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Regular Session, 2012
HOUSE BILL NO. 1014
BY REPRESENTATIVE HOFFMANN
REAL ESTATE/APPRAISERS: Provides relative to real estate appraisals
AN ACT1
To amend and reenact R.S. 37:3397(B)(4), 3401(D), 3410, 3415.3(B)(10) and (11), 3415.13,2
and 3415.21 and to enact R.S. 37:3415.2(11), (12), and (13), 3415.3(C) and (D), and3
3415.15, relative to real estate appraisals; to repeal the maximum time an individual4
may hold a real estate appraiser trainee license; to provide for reciprocity for real5
estate appraiser licenses; to define certain terms; to require an appraiser's license to6
perform appraisal reviews; to provide that administrative reviews of an appraisal do7
not require an appraiser's license; to require a surety bond; to provide for the8
competency of appraisers; to provide for customary and reasonable fees for9
appraisers; to provide for disclosure of fees paid to appraisers by appraisal10
management companies; to provide for the disclosure of administration fees charged11
by appraisal management companies; to require that administrative rules receive12
affirmative approval from the Louisiana Legislature; to repeal an outdated13
grandfathering clause; to provide for applicability; to provide for an effective date;14
and to provide for related matters.15
Be it enacted by the Legislature of Louisiana:16
Section 1. R.S. 37:3397(B)(4), 3401(D), 3410, 3415.3(B)(10) and (11), 3415.13, and17
3415.21 are hereby amended and reenacted and R.S. 37:3415.2(11), (12), and (13),18
3415.3(C) and (D), and 3415.15 are hereby enacted to read as follows:19 HLS 12RS-1426 ENGROSSED
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§3397. License classifications; criteria1
* * *2
B.3
* * *4
(4) A real estate appraiser trainee may not be licensed in this category in5
excess of six years. All trainees who have been licensed in excess of two years shall6
be required to obtain continuing education that is equivalent to fifteen classroom7
hours of instruction for each year.8
* * *9
§3401. Nonresident license; temporary registration; reciprocity10
* * *11
D. If the board determines that another jurisdiction has substantially12
equivalent certification or license requirements to those of this state, the board may13
enter into a reciprocal agreement with the appropriate authority to allow any resident14
applicant who is certified under the laws of that jurisdiction to obtain a reciprocal15
license as a real estate appraiser in this state. The terms and conditions shall be16
determined by written agreement between the jurisdictions.17
* * *18
§3410. Standards for the development and communication of real estate appraisals19
A. A licensed real estate appraiser shall comply with generally accepted20
standards of professional practice in the development and communication of21
appraisals of real estate located in this state and with generally accepted ethical rules22
of conduct as contained in the "Uniform Standards of Professional Appraisal23
Practice", or its successor, as approved by the Appraisal Subcommittee of the24
Federal Financial Institutions Examination Council, or its successor.25
B. The licensed real estate appraiser shall include within the body of the26
appraisal report the amount of the appraiser's fee for appraisal services.27
* * * 28 HLS 12RS-1426 ENGROSSED
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§3415.2. Definitions1
As used in this Chapter, the following words have the meaning ascribed to2
them in this Section unless the context clearly indicates otherwise:3
* * *4
(11) "Administrative review", "compliance review", "quality check", or5
"QC" means a process that checks an appraisal report for compliance with the6
Uniform Standards of Professional Appraisal Practice or other stipulated7
requirements.8
(12) "Appraisal review" means the act or process of developing and9
communicating an opinion about the quality of another appraiser's work that was10
performed as part of an appraisal assignment. The term shall not include an11
examination of an appraisal for grammatical, typographical, mathematical, or other12
similar administrative errors that do not involve the appraiser's professional13
judgment, including compliance with the elements of the client's statement of work.14
(13) "Fee appraiser" means a person who is not an employee of the mortgage15
loan originator or appraisal management company engaging the appraiser and is one16
of the following:17
(a) A state-licensed or certified appraiser who receives a fee for performing18
an appraisal and certifies that the appraisal has been prepared in accordance with the19
Uniform Standards of Professional Appraisal Practice.20
(b) A company not subject to the requirements of §1124 of the Financial21
Institutions Reform, Recovery, and Enforcement Act of 1989, 12 U.S.C. 3331 et22
seq., that utilizes the services of state-licensed or certified appraisers and receives a23
fee for performing appraisals in accordance with the Uniform Standards of24
Professional Appraisal Practice. 25 HLS 12RS-1426 ENGROSSED
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§3415.3. License required1
* * *2
B. The license required by Subsection A of this Section shall, at a minimum,3
include the following information:4
* * *5
(10) Proof that the entity has obtained and maintains a surety bond that meets6
the requirements of Subsection D of this Section.7
(11) An irrevocable Uniform Consent to Service of Process, pursuant to this8
Chapter.9
(11) Any other information required by the board.10
C.(1) A person who performs an appraisal review for an appraisal11
