Second Substitute H.B. 346

Representative Gage Froerer proposes the following substitute bill:

1 DIVISION OF REAL ESTATE RELATED
2 AMENDMENTS
3 2008 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Gage Froerer
6 Senate Sponsor: Sheldon L. Killpack
7
8 LONG TITLE
9 General Description:
10 This bill modifies provisions related to areas regulated by the Division of Real Estate.
11 Highlighted Provisions:
12 This bill:
13 . addresses rulemaking by the Real Estate Commission;
14 . addresses fines that may be imposed;
15 . addresses disciplinary actions that may be imposed under provisions related to real
16 estate brokers and agents, the Real Estate Appraiser Licensing and Certification Act,
17 and the Utah Residential Mortgage Practices Act;
18 . provides for registration of trainees under the Real Estate Appraiser Licensing and
19 Certification Act;
20 . addresses terminology for experts under the Real Estate Appraiser Licensing and
21 Certification Act;
22 . modifies criminal penalties under the Real Estate Appraiser Licensing and
23 Certification Act and the Utah Residential Mortgage Practices Act;
24 . addresses the hours required of prelicensing education for mortgage licensing
25 including providing for rulemaking;

26 . removes grandfathering language related to principal lending manager;
27 . provides for deposit of certain fees into the Residential Mortgage Loan Education,
28 Research, and Recovery Fund; and
29 . makes technical and conforming amendments.
30 Monies Appropriated in this Bill:
31 None
32 Other Special Clauses:
33 None
34 Utah Code Sections Affected:
35 AMENDS:
36 61-2-5.5, as last amended by Laws of Utah 2007, Chapter 325
37 61-2-13, as last amended by Laws of Utah 1991, Chapter 165
38 61-2-20, as last amended by Laws of Utah 2007, Chapter 325
39 61-2-21, as last amended by Laws of Utah 2007, Chapter 325
40 61-2b-2, as last amended by Laws of Utah 2005, Chapter 199
41 61-2b-6, as last amended by Laws of Utah 2005, Chapter 199
42 61-2b-8, as last amended by Laws of Utah 2005, Chapter 199
43 61-2b-18, as last amended by Laws of Utah 2005, Chapter 199
44 61-2b-21, as last amended by Laws of Utah 2005, Chapter 199
45 61-2b-22, as last amended by Laws of Utah 2005, Chapter 199
46 61-2b-24, as last amended by Laws of Utah 2005, Chapter 199
47 61-2b-25, as last amended by Laws of Utah 2007, Chapter 306
48 61-2b-26, as last amended by Laws of Utah 2005, Chapter 199
49 61-2b-27, as last amended by Laws of Utah 2005, Chapter 199
50 61-2b-28, as last amended by Laws of Utah 2007, Chapter 325
51 61-2b-29, as last amended by Laws of Utah 2007, Chapter 325
52 61-2b-30.5, as last amended by Laws of Utah 2005, Chapter 199
53 61-2b-31, as last amended by Laws of Utah 2007, Chapter 325
54 61-2b-33, as last amended by Laws of Utah 2005, Chapter 199
55 61-2c-202, as last amended by Laws of Utah 2007, Chapter 325
56 61-2c-206, as last amended by Laws of Utah 2007, Chapter 325

57 61-2c-403, as last amended by Laws of Utah 2007, Chapter 325
58 61-2c-502, as last amended by Laws of Utah 2007, Chapter 325
59 ENACTS:
60 61-2c-405, Utah Code Annotated 1953
61
62 Be it enacted by the Legislature of the state of Utah:
63 Section 1. Section 61-2-5.5 is amended to read:
64 61-2-5.5. Real Estate Commission.
65 (1) There is created within the division a Real Estate Commission. The commission
66 shall:
67 (a) make rules for the administration of this chapter that are not inconsistent with this
68 chapter, including:
69 (i) licensing of:
70 (A) principal brokers;
71 (B) associate brokers;
72 (C) sales agents;
73 (D) real estate companies; and
74 (E) branch offices;
75 (ii) prelicensing and postlicensing education curricula;
76 (iii) examination procedures;
77 (iv) the certification and conduct of:
78 (A) real estate schools;
79 (B) course providers; and
80 (C) instructors;
81 (v) proper handling of funds received by real estate licensees;
82 (vi) brokerage office procedures and recordkeeping requirements;
83 (vii) property management;
84 (viii) standards of conduct for real estate licensees; [and]
85 (ix) rules made under Section 61-2-26 regarding an undivided fractionalized long-term
86 estate; and
87 (x) if the commission determines necessary, rules as provided in Subsection 61-2-20 (3)

