Appraisers in The Ring Government Relations for Appraisers

“Appraisers in The Ring” Government Relations for Appraisers and the Appraisal Institute

What is Government Relations? § Government relations is the process of interacting with government entities to persuade government to take a desired action; participating in the democratic process; and/or educating the public about an issue or profession. § Three primary components: § Direct Lobbying § Political Action § Education

Tenets of Government Relations § Embodied in the U. S. Constitution: § Right to free speech § Right to associate § Right to petition government

Why is it important to appraisers? § Lobbying is not a mysterious process § Nor is it immoral § All of us are affected by laws created by government § Stop signs, parking meters, speed limits – all of them typically expected and accepted § Laws can also have an impact on your practice or profession § Requirements for the practice of minimum standards § Licensing requirements and fees

Appraisal Theory Is Impacted by Government Actions § Land use impacted by legal system § Public Restrictions on Ownership § § Taxation Eminent Domain Police Power Escheat

No matter what… § Government policies impact: § You as an appraiser § Your opinions of value § The Appraisal Institute and your local Appraisal Institute Chapter

Part I The Appraisal Institute Government Relations Program

Appraisal Institute Government Relations § § 18, 000 members 99 Chapters Board of Directors Government Relations Committee

Appraisal Institute Board of Directors Appraisal Institute Regions Appraisal Institute Washington Office National Government Relations Committee Appraisal Institute Chapters State Coalitions And Retained Lobbyist(s) Chapter Government Relations Committees Appraisal Institute Members

AI Washington Office § A division of the Public Affairs Department § Three full-time staff, all are registered lobbyists § Responsibilities and Directives § Resources § Personal visits, official comments, testimony § Newsletters, Actions Alerts, Position Papers, Web site § Appraiser News Online, The Federal Line, Capwiz and Capwiz State

Appraisal Institute Political Action Committee (APPAC) § Voluntary, non-partisan PAC § Represents real estate appraisal interests in campaigns for federal office § Pools contributions of Appraisal Institute members to support candidates who understand the issues and concerns confronted by real estate appraisers § APPAC is another voice on Capitol Hill

AI Government Relations Events § Washington Appraisal Summit § Appraisal Institute Policy Conference § Leadership Development & Advisory Council (LDAC) § Leadership Conference with visits to Capitol Hill § Special Briefings § ABA-AI Telephone Briefing

National Coalition Building § Appraisal Institute – American Society of Appraisers Joint Government Relations Contract § Appraisal Institute-American Society of Farm Managers and Rural Appraisers Joint Government Relations Contract § Member, National Real Estate Organizations § Memorandums of Understanding— one example: Toronto Valuation Accord

Examples of the AI Government Relations Program at Work Current Issues the National Government Relations Committee and the AI Office Have Worked on Recently: § § § Valuation for Financial Reporting Purposes Real Estate Settlement Procedures Act Appraisal Licensing Reform Client Pressure International Government Relations § With VFR, IVS appraisers need to be effective government relations advocates in all corners of the world!

Chapter Government Relations § Many AI Chapters are active in Government Relations § Government Affairs Chairs § Government Relations Committees § Chapter retained lobbyists § State Appraisal Coalitions § Volunteer-driven § Resource constraints

Current Issues Recently Addressed by AI Chapters § Some Recent Examples Include: § Florida – Rewrite of Appraisal Licensing Law § Washington – Appraiser Trainees legislation § North Carolina – AI Member Appointments to NC Appraisal Board § New Jersey – Formation of Statewide Appraisal Coalition § Texas – Fighting Service Tax on Appraisals § California – Promoting Sufficient Funding for Appraisal Licensing Board

Part II How Does Government Impact Me as an Appraiser?

The Financial Institutions Reform, Recovery and Enforcement Act of 1989 § We have FIRREA to thank for the current appraiser regulatory structure (YIKES!)

