Legislature(1993 - 1994)

03/31/1994 01:40 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  CHAIRMAN TIM KELLY  called the Labor and Commerce Committee meeting     g    
 to order at   1:40 p.m.  He brought  SB 361  (REAL ESTATE APPRAISERS)    S)   
 before the committee as the first order of business.                          
                                                                               
 FRED FERRARA, a licensed general real estate appraiser testifying             
 from Anchorage,  related that when FIREA was initially enacted,               
 which required all the states to put into effect certification for            
 appraisers they are licensing, they followed the legislation and              
 the hours required.  In the intervening time, the hours required              
 for the residential appraiser have been changed and, as a result,             
 as of January 1, 1994, any people that they do pass under the                 
 present authorized regulations and statutes would not meet the                
 federal requirements.  He said it is conceivable that these new               
 appraisers that would be coming into the field would not be able to           
 work in a federally related transaction.  SB 361 would give the               
 board the ability to change the hours in conforming to the FIREA              
 requirements as they are modified over the years.                             
                                                                               
 Number 047                                                                    
                                                                               
 SENATOR KELLY asked if when an individual is purchasing a house and           
 is going through a FHA of VA appraisal, does it require a FHA or a            
 VA authorized appraiser.  FRED FERRARA acknowledged that it does              
 require a FHA or a VA authorized appraiser, and, at present, they             
 are selected only from the panel of appraisers that are approved by           
 those agencies.  He added that the agency has some proposed changes           
 underway and draft regulations have been circulated around the                
 nation.                                                                       
                                                                               
 Number 066                                                                    
                                                                               
 SENATOR RIEGER inquired as to what the definition of "appraisal" is           
 supposed to describe.  FRED FERRARA answered that there are number            
 of market value definitions that have been adopted by different               
 states and by different jurisdictions.  At one point it did say the           
 highest, most probable price that would be paid.  That definition             
 was changed in both the national appraisal organizations and in the           
 additions to FIREA, as well as the uniform standards that have been           
 adopted by states, which, basically, clarifies that it is the most            
 probable price.                                                               
                                                                               
 SENATOR RIEGER asked what the liability was to an appraiser on an             
 appraisal he has made.  FRED FERRARA responded that the most risk             
 an appraiser is facing is if he is making a factual error.  SENATOR           
 RIEGER said there is a lot frustration that appraisals come in far            
 lower than actual transaction prices.  MR. FERRARA agreed and said            
 he has had some concerns himself where people are perhaps more                
 conservative than they should be in some instances, but it is a               
 judgement situation.                                                          
                                                                               
 Number 175                                                                    
                                                                               
 SENATOR KELLY asked if the legislation concerns commercial real               
 estate appraisers as well as residential appraisers.  FRED FERRARA            
 responded that it doesn't, but it would serve to protect that group           
 also in the future, because there is discussion at the federal                
 level to raise the required hours from the present 165 hours to 190           
 hours.  As a result, this would give the board the authority to               
 change those hours when they do go up and conform to the federal              
 requirement.                                                                  
                                                                               
 Number 190                                                                    
                                                                               
 SENATOR KELLY asked for the will of the committee.  SENATOR RIEGER            
 said he was willing to move the bill out of committee, but he is              
 still concerned with hearing so many tales of unreasonably low                
 appraisals.  He suggested the board should take a look at the                 
 circumstances that there are numerous reported instances of low               
 ball appraisals that seem to have been correlated to the banking              
 crunch over the last decade.                                                  
                                                                               
 SENATOR RIEGER moved that SB 361 be passed out of committee with              
 individual recommendations.  Hearing no objections, the Chairman              
 stated the bill would move on to the Judiciary Committee.                     

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