GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2013
H 2
HOUSE BILL 565
Committee Substitute Favorable 6/12/13
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Short Title: Amend Real Estate Appraisers' Laws/Fees. |
(Public) |
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Sponsors: |
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Referred to: |
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April 4, 2013
A BILL TO BE ENTITLED
AN ACT to amend the laws regulating real estate appraisers.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 93E-1-3(a) reads as rewritten:
"(a) No trainee
registration, license, or certificate shall be issued under the provisions of
this Chapter to a partnership, association, corporation, firm, or group.
However, nothing herein shall preclude a registered trainee or licensed or
certified real estate appraiser from rendering appraisals for or on behalf of a
partnership, association, corporation, firm, or group, provided the appraisal
report is prepared by a licensed or certified real estate appraiser or by a
registered trainee under the immediate personal direction of, of
the licensed or certified real estate appraiser and is reviewed and
signed by that licensed or certified appraiser."
SECTION 2. G.S. 93E-1-6 reads as rewritten:
"§ 93E-1-6. Qualifications for registration and certification; applications; application fees; examinations.
(a) Any person
desiring to be registered as a trainee or to obtain licensure as a licensed
real estate appraiser or certification as a certified real estate appraiser
shall make written application to the Board on the forms as are prescribed by
the Board setting forth the applicant's qualifications for registration,
licensure,registration or certification. Each applicant shall
satisfy the following qualification requirements:
(1) Each applicant for registration as a trainee shall:
a. Have obtained a high school diploma or its equivalent; and
b. Demonstrate to the Board that the applicant possesses the knowledge and competence necessary to perform appraisals of real property, by: (i) having satisfactorily completed within the five-year period immediately preceding the date application is made, a course of instruction, approved by the Board, in real estate appraisal principles and practices consisting of at least 90 hours of classroom instruction in subjects determined by the Board; and (ii) satisfying any additional qualification the Board imposes by rule, not inconsistent with any requirements imposed by the Appraisal Foundation.
(2) Each applicant for certification as a certified residential real estate appraiser shall:
a. Hold an
associate's degree or highera bachelor's degree from an accredited
college, junior college, community college, or university; or have a
high school diploma or its equivalent and have successfully completed at least
21 semester credit hours of college courses from an accredited college, junior
college, community college, or university in English composition, principles of
economics, finance, higher mathematics, such as geometry or algebra,
statistics, introduction to computers, and business or real estate law;
b. Demonstrate
that the applicant possesses the knowledge and competence necessary to perform
appraisals of real property as the Board may prescribe by having satisfactorily
completed, within the five-year period immediately preceding the date the
application is made,completed a course of instruction, approved by
the Board, in real estate appraisal principles and practices consisting of at
least 200 hours;hours. All instructional courses shall have been
completed on or after January 1, 2008;
c. Present
evidence satisfactory to the Board of at least 2,500 hours or the minimum
requirement as imposed by the Appraisal Foundation, whichever is greater, of
experience in real estate appraising within the five-yeareight-year
period immediately preceding the date application is made, and over a period of
at least two calendar years; and
d. Satisfy the additional qualifications criteria as may be imposed by the Board by rule, not inconsistent with any requirements imposed by the Appraisal Foundation; or
e. Possess education and experience which is found by the Board in its discretion to be equivalent to the above requirements.
(3) Each applicant for certification as a certified general real estate appraiser shall:
a. Hold a
bachelor's degree or higher from an accredited college or university; or
have a high school diploma or its equivalent and have successfully completed at
least 30 semester credit hours of college courses from an accredited college or
university in English composition, macroeconomics and microeconomics, finance,
higher mathematics, such as geometry or algebra, statistics, introduction to
computers, and business or real estate law and two elective courses in
accounting, geography, business management, or real estate;
b. Demonstrate
that the applicant possesses the knowledge and competence necessary to perform
appraisals of all types of real property by having satisfactorily completed,
within the five-year period immediately preceding the date application is made,completed
a course of instruction, approved by the Board, in general real estate
appraisal practices consisting of at least 300 hours;hours. All
instructional courses shall have been completed on or after January 1, 2008;
c. Present
evidence satisfactory to the Board of at least 3,000 hours or the minimum
requirement as imposed by the Appraisal Foundation, whichever is greater, of
experience in real estate appraising within the five-yeareight-year
period immediately preceding the date application is made, and over a period of
at least two and one-half calendar years, fifty percent (50%) of which must be
in appraising nonresidential real estate; and
d. Satisfy the additional qualifications criteria as may be imposed by the Board by rule, not inconsistent with any requirements imposed by the Appraisal Foundation; or
e. Possess education or experience which is found by the Board in its discretion to be equivalent to the above requirements.