88 regarding legal forms;
89 (b) establish, with the concurrence of the division, all fees as provided in this chapter
90 and Title 61, Chapter 2a, Real Estate Recovery Fund Act;
91 (c) conduct all administrative hearings not delegated by the commission to an
92 administrative law judge or the division relating to the:
93 (i) licensing of any applicant;
94 (ii) conduct of any licensee;
95 (iii) the certification or conduct of any real estate school, course provider, or instructor
96 regulated under this chapter; or
97 (iv) violation of this chapter by any person;
98 (d) with the concurrence of the director, impose sanctions as provided in Section
99 61-2-12 ;
100 (e) advise the director on the administration and enforcement of any matters affecting
101 the division and the real estate sales and property management industries;
102 (f) advise the director on matters affecting the division budget;
103 (g) advise and assist the director in conducting real estate seminars; and
104 (h) perform other duties as provided by:
105 (i) this chapter; and
106 (ii) Title 61, Chapter 2a, Real Estate Recovery Fund Act.
107 (2) (a) The commission shall be comprised of five members appointed by the governor
108 and approved by the Senate.
109 (b) Four of the commission members shall:
110 (i) have at least five years' experience in the real estate business; and
111 (ii) hold an active principal broker, associate broker, or sales agent license.
112 (c) One commission member shall be a member of the general public.
113 (d) No more than one commission member described in Subsection (2)(b) shall at the
114 time of appointment reside in any given county in the state.
115 (e) At least one commission member described in Subsection (2)(b) shall at the time of
116 an appointment reside in a county that is not a county of the first or second class.
117 (3) (a) Except as required by Subsection (3)(b), as terms of current commission
118 members expire, the governor shall appoint each new member or reappointed member to a

119 four-year term ending June 30.
120 (b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the
121 time of appointment or reappointment, adjust the length of terms to ensure that the terms of
122 commission members are staggered so that approximately half of the commission is appointed
123 every two years.
124 (c) Upon the expiration of the term of a member of the commission, the member of the
125 commission shall continue to hold office until a successor is appointed and qualified.
126 (d) A commission member may not serve more than two consecutive terms.
127 (e) Members of the commission shall annually select one member to serve as chair.
128 (4) When a vacancy occurs in the membership for any reason, the replacement shall be
129 appointed for the unexpired term.
130 (5) (a) A member may not receive compensation or benefits for the member's services,
131 but may receive per diem and expenses incurred in the performance of the member's official
132 duties at the rates established by the Division of Finance under Sections 63A-3-106 and
133 63A-3-107 .
134 (b) A member may decline to receive per diem and expenses for the member's service.
135 (6) (a) The commission shall meet at least monthly.
136 (b) The director may call additional meetings:
137 (i) at the director's discretion;
138 (ii) upon the request of the chair; or
139 (iii) upon the written request of three or more commission members.
140 (7) Three members of the commission constitute a quorum for the transaction of
141 business.
142 Section 2. Section 61-2-13 is amended to read:
143 61-2-13. Grounds for revocation of principal broker's license -- Automatic
144 inactivation of affiliated associate brokers and sales agents licenses.
145 (1) (a) [Any] An unlawful act or [any] violation of this chapter committed by [any real
146 estate sales agent or associate broker employed or engaged as an independent contractor by or
147 on behalf of a licensed principal broker or committed by any employee, officer, or member of a
148 licensed principal broker] a person listed in Subsection (1)(b) is cause for:
149 (i) the revocation, suspension, or probation of [the] a principal broker's license[,]; or

