                                  ATTORNEY GENERAL OF TEXAS
                                                GREG         ABBOTT




                                                 September 27,2004



Mr. Wayne Thorburn                                          Opinion No. GA-0253
Commissioner
Texas Appraiser Licensing and                               Re: Whether the Texas Appraiser Licensing and
  Certification Board                                       Certification Board may adopt a rule establishing
Post Office Box 12 188                                      minimum      education requirements for appraiser
Austin, Texas 78711-2188                                    trainees (RQ-0207-GA)

Dear Commissioner         Thorbum:

      You ask whether the Texas Appraiser Licensing and Certification                           Board (the “board” or
“TALCB”) may adopt a rule establishing minimum education requirements                           for appraiser trainees.’

          The Texas Appraiser Licensing and Certification Act, chapter 1103 ofthe Occupations Code
(the “Act”), was enacted in 1991 to conform state law to the requirements of Title XI of the federal
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FlRREA”).2 See TEX.
OCC. CODE ANN. $5 1103.001-.002 (Vernon 2004)’ Subchapters B and C of the Act establish that
TALCB “is an independent subdivision of the Texas Real Estate Commission,” and is responsible
for the administration of the Act. See id. $3 1103.051-,059 (establishing TALCB), 1103.101
(TALCB “may delegate to the commissioner            the responsibility for administering” the Act).
Subchapter D provides TALCB with the power to adopt rules relating to appraiser licensing and
certification.   See id. $4 1103.151-,154.      Subchapter E establishes certificate and license
requirements. See id. 55 1103.201-,213. Subchapter H permits the board to authorize “a certified




           ‘See Letter from Wayne Thorbum, Commissioner,     Texas Appraiser Licensing and Certification Board, to
Honorable Greg Abbott, Texas Attorney General, at 2 (Apr. 7,2004) (on file with Opinion Committee, alsoavailable
or http://www.oag.state.tx.us) [hereinafter Request Letter].

          2FIRRF?A was enacted by Congress in response to the savings and loan crisis to protect federal fmancial and
public policy interests. See HOUSECOMM. ON FINANCIALINSTITUTIONS,               INTERIMREPORTTO THESEVENTY-SECOND
LEGISLATURE,    at 48 (Nov. 1990). Title XI of FIRREA “is specifically designed to address the real estate appraisal
industry,” and provides the federal foundation for the cextitication and licensing ofreal estate appraisers at the state level.
Id.; see niso 12 U.S.C. $4 3331-3352 (Title XI) (2000).

        ‘See Act of May 24, 1991, 72d Leg., R.S., ch. 663, $5 1-2, 6, 1991 Tex. Gen. Laws 2413, 2414, 2415,
modifiedby Act ofMay22,2~01,77tbLeg.,    R.S., ch. 1421, $2, $5 1103.001..554,2001 Tex. Gen. Laws4570,4702.
Mr. Wayne Thorbum          - Page 2                    (GA-0253)




appraiser.   to sponsor an appraiser trainee, ” id. 5 1103.351, and governs eligibility requirements
for approval as an appraiser trainee, see id. 4 1 103.353.4

        You assert that sections 1103.151 and 1103.152 authorize TALC% to adopt education
requirements for appraiser trainees. See Request Letter, supra note 1, at 2. Section 1103.151
provides that TALCB may adopt:

                          (1) rules for certifying or licensing an appraiser in this state
                  that are in accordance with this chapter and consistent with, but not
                  more stringent than, applicable federal law;

                           (2) rules relating to the education and experiencerequired for
                  certifying or licensing an appraiser that are consistent with, but not
                  more stringent than, the guidelines recognized by the Appraisal
                  Subcommittee[.]

TEX.   Oct. CODE ANN. $1103.15 1 (Vernon 2004). Section 1103.152(b) provides that the board may:

                           (1) establish certificate and license categories that are
                  consistent    with the categories recognized    by the Appraiser
                  Qualifications    Board, the Appraisal Standards Board, and the
                  Appraisal Subcommittee; and

                          (2) prescribe qualifications for each category that are not
                  more stringent than the qualifications established for that category by
                  the Appraiser Qualifications Board, the Appraisal Standards Board,
                  and the Appraisal Subcommittee.

