## T E X A S A P P R A I S E R L I C E N S I N G & C E R T I F I C A T I O N B O A R D

P

. O

. Box 12188 Austin, Texas 78711

- 2188 ● 512

- 936

- 3001 ● www.t alcb .tex a s .gov TALCB Board Members Luis F. De La Garza, Jr Chair

Walker Beard Vice Chair

Sheryl R. Swift Secretary

Keith Kidd

Laurie C. Fontana

Mark A. McAnally

Shannon K. McClendon

Donna J. Walz

Jamie S. Wickliffe

Douglas E. Oldmixon Commissioner Comments to ASC Revised Policy Statements [Docket No. AS12

– 16] :

These comments are submitted on behalf of the Texas Appraiser Licensing & Certification Board (TALCB):

 In Policy Statement 1. A, in the second paragraph, after the first sentence talking ab out avoiding conflicts of interests with other real estate related professions, TALCB requests that the following two sentences from the current ASC Policy Statement 1 be added back in:

“ A State, however, may choose to locate its State agency within an ex isting regulatory body. Any State with its appraiser regulatory function in a department that regulates realty related activities must ensure that adequate safeguards exist to protect the independence of the appraiser regulatory function. ” Given the curre nt constrained fiscal environment of many state governments, the future consolidation of state agencies is likely to continue. We think that keeping this current language in the proposed policy statement offers important ongoing guidance to states and reas sures them of the acceptable nature of such a structure while preserving the associated key safeguard instruction language.

 In Policy Statement 1. I., TALCB agrees that not allowing ASC staff to attend closed sessions of State Board meetings for “ quasi

- j udicial ” proceedings is appropriate as proposed, but believes that consideration is too narrowly expressed. We request that the text be expanded to exclude attendance of ASC staff any time a State Board convenes in closed session “ to receive advice of

coun sel ” specifically authorized by State statute or regulation. Allowing ASC staff to be present when the Board is receiving advice of counsel would waive the Board’s attorney

- client privilege for any matters discussed in the presence of ASC staff and/or will prevent such privileged communication from taking place. ASC attendance during such sessions would also be considered a violation of current relevant provisions of the Texas Open Meetings Act.

 In Policy Statement 7.B.2, TALCB suggests that ASC provid e clarification to the language requiring a state to analyze each complaint “...whether additional violations, especially those related to USPAP, should be added to the complaint.” When reviewing reports for USPAP compliance, it is more important that the f ocus be on the significant characteristics of the subject and comparable properties and the essential elements of the transactions that may have a material impact on the value conclusion. Automated systems currently exist which purport to provide a “USPAP Compliance Review” of a report, but these are generally limited to ensuring that there are no missing requirements in the report form, that certain measurable aspects of the scope of work were adhered to and that there are not mathematical errors, among o ther similar administrative matters. Such compliance checks are insufficient to render an opinion as to whether the appraiser used acceptable methodologies and applied them appropriately. For complaints, review of these “administrative” details should not generally be required if thePage 2 Comments

agency’s report review is focused on the more important significant characteristics of the

subject and comparable properties and the essential elements of the transactions that may have a material impact on the value conclusio n . Minor technical USPAP violations should not be the focus of the efforts of an agency’s enforcement review. Much time and effort is currently expended in reviewing reports for ANY USPAP related violation under the assumption that this is required by AS C policy. Clarifying the focus of this requirement will greatly assist state agencies in allocating resources appropriately and could help reduce overall complaint processing times.

 Also in Policy Statement 7.B.2, TALCB objects to the statement that ap pears to eliminate the use of any statute of limitations for dismissing complaints. This policy is inconsistent with well

established state and federal public policy allowing the use of statutes of limitation in criminal,

civil and administrative cases. W e respectfully request that ASC define the parameters of what they consider an acceptable statute of limitations for administrative appraiser cases, including the important distinction between “occurrence” based statutes of limitation and “discovery”

based statutes of limitation. It appears from prior state review reports that “occurrence” based statutes of limitations shorter than 4 years are unacceptable to ASC; and no comments were discovered that considered “discovery” based statutes of limitation to be a problem for ASC. We think that guidance regarding this period should certainly not require any state to exceed the ten year statute of limitations for taking civil action against an appraiser as currently set forth in FIRREA (12 U. S. C. §1833a).

 In Policy Statement 8. A & B, TALCB objects to the use of the interim sanction of removing a State licensed or certified appraiser from the National Registry for up to 90 days when a state receives an ASC rating of “poor” on an ASC compliance report. While §1 118(a) of FIRREA does specifically grant ASC the authority to remove a state licensed or certified appraiser from the National Registry for up to 90 days, there is certainly an implied link to a pending state agency disciplinary or licensing action agains t the appraiser. This section of FIRREA also grants ASC the authority to impose interim sanctions against a state agency as an alternative to derecognition. TALCB does not see the connection between the proposed interim sanction against an appraiser

and t he “poor” rating earned by the agency. It is unclear from proposed Policy Statement 8 how suspending a licensee will translate into better compliance by the state agency. Furthermore, the removal of a state licensed or certified appraiser from the Nationa l Registry for the sole purpose of encouraging compliance of a State agency raises serious questions regarding the constitutionality of that action, particularly the takings clause of the 5 th Amendment.

Kerri T. Galvin General Counsel & Deputy Commis sioner