(4) Repealed by Session Laws 2001-399, s. 1.
(b) Each application for registration as a trainee or for certification as a real estate appraiser shall be accompanied by a fee of two hundred dollars ($200.00), plus any additional fee as may be necessary to defray the cost of any competency examination administered by a private testing service.
(c) Any person who
files with the Board an application for registration orcertification as
a real estate appraiser shall be required to pass an examination to demonstrate
the person's competence.
(c1) The Board shall
also make an investigation as it deems necessary into the background of the
applicant to determine the applicant's qualifications with due regard to the
paramount interest of the public as to the applicant's competency, honesty,
truthfulness, and integrity. All applicants shall obtain criminal record
reports from one or more reporting services designated by the Board to provide
criminal record reports. Applicants are required to pay the designated
reporting service for the cost of the reports.All applicants shall
consent to a criminal history record check. Refusal to consent to a criminal
history record check may constitute grounds for the Board to deny an
application. The Board shall ensure that the State and national criminal
history of an applicant is checked. The Board shall be responsible for
providing to the North Carolina Department of Justice the fingerprints of the
applicant to be checked, a form signed by the applicant consenting to the
criminal history record check, and the use of fingerprints and other identifying
information required by the State or National Repositories of Criminal
Histories and any additional information required by the Department of Justice
in accordance with G.S. 114-19.30. The Board shall keep all information
obtained pursuant to this section confidential. The Board shall collect any
fees required by the Department of Justice and shall remit the fees to the
Department of Justice for expenses associated with conducting the criminal
history record check.
(c2) In addition, the Board may investigate and consider whether the applicant has had any disciplinary action taken against any other professional license in North Carolina or any other state, or if the applicant has committed or done any act which, if committed or done by any real estate trainee or appraiser, would be grounds under the provisions hereinafter set forth for disciplinary action including the suspension or revocation of registration, licensure, or certification, or whether the applicant has been convicted of or pleaded guilty to any criminal act. If the results of the investigation shall be satisfactory to the Board, and the applicant is otherwise qualified, then the Board shall issue to the applicant a trainee registration or certificate authorizing the applicant to act as a registered trainee real estate appraiser or certified real estate appraiser in this State.
(d) If the applicant has not affirmatively demonstrated that the applicant meets the requirements for registration or certification, action on the application will be deferred pending a hearing before the Board."
SECTION 3. G.S. 93E-1-6.1 reads as rewritten:
"§ 93E-1-6.1. Trainee supervision.
All trainees shall perform all real estate appraisal-related
activities under the immediate, active, and personal supervision of a licensed
or certified real estate appraiser. All appraisal reports must be signed by
the appraiser who supervised the trainee. By signing the appraisal report, the
appraiser accepts shared responsibility, with the trainee, for the content of and
conclusions in the report. All trainees and any appraisers desiring to
supervise a trainee shall complete a course in trainee supervision as required
in rules adopted by the Board."
SECTION 4. G.S. 93E-1-8 reads as rewritten:
"§ 93E-1-8. Education program approval and fees.
(a) The Board may
by rule prescribe minimum standards for the approval and renewal of approval of
schools and other course sponsors and their instructors to conduct appraiser prelicensing
and precertificationqualifying courses required by G.S. 93E-1-6(a).
Such standards may address subject matter, program structuring, instructional
materials, requirements for satisfactory course completion, instructors'
qualifications, and other related matters relevant to the provision of such
courses in a manner that best serves the public interest. The standards may
require that schools and course sponsors obtain approval for the content of prelicensing
and precertificationqualifying courses from the Appraiser
Qualifications Board of the Appraisal Foundation as part of the application
process with the Appraisal Board and pay any fees directly to the Appraiser
Qualifications Board as required by the Appraiser Qualifications Board for the
approval.