Id. 5 1103.152(b).   Title XI of FLRRPA establishes the Appraisal Subcommittee, which forms the
core of “a complex oversight structure for real estate appraisals and appraisers that involves private,
state, and federal entities.” See U.S. GENERAL ACCOUNTING OFFICE, REGULATORY PROGRAMS,
OPPORTWJITIES     TO ENHANCE OVERSIGHT OF THE REAL ESTATE APPRAISAL INDUSTRY, at 1 (Mar.
24,2004) [hereinafter GAO Report].5 The Appraisal Subcommittee is responsible for monitoring
and reviewing the “practices, procedures, activities, and organizational structure of the Appraisal
Foundation.”    12 U.S.C. 5 3332 (2000) (functions of Appraisal Subcommittee).           The Appraisal
Foundation “provides the organizational framework for the [Appraisal Standards Board] and the
[Appraisal Qualifications Board],” GAO Report at 5, which are independent boards ofthe Appraisal
Foundation.    See id. at 2-3. The Appraisal Standards Board is responsible for establishing
“minimum standards for the development and reporting of real estate appraisals,” id. at 5, while the
Appraisal Qualifications Board (“AQB”) is responsible for establishing “minimum qualification


          4SubchaptenFandG,whichrespectivelyprovideforappraiserexaminationsandtemporaryappraisalauthority
for out-of- state appraisers, are not at issue in this request. SeeT~x. OCC. CODE ANN. $5 1103.25 l-.303 (Vernon 2004).

      ‘Effective July 7,2004, the General Accounting Office became the Government           Accountability   Off&.   See
GAO Human Capital Reform Act of 2004, Pub. L. 108.271, I I8 Stat. 81 I (2004).
Mr. Wayne Thorbum           - Page 3                     (GA-0253)




criteria for certified appraisers” and recommends               criteria applicable     to licensed appraisers       and
appraiser trainees. Id.

        TALCB’s proposed rule would require a prospective trainee to “provide evidence of the
successful completion of 75 classroom hours in courses approved by the board, including I5
classroom hours in a class devoted to the Uniform Standards of Professional Appraisal Practice,”
Request Letter, supra note 1, at 2 (emphasis omitted), and would be in conformity with current
recommendations     of the AQB. See id.; see also APPRAISAL QUALIFICATIONS         BOARD, THE
APPRAISAL      FOUNDATION;         THE    REAL    PROPERTY       APPRAISER       QUALIFICATION         CRITERIA     AND
INTERPRETATIONS        OF   THE CRITERIA, at 2. You ask whether TALCB may adopt this education
requirement.

        “As a general rule, an administrative agency is a creation of the legislature and, as such, has
only those powers expressly conferred and those necessary to accomplish its duties.” State v. Pub.
Util. Comm’n, 883 S.W.2d 190, 194 (Tex. 1994); State v. Exiga, 71 S.W.3d 429, 433 (Tex.
App.-Corpus    Christi 2002, no pet.). In addition, an administrative “‘agency can adopt only such
rules as are authorized by and consistent with its statutory authority,“’ which “‘may be expressly
conferred on it by statute or implied from other powers and duties given or imposed by statute.“’
Exiga, 71 S.W.3d at 433 (quoting R.R. Comm’n ofTex. v. Lone Star Gas Co., 844 S.W.2d 679,685
(Tex. 1992)). “‘The determining factor           whether [an agency] has exceeded its rule-m&king
powers is that the rule’s provisions must be in harmony with the general objectives of the Act
involved.“’ Id.

          TheproposedruleexceedsTALCB’s         statutoryauthority. Sections 1103.151 and 1103.152(b)
authorize TALCB to prescribe qualifications for certificate and license categories. See TEX. Oct.
CODE ANN. $5 1103.151-.152(b) (Vernon 2004). It is clear under the Act, however, that a trainee
does not hold a license or certificate. See, e.g., id. $5 1103.003(7)-(8) (defining “state-certified real
estate appraiser’ or “certified appraiser” to mean “a person who is certified under this chapter,” and
“state-licensed appraiser” or “licensed appraiser” to mean “a person who is licensed under this
chapter”); 1103.156(l), (5) (distinguishing certificate and licensing fees from appraiser trainee
application fee); 1103.201(a)-@) (a certificate or license is required in order to use its coordinating
title).6 In addition, subchapter E of the Act, which is devoted exclusively to certificate and license
requirements, provides that applicants must fulfill experience, classroom, and exam requirements.
See id. @ 1103.201-,213.        Provisions applicable to appraiser trainees are found exclusively in
subchapter H. See id. @ 1103.35 l-.355. The eligibility requirements for appraiser trainees set forth
in section 1103.353 do not impose an education requirement:

                  To be eligible for approval as an appraiser trainee, an applicant must:


