SB 0846 - Fiscal Note

Fiscal Note - SB 0846 - Licensing of real estate appraisers

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 2952-04

BILL NO. SCS for SB Nos. 846 & 847

SUBJECT: Boards and Commissions: Licenses-Professional

TYPE: Original

DATE: February 25, 1998

---

FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Real Estate Appraisers	$76,950	$50,250	$51,750
PR Fees	$0	$0	$0
Total Estimated Net Effect on All State Funds	$76,950	$50,250	$51,750

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Local Government

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 5 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials of the Department of Economic Development - Division of Professional Registration (DPR) assume the proposed legislation would result in additional revenue, since it would change the Missouri Real Estate Appraiser licensing/certification law from voluntary (title act) to mandatory (practice act).

There is no conclusive data available which states the number of appraisers practicing in Missouri. However, according to the Missouri Appraisers Advisory Council, it is estimated there are approximately 2,000 practicing appraisers in the state. It is estimated there would be approximately 325 additional applications in the last ten months of FY 99 due to this legislation. Based on the current fee of $125 for application processing and the annual licensing fee of $150, the revenue for FY 99 would be $89,375. Additional revenue for subsequent years is based on the $150 licensing fee with 325 additional licensees, with a 3% annual growth.

The Real Estate Appraisers Fund would reimburse the PR Fees Fund for the contracted clerical services.

DPR assumes the additional applications would require contract clerical staff to assist current staff in processing. This would be a one-time cost of $12,245 ($7.17 per hour contract clerical staff x 1,733 hours = $12,425). Additional costs associated with the licensing of these applicants in regard to postage, printing, telephone, and GR transfers could be absorbed under current appropriations. However, if this legislation would result in a larger increase than expected or if the increased number of licensees would result in a substantial number of additional investigations, additional appropriations in personnel and/or expense and equipment would be required. If the additional licensees would result in few additional investigations, it is possible the annual licensing fee would be reduced in future fiscal years.

It is assumed the current licensing system would be adequate to handle an additional 325 licensees per year.

Officials from the Office of the Secretary of State (SOS) assume the proposed legislation would require the printing of additional pages in the Missouri Register and the Code of State Regulations and have estimated a one-time publishing and distribution cost of $3,025 for FY 99. While this bill alone would not require SOS to acquire additional staff, SOS assumes the

cumulative effect of additional Register and Code publishing duties could, at some point, require additional staff. However, Oversight assumes SOS could increase fees to cover any additional costs, per Section 536.033, RSMo.

ASSUMPTION (continued)

Officials from the Office of the Attorney General (AGO), Department of Revenue (DOR), Office of State Courts Administrator (CTS), Department of Transportation (DHT), Administrative Hearing Commission (AHC) and the Office of the State Treasurer (STO) assume the proposed legislation would have either minimal or no fiscal impact on their agencies.

FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
REAL ESTATE APPRAISERS FUND
Income-Division of Professional Registration (DPR)
License Fees/Renewals	$89,375	$50,250	$51,750
Costs-DPR
Transfer to PR Fees Fund	($12,425)	$0	$0
ESTIMATED NET EFFECT TO
REAL ESTATE APPRAISERS FUND	$76,950	$50,250	$51,750
PR FEES FUND
Income-Division of Professional Registration (DPR)
Transfer from Real Estate Appraisers Fund	$12,425	$0	$0
Costs-DPR
Expense	($12,425)	$0	$0
ESTIMATED NET EFFECT TO
PR FEES FUND	$0	$0	$0
FISCAL IMPACT - Local Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
	$0	$0	$0

FISCAL IMPACT - Small Business

This proposal could result in a direct fiscal impact to small businesses, since it would require those dealing in real estate appraisals to obtain a license.

DESCRIPTION

After July 1, 1999, the proposed legislation would require that any person in this state who acts as a real estate appraiser or engages in the business of real estate appraisal would be required to obtain a license or certificate issued by the Missouri Real Estate Appraisers Commission. No license or certificate would be issued under the provisions of Chapter 339, RSMo, to a partnership, association, corporation, firm or group.

A nonlicensed or certified person could assist a state-licensed or state-certified appraiser. The provisions of Chapter 339, RSMo, should not be construed to require a license or certificate for certain persons as set out in subsection 5 of section 339.501 of this act.

Current law provides for two classes of certified real estate appraisers. These are residential real estate appraiser and general real estate appraiser. This act adds state-licensed real estate appraiser to the list. The act contains provisions covering license renewal, failure to renew in a specified time and renewal of an expired license. The act also deletes the thirty hour requirement for continuing education. This requirement will be set by the Appraisal Qualification Board with the approval of the Real Estate Commission. Various definitions are changed or added to Section 339.503 of this act. The Real Estate Commission may refuse to issue or renew any certificate or license issued pursuant to sections 339.500 to 339.549 for any cause set out in subsection 2 of section 339.532 of this act. Violations of the provisions of Sections 339.500 to 339.549 of this act are Class B misdemeanors.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

This legislation could affect Total State Revenues.

SOURCES OF INFORMATION

Department of Economic Development - Professional Registration

Department of Revenue

Office of the Secretary of State

Department of Transportation

Administrative Hearing Commission

Office of the Attorney General

Office of the State Treasurer

Office of the State Courts Administrator

Jeanne Jarrett, CPA

Director

February 25, 1998