150 [for]
151 (ii) the imposition of a fine against the principal broker in an amount not to exceed
152 [$500] $2,500 per violation.
153 (b) Subsection (1)(a) applies to an act or violation by any of the following:
154 (i) a real estate sales agent or associate broker employed by a licensed principal broker;
155 (ii) a real estate sales agent or associate broker engaged as an independent contractor
156 by or on behalf of a licensed principal broker; or
157 (iii) an employee, officer, or member of a licensed principal broker.
158 (2) (a) The revocation or suspension of a principal broker license automatically
159 inactivates [every] an associate broker or sales agent license granted to [those persons] a person
160 by reason of [their] that person's affiliation with the principal broker whose license [was] is
161 revoked or suspended, pending a change of broker affiliation.
162 (b) A principal broker shall, [prior to] before the effective date of [the] a suspension or
163 revocation of [his] the principal broker's license, notify in writing every licensee affiliated with
164 [him] the principal broker of the revocation or suspension of [his] the principal broker license.
165 Section 3. Section 61-2-20 is amended to read:
166 61-2-20. Rights and privileges of real estate licensees to fill out forms or
167 documents.
168 [A] (1) Except as provided in Subsection (2), a real estate licensee may fill out only
169 those legal forms approved by the commission and the attorney general, and those forms
170 provided by statute[, with the following exceptions:].
171 [(1)] (2) (a) (i) A principal broker may fill out any documents associated with the
172 closing of a real estate transaction.
173 [(b)] (ii) A branch broker or associate broker may fill out any documents associated
174 with the closing of a real estate transaction if designated to fill out the documents by the
175 principal broker with whom the branch broker or associate broker is affiliated.
176 [(2)] (b) A real estate licensee may fill out real estate forms prepared by legal counsel
177 of the buyer, seller, lessor, or lessee.
178 [(3)] (c) If the commission and the attorney general have not approved a specific form
179 for the transaction, a principal broker, associate broker, or sales agent may fill out real estate
180 forms prepared by any legal counsel, including legal counsel retained by the brokerage to

181 develop these forms.
182 (3) The commission may by rule, made in accordance with Title 63, Chapter 46a, Utah
183 Administrative Rulemaking Act, provide a process for the approval of a legal form under this
184 section by the commission and the attorney general:
185 Section 4. Section 61-2-21 is amended to read:
186 61-2-21. Remedies and action for violations.
187 (1) (a) The director shall issue and serve upon a person an order directing that person to
188 cease and desist from an act if:
189 (i) the director has reason to believe that the person has been engaging, is about to
190 engage, or is engaging in the act constituting a violation of this chapter; and
191 (ii) it appears to the director that it would be in the public interest to stop the act.
192 (b) Within ten days after receiving the order, the person upon whom the order is served
193 may request [an adjudicative proceeding] a hearing.
194 (c) Pending [the] a hearing requested under Subsection (1)(b), [any] a cease and desist
195 order shall remain in effect.
196 (d) If a request for a hearing is made, the division shall follow the procedures and
197 requirements of Title 63, Chapter 46b, Administrative Procedures Act.
198 (2) (a) After [the] a hearing requested under Subsection (1), if the commission and the
199 director agree that [the] an act of the person violates this chapter, the director:
200 (i) shall issue an order making the order issued under Subsection (1) permanent; and
201 (ii) may impose [a civil penalty not to exceed the greater of:] another disciplinary
202 action under Section 61-2-12 .
203 [(A) $2,500 for each violation; or]
204 [(B) the amount of any gain or economic benefit derived from each violation.]
205 (b) The director shall file suit in the name of the Department of Commerce and the
206 Division of Real Estate, in the district court in the county in which an act described in
207 Subsection (1) [occurred] occurs or where the person resides or carries on business, to enjoin
208 and restrain the person from violating this chapter if:
209 (i) (A) [no] a hearing is not requested under Subsection (1); and
210 (B) the person fails to cease the act described in Subsection (1); or
211 (ii) after discontinuing the act described in Subsection (1), the person again

