The Texas Appraiser Licensing and Certification Board (TALCB) proposes new §§159.1, 159.3, 159.4, 159.52, 159.101 - 159.105, 159.107 - 159.109, 159.154 - 159.157, 159.159, 159.161, 159.162, 159.201, and 159.204, concerning Rules Relating to Provisions of the Texas Appraiser Management Company Registration and Regulation Act.

The proposed new rules would implement House Bill 1146, which enacted Chapter 1104, Texas Occupations Code (The Texas Appraisal Management Company Registration and Regulation Act, or the Act) to provide for registration and regulation of appraisal management companies.

Proposed new §159.1, Definitions, would establish definitions relevant to registration and regulation of AMCs. Proposed new §159.3, Appraisal Management Company Advisory Committee, would establish parameters for the Appraisal Management Company Advisory Committee. Proposed new §159.4, Jurisdiction and Exemptions, would clarify the Board's jurisdiction over AMCs acting within various exceptions to the registration requirement as outlined in Chapter 1104 of the Act. Proposed new §159.52, Fees, would establish application, renewal, and other fees in amounts sufficient for the administration of the AMC registration program.

Proposed new §159.101, Registration Requirements, would clarify what constitutes an advertisement and would require registrants to notify the Board within 30 days after beginning or ceasing to use an assumed business name. Proposed new §159.102, Eligibility for Registration; Ownership, would permit applicants to rely on Appraisal Subcommittee records for the purpose of certifying to the Board that its owners have not had adverse action against a license that would prevent the applicant from becoming registered as an AMC. Proposed new §159.103, Applications, would establish technical requirements for applications and would also require registrants to retain ownership records for a period of five years from the date of application. Proposed new §159.104, Primary Contact; Appraiser Contact, would establish parameters for the primary contact and appraiser contact and would establish a process by which a registrant may add, remove, or change either of these persons. Proposed new §159.105, Denial of Registration, would establish moral character/criminal history requirements, standards for evaluating criminal history information, and the process by which the Board may deny an application for registration. Proposed new §159.107, Expiration, would provide that a registration is valid for the term for which it was issued unless it is suspended or revoked for cause. Proposed new §159.108, Renewal, would establish a process for the issuance of renewal notices and for the renewal of a registration. Proposed new §159.109, Inactive Status, provides a process for returning to active status and clarifies that a registrant may not engage in any act for which registration is required while on inactive status.

Proposed new §159.154, Competency of Appraisers, would clarify the requirement to verify the competency of an appraiser. Proposed new §159.155, Periodic Review of Appraisals, would establish the process to be used in periodic reviews of appraisals. Proposed new §159.156, Business Records, would clarify that a communication between an AMC and an appraiser is "substantive" if it relates to the appraiser's qualifications or to the scope of work of an assignment. Proposed new §159.157, Compensation of Appraisers, would clarify the statutory requirement that registrants compensate appraisers at a rate that is reasonable and customary under the circumstances, by requiring registrants to establish a compensation policy that takes into account factors such as the scope of work, type of property, and the qualifications of the appraiser, and further prohibits registrants from requiring appraisers to sign a certification that the fee he or she was paid is customary and reasonable. Proposed new §159.159, Disclosure of Registration Number, would clarify that the requirement that registrants include their registration number on all documents used to procure appraisals applies to all types of documents used for that purpose but not to general advertisements. Proposed new §159.161, Appraiser Panel, would establish a process by which a panelist may be added or terminated from a panel. Proposed new §159.162, Dispute Resolution, would provide guidelines for a registrant's dispute resolution process as required under the Act.

Proposed new §159.201, Guidelines for Revocation, Suspension, or Denial of a Registration, would establish parameters for the revocation, suspension, or denial of a registration for conduct, as articulated in the rule, that suggests that a person is unfit to act as an AMC. Proposed new §159.204, Complaint Processing, would establish a process, modeled after the process for complaints against an appraiser, by which the Board would receive and process complaints against AMCs.

Karen Alexander, Director of Staff Services, has determined that, for the first five-year period new §159.52 is in effect, there will be fiscal implications for the state, but not to units of local government, as a result of enforcing or administering the new section. Approximately 180 applicants/registrants would be required to pay the application and other fees (including fees to add an estimated 4,000 panelists to panels) in the remaining months of FY 2012, with estimated revenue of $800,000. For FY 2013, the total estimated revenue would be minimal since the registration will be for a two year period. For the three years after (FY 2014 - FY 2016), the estimated revenue would be $720,000 per year for FY 2014 and FY 2016, with a minimal amount in FY 2015. There will be no fiscal implications for state or local government as a result of enforcing new §§159.1, 159.3, 159.4, 159.101 - 159.105, 159.107 - 159.109, 159.154 - 159.157, 159.159, 159.161, 159.162, 159.201, and 159.204.

Ms. Alexander has determined that there is no anticipated impact on local or state employment as a result of implementing the new sections. However, there is an anticipated impact on small businesses and micro-businesses. The Board estimates that there are approximately 180 appraisal management companies operating in Texas that would be subject to regulation as required by House Bill 1146, 82nd Legislature, Regular Session (2011). It is estimated that many of these companies are small businesses and micro-businesses. The projected economic impact of these new rules on these small businesses will be negative due to the fees and regulations imposed on them by House Bill 1146. Under §2006.002, Texas Government Code, an agency is required to consider alternative regulatory methods only if the alternative methods would be consistent with the health, safety and environmental and economic welfare of the state. The Board has developed §159.52 in accordance with House Bill 1146 and with a legislative mandate to cover all costs of operation under Senate Bill 1000, 82nd Legislature, Regular Session (2011) and the other rules in order to comply with the requirement of House Bill 1146 that the Board regulate appraisal management companies. Consequently, any variance from the legislative mandate would not be consistent with the health, safety, and environmental and economic welfare of the state, and no alternative regulatory methods have been considered.

Ms. Alexander also has determined that, for each year of the first five years the increased fees under §159.52 are in effect, the public benefit anticipated as a result of enforcing the amendments is that the agency will raise sufficient revenue to fund costs of agency operations and required payments to the General Revenue Fund and other state agencies under Senate Bill 1000, 82nd Legislature, Regular Session (2011). The anticipated public benefit of the other rules is enforcement of Chapter 1104, Texas Occupations Code, in accordance with the legislative mandate of House Bill 1146.

Comments on the proposed new sections may be submitted to Devon V. Bijansky, General Counsel, P.O. Box 12188, Austin, Texas 78711-2188.

The new sections are proposed under the Texas Occupations Code, §1104.051, Rules, and §1104.052, Fees.

The statute affected by this proposal is Texas Occupations Code, Chapter 1104. No other statute, code, or article is affected by the proposed new sections.