(b) The Board may
by rule set nonrefundable fees chargeable to private real estate appraisal
schools or course sponsors, including appraisal trade organizations, for the
approval and annual renewal of approval of their prelicensing and
precertificationqualifying courses required by G.S. 93E-1-6(a),
or equivalent courses. The fees shall be one hundred dollars ($100.00) per
course for approval and fifty dollars ($50.00) per course for renewal of
approval. No fees shall be charged for the approval or renewal of approval to
conduct appraiser prelicensing or precertificationqualifying
courses where such courses are offered by a North Carolina college, university,
junior college, or community or technical college accredited by the Southern
Association of Colleges and Schools, or an agency of the federal, State, or
local government.
(c) The Board may by rule prescribe minimum standards for the approval and annual renewal of approval of schools and other course sponsors and their instructors to conduct appraiser continuing education courses. Such standards may address subject matter, instructional materials, requirements for satisfactory course completion, minimum course length, instructors' qualifications, and other related matters relevant to the provision of such courses in a manner that best serves the public interest.
(d) Nonrefundable fees of one hundred dollars ($100.00) per course may be charged to schools and course sponsors for the approval to conduct appraiser continuing education courses and fifty dollars ($50.00) per course for renewal of approval. However, no fees shall be charged for the approval or renewal of approval to conduct appraiser continuing education courses where such courses are offered by a North Carolina college, university, junior college, or community or technical college accredited by the Southern Association of Colleges and Schools, or by an agency of the federal, State, or local government. A nonrefundable fee of fifty dollars ($50.00) per course may be charged to current or former licensees or certificate holders requesting approval by the Board of a course for continuing education credit when approval of such course has not been previously obtained by the offering school or course sponsor."
SECTION 5. G.S. 93E-1-9 reads as rewritten:
"§ 93E-1-9.
Nonresident registration, licensure,registration and
certification.
(a) An applicant
from another state which offers real estate trainee registration or the
equivalent, or appraiser licensing or certification privileges to
residents of North Carolina may become registered, licensed,registered
or certified in North Carolina by conforming to all of the provisions of this
Chapter and, in the discretion of the Board, such other terms and conditions as
are required of North Carolina residents applying for trainee registration,
licensure,registration and certification in such other state.
(b) The Board, in
its discretion, may undertake to register, license,register or
certify on a reciprocal basis, persons registered, licensed,registered
or certified in other states who are deemed by the Board to possess
qualifications equivalent to resident North Carolina trainees or State-licensed
or State-certified real estate appraisers.
(c) The Board may by rule establish a procedure for granting temporary trainee registration, appraiser licensure or certification and may charge an application fee of one hundred fifty dollars ($150.00) for temporary trainee registration, appraiser licensure, or certification.
(d) Every applicant
for trainee registration, State licensure,registration or
certification under this Chapter who is not a resident of this State shall
submit with his application an irrevocable consent that service of process in
any action against the applicant arising out of the applicant's activities as a
registered trainee or State-licensed or State-certified real estate
appraiser may be made by delivery of the process on the Executive Director of
the Board."
SECTION 6. G.S. 93E-1-11(a) reads as rewritten:
"(a) The Executive
Director of the Board shall keep a register of all applicants for State trainee
registration or for State licensure or certification as real estate
appraisers, showing for each the date of application, name, business or
residence address, and whether the registration, licenseregistration
or certificate was granted or refused. The register shall be prima facie
evidence of all matters received therein."
SECTION 7. Article 1 of Chapter 93E of the General Statutes is amended by adding the following new section to read:
"§ 93E-1-15. Payment of fees by electronic means.
The Board may allow any of its fees to be paid through electronic means. The Board may charge a processing fee for electronic payments that does not exceed the actual cost to the Board for processing electronic payments."
SECTION 8. G.S. 93E-2-4 reads as rewritten:
"§ 93E-2-4. Qualifications for registration; duties of registrants.