Appraisal Regulatory Structure Federal Deposit Insurance Corporation National Credit Union Administration Office of the Comptroller of the Currency Federal Reserve Board Financial Institutions Examinations Council The Appraisal Foundation Appraisal Standards Board Appraisal Organizations Appraisal Subcommittee Appraisal Qualifications Board State Appraiser Regulatory Agencies Licensing Certification Licensed/Certified Appraisers Office of Thrift Supervision Department of Housing & Urban Development Association of Appraisal Regulatory Organizations Enforcement

Components of U. S. Government § Federal § Congress/Legislative Branch § President/Federal Agencies/Executive Branch § Federal Court System/Judiciary Branch § State § Legislative § Executive § Initiatives/Referendums § Municipal § § Mayor City Council City Manager Ordinances

Federal Legislative Branch § House of Representatives § 435 Members based on population § Senate § 100 members; 2 from each state § House Leadership § Majority/Minority Leader § Majority/Minority Whip § Conference Chairs § Senate Leadership § § President of the Senate Majority/Minority Leader Majority/Minority Whip Conference Chairs

Key Congressional Committees § § House of Representatives § Agriculture § Financial Services § Judiciary § Resources § Small Business § Transportation and Infrastructure § Veterans’ Affairs § Ways and Means Senate § § § Banking, Housing and Urban Affairs Commerce, Science and Transportation Environment and Public Works Small Business and Entrepreneurship Veterans’ Affairs

Life Cycle of Legislation § § Introduction Referral to Committee Hearings Committee Markup § If in House, bill goes to Rules Committee § If in Senate, placed on the Senate Calendar § § Floor Consideration House-Senate Conference Committees President’s Signature Public Law

AI Case Study: Congressional Success Story § Real Estate Settlement Procedures Act (RESPA) – 2004 § Steps taken by Appraisal Institute: § § § § § Proposal introduced by HUD Comment period – Comment Letter Coalition development Grassroots campaign (Letters sent by AI members to Capitol Hill) Congressional testimony Proposal moves forward for final review Congressional pressure LDAC attendees lobby their members of Congress on Capitol Hill Confirmation hearings, Letter to Office of Management and Budget HUD withdraws Rule

Federal Executive Branch § Executive Office of the President § § § § White House Department of Homeland Security Office of Management and Budget United States Trade Representative Executive Agencies (15) Independent Agencies (62) Boards and Commissions (5) Quasi-Official Agencies (4)

Implementation of Public Law § Rulemaking Process § Advanced Notice of Proposed Rulemaking § Proposed Rules § Final Rules § Guidance and Administrative Actions § Federal Register

Federal Agencies Impacting Appraisers § Most Federal Agencies Impact Appraisers § Ex. Department of Labor does not consider appraisal as a “profession” in labor statistics § Key Agencies Include: § Appraisal Subcommittee of the Federal Financial Institutions Examinations Council § Five Federal Financial Institution Regulators § Securities and Exchange Commission § Department of Housing and Urban Development § Department of Veterans’ Affairs § Small Business Administration § Department of Agriculture § Department of Interior § Department of Transportation

Federal Agencies Impacting Appraisers § Even agencies you would not necessarily think are appraisalrelated, are! § Securities and Exchange Commission § Employee Benefits Security Administration § Public Company Accounting Oversight Board § General Services Administration § Department of Defense § U. S. Agency for International Development

AI Case Study: Federal Regulatory Success Story § VA Appraisal Panel – 2003 § Bill introduced in Congress to alter appraisal process § AI meets with Congressional, Agency staff § Agency staff asks for input on regulatory changes – Input provided § Congressional hearing – AI testifies against legislation, in favor of reforms (with qualifications) § Bill killed following hearing § Agency moves forward with reforms § Opportunity for AI members to participate

State Governments § Legislative Branch § State Legislature/Assembly § Executive Branch § § § Governor Secretary of State Attorney General State Agencies Boards and Commissions § Initiatives and Referendums § State Constitutions

State Legislative Branches § Most State Legislatures are Bicameral § Consist of House and Senate § One State (Nebraska) is Unicameral § § Full time vs. Part time Legislators Annual vs. Bi-annual Sessions Emergency Boards Committee Process is similar to Congress § Some nuances in procedure § Vary from state to state

Initiatives and Referendums § Initiatives § § Adopt New Laws Amend state constitution Grassroots driven Possible in 22 states § Referendums § Opportunity to reject laws passed by legislature § Popular (allowed in 24 states) § Legislative (allowed in all states)

State Appraisal Boards § Per FIRREA, now required in every state § Appraisal Subcommittee Oversight § Structures Diverse and Inconsistent § § § Housed in varying departments Funding mechanisms Board Structures Licensing Requirements and Fees Enforcement Activities

State Appraisal Boards § Turn the Spotlight on State Appraisal Boards § Often operate with little input or “in the dark” § You can: § § Attend Public Meetings Track Administrative Notices Impact the Rulemaking Process Use Legislative Recourse

