(A196, R204, H3278)

AN ACT TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY AMENDING SECTION 40-60-10, RELATING TO THE SOUTH CAROLINA REAL ESTATE APPRAISERS BOARD, SO AS TO MODIFY THE COMPOSITION OF THE BOARD; BY AMENDING SECTION 40-60-20, RELATING TO DEFINITIONS, SO AS TO ADD DEFINITIONS AND MODIFY EXISTING DEFINITIONS; BY AMENDING SECTIONS 40-60-30, 40-60-31, AND 40-60-33, ALL RELATING TO REAL ESTATE APPRAISER LICENSURE REQUIREMENTS, SO AS TO MODIFY EXEMPTIONS, REVISE, AND PROVIDE EDUCATION REQUIREMENTS AND ACCEPTABLE EQUIVALENCIES FOR APPRENTICE APPRAISERS, AND TO REVISE REQUIREMENTS AND QUALIFICATIONS FOR LICENSED MASS APPRAISERS; BY AMENDING SECTION 40-60-34, RELATING TO REQUIREMENTS RELATING TO APPRENTICE APPRAISERS AND APPRAISER SUPERVISING APPRENTICES, SO AS TO REVISE REQUIREMENTS; BY AMENDING SECTION 40-60-35, RELATING TO CONTINUING EDUCATION REQUIREMENTS, SO AS TO IMPOSE REPORTING REQUIREMENTS UPON LICENSEES; BY AMENDING SECTION 40-60-36, RELATING TO THE APPROVAL OF COURSES, EDUCATIONAL PROVIDERS, AND INSTRUCTORS, SO AS TO IMPOSE REPORTING REQUIREMENTS UPON PROVIDERS; BY AMENDING SECTION 40-60-37, RELATING TO RECIPROCAL APPLICATIONS FROM APPRAISERS FROM OTHER JURISDICTIONS, SO AS TO MAKE A TECHNICAL CORRECTION; BY AMENDING SECTION 40-60-40, RELATING TO REQUIRED APPRAISER CONTACT INFORMATION, SO AS TO INCLUDE EMAIL ADDRESSES OF LICENSEES; BY AMENDING SECTION 40-60-50, RELATING TO APPLICATION AND LICENSE FEES, SO AS TO OUTLINE REQUIREMENTS FOR APPLICATION; BY AMENDING SECTION 40-60-70, RELATING TO THE CODE OF ETHICS, SO AS TO REQUIRE APPRAISERS TO CONDUCT THEMSELVES IN ACCORDANCE WITH A CODE OF ETHICS AS ESTABLISHED IN THE UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE; BY AMENDING SECTION 40-60-80, RELATING TO INVESTIGATION OF COMPLAINTS AND VIOLATIONS, SO AS TO ALLOW THE BOARD TO DECLINE TO CONDUCT AN INVESTIGATION UNDER CERTAIN CIRCUMSTANCES; BY AMENDING SECTION 40-60-110, RELATING TO GROUNDS FOR DENYING LICENSURE OR TAKING DISCIPLINARY ACTIONS, SO AS TO REMOVE REFERENCES TO PERMITS AND TO PROVIDE CIRCUMSTANCES WHEN DISCIPLINARY ACTIONS MAY BE TAKEN; BY AMENDING SECTION 40-60-220, RELATING TO THE CONTINUATION OF EXISTING LICENSES, SO AS TO REFERENCE PEOPLE CREDENTIALED IN THIS STATE; BY AMENDING SECTION 40-60-320, RELATING TO DEFINITIONS, SO AS TO REVISE THE DEFINITION OF APPRAISAL PANEL; BY AMENDING SECTION 40-60-330, RELATING TO REGISTRATION REQUIREMENTS, SO AS TO REVISE REQUIREMENTS CONCERNING CERTAIN FINANCIAL INFORMATION; BY AMENDING SECTION 40-60-340, RELATING TO EXCLUSIONS FROM REGISTRATION REQUIREMENTS, SO AS TO REQUIRE REGULATION BY THE OFFICE OF COMPTROLLER GENERAL, AMONG OTHER THINGS; BY AMENDING SECTION 40-60-350, RELATING TO RENEWAL OF REGISTRATIONS, SO AS TO MODIFY THE RENEWAL FREQUENCY; BY AMENDING SECTION 40-60-360, RELATING TO PROMULGATION OF REGULATIONS, SO AS TO SPECIFY REQUIRED REGULATIONS; BY AMENDING SECTION 40-60-370, RELATING TO REQUIREMENTS FOR OWNERS OF APPRAISAL MANAGEMENT COMPANIES, SO AS TO PROVIDE CIRCUMSTANCES IN WHICH AN APPRAISAL MANAGEMENT COMPANY SHALL NOT BE REGISTERED IN THIS STATE OR INCLUDED ON THE NATIONAL REGISTRY; BY AMENDING SECTION 40-60-400, RELATING TO CERTIFICATION OR LICENSURE REQUIRED FOR EMPLOYEES AND INDEPENDENT CONTRACTORS, SO AS TO INCLUDE REFERENCES TO THE UNIFORM STANDARDS OF PROFESSIONAL APPRAISALS PRACTICE STANDARDS; BY AMENDING SECTION 40-60-420, RELATING TO RECORD-KEEPING REQUIREMENTS FOR REGISTRATION RENEWAL, SO AS TO REVISE REQUIREMENTS CONCERNING RECORDS THAT APPRAISAL MANAGEMENT COMPANIES MUST PROVIDE; AND BY AMENDING SECTION 40-60-450, RELATING TO COMPENSATION, SO AS TO CLARIFY THE APPLICABLE GOVERNING FEDERAL REGULATIONS.

