certified general real estate appraisers. At least one member of the board shall be a state-certified residential real estate appraiser. The term of each member of the board shall be three years, except that, of the members first appointed, one shall serve for three years, two shall serve for two years, and two shall serve for one year. Upon the expiration of a term, a member of the board continues to hold office until the appointment of a successor. No person shall serve as a member of the board for more than two consecutive terms. The appointing authority may remove a member for cause.

The public member of the board shall not be engaged in the practice of real estate appraising.

The members of the board shall elect a chairperson during the first meeting of each year. The chairperson is a board member and presides at board meetings.

The board shall meet at least once a year or as necessary to conduct board business upon the call of the chairperson at times and places as the chairperson shall designate.

A quorum of the board shall be four members.

Members of the board shall receive compensation under RCW 43.03.240 and shall be reimbursed for travel expenses under RCW 43.03.050 and 43.03.060.

NEW SECTION. Sec. 6. The real estate appraiser certification board provides technical assistance to the director relating to real estate appraisal standards and real estate appraiser qualifications and has the following responsibilities, powers, and duties:

(1) To recommend to the director the experience, education, and examination requirements that are appropriate for each classification of state-certified real estate appraiser, except that in no event shall the experience, education, and examination requirements recommended by the board be less than the minimum criteria established by the appraiser qualification board of the appraisal foundation unless, after notice and public hearing, the director has found that such minimum criteria are not appropriate for state-certified appraisers in this state;

(2) To recommend to the director the continuing education requirements that are appropriate for renewal of certification;

(3) To provide upon request of the director an explanation of the standards of professional appraisal practice required by section 27 of this act, when the appraisal standards board of the appraisal foundation has not issued an interpretation or explanation;

(4) To recommend to the director the examination specifications, and the minimum scaled score required to pass the certification examinations for each classification of certification required by this chapter, except that in no event shall the recommended examination specifications be less than the minimum criteria established by the appraisal qualification board of the appraisal foundation unless, after notice and a public hearing, the director has found that such minimum criteria are not appropriate for state-certified appraisers in this state;

(5) To review the bank of questions and answers provided by the contractor hired by the director to prepare examinations; and

(6) To conduct administrative hearings, as requested by the director, in connection with disciplinary proceedings under this chapter.

NEW SECTION. Sec. 7. The director shall have the following powers and duties:

(1) To adopt rules in accordance with chapter 34.05 RCW necessary to implement this chapter;

(2) To receive and approve applications for certification as a state-certified real estate appraiser under this chapter; to establish appropriate administrative procedures for the processing of such applications; to issue certificates to qualified applicants pursuant to the provisions of this chapter; and to maintain a register of the names and addresses of individuals who are currently certified under this chapter;

(3) To provide administrative assistance to the real estate appraiser certification board to enable the board to carry out its responsibilities under this chapter;

(4) To solicit bids and enter into contracts with educational testing services or organizations for the preparation of questions and answers for certification examinations;

(5) To administer or contract for administration of certification examinations at locations and times as may be required to carry out the responsibilities under this chapter;

(6) To consider recommendations by the real estate appraiser certification board relating to the experience, education, and examination requirements for each classification of state-certified appraiser;

(7) To consider recommendations by the real estate appraiser certification board relating to the continuing education requirements for renewal of certification;

(8) To consider recommendations by the real estate appraiser certification board relating to standards of professional appraisal practice in the enforcement of this chapter;

(9) To issue an annual statement describing the receipts and expenditures in the administration of this chapter during each fiscal year;

(10) To establish appropriate administrative procedures for disciplinary proceedings conducted pursuant to the provisions of this chapter;

(11) To compel the attendance of witnesses and production of books, documents, records, and other papers; to administer oaths; and to take testimony and receive evidence concerning all matters within their jurisdiction. These powers may be exercised directly by the director or may be delegated by the director to the board or the director's authorized representatives acting by authority of law;

(12) To impose any one or more of the following sanctions; to deny applications for certification, to suspend or revoke certification, to require successful completion of remedial education courses, to require successful completion of the appropriate certification examination, to issue a formal reprimand or to impose a fine against a state-certified appraiser if, after an administrative hearing, the director finds that an applicant or state-certified real estate appraiser has violated this chapter;

(13) To employ such professional, clerical, and technical assistance as may be necessary to properly administer the work of the director;

(14) To establish forms necessary to administer this chapter; and

(15) To do all other things necessary to carry out the provisions of this chapter.