AI Case Study: State Legislative Success Story § North Carolina § Two positions open up on Appraisal Board § Two AI members want to apply § AI Washington office assistance § Capwiz State Letters to Governor in support of AI Chapter-endorsed candidates § Over 30 letters sent to Governor Easley § Governor Easley appointed one of the AI members to the Board

Local - Municipal Governments § Mayor § City Council § City Manager § Weak Mayor vs. Strong Mayor § City Manager Systems § County Governments § Regional Governments

Local Law § Ordinances § Zoning § Planning Boards and Commissions § Local Initiatives § Most major cities have formal process § Used more frequently than statewide initiatives

Part III What Can I Do as an Appraiser to Impact Government?

Grassroots Activities § You can educate your legislators and their staff through: § Personal Contact § Letter Writing Utilize your personal experiences!

Appraisal Institute Grassroots Activities § Chapters can: § Track Legislation and Regulations § Form Coalitions § Communicate to the membership (newsletters/action alerts) § Develop Positions and Action Alerts § Organize Lobby Days/Policy Conferences § Host Fundraisers § Organize Advisory Groups § Host Special Events

Appraisal Institute Grassroots Activities § Individuals can: § § § Attend Town Hall Events Host Special Events Organize Advisory Groups Host Fundraisers Volunteer in a Campaign Write Letters (see handout and section on using Capwiz)

Appraisal Institute Grassroots Activities § K Street is Different than Main Street § Local politics is just that – local § Sometimes inappropriate for national organizations to participate § Preferred for “locals” to take the lead § National issues oftentimes require technical expertise § Legislative and regulatory proposals can be complex § Full-time staff can be helpful § Grassroots still extremely important

General Guidelines: Making Decisions § Use Force when… § The issue is very important § You’re right § There is something else to be gained § You have the facts to back you up § The cost of losing is high

General Guidelines: Making Decisions § Compromise when… § The issue is more important to the other side § There are rights and wrongs on both sides § You’re going to have to work with that group in the future

General Guidelines: Making Decisions § Withdraw when… § § § The issue is not important You’re wrong There’s more to lose than to gain You can’t win The time is not right

General Guidelines: Making Decisions § Wait when… § You don’t have the facts § The time is not right

Effective Government Relations Programs § Understanding Your Political Environment § § Identifying/Understanding the issues Establishing Policy Identifying Resources Setting Priorities § § § Who are you? How committed is your association? Who is the opposition? Will your success on the issue have other effects? How right are you? Understanding Political Dynamics

Part IV Now It’s Your Turn

Group Activity § Groups of 5 -10 people § Question posed; Formulate Response § Explain Your Government Relations Plan in less than 10 steps § Group Presentation § Comments/Questions

Group Activity § Problem A § Your state is one of the last remaining states to not accept online education for credit… § Question: What can your Chapter(s) do to change this?

Group Activity § Problem B § A property rights group is pushing an ballot initiative to require state agencies to compensate landowners when their regulations result in a decrease in property value… § How can your Chapter(s) help?

Group Activity § Problem C § Your state currently doesn’t license mortgage brokers and mortgage broker abuse in the form of client pressure is on the rise … § What could your Chapter(s) do?

Group Activity § Problem D: § Appraisal Institute Headquarters has issued an action alert for all members to Contact their Members of Congress regarding a bill to be voted on by the House and Senate… § What can your Chapter(s) do to support this effort?

Group Activity § Problem E: § The appraisal and valuation organizations in your state want to form a statewide legislative coalition… § How should your Chapter react to this?

Group Activity § Problem F: § A series of newspaper articles have highlighted poor appraisal practices with regard to land donations and purchasing homes. State legislators are looking to take action… § What should your Chapter(s) do?

Group Activity § Problem G: § A recent audit by the Appraisal Subcommittee shows that your state’s appraisal board is slow to process appraiser complaints. Some complaints are more than five years old… § What can your Chapter do in reaction to this news?

Group Activity § Problem H: § Instances of inappropriate pressure of appraisers abounds in your state. The primary culprits are mortgage brokers, bankers and realty agents. Appraisers are fed up… § What should your Chapter do to combat these inappropriate practices?

Your Feedback is Important! § What can the Washington Office do to assist your Chapter in becoming more politically active?