           6TALCB rules define “license” as “[t]he whole or a part of any board permit, certificate, approval, registration
cm similar form of permission required by law,” and “licensee” as “[a] person certified, licensed, approved, authorized
OI registered by the board under the Texas Appraiser Licensing and Certification Act.” 22 TEX. ADMIN. CODE g
153.1(29)-(30) (2004). While TALCB suggests that this rule gives it the authority to treat a trainee as a license or
certificate holder, see Request Letter, supra note 1, at 3, chapter 1103 does not support such a conshuction.   See Exiga,
71 S.W.3d at 433 (“rulemaking power of administrative agencies does not permit the enactment of regulations which
are inconsistent with the expression of the lawmakers intent”).
Mr. Wayne Thorbum            - Page 4                      (GA-0253)




                             (1) be at least 18 years of age;

                             (2) be a citizen of the United States or a lawtilly                admitted
                   alien;

                           (3) have been a resident of this state for the 60 days
                   preceding the date the application is filed; and

                            (4) satisfy the board              as to     the    applicant’s      honesty,
                   trustworthiness, and integrity.

Id. 5 1103.353.    Nor is there a provision             in subchapter      H that authorizes       the board to establish
additional education requirements.’

         TALCB suggests that a rule imposing additional education requirements for appraiser
trainees is justified because AQB guidelines recommend that appraiser trainees obtain “75 classroom
hours of courses in subjects related to real estate appraisals” prior to applying for approval as an
appraiser trainee. See APPRAISAL QUALIFICATIONS BOARD, THE APPRAISAL FOUNDATION; THE
REAL PROPERTY         APPRAISER       QUALIFICATION        CRITERIA      AND INTERPRETATIONS            OF THE CRITERIA,
at 2; Request Letter, supra note 1, at 2; see also TEX. Oct. CODE ANN. 5s 1103.002 (Vernon 2004)
(“purpose of this chapter is to conform state law relating to the regulation of real estate appraisers
to the requirements adopted under Title XI” of FIRREA), 1103.152(b) (authorizing the board to
“establish certificate and license categories” and “prescribe qualifications for each category that are
not more stringent than the qualifications         established for that category by the Appraiser
QualificationsBoard,    the Appraisal StandardsBoard, andtheAppraisa1 Subcommittee”). However,
although Title XI requires states to follow AQB criteria for appraiser certification, see 12 U.S.C. 5
3345(a)-(b) (2000), “Title XI doesnot require states to adhere to AQB criteria for licensed appraisers
or for trainees.” GAO Report at 6.’

         In sum, chapter 1103 of the Occupations Code does not authorize TALCB to adopt a rule
establishing education requirements for appraiser trainees, and federal law does not require it.



          ‘Section 1103.208 provides that the board shall “issue a license under this section” to an applicant for appraiser
trainee classification “who has complet[ed] the classroom education requirements” and has “passe[d] the examination
required by Subchapter F” but “‘has failed to secure sponsorship from at least two certitied appraisers.” TEX. Oct. CODE
ANN. 5 1103.208 (Vernon 2004). Section 1103.208 is part of subchapter E concerning certificate and licensing
requirements and does not authorize the board to impose additional education requirements for appraiser trainees under
subchapter H.

          ‘See also 12 U.S.C. 9 3345(e) (2000) (“The Appraisal SubcommitteeshaN           not set qualifications or experience
requirements for the States in licensing real estate appraisers, including a de minim[i]s standard. Recommendations           of
the Subcommittee shall be nonbinding on the States.“) (emphasis added, footnote omitted). Title XI does not provide
for an appraisertrainee  classification. See id. $5 3331-52. The appraisertrainee    classificationwas    “adoptedbythe   AQB
in 1993,” and thus, the “authority tn develop requirements for      Trainee classifications is vested in the individual states,
territories,and possessions.” APPRAISALQUALIFICATIONS
                                                   BOARD,THEAPPRUSALFOIJNDATION;
                                                                              THEREALPROPERTY
APPRAISER   QUALIFICATION   CRITERIA
                                   AND INTERPRETATIONS
                                                     OFTHECRITERIA,at 1,
Mr. Wayne Thorbum     - Page 5              (GA-0253)




                                     SUMMARY

                       The Texas Appraiser Licensing and Certification Board may
               not adopt a rule establishing minimum education requirements for
               appraiser trainees.




BARRY R. MCBEE
First Assistant Attorney General

DON R. WILLETT
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Mary Crouter
Assistant Attorney General, Opinion Committee