NEW SECTION. Sec. 8. The director, members of the board, or individuals acting on their behalf are immune from suit in any action, civil or criminal, based on any acts performed in the course of their duties.

NEW SECTION. Sec. 9. The director shall set fees under RCW 43.24.086 and establish collection procedures for the following fees: Examination, reexamination, original certification, duplicate certification, change of name or address, renewal, delinquency, and certification history.

NEW SECTION. Sec. 10. (1) Applications for examinations, original certification, renewal certification, and change of name and address shall be made in writing to the department on forms approved by the director.

(2) The appropriate fees shall accompany all applications for examination, reexamination, original certification, renewal certification, and change of name and address.

(3) At the time of filing an application for certification, each applicant shall sign a pledge to comply with standards set forth in this chapter and state that he or she understands the types of misconduct for which disciplinary proceedings may be initiated against a state-certified real estate appraiser, as set forth in this chapter.

NEW SECTION. Sec. 11. There shall be two classes of state-certified real estate appraisers:

(1) The state-certified residential real estate appraiser classification shall consist of those persons meeting the requirements for appraisal of residential real property of one to four units.

(2) The state-certified general real estate appraiser classification shall consist of those persons meeting the requirements for certification relating to the appraisal of all types of real property.

NEW SECTION. Sec. 12. (1) As a prerequisite to taking the examination for certification as a state-certified general real estate appraiser, an applicant shall present evidence satisfactory to the director that he or she has a baccalaureate degree from an accredited college or university or has successfully completed no less than one hundred fifty classroom hours of courses in subjects relating to real estate appraisal from a nationally recognized appraisal organization or an accredited college or university plus fifteen classroom hours relating to standards of professional practice and the provisions of this chapter.

(2) As a prerequisite to taking the examination for certification as a state-certified residential real estate appraiser, an applicant shall present evidence satisfactory to the director that he or she has a baccalaureate degree from an accredited college or university or has successfully completed not less than sixty classroom hours of courses in subjects relating to real estate appraisal from a nationally recognized appraisal organization or an accredited college or university plus fifteen classroom hours relating to standards of professional practice and the provisions of this chapter.

NEW SECTION. Sec. 13. As a prerequisite to taking the examination for certification as a state-certified real estate appraiser an applicant must possess the equivalent of two years of experience in real property appraisal supported by adequate written reports or file memoranda. Such experience, or the equivalent thereof, must be acquired within a period of five years immediately preceding the filing of the application for certification.

Each applicant for certification shall furnish under oath a detailed listing of the real estate appraisal reports or file memoranda for each year for which experience is claimed by the applicant. Upon request, the applicant shall make available to the director, for examination, a sample of the appraisal reports or file memoranda which the applicant has prepared in the course of his or her appraisal practice.

NEW SECTION. Sec. 14. An original certification as a state-certified real estate appraiser shall be issued to persons who have demonstrated through a written examination process that they possess the following:

(1) Appropriate knowledge of the English language, including reading, writing, spelling, and arithmetic;

(2) Appropriate knowledge of technical terms commonly used in or related to real estate appraising, appraisal report writing, and economic concepts applicable to real estate;

(3) Understanding of the principles of land economics, real estate appraisal processes, and problems likely to be encountered in gathering, interpreting, and processing data in carrying out appraisal disciplines;

(4) Understanding of the standards for the development and communication of real estate appraisal as provided in this chapter;

(5) Knowledge of theories of depreciation, cost estimating, methods of capitalization, and the mathematics of real estate appraisal that are appropriate for the classification of certification for which application is made;

(6) Knowledge of such other principles and procedures as may be appropriate for the classifications of certification for which application is made;

(7) Basic understanding of real estate law; and

(8) Understanding of the types of misconduct for which disciplinary proceedings may be initiated against a state-certified real estate appraiser, as set forth in this chapter.

NEW SECTION. Sec. 15. The director shall establish the term of certification issued under this chapter by rule pursuant to RCW 43.24.140. The expiration date of the certificate shall appear on the certificate and no other notice of its expiration need be given to the holder.