(a) Any person or entity desiring to be registered as an appraisal management company in this State shall make written application to the Board on forms prescribed by the Board setting forth the applicant's qualifications for registration. The application shall be accompanied by the applicable fee under G.S. 93E-2-6 and any other information the Board deems necessary pursuant to rules adopted by the Board. Upon receipt of a properly completed application and fee and upon a determination by the Board that the applicant is of good moral character, the Board shall issue to the applicant a certificate of registration authorizing the applicant to act as a real estate appraisal management company in this State.
(b) The registration required by subsection (a) of this section shall include the following information:
(1) Legal name of the entity seeking registration.
(2) Business address of the entity seeking registration.
(3) Phone contact information of the entity seeking registration.
(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 for any individual or any corporation, partnership, or other business entity that owns ten percent (10%) or more of the appraisal management company.
(6) The name, address, and contact information for the compliance manager.
(7) A 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 a license in good standing in this State pursuant to the North Carolina Appraisers Act if a license or certification is required to perform appraisals.
(8) A certification that the entity has a system in place to require that appraisers inform the appraisal management company of their areas of geographic competency, the types of properties the appraiser is competent to appraise, and the methodologies the appraiser is competent to perform.
(9) A certification that the entity has a system in place to review the work of all independent appraisers that are performing real estate appraisal services for the appraisal management company on a periodic basis to validate that the real estate appraisal services are being conducted in accordance with the Uniform Standards of Professional Appraisal Practice.
(10) A certification that the entity maintains a detailed record of each service request that it receives and the independent appraiser that performs the residential real estate appraisal services for the appraisal management company.
(10a) A certification that the entity has obtained a surety bond as required by this Article.
(11) An irrevocable Uniform Consent to Service of Process.
(12) Any other information required by the Board pursuant to G.S. 93E-2-3.
(c) Any registrant having a good faith belief that a real estate appraiser licensed or certified in this State has violated applicable law or the Uniform Standards of Professional Appraisal Practice or engaged in unethical conduct shall promptly file a complaint with the Board.
(d) Registered appraisal management companies shall pay fees to an appraiser within 30 days of the date the appraisal is transmitted by the real estate appraiser to the registrant, except in cases of noncompliance with the conditions of the engagement. In such cases, the registrant shall notify the real estate appraiser in writing that the fees will not be paid.
(e) To qualify to be registered as an appraisal management company, each individual who owns, directly or indirectly, more than ten percent (10%) of the appraisal management company shall be of good moral character, as determined by the Board, and shall submit all information the Board deems necessary pursuant to the rules adopted by the Board. Additionally, each owner shall certify that he or she has never had a license to act as an appraiser refused, denied, cancelled, or revoked by the State of North Carolina or any other state.
(f) A registered appraisal management company shall not enter into any contracts or agreements with an independent appraiser for the performance of residential real estate appraisal services for properties located in this State unless the independent appraiser is licensed or certified in good standing pursuant to the North Carolina Appraisers Act.
(g) Each applicant for registration or for a renewal of a registration shall post with the Board and maintain a surety bond in the amount of twenty-five thousand dollars ($25,000).
(1) The bond shall be in a form satisfactory to the Board.
(2) The bond will accrue to the Board for the benefit of a claimant against the registrant to secure the faithful performance of the registrant's obligations under this Article and to a real estate appraiser who has performed an appraisal for the registrant for which the appraiser has not been paid.
(3) The aggregate liability of the surety shall not exceed the principal sum of the bond.
(4) A party having a claim against the registrant may bring suit directly on the surety bond, or the Board may bring suit on behalf of the party having a claim against the registrant, either in one action or in successive actions.
(5) A claim reducing the face amount of the bond shall be annually restored upon renewal of the registrant's registration.
(6) The bond shall remain in effect until cancellation, which may occur only after 90 days written notice to the Board. Cancellation shall not affect any liability incurred or accrued during that period.
(7) The surety bond shall remain in place for no less than two years after the registrant ceases operations in this State. However, notwithstanding this provision, the Board may permit the surety bond to be reduced or eliminated prior to that time to the extent that the amount of the registrant's outstanding obligations to appraisers is reduced."
SECTION 9. G.S. 93E-2-6 reads as rewritten:
"§ 93E-2-6. Fees and renewals.