Be it enacted by the General Assembly of the State of South Carolina:

South Carolina Real Estate Appraisers Board

SECTION 1.    Section 40-60-10(B) of the S.C. Code is amended to read:

(B) The South Carolina Real Estate Appraisers Board consists of eight members who must be residents of this State and appointed by the Governor with the advice and consent of the Senate and with consideration given to appropriate geographic representation and to areas of appraisal expertise as follows:

(1) One member must be a public member who may not be connected in any way with the practice of real estate appraisal, real estate brokerage, or mortgage lending. The member from the general public may be nominated by an individual, group, or association and must be appointed by the Governor in accordance with Section 40-1-45.

(2) One member must be a licensed real estate broker.

(3) One member must be actively engaged in mortgage lending, representing supervised financial institutions, who is not a real estate licensee or a real estate appraiser and who also must not be connected in any way with the brokerage of real estate, the appraisal of real estate, or the review of real estate appraisals.

(4) Four members must be licensed or certified appraisers, actively engaged in real estate appraisal for at least three years, one of whom must be a certified general appraiser and one of whom must be a certified residential appraiser. In appointing real estate appraisers to the board, the Governor, while not automatically excluding other appraisers, shall give preference to real estate appraisers whose primary source of income is derived from appraising real estate and not real estate brokerage.

(5) One member must represent an appraisal management company registered with the board.

Definitions

SECTION 2.    Section 40-60-20 of the S.C. Code is amended to read:

Section 40-60-20.    As used in this chapter unless the context requires otherwise:

(1) "Analysis" means a study of real estate or real property other than one estimating value.

(2) "Appraisal", as a noun, means the act or process of developing an opinion of value; as an adjective, "appraisal" means of or pertaining to appraising and related functions including, but not limited to, appraisal practice and appraisal services.

(3) "Appraisal assignment" or "valuation assignment" means an engagement for which an appraiser is employed or retained to act, or would be perceived by third parties or the public as acting, as a disinterested third party in rendering an unbiased analysis, opinion, or conclusion that estimates the value of real estate.

(4) "Appraisal Foundation" means the Appraisal Foundation established on November 30, 1987, as a not-for-profit corporation under the laws of Illinois, containing the Appraisal Standards Board (ASB), Appraiser Qualifications Board (AQB), a board of trustees, and other advisory bodies.

(5) "Appraisal report" means any communication, written or oral, of an appraisal or appraisal review. The testimony of an individual dealing with the analyses, conclusions, or opinions concerning identified real estate or real property is considered to be an oral appraisal report.

(6) "Appraisal subcommittee" means the designees of the heads of the federal financial institutions regulatory agencies established by the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. Section 3301, et seq.), as amended, as well as the Secretary of the Department of Housing and Urban Development, or the secretary's designee, under the Department of Housing and Urban Development Reform Act of 1989 (12 U.S.C. Section 1708(g)).

(7) "Appraiser" means a person who holds a license or certification issued by the board to perform valuation services competently and in a manner that is independent, impartial, and objective, and in accordance with all applicable laws.

(8) "Apprentice appraiser" means an individual who holds a credential issued by the board to assist a state-certified appraiser in the performance of an appraisal if the apprentice is actively supervised by the certified appraiser.