NEW SECTION. Sec. 16. (1) Every applicant for certification who is not a resident of this state shall submit, with the application for certification, an irrevocable consent that service of process upon him or her may be made by service on the director if, in an action against the applicant in a court of this state arising out of the applicant's activities as a state-certified real estate appraiser, the plaintiff cannot, in the exercise of due diligence, obtain personal service upon the applicant.

(2) A nonresident of this state who has complied with subsection (1) of this section may obtain a certificate as a state-certified real estate appraiser by conforming to all of the provisions of this chapter relating to state-certified real estate appraisers.

NEW SECTION. Sec. 17. If in the determination of the director another state is deemed to have substantially equivalent certification requirements, an applicant who is currently certified and in good standing under the laws of such other state may obtain a certificate as a state-certified real estate appraiser in this state without being required to satisfy the examination requirements of this chapter.

NEW SECTION. Sec. 18. (1) To be renewed as a state-certified real estate appraiser, the holder of a valid certificate shall apply and pay the prescribed fee to the director no earlier than one hundred twenty days prior to the expiration date of the certificate. With the application for renewal, the state-certified real estate appraiser shall present evidence in the form prescribed by the director of having completed the continuing education requirements for renewal specified in this chapter.

(2) If a person fails to renew a certificate prior to its expiration, the person may obtain a renewal certificate by satisfying all of the requirements for renewal and paying late renewal fees.

NEW SECTION. Sec. 19. (1) Each state-certified real estate appraiser shall advise the director of the address of his or her principal place of business and his or her residence address.

(2) Whenever a state-certified real estate appraiser changes his or her principal place of business or his or her current residence address, he or she shall immediately give written notification on a form prescribed by the director of the change to the director and pay the appropriate fee.

NEW SECTION. Sec. 20. (1) A certificate issued under this chapter shall bear the signature or facsimile signature of the director and a certificate number assigned by the director.

(2) Each state-certified real estate appraiser shall place his or her certificate number adjacent to or immediately below the title "state-certified residential real estate appraiser" or "state-certified general real estate appraiser" when used in an appraisal report or in a contract or other instrument used by the certificate holder in conducting real property appraisal activities.

NEW SECTION. Sec. 21. (1) The term "state-certified real estate appraiser" may only be used to refer to individuals who hold the certificate and may not be used following or immediately in connection with the name or signature of a firm, partnership, corporation, or group, or in such manner that it might be interpreted as referring to a firm, partnership, corporation, group, or anyone other than an individual holder of the certificate.

(2) No certificate may be issued under this chapter to a corporation, partnership, firm, or group. This shall not be construed to prevent a state-certified appraiser from signing an appraisal report on behalf of a corporation, partnership, firm, or group practice.

NEW SECTION. Sec. 22. (1) As a prerequisite to renewal of certification, a state-certified real estate appraiser shall present evidence satisfactory to the director of having met the continuing education requirements of this section.

(2) The continuing education requirements for renewal of certification shall be the completion, within the two-year period preceding renewal, of not less than forty classroom hours of instruction in courses or seminars approved by the director.

(3) In lieu of meeting the requirements of subsection (2) of this section, an applicant for recertification may satisfy all or part of the requirements by presenting evidence of participation other than as a student in educational processes and programs which relate to real property appraisal theory, practices, and techniques, including but not limited to, teaching, program development, and preparation of textbooks, monographs, articles, and other instructional materials.

(4) The director shall adopt rules for the implementation of this section to assure that persons renewing their certifications as state-certified real estate appraisers have current knowledge of real property appraisal theories, practices, and techniques which will provide a high degree of service and protection to those members of the public with whom they deal in a professional relationship under authority of the certification.

NEW SECTION. Sec. 23. Certification as a state-certified real estate appraiser that has been revoked or suspended as the result of a disciplinary action taken by the director shall not be reinstated unless the applicant for reinstatement presents evidence of completing the continuing education requirements provided in this chapter. This continuing education requirement shall not be imposed upon an applicant for reinstatement who has been required by the director to successfully complete the certification examination required by this chapter.