212 commences the act.
213 (c) [The] A district [courts] court of this state [shall have] has jurisdiction of an action
214 brought under this section.
215 (d) Upon a proper showing in an action brought under this section [related to an
216 undivided fractionalized long-term estate], the court may:
217 (i) issue a permanent or temporary, prohibitory or mandatory injunction;
218 (ii) issue a restraining order or writ of mandamus;
219 (iii) enter a declaratory judgment;
220 (iv) appoint a receiver or conservator for the defendant or the defendant's assets;
221 (v) order disgorgement;
222 (vi) order rescission;
223 (vii) impose a civil penalty not to exceed the greater of:
224 (A) $2,500 for each violation; or
225 (B) the amount of any gain or economic benefit derived from [each] a violation; and
226 (viii) enter any other relief the court considers just.
227 (e) The court may not require the division to post a bond in an action brought under
228 this Subsection (2).
229 (3) [The remedies and action] A remedy or action provided in this section [may] does
230 not limit, interfere with, or prevent the prosecution of[, any other remedies or actions] another
231 remedy or action, including a criminal [proceedings] proceeding.
232 Section 5. Section 61-2b-2 is amended to read:
233 61-2b-2. Definitions.
234 (1) As used in this chapter:
235 (a) (i) "Appraisal" means an unbiased analysis, opinion, or conclusion relating to the
236 nature, quality, value, or utility of a specified [interests] interest in, or [aspects] aspect of,
237 identified real estate or identified real property.
238 (ii) An appraisal [shall be] is classified by the nature of the assignment as a valuation
239 appraisal, an analysis assignment, or a review assignment in accordance with the following
240 definitions:
241 (A) "Valuation appraisal" means an unbiased analysis, opinion, or conclusion that
242 estimates the value of an identified parcel of real estate or identified real property at a particular

243 point in time.
244 (B) "Analysis assignment" means an unbiased analysis, opinion, or conclusion that
245 relates to the nature, quality, or utility of identified real estate or identified real property.
246 (C) "Review assignment" means an unbiased analysis, opinion, or conclusion that
247 forms an opinion as to the adequacy and appropriateness of a valuation appraisal or an analysis
248 assignment.
249 (b) "Appraisal Foundation" means the Appraisal Foundation that was incorporated as
250 an Illinois not-for-profit corporation on November 30, 1987.
251 (c) (i) "Appraisal report" means [any] a communication, written or oral, of an
252 appraisal.
253 (ii) An appraisal report [shall be] is classified by the nature of the assignment as a
254 valuation report, analysis report, or review report in accordance with the definitions provided in
255 Subsection (1)(a)(ii).
256 (iii) The testimony of a person relating to the person's analyses, conclusions, or
257 opinions concerning identified real estate or identified real property is considered to be an oral
258 appraisal report.
259 (d) "Board" means the Real Estate Appraiser Licensing and Certification Board that is
260 established in Section 61-2b-7 .
261 (e) "Certified appraisal report" means a written or oral appraisal report that is certified
262 by a state-certified general appraiser or state-certified residential appraiser.
263 (f) (i) (A) "Consultation service" means an engagement to provide a real estate
264 valuation service analysis, opinion, conclusion, or other service that does not fall within the
265 definition of appraisal.
266 (B) "Consultation service" does not mean a valuation appraisal, analysis assignment, or
267 review assignment.
268 (ii) Regardless of the intention of the client or employer, if a person prepares an
269 unbiased analysis, opinion, or conclusion, the analysis, opinion, or conclusion is considered to
270 be an appraisal and not a consultation service.
271 (g) "Contingent fee" means a fee or other form of compensation, payment of which is
272 dependent on or conditioned by:
273 (i) the reporting of a predetermined analysis, opinion, or conclusion by the person