management company shall be licensed or certified in Louisiana.12
(2) An administrative review may be performed by any individual, including13
a certified appraiser.14
D.(1) Every applicant for a license or the renewal of a license shall obtain15
and maintain a surety bond in the amount of twenty thousand dollars. The surety16
bond shall:17
(a) Be in the form prescribed by the board pursuant to regulations duly18
promulgated by it.19
(b) Accrue to the state for the benefit of a claimant against the registrant to20
secure the faithful performance of the licensee obligations under this Chapter.21
(2) The aggregate liability of the surety shall not exceed the principal sum22
of the bond.23
(3) A party having a claim against the licensee may bring suit directly on the24
surety bond, or the board may bring suit on behalf of the party having a claim against25
the licensee.26
(4) Consumer claims shall be given priority in recovering from the bond.27
(5) A deposit of cash or security may be accepted in lieu of the surety bond.28 HLS 12RS-1426 ENGROSSED
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(6) If a claim reduces the face amount of the bond, the bond shall be1
annually restored upon renewal of the licensee's registration.2
* * *3
§3415.13. Adherence to standards; competency4
A. Each appraisal management company seeking to be licensed in this state5
shall certify to the board on an annual basis that it has a system in place to review on6
a periodic basis the work of all appraisers that are performing real estate appraisal7
services for the appraisal management company to ensure that the real estate8
appraisal services are being conducted in accordance with Uniform Standards of9
Professional Appraisal Practice.10
B. Before or at the time of making an assignment to an appraiser, an11
appraisal management company shall verify that the appraiser receiving the12
assignment satisfies each provision of the competency rule of the Uniform Standards13
of Professional Appraisal Practice for the appraisal being assigned.14
* * *15
§3415.15. Fees; customary and reasonable; disclosure16
A. An appraisal management company shall compensate appraisers at a rate17
that is customary and reasonable for appraisals being performed in the market area18
of the property being appraised, consistent with the presumptions of compliance19
under federal law.20
B. An appraisal management company shall separately state to the client all21
of the following:22
(1) The fees paid to an appraiser for appraisal services.23
(2) The fees charged by the appraisal management company for services24
associated with the management of the appraisal process, including procurement of25
the appraiser's services.26
C.(1) An appraisal management company shall not prohibit any appraiser27
who is part of an appraiser panel from recording the fee that the appraiser was paid28
by the appraisal management company for the performance of the appraisal within29 HLS 12RS-1426 ENGROSSED
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the appraisal report that is submitted by the appraiser to the appraisal management1
company.2
(2) An appraisal management company shall not include any fees for3
appraisal management services performed by the company in the amount the4
company reports as charges for the actual completion of an appraisal by the5
appraiser.6
* * *7
§3415.21. Rulemaking authority; effective date8
A. The board shall have the power to may adopt any rules and regulations9
in accordance with the Administrative Procedure Act necessary for the enforcement10
of this Chapter.11
B. Notwithstanding any law to the contrary, these rules shall require the12
affirmative approval by the House of Representatives Committee on Commerce and13
the Senate Committee on Commerce, Consumer Protection and International Affairs.14
If the board submits its proposed rules for affirmative approval and the legislature15
is not in session, the proposed rules shall be deemed affirmatively approved if forty-16
five days have elapsed from the date the proposed rules are received by the oversight17
committees and no hearing is held by either committee.18
C. Any appraisal management company doing business in this state at the19
time of passage of this Act, may continue to perform such services without a license20
until the earlier of either such time that the rules and regulations pertaining to this21
Chapter have been approved in accordance with Subsections A and B of this Section22
or January 1, 2011.23
Section 2. The provisions of R.S. 37:3415.3(B)(10) and (C) shall apply to any new24
or renewed license after December 31, 2011, and only upon promulgation of rules by the25
board concerning the provisions of R.S. 37:3415.3(B)(10) and (C).26
Section 3. This Act shall become effective upon signature by the governor or, if not27
signed by the governor, upon expiration of the time for bills to become law without signature28
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If29 HLS 12RS-1426 ENGROSSED
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vetoed by the governor and subsequently approved by the legislature, this Act shall become1
effective on the day following such approval.2
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Hoffmann HB No. 1014
Abstract: Provides for licensure of real estate appraisal trainees; provides for reciprocity;
requires a surety bond as a condition of licensure as an appraisal management
company; provides for appraisal reviews by licensed appraisers; establishes
guidelines for fees to be paid to appraisers; and requires an appraisal management
company to confirm the competency level of an appraiser prior to assignment.