(9) "Board" means the South Carolina Real Estate Appraisers Board established pursuant to the provisions of this chapter.

(10) "Complex residential property appraisal" means one in which the property to be appraised, the form of ownership, or market conditions are atypical.

(11) "Federally related transaction" means any real estate-related financial transaction which a federal financial institution regulatory agency engages in, contracts for, or regulates and which requires the services of an appraiser.

(12) "Mass appraisal" means the process of valuing a universe of properties as of a given date using standard methodology, employing common data, and allowing for statistical testing.

(13) "Mass appraiser" means any appraiser who is employed in the office of a tax assessor to appraise real property for ad valorem tax purposes and who is licensed or certified as a mass appraiser.

(14) "Noncomplex residential property appraisal" means one in which the property to be appraised, the form of ownership, and market conditions are those which are typically found in the subject market.

(15) "Person" means an individual, corporation, partnership, or association, foreign and domestic.

(16) "Price" means the amount asked, offered, or paid for a property.

(17) "Real estate" means an identified parcel or tract of land including improvements, if any.

(18) "Real estate appraisal activity" means the act or process of performing an appraisal and preparing an appraisal report.

(19) "Real property" means the interests, benefits, and rights inherent in the ownership of real estate.

(20) "Residential appraisal" is an appraisal of a vacant or improved parcel of land that is devoted to or available for use as a one-to-four family abode including, but not limited to, a single-family home, apartment, or rooming house.

(21) "Standards of professional appraisal practice" or "USPAP" means the National Uniform Standards of Professional Appraisal Practice as adopted by the Appraisal Standards Board of the Appraisal Foundation and adopted by the board.

(22) "State-certified general appraiser" means an appraiser authorized to engage in the appraisal of all types of real property.

(23) "State-certified general mass appraiser" means an appraiser authorized to engage in all types of real estate mass appraisal activity for ad valorem purposes.

(24) "State-certified residential appraiser" means an appraiser authorized to engage in the appraisal of one to four residential units without regard to transaction value or complexity and nonresidential appraisals with a transaction value less than five hundred thousand dollars.

(25) "State-certified residential mass appraiser" means an appraiser authorized to engage in the mass appraisal of one to four residential units without regard to value or complexity and nonresidential appraisals with a transaction value less than five hundred thousand dollars.

(26) "State-licensed appraiser" means an appraiser authorized to engage in the appraisal of noncomplex one to four residential units having a transaction value less than one million dollars and complex one to four residential units and nonresidential appraisals having a transaction value less than five hundred thousand dollars.

(27) "State-licensed mass appraiser" means an appraiser authorized to engage in the mass appraisal of noncomplex one to four residential units having a transaction value less than one million dollars and complex one to four residential units and nonresidential appraisals having a transaction value less than five hundred thousand dollars.

(28) "Timberland" means forestland that is producing or is capable of producing timber as a crop.

(29) "Valuation services" means the value of real estate or real property based on assignment instructions of the client in accordance with federal law or regulations.

(30) "Value" means the monetary relationship between properties and those who buy, sell, or use those properties, expressed as an opinion of the worth of the property at a given time.

License requirements and exceptions

SECTION 3.    Section 40-60-30 of the S.C. Code is amended to read:

Section 40-60-30.    It is unlawful for an individual to assume or use a title, designation, or abbreviation likely to create the impression that the person is a real estate appraiser or to engage in real estate appraisal activity or advertise as an appraiser without a valid license issued by the department. However, nothing in this chapter may be construed to apply to:

(1) A real estate licensee licensed in accordance with Chapter 57, Title 40 who performs valuation services of real estate for a client or customer on the condition that the valuation service is not referred to as an appraisal. In performing a valuation service, which federal law or regulation does not require a license or certified appraiser, the real estate licensee must disclose to the requesting party: "This valuation service may not be used for the purposes of obtaining financing in a federally related transaction.".

(2) A forester registered pursuant to Chapter 27, Title 48 who performs valuation services on standing or growing timber or timberland located in this State and issues a valuation service on the timber or timberland, as permitted by Chapter 27, Title 48 and Regulation 53-13. When a valuation service is to be used in a federally related transaction, the registered forester must be licensed or certified under this chapter if required by federal law or regulation.

(3) A person, employed by a lender in the performance of valuation services, with respect to which federal law or regulation does not require a licensed or certified appraiser.

(4) A person, credentialed by this board in the performance of valuation services, with respect to which federal law or regulation does not require a licensed or certified appraiser.

