STAND. COM. REP. NO. 560

Honolulu, Hawaii

RE:    S.B. No. 771

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

Madam:

     Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 771 entitled:

"A BILL FOR AN ACT RELATING TO APPRAISALS,"

begs leave to report as follows:

     The purpose of this measure is to require a real estate appraiser who is acting as an arbitrator in a process to determine the fair market value of real estate to comply with the Uniform Standards of Professional Appraisal Practice. 

     Your Committee received testimony in support of this measure from Hawaii Council of Associations of Apartment Owners and two private citizens.  Testimony in opposition to this measure was received from the Department of Commerce and Consumer Affairs and the Hawaii Chapter of the Appraisal Institute.  Written testimony presented to the Committee may be reviewed on the Legislature's website.

     Your Committee finds that under the current law, appraisers are required to adhere to the Uniform Standards of Professional Appraisal Practice in determining the value of real estate.  Your Committee further finds that it is appropriate for an appraiser who is acting as an arbitrator to rely on the same standard to guide the appraiser's decision in an arbitration process.  Your Committee encourages the next legislative body that considers this measure to investigate the benefits and drawbacks of requiring an appraiser acting as an arbitrator to comply with the Uniform Standards of Professional Appraisal Practice in determining the amount of an arbitration award.  

     Your Committee has amended this measure by:

     (1)  Clarifying the requirement that an appraiser acting as an arbitrator shall rely on the Uniform Standards of Professional Appraisal Practice to guide the appraiser's decision determining an arbitration award;

     (2)  Adding a provision to require that an appraiser acting as an arbitrator include findings of fact, the rationale for the appraiser's decision, and information on the evidence upon which the award is based in the record of an award;

     (3)  Deferring the effective date of this measure to encourage further discussion; and

     (4)  Making technical, nonsubstantive changes to the language of this bill for the purpose of conformity with the existing law. 

     As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 771, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 771, S.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,

____________________________

ROSALYN H. BAKER, Chair