[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 3902 Introduced in Senate (IS)]

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118th CONGRESS
  2d Session
                                S. 3902

     To amend the National Housing Act to authorize State-licensed 
 appraisers to conduct appraisals in connection with mortgages insured 
    by the FHA and to ensure compliance with the existing appraiser 
     education and competency requirements, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 11, 2024

Mr. Tester (for himself and Mr. Cramer) introduced the following bill; 
which was read twice and referred to the Committee on Banking, Housing, 
                           and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
     To amend the National Housing Act to authorize State-licensed 
 appraisers to conduct appraisals in connection with mortgages insured 
    by the FHA and to ensure compliance with the existing appraiser 
     education and competency requirements, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Appraisal Industry Improvement 
Act''.

SEC. 2. APPRAISER STANDARDS.

    (a) Certification or Licensing.--
            (1) In general.--Section 202(g)(5) of the National Housing 
        Act (12 U.S.C. 1708(g)(5)) is amended by striking subparagraphs 
        (A) and (B) and inserting the following:
            ``(A) be certified or licensed by the State in which the 
        property to be appraised is located, except that a Federal 
        employee who chooses to become State-licensed or certified real 
        estate appraisers need to only be licensed or certified in 1 
        State or territory to perform real estate appraisal duties as a 
        Federal employee in all States and territories;
            ``(B) meet the competency requirements described in the 
        Uniform Standards of Professional Appraisal Practice before 
        accepting an assignment; and
            ``(C) have demonstrated verifiable education in the 
        appraisal requirements established by the Federal Housing 
        Administration under this subsection, which shall include the 
        completion of a course or seminar that educates appraisers on 
        those appraisal requirements, which shall be--
                    ``(i) provided by the Federal Housing 
                Administration or a private or public organization with 
                special competence in and knowledge of appraisal 
                education through contracts, grants, or other 
                assistance provided by the Secretary; or
                    ``(ii) approved by the Course Approval Program of 
                the Appraiser Qualification Board of the Appraisal 
                Foundation or a State appraiser certifying and 
                licensing agency.''.
            (2) Application.--Subparagraph (C) of section 202(g)(5) of 
        the National Housing Act (12 U.S.C. 1708(g)(5)), as added by 
        paragraph (1), shall not apply with respect to any appraiser 
        approved by the Federal Housing Administration to conduct 
        appraisals on mortgages insured under title II of the National 
        Housing Act (12 U.S.C. 1707 et seq.) on or before the date on 
        which the mortgagee letter or other guidance or regulations 
        take effect under subsection (c)(3).
    (b) Compliance With Verifiable Education and Competency 
Requirements.--Effective beginning on the date on which the mortgagee 
letter or other notice or regulations take effect under subsection 
(c)(3), no appraiser may conduct an appraisal for any mortgage insured 
under title II of the National Housing Act (12 U.S.C. 1707 et seq.) 
unless--
            (1) the appraiser is in compliance with the requirements 
        under subparagraphs (A) and (B) of section 202(g)(5) of such 
        Act (12 U.S.C. 1708(g)(5)), as amended by subsection (a); and
            (2) if the appraiser was not approved by the Federal 
        Housing Administration to conduct appraisals on mortgages 
        insured under title II of the National Housing Act (12 U.S.C. 
        1707 et seq.) before the date on which the mortgagee letter or 
        other notices or regulations take effect under subsection 
        (c)(3), the appraiser is in compliance with subparagraph (C) of 
        such section 202(g)(5).
    (c) Implementation.--Not later than the 240 days after the date of 
enactment of this Act, the Secretary of Housing and Urban Development 
shall issue a mortgagee letter or other notice or regulations that 
shall--
            (1) implement the amendments made by subsection (a);
            (2) clearly set forth all of the specific requirements 
        under section 202(g)(5) of the National Housing Act (12 U.S.C. 
        1708(g)(5)), as amended by subsection (a), for approval to 
        conduct appraisals under title II of such Act (12 U.S.C. 1707 
        et seq.), which shall include--
                    (A) providing that, before the effective date of 
                the mortgagee letter or other guidance or regulations, 
                a demonstration of competency and completion of 
                training that meet the requirements under subparagraphs 
                (A), (B), and (C) of such section 202(g)(5), as amended 
                by subsection (a), shall be considered to fulfill the 
                requirements under such subparagraphs; and
                    (B) providing a method for appraisers to 
                demonstrate such prior competency and completion; and
            (3) take effect not later than the date that is 180 days 
        after the date on which the Secretary issues the mortgagee 
        letter or other notice or regulations.