Required qualifications

SECTION 4.    Section 40-60-31 of the S.C. Code is amended to read:

Section 40-60-31.    To qualify as an appraiser, an applicant shall:

(1) have attained the age of eighteen years;

(2) satisfy educational requirements of having:

(a) as an apprentice, state-licensed, or mass appraiser:

(i) a high school diploma; or

(ii) hold a certificate of equivalency;

(b) as a state-certified residential appraiser:

(i) a high school diploma or certificate of equivalency; and

(ii) additional education as required by the Appraiser Qualifications Board of the Appraisal Foundation or as promulgated by the board through regulation;

(3) submit proof of completion of appraiser qualifying education as required by the Appraiser Qualifications Board and experience requirements as specified in this chapter or promulgated by the board through regulation;

(4) submit certificates of licensure from all jurisdictions where presently or previously certified;

(5) submit to a state fingerprint-based criminal records check, to be conducted by the State Law Enforcement Division, a national criminal records check, supported by fingerprints, conducted by the FBI, and, if required by the Appraiser Qualifications Board, undergo a criminal background check in compliance with AQB requirements to be submitted by the applicant with his application; and

(6) pass an examination, if applicable. An applicant who does not become licensed or certified within two years after passing the examination must retake the examination.

Educational and experience requirements

SECTION 5.    Section 40-60-33 of the S.C. Code is amended to read:

Section 40-60-33.    In addition to the requirements of Section 40-60-31, an applicant for a permit, license, or certification shall provide proof of having met the following educational and applicable experience requirements:

(1) To qualify as an apprentice appraiser, an applicant shall:

(a) furnish evidence that the applicant will be supervised by an appraiser who is state-certified by the board;

(b) furnish evidence that the applicant has successfully completed additional education as required by the Appraiser Qualifications Board or promulgated by the board in regulation; and

(c) successfully complete a trainee/supervisor course conducted in compliance with the Appraiser Qualifications Board requirements.

(2) To qualify as a state-licensed appraiser or licensed mass appraiser, an applicant shall:

(a) furnish evidence that the applicant has successfully completed additional education as required by the Appraiser Qualifications Board or promulgated by the board in regulation;

(b) successfully complete experience as required by the Appraiser Qualifications Board or promulgated by the board in regulation. Experience may include, but is not limited to, fee and staff appraisal, ad valorem tax appraisal not to exceed fifty percent of the total hours claimed, review appraisal, appraisal analysis, highest and best use analysis, and feasibility analysis/study. Mass appraiser experience may be one hundred percent ad valorem tax appraisal. The verification for experience credit claimed by an applicant must be by affidavit on forms prescribed by the board; and

(c) pass an examination approved by the board. The prerequisites to sit for the examination are completion of the educational requirements and appraisal experience.

(3) To qualify as a state-certified residential appraiser or certified residential mass appraiser, an applicant shall:

(a) furnish evidence that the applicant has successfully completed additional education as required by the Appraiser Qualifications Board or promulgated by the board in regulation;

(b) successfully complete experience as required by the Appraiser Qualifications Board or promulgated by the board in regulation. Experience may include, but is not limited to, fee and staff appraisal, ad valorem tax appraisal not to exceed fifty percent of the total hours claimed, review appraisal, appraisal analysis, highest and best use analysis, and feasibility analysis/study. Mass appraiser experience may be one hundred percent ad valorem tax appraisal. The verification for experience credit claimed by an applicant must be by affidavit on forms prescribed by the board; and

(c) pass an examination approved by the board. The prerequisites to sit for the examination are completion of the educational requirements and appraisal experience.

(4) To qualify as a state-certified general appraiser or certified general mass appraiser, an applicant shall:

(a) furnish evidence that the applicant has successfully completed additional education required by the Appraiser Qualifications Board or promulgated by the board in regulation;

(b) successfully complete experience as required by the Appraiser Qualifications Board or promulgated by the board in regulation. Experience may include, but is not limited to, fee and staff appraisal, ad valorem tax appraisal not to exceed fifty percent of the total hours claimed, review appraisal, appraisal analysis, highest and best use analysis, and feasibility analysis/study. Mass appraiser experience may be one hundred percent ad valorem tax appraisal. The verification for experience credit claimed by an applicant must be by affidavit on forms prescribed by the board; and

(c) pass an examination approved by the board. The prerequisites to sit for the examination are completion of the educational requirements and appraisal experience.

Identification numbers, requirements related to apprentices