Present law provides that a real estate appraiser trainee may not be licensed in this category
in excess of six years.
Proposed law repeals present law.
Present law requires all trainees who have been licensed in excess of two years to obtain
continuing education that is equivalent to 15 classroom hours of instruction for each year.
Proposed law retains present law.
Present law provides that, if the La. Real Estate Appraisers Board determines that another
jurisdiction has substantially equivalent real estate appraiser certification or license
requirements to those of La., the board may enter into a reciprocal agreement with the
appropriate authority to allow any resident applicant who is certified under the laws of that
jurisdiction to obtain a reciprocal license as a real estate appraiser in this state. Proposed law
requires the terms and conditions to be determined by written agreement between the
jurisdictions.
Proposed law retains present law but removes the requirement that the board enter into a
reciprocal agreement with another jurisdiction.
Present law requires a licensed real estate appraiser to comply with generally accepted
standards of professional practice in the development and communication of appraisals of
real estate located in this state and with generally accepted ethical rules of conduct as
contained in the "Uniform Standards of Professional Appraisal Practice", or its successor,
as approved by the Appraisal Subcommittee of the Federal Financial Institutions
Examination Council, or its successor.
Proposed law retains present law.
Proposed law requires the licensed real estate appraiser to include within the body of the
appraisal report the amount of the appraiser's fee for appraisal services.
Proposed law defines "administrative review", "compliance review", "quality check", or
"QC" as a process that checks an appraisal report for compliance with the Uniform Standards
of Professional Appraisal Practice or other stipulated requirements.
Proposed law defines "appraisal review" as the act or process of developing and
communicating an opinion about the quality of another appraiser's work that was performed HLS 12RS-1426 ENGROSSED
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as part of an appraisal assignment. The term shall not include an examination of an appraisal
for grammatical, typographical, mathematical, or other similar administrative errors that do
not involve the appraiser's professional judgment, including compliance with the elements
of the client's statement of work.
Proposed law defines "fee appraiser" as a person who is not an employee of the mortgage
loan originator or appraisal management company engaging the appraiser and is one of the
following:
(1)A state-licensed or certified appraiser who receives a fee for performing an appraisal
and certifies that the appraisal has been prepared in accordance with the Uniform
Standards of Professional Appraisal Practice.
(2)A company not subject to the requirements of §1124 of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 that utilizes the services of state-
licensed or certified appraisers and receives a fee for performing appraisals in
accordance with the Uniform Standards of Professional Appraisal Practice.
Proposed law requires a person who performs an appraisal review for an appraisal
management company to be licensed or certified in La.
Proposed law provides that an administrative review may be performed by any individual,
including a certified appraiser.
Present law prohibits an entity from directly or indirectly engaging or attempting to engage
in business as an appraisal management company, directly or indirectly engaging or
attempting to perform appraisal management services, or advertising or holding itself out as
engaging in or conducting business as an appraisal management company without first
obtaining a license issued by the La. Real Estate Appraisers Board.
Present law requires the license to, at a minimum, include the following information:
(1)The name of the entity seeking a license.
(2)The business address of the entity seeking a license.
(3)The phone contact information of the entity seeking a license.
(4)If the entity is not a corporation that is domiciled in this state, the name and contact
information for the company's agent for service of process in this state.
(5)The name, address, and contact information of any individual, corporation,
partnership, or other business entity that has any ownership interest in the appraisal
management company.
(6)The name, address, and contact information for a controlling person.
(7)Certification that the entity has a system and process in place to verify that a person
being added to the appraiser panel of the appraisal management company holds an
appraisal license in good standing.
(8)Certification that the entity has a system in place to review the work on a periodic
basis of all independent appraisers that are performing real estate appraisal services
for the appraisal management company to ensure that the real estate appraisal
services are being conducted in accordance with Uniform Standards of Professional
Appraisal Practice. HLS 12RS-1426 ENGROSSED
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(9)Certification that the entity maintains a detailed record for five years of each real
estate appraisal service request that it receives and an itemized list of all fees
contracted with each appraiser who performs real estate appraisal services for the
appraisal management company.
(10)An irrevocable Uniform Consent to Service of Process.
(11) Any other information required by the board.