(a) Each application for registration as an appraisal management company under this Article shall be accompanied by a registration fee in an amount set by the Board not to exceed three thousand five hundred dollars ($3,500). Registration issued under this Article shall expire on June 30, 2012, and on June 30 of each year thereafter. The registration shall become invalid after that date unless renewed before the expiration date by filing an application with and paying to the Board a fee in an amount set by the Board not to exceed two thousand dollars ($2,000).
(b) All registrations reinstated after the expiration date are subject to a late filing fee of twenty dollars ($20.00) for each month or part thereof that the registration is lapsed, not to exceed one hundred twenty dollars ($120.00). The late filing fee shall be in addition to the required renewal fee. In the event a registrant fails to reinstate the registration within six months after the expiration date, the registration shall expire and the registrant shall be required to file a new application for registration. Reinstatement of a registration shall not be retroactive.
(c) The Board may issue a replacement registration to the registrant upon payment of fifty dollars ($50.00) to the Board. The Board may certify the registration history of an appraisal management company registered under this Article upon payment of a fee of one hundred dollars ($100.00) to the Board.
(d) Each applicant for registration, or for renewal of registration, as an appraisal management company shall pay a fee of five hundred dollars ($500.00) to be deposited in the Appraisal Management Company Recovery Fund.
(e) The Board may allow any of its fees to be paid through electronic means. The Board may charge a processing fee for electronic payments that does not exceed the actual cost to the Board for processing electronic payments."
SECTION 10. G.S. 93E-2-8(a) reads as rewritten:
"§ 93E-2-8. Disciplinary authority.
(a) The Board may, by order, deny, suspend, revoke, or refuse to issue or renew a registration of an appraisal management company under this Article or may restrict or limit activities of a person who owns an interest in or participates in the business of an appraisal management company if the Board determines that an applicant, registrant, or any partner, member, manager, officer, director, compliance manager, or person occupying a similar status, performing similar functions, or directly or indirectly controlling the applicant or registrant has done any of the following:
(1) Filed an application for registration that, as of its effective date or as of any date after filing, contained any statement that, in light of the circumstances under which it was made, is false or misleading with respect to any material fact.
(2) Violated or failed to comply with any provision of this Article or any rules adopted by the Board.
(3) Been convicted of any felony or, within the past 10 years, been convicted of any misdemeanor involving mortgage lending or real estate appraisal or any offense involving breach of trust, moral turpitude, or fraudulent or dishonest dealing.
(4) Been permanently or temporarily enjoined by any court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of the real estate appraisal management business.
(5) Been the subject of an order of the Board or any other state appraiser regulatory agency denying, suspending, or revoking the person's license as a real estate appraiser.
(6) Acted as an appraisal management company while not properly licensed by the Board.
(7) Failed to pay the proper filing or renewal fee under this Article.
(8) Failed to maintain the bond required by G.S. 93E-2-4."
SECTION 11. G.S. 93E-2-8(g) reads as rewritten:
"(g) If the Board has reasonable grounds to believe that an appraisal management company has violated the provisions of this Article or that facts exist that would be the basis for an order against an appraisal management company, the Board may at any time, either personally or by a person duly designated by the Board, investigate or examine the books, accounts, records, and files of any registrant or other person relating to the complaint or matter under investigation.
(g1) The Board may require any registrant or other person to submit a criminal history record check and a set of that person's fingerprints in connection with any examination or investigation. Refusal to submit the requested criminal history record check or a set of fingerprints shall be grounds for disciplinary action. The reasonable cost of the investigation or examination shall be charged against the registrant."
SECTION 12. Article 2 of Chapter 93E of the General Statutes is amended by adding a new section to read:
"§ 93E-2-12. Appraisal Management Company Recovery Fund.
(a) The Appraisal Management Company Recovery Fund is established as a special account of the Board. The Fund shall consist of fees collected from appraisal management company applications for registration and renewals pursuant to G.S. 93E-2-6(d).
(b) The Board shall administer the Fund. The sole purpose of the Fund is to provide restitution to a North Carolina trainee or licensed or certified appraiser who has suffered a monetary loss as the result of the failure of an appraisal management company to pay appraisal fees owed. The Board shall adopt rules governing procedures for:
(1) Applying to the Board for restitution for unpaid appraisal fees.
(2) Processing applications.