274 performing the analysis, opinion, or conclusion; or
275 (ii) achieving a result specified by the person requesting the analysis, opinion, or
276 conclusion.
277 (h) "Division" means the Division of Real Estate of the Department of Commerce.
278 (i) "Federally related transaction" means [any] a real estate related transaction that is
279 required by federal law or by federal regulation to be supported by an appraisal prepared by:
280 (i) a state-licensed appraiser; or
281 (ii) a state-certified appraiser.
282 (j) "Real estate" means an identified parcel or tract of land including improvements if
283 any.
284 (k) "Real estate appraisal activity" means the act or process of making an appraisal of
285 real estate or real property and preparing an appraisal report.
286 (l) "Real estate related transaction" means:
287 (i) the sale, lease, purchase, investment in, or exchange of real property or an interest in
288 real property, or the financing of such a transaction;
289 (ii) the refinancing of real property or an interest in real property; or
290 (iii) the use of real property or an interest in real property as security for a loan or
291 investment, including mortgage-backed securities.
292 (m) "Real property" means one or more defined interests, benefits, or rights inherent in
293 the ownership of real estate.
294 (n) "State-certified general appraiser" means a person who holds a current, valid
295 certification as a state-certified general appraiser issued under this chapter.
296 (o) "State-certified residential appraiser" means a person who holds a current, valid
297 certification as a state-certified residential real estate appraiser issued under this chapter.
298 (p) "State-licensed appraiser" means a person who holds a current, valid license as a
299 state-licensed appraiser issued under this chapter.
300 [(q) "State-registered appraiser" means a person who before May 3, 1999, was
301 registered as an appraiser under this chapter.]
302 [(r)] (q) "Trainee" means an individual who:
303 (i) does not hold an appraiser license or appraiser certification issued under this
304 chapter; [and]

305 (ii) works under the direct supervision of a [state-licensed appraiser or] state-certified
306 appraiser to earn experience for licensure[.]; and
307 (iii) is registered as a trainee under this chapter.
308 [(s)] (r) "Unbiased analysis, opinion, or conclusion" means an analysis, opinion, or
309 conclusion relating to the nature, quality, value, or utility of identified real estate or identified
310 real property that is prepared by a person who is employed or retained to act, or would be
311 perceived by third parties or the public as acting, as a disinterested third party in rendering the
312 analysis, opinion, or conclusion.
313 (2) (a) If a term not defined in this section is defined by rule, the term shall have the
314 meaning established by the division by rule made in accordance with Title 63, Chapter 46a,
315 Utah Administrative Rulemaking Act.
316 (b) If a term not defined in this section is not defined by rule, the term shall have the
317 meaning commonly accepted in the business community.
318 Section 6. Section 61-2b-6 is amended to read:
319 61-2b-6. Duties and powers of division.
320 (1) The division [shall have] has the powers and duties listed in this Subsection (1).
321 (a) The division shall:
322 (i) receive [applications] an application for licensing [and], certification, or
323 registration;
324 (ii) establish appropriate administrative procedures for the processing of [applications]
325 an application for licensure [or], certification, or registration;
326 (iii) issue [licenses and certifications to qualified applicants] a license or certification
327 to a qualified applicant pursuant to this chapter; and
328 [(iv) maintain a registry of the names and addresses of individuals who are currently
329 licensed or certified as appraisers under this chapter.]
330 (iv) register an individual who applies for registration as a trainee under this chapter.
331 (b) (i) The division shall require [a trainee to notify the division that the trainee is
332 acting] an individual to register as a trainee with the division before the individual acts in the
333 capacity of a trainee earning experience for licensure.
334 (ii) The board shall adopt rules in accordance with Title 63, Chapter 46a, Utah
335 Administrative Rulemaking Act, for the trainee [notification] registration required by this

336 Subsection (1)(b).
337 (c) The division shall hold public hearings under the direction of the board.
338 (d) The division may:
339 (i) solicit bids and enter into contracts with one or more educational testing services or
340 organizations for the preparation of a bank of questions and answers approved by the board for
341 licensing and certification examinations; and
342 (ii) administer or contract for the administration of licensing and certification
343 examinations as may be required to carry out the division's responsibilities under this chapter.
344 (e) The division shall provide administrative assistance to the board by providing to the
345 board the facilities, equipment, supplies, and personnel that are required to enable the board to
346 carry out the board's responsibilities under this chapter.
347 (f) The division shall assist the board in upgrading and improving the quality of the
348 education and examinations required under this chapter.
349 (g) The division shall assist the board in improving the quality of the continuing
350 education available to [persons] a person licensed and certified under this chapter.
351 (h) The division shall assist the board with respect to the proper interpretation or
352 explanation of the Uniform Standards of Professional Appraisal Practice as required by Section
353 61-2b-27 when an interpretation or explanation becomes necessary in the enforcement of this
354 chapter.
355 (i) The division shall establish fees in accordance with Section 63-38-3.2 :
356 (i) for processing:
357 (A) a trainee [notifications] registration;
358 (B) [applications] an application for licensing and certification; and
359 (C) [registration of expert witnesses] approval of an expert witness; and
360 (ii) for all other functions required or permitted by this chapter.
361 (j) The division may:
362 (i) investigate [complaints] a complaint against:
363 (A) [trainees] a trainee; [or]
364 (B) [persons] a person licensed or certified under this chapter; or
365 (C) a person required to be licensed, certified, or registered under this chapter;
366 (ii) subpoena [witnesses and the production of books, documents, records, and other