Proposed law retains present law but repeals the board's authority to request other
information and adds a requirement of proof that the entity has obtained and maintains a
surety bond that meets the requirements of proposed law.
Proposed law requires every applicant for a license or the renewal of a license to obtain and
maintain a surety bond in the amount of $20,000.
Proposed law requires the surety bond to:
(1)Be in the form prescribed by the board pursuant to regulations duly promulgated by
it.
(2)Accrue to the state for the benefit of a claimant against the registrant to secure the
faithful performance of the licensee obligations under proposed law.
Proposed law provides that the aggregate liability of the surety shall not exceed the principal
sum of the bond.
Proposed law authorizes a party having a claim against the licensee to bring suit directly on
the surety bond, or the board to bring suit on behalf of the party having a claim against the
licensee.
Proposed law provides that consumer claims shall be given priority in recovering from the
bond.
Proposed law provides that a deposit of cash or security may be accepted in lieu of the surety
bond.
Proposed law requires that, if a claim reduces the face amount of the bond, the bond shall
be annually restored upon renewal of the licensee's registration.
Proposed law requires an appraisal management company, before or at the time of making
an assignment to an appraiser, to verify that the appraiser receiving the assignment satisfies
each provision of the competency rule of the Uniform Standards of Professional Appraisal
Practice for the appraisal being assigned.
Proposed law requires an appraisal management company to compensate appraisers at a rate
that is customary and reasonable for appraisals being performed in the market area of the
property being appraised, consistent with the presumptions of compliance under federal law.
Proposed law requires an appraisal management company to separately state to the client
all of the following:
(1)The fees paid to an appraiser for appraisal services.
(2)The fees charged by the appraisal management company for services associated with
the management of the appraisal process, including procurement of the appraiser's
services. HLS 12RS-1426 ENGROSSED
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are additions.
Proposed law prohibits an appraisal management company from prohibiting any appraiser
who is part of an appraiser panel from recording the fee that the appraiser was paid by the
appraisal management company for the performance of the appraisal within the appraisal
report that is submitted by the appraiser to the appraisal management company.
Proposed law prohibits an appraisal management company from including any fees for
appraisal management services performed by the company in the amount the company
reports as charges for the actual completion of an appraisal by the appraiser.
Present law authorizes the board to adopt any rules and regulations necessary for the
enforcement of present law.
Proposed law retains present law but makes technical changes.
Present law requires the rules to obtain the affirmative approval of the House Committee on
Commerce and the Senate Committee on Commerce, Consumer Protection, and International
Affairs.
Proposed law retains present law and further provides that if the board submits its proposed
rules for affirmative approval and the legislature is not in session, the proposed rules shall
be deemed affirmatively approved if 45 days have elapsed from the date the proposed rules
are received by the oversight committees and no hearing is held by either committee.
Present law provides that any appraisal management company doing business in this state
at the time of passage of present law, may continue to perform such services without a
license until the earlier of either such time that the rules and regulations pertaining to present
law have been approved in accordance with present law or Jan. 1, 2011.
Proposed law repeals present law.
Proposed law provides that the surety bond requirement shall apply to any new or renewed
license after Dec. 31, 2011, and only upon promulgation of rules by the board concerning
proposed law.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 37:3397(B)(4), 3401(D), 3410, 3415.3(B)(10) and (11), 3415.13, and
3415.21; Adds R.S. 37:3415.2(11), (12), and (13), 3415.3(C) and (D), and 3415.15)
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Commerce to the original
bill.
1. Made technical changes.
2. Repealed the maximum time an individual may hold a real estate appraiser
trainee license.
3. Removed the requirement that the Real Estate Appraisers Board enter into an
agreement with another jurisdiction in order to grant reciprocity for licensing.
4. Required the licensed real estate appraiser to include within the body of the
appraisal report the amount of the appraiser's fee for appraisal services.
5. Changed the definition of "appraisal review".
6. Deleted the proposed definition of "uniform settlement statement". HLS 12RS-1426 ENGROSSED
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7. Amended the requirement that a person who performs an appraisal review for an
appraisal management company be licensed or certified in La. by removing the
requirement that the person have at least the same certification for the property
type as the appraiser who completed the report being reviewed.
8. Required a surety bond as a condition for obtaining and maintaining an appraisal
management company license.
9. Provided for the compensation of appraisers and the disclosure of the fees.
10.Provided that proposed administrative rules shall be deemed affirmatively
approved if 45 days have elapsed from the date the proposed rules are received
by the oversight committees and no hearing is held by either committee.
11.Provided for applicability of proposed law.
12.Made proposed law effective upon signature of governor or lapse of time for
gubernatorial action.