Petition Clears First Hurdle to Put USPAP Through CA Rulemaking

*** FOR IMMEDIATE RELEASE ***

(LOS ANGELES, September 1, 2020) – A petition to the State of California to submit the 2020-2021 version of the Uniform Standards of Professional Appraisal Practice to a required notice-and-comment rulemaking cleared its first hurdle today. The matter is now under review by the California Office of Administrative Law. You can locate the case here under OAL File Number: CTU2020-0817-01.

The petition calls for a rulemaking, which includes a state-mandated promulgation in the California Regulatory Notice Register, a cost-benefit analysis and compulsory sign-offs by the Department of Finance and filings with the Secretary of State’s Office. In short, it requires a state agency, the Bureau of Real Estate Appraisers, to comply with California law. The Uniform Standards of Professional Appraisal Practice is what the California Office of Administrative Law calls an “underground regulation,” due to deficient rulemaking.

A side benefit: A rulemaking will give a voice to the mortgagors, employees, depositors and investors in the 200 banks doing business in the state; members and employees of the 300 credit unions headquartered here; the state’s 10,000 licensed real estate appraisers who must contend with continual regulatory changes; state and local agencies that rely on eminent domain; property owners who have been (or will be) subject to eminent domain; and personnel in the offices of the state’s 58 county assessors. Also given a voice will be the investors in so-called community facilities district bonds. USPAP appraisals are often the centerpiece of the bonds’ official statements.

Moreover, it is an opportunity for appraisers to go on record about definitions in the new version of the standards. One new definition has rankled many.

The paid panelists of the nonprofit Washington, D.C.-based Appraisal Foundation do yeoman’s work but the California Administrative Procedure Act and the California Code of Regulations, Title 1, § 20, “Incorporation by Reference,” do not allow an open-ended delegation of the people’s business of California to private persons. A state rulemaking is required for each revision of any outside standard incorporated into a state regulation. This is a key safeguard for this very reason.

If you’d like to help, here’s something you can do:

Please email the California Office of Administrative Law at staff@oal.ca.gov and express your interest in seeing a notice-and-comment rulemaking pursuant to the California Administrative Procedure Act and the California Code of Regulations, Title 1, § 20, “Incorporation by Reference.” Please refer to “underground regulation” OAL File Number: CTU2020-0817-01. By doing this, you are not necessarily rejecting the current version of USPAP. You are simply insisting California follow its own administrative laws. You are also supporting Californians in exercising their rights, guaranteed by state law, to go on record in the state register about the 2020-2021 version of the copyrighted standards and each future version of them. Californians deserve state agencies that adhere to state law.

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