(3) Granting requests for recovery of unpaid appraisal fees.
(4) Subrogation or assignment of the rights of any applicant who receives a distribution from the Fund.
(c) The Board may use money in the Fund only to:
(1) Provide restitution to a North Carolina trainee or licensed or certified appraiser who has suffered a monetary loss as the result of the failure of an appraisal management company to pay an appraisal fee.
(2) Purchase insurance to cover the payment of restitution for unpaid appraisal fees when the Board deems it appropriate to do so.
(3) Invest amounts in the Fund that are not currently needed to pay claims and maintain adequate reserves in the manner in which the State law allows fiduciaries to invest funds.
(4) Pay the expenses of the Board in administering the Fund.
(d) A North Carolina trainee or licensed or certified appraiser shall be entitled to restitution from the Fund in the following circumstances if no viable alternative for restitution is available as determined by the Board:
(1) The appraisal management company that owes the appraisal fees has filed for bankruptcy protection, either voluntarily or involuntarily;
(2) The North Carolina trainee or licensed or certified appraiser has obtained a judgment against the appraisal management company for the appraisal fee owed and the judgment remains unsatisfied; or
(3) The amount of the appraisal fee due is less than two thousand dollars ($2,000).
(e) The amount to be paid from the Fund to the North Carolina trainee or licensed or certified appraiser shall not exceed the actual amount of appraisal fees that are proven to be owed to the applicant by the appraisal management company and, as determined by the Board, reasonable and appropriate court costs associated with obtaining a final judgment against the appraisal management company in favor of the applicant. If the amount of restitution to be paid to any one or more applicants at any time exceeds the balance in the fund, the Board shall:
(1) Distribute as much of the restitution amount as possible, which shall be deemed to satisfy in full any claim the applicant has on payments from the Fund; and
(2) In the case of distributions to more than one applicant, provide for a pro rata distribution of the available Fund balance, which shall be deemed to satisfy in full any claim the applicants have on payments from the Fund.
(f) The Board may suspend collection of the fees imposed by G.S. 93E-2-6(d) for any year if the balance of the Fund exceeds four hundred thousand dollars ($400,000) and the Board determines that the amount in the Fund is sufficient to meet likely disbursements from the Fund for that year. The Board shall resume collection of fees if the balance falls below four hundred thousand dollars ($400,000). The Board shall submit annually a report to the State Treasurer accounting for all monies credited to and expended from the Fund.
(g) The Board is subrogated to an applicant who receives restitution from the Fund in the amount disbursed and may bring an action against the appraisal management company that failed to pay the appraisal fees owed. If an applicant receives payment from the Fund for an appraisal fee and subsequently receives payment for that same appraisal, the applicant shall reimburse the Fund the amount the applicant has received from the fund."
SECTION 13. G.S. 114-19.30 reads as rewritten:
"§ 114-19.30. Criminal history record checks of applicants for trainee registration, appraiser certification, or registrants for registration as real estate appraisal management companies.
The Department of Justice may provide to the North Carolina Appraisal Board from the State and National Repositories of Criminal Histories the criminal history of any applicant or registrant for registration under Article 1 and Article 2 of Chapter 93E of the General Statutes. Along with the request, the Board shall provide to the Department of Justice the fingerprints of the applicant or registrant, a form signed by the applicant or registrant consenting to the criminal history record check and use of fingerprints and other identifying information required by the State and National Repositories, and any additional information required by the Department of Justice. The applicant's or registrant's fingerprints shall be forwarded to the State Bureau of Investigation for a search of the State's criminal history record file, and the State Bureau of Investigation shall forward a set of fingerprints to the Federal Bureau of Investigation for a national criminal history record check. The Board shall keep all information obtained pursuant to this section confidential. The Department of Justice may charge a fee to offset the cost incurred by the Department to conduct a criminal history record check under this section. The fee shall not exceed the actual cost of locating, editing, researching, and retrieving the information."
SECTION 14. Any person who has been licensed or certified by the Board as a residential or general real estate appraiser on or before the effective date of this act shall be deemed to have complied with the requirements of G.S. 93E-1-6, as enacted in Section 2 of this act.
SECTION 15. This act becomes effective January 1, 2014.