SEC. 3. ANNUAL REGISTRY FEES FOR APPRAISAL MANAGEMENT COMPANIES.

    Section 1109(a) of the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 (12 U.S.C. 3338(a)) is amended, in the matter 
following clause (ii) of paragraph (4)(B), by adding at the end the 
following: ``If the Appraisal Subcommittee determines that the fees 
established under clause (i) or (ii) result in adverse consequences or 
are otherwise not appropriately tailored to meet the functions of the 
Appraisal Subcommittee under this Act, the Appraisal Subcommittee may 
establish a new formula to decrease the amount of the fees.''.

SEC. 4. STATE CREDENTIALED TRAINEE APPRAISERS.

    (a) Maintenance on National Registry.--Section 1103(a) of the 
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 
(12 U.S.C. 3332(a)) is amended--
            (1) in paragraph (3)--
                    (A) by inserting ``and State credentialed trainee 
                appraisers'' after ``licensed appraisers''; and
                    (B) by striking ``and'' at the end;
            (2) by striking paragraph (4);
            (3) by redesignating paragraphs (5) and (6) as paragraphs 
        (4) and (5), respectively; and
            (4) in paragraph (4), as so redesignated--
                    (A) by striking ``year. The report shall also 
                detail'' and inserting ``year, details'';
                    (B) by striking ``provide'' and inserting 
                ``provides''; and
                    (C) by striking the period at the end and inserting 
                ``; and''.
    (b) Annual Registry Fees.--
            (1) In general.--Section 1109 of the Financial Institutions 
        Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3338) 
        is amended--
                    (A) in the section heading, by striking ``or 
                licensed'' and inserting ``, licensed, and credentialed 
                trainee''; and
                    (B) in subsection (a)--
                            (i) in paragraph (1), by inserting ``, and 
                        in the case of a State with a supervisory or 
                        trainee program, a roster listing individuals 
                        who have received a State trainee credential'' 
                        after ``this title'';
                            (ii) by striking paragraph (2) and 
                        inserting the following:
            ``(2) transmit reports on the issuance and renewal of 
        licenses, certifications, credentials, sanctions, and 
        disciplinary actions on a timely basis to the national registry 
        of the Appraisal Subcommittee;''; and
                            (iii) in paragraph (4)(A)--
                                    (I) by inserting ``including State 
                                credentialed trainee appraisers,'' 
                                after ``transactions,''; and
                                    (II) by inserting ``and from State 
                                credentialed trainee appraisers, an 
                                annual registry fee of not more than 
                                $20,'' after ``$40,''.
            (2) Rule of construction.--Nothing in the amendments made 
        by paragraph (1) shall require a State to establish or operate 
        a program for State credentialed trainee appraisers, as defined 
        in paragraph (12) of section 1121 of the Financial Institutions 
        Reform, Recovery, and Enforcement Act of 1989, as added by 
        subsection (d) of this section.
    (c) Transactions Requiring the Services of a State Certified 
Appraiser.--Section 1113 of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3342) is amended--
            (1) by striking ``In determining'' and inserting ``(a) In 
        General.--In determining''; and
            (2) by adding at the end the following:
    ``(b) Use of State Credentialed Trainee Appraisers.--In performing 
an appraisal under this section, a State certified appraiser may use 
the assistance of a State credentialed trainee appraiser or an 
unlicensed trainee appraiser.''.
    (d) Definition.--Section 1121 of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350) is amended by 
adding at the end the following:
            ``(12) State credentialed trainee appraiser.--The term 
        `State credentialed trainee appraiser' means an individual 
        who--
                    ``(A) meets the minimum criteria established by the 
                Appraiser Qualification Board for a trainee appraiser 
                credential; and
                    ``(B) is credentialed by a State appraiser 
                certifying and licensing agency.''.

SEC. 5. GRANTS FOR WORKFORCE AND TRAINING.

    Section 1109(b) of the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 (12 U.S.C. 3338(b)) is amended--
            (1) in paragraph (5), by striking ``and'' at the end;
            (2) in paragraph (6), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(7) to make grants to State appraiser certifying and 
        licensing agencies to support the carrying out of education and 
        training activities or other activities deemed appropriate by 
        the Appraisal Subcommittee for purposes of addressing appraiser 
        industry workforce needs.''.

SEC. 6. APPRAISAL SUBCOMMITTEE.

    Section 1011 of the Federal Financial Institutions Examination 
Council Act of 1978 (12 U.S.C. 3310) is amended, in the first sentence, 
by inserting ``the Department of Veterans Affairs, the Rural Housing 
Service of the Department of Agriculture, the Department of Housing and 
Urban Development,'' after ``Financial Protection,''.
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