NEW SECTION. Sec. 24. An application for certification or recertification may be denied, and the certification of any state-certified real estate appraiser may be revoked, suspended, or otherwise disciplined in accordance with the provisions of this chapter, for any of the following acts or omissions:

(1) Failing to meet the minimum qualifications for state certification established by or pursuant to this chapter;

(2) Procuring or attempting to procure state certification under this chapter by knowingly making a false statement, knowingly submitting false information, or knowingly making a material misrepresentation on any application filed with the director;

(3) Paying money other than the fees provided for by this chapter to any employee of the director or the board to procure state certification under this chapter;

(4) Violation of section 27 of this act;

(5) Failure or refusal without good cause to exercise reasonable diligence in developing an appraisal, preparing an appraisal report, or communicating an appraisal;

(6) Negligence or incompetence in developing an appraisal, preparing an appraisal report, or communicating an appraisal;

(7) Continuing to act as a certified real estate appraiser when his or her certificate is on an expired status;

(8) Failing, upon demand, to disclose any information within his or her knowledge to, or to produce any document, book, or record in his or her possession for inspection of the director or the director's authorized representatives acting by authority of law; and

(9) Violating any provision of this chapter or any lawful rule or regulation made by the director pursuant thereto.

NEW SECTION. Sec. 25. The director may investigate the actions of a state-certified real estate appraiser or an applicant for certification or recertification. Upon receipt of information indicating that a state-certified real estate appraiser under this chapter may have violated this chapter, the director shall cause one or more of the staff investigators to make an investigation of the facts to determine whether or not there is admissible evidence of any such violation. If technical assistance is required, a staff investigator may consult with not more than one of the appraiser members of the board. If an appraiser member of the board is consulted and renders assistance in an investigation, the appraiser member is excused from service on the board in connection with any administrative hearing that may result from such investigation.

In any investigation made by the director's investigative staff, the director shall have the power to compel the attendance of witnesses and the production of books, documents, records, and other papers, to administer oaths, and to take testimony and receive evidence concerning all matters within the director's jurisdiction.

If the director determines, upon investigation, that a state-certified real estate appraiser under this chapter has violated this chapter, a statement of charges shall be prepared and served upon the state-certified real estate appraiser. This statement of charges shall require the accused party to file an answer to the statement of charges within twenty days of the date of service.

In responding to a statement of charges, the accused party may admit to the allegations, deny the allegations, or otherwise plea. Failure to make a timely response shall be deemed an admission of the allegations contained in the statement of charges.

NEW SECTION. Sec. 26. The administrative hearing on the allegations in the statement of charges may be heard by the board or an administrative law judge appointed under chapter 34.12 RCW at the time and place prescribed by the director and in accordance with the provisions of the administrative procedure act, chapter 34.05 RCW. If the board or the administrative law judge determines that a state-certified real estate appraiser is guilty of a violation of any of the provisions of this chapter, a formal decision shall be prepared that contains findings of fact and recommendations to the director concerning the appropriate disciplinary action to be taken.

If the director shall decide, after such hearing, that the evidence supports the accusation by a preponderance of evidence, the director may impose sanctions authorized under section 7 of this act. In such event the director shall enter an order to that effect and shall file the same in his or her office and immediately mail a copy thereof to the affected party at the addresses of record with the department. Such order shall not be operative for a period of ten days from the date thereof. Any licensee or applicant aggrieved by a final decision by the director in an adjudicative proceeding whether such decision is affirmative or negative in form, is entitled to a judicial review in the superior court under the provisions of the administrative procedure act, chapter 34.05 RCW.

NEW SECTION. Sec. 27. A state-certified real estate appraiser shall comply with the standards of professional appraisal practice in this chapter and those promulgated by the appraisal standards board of the appraisal foundation as the standards exist on the effective date of this section. The director may adopt future changes in the standards by rule.

NEW SECTION. Sec. 28. The attorney general shall render to the director and board opinions upon all questions of law relating to the construction or interpretation of this chapter, or arising in the administration thereof that may be submitted by the director or board, and shall act as attorney for the director and board in all actions and proceedings brought by or against the director and board under or pursuant to any provisions of this chapter.

NEW SECTION. Sec. 29. Sections 2 through 28 of this act shall constitute a new chapter in Title 18 RCW.

NEW SECTION. Sec. 30. There is appropriated from the general fund to the department of licensing for the biennium ending June 30, 1991, the sum of .......... ; to carry out the purposes of this act.

NEW SECTION. Sec. 31. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 32. (1) Sections 2, 3, 5 through 8, 28, 30, and 31 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect July 1, 1989.

(2) Sections 1, 4, 9 through 27, and 29 of this act shall take effect July 1, 1990.