367 papers;] a witness;
368 (iii) subpoena the production of a book, document, record, or other paper;
369 [(iii)] (iv) administer [oaths] an oath; and
370 [(iv)] (v) take testimony and receive evidence concerning [all matters] a matter within
371 the division's jurisdiction.
372 (k) The division may:
373 (i) promote research and conduct studies relating to the profession of real estate
374 appraising; and
375 (ii) sponsor real estate appraisal educational activities.
376 (l) The division shall adopt, with the concurrence of the board, rules for the
377 administration of this chapter pursuant to Title 63, Chapter 46a, Utah Administrative
378 Rulemaking Act, that are not inconsistent with this chapter or the constitution and laws of this
379 state or of the United States.
380 (m) The division shall employ an appropriate staff to investigate allegations that
381 [persons] a person required to be licensed [or], certified, or registered under this chapter
382 [failed] fails to comply with this chapter.
383 (n) The division may employ [such] other professional, clerical, and technical staff as
384 may be necessary to properly administer the work of the division under this chapter.
385 (o) The division may make available, at a reasonable cost determined by the division, a
386 list of the names and addresses of all persons licensed or certified by the division under this
387 chapter to the extent the information is a public record under Title 63, Chapter 2, Government
388 Records Access and Management Act.
389 (2) (a) The division shall [register expert witnesses who are] approve an expert witness
390 who is not otherwise licensed or certified under this chapter to appear in [all] an administrative
391 [and] or judicial tax [proceedings] proceeding to provide evidence related to the valuation of
392 real property that is assessed by the tax commission, provided that the:
393 (i) [registration] approval is limited to a specific proceeding;
394 (ii) [registration] approval is valid until the proceeding becomes final;
395 (iii) applicant pays [a registration] an approval fee to the division;
396 (iv) applicant provides the applicant's name, address, occupation, and professional
397 credentials; and

398 (v) applicant provides a notarized statement that:
399 (A) the applicant is competent to render an appraisal and to testify as an expert witness
400 in the proceeding; and
401 (B) the appraisal and testimony to be offered shall be in accordance with the Uniform
402 Standards of Professional Appraisal Practice adopted by the board.
403 (b) Subsection (2)(a) [shall be] is effective for [all] an administrative [and] or judicial
404 property tax [proceedings] proceeding related to the valuation of real property that is assessed
405 by the tax commission, including those filed but which are not final as of May 3, 1994.
406 (3) (a) [The division shall be] If the conditions of Subsection (3)(b) are met, the
407 division is immune from any civil action or criminal prosecution for initiating or assisting in
408 [any] a lawful investigation of [the actions of] an act of, or participating in [any] a disciplinary
409 proceeding concerning [a trainee or]:
410 (i) a person required to be licensed, certified, or registered pursuant to this chapter; or
411 (ii) a person approved as an expert witness pursuant to this chapter [if the action is
412 taken].
413 (b) This Subsection (3) applies if the division takes the action:
414 (i) without malicious intent; and
415 (ii) in the reasonable belief that the action [was] is taken pursuant to the powers and
416 duties vested in the [members of the] division under this chapter.
417 Section 7. Section 61-2b-8 is amended to read:
418 61-2b-8. Duties of board.
419 (1) (a) The board shall provide technical assistance to the division relating to real estate
420 appraisal standards and real estate appraiser qualifications [and shall have the responsibilities,
421 powers,].
422 (b) The board has the powers and duties listed in this section.
423 [(1)] (2) The board shall:
424 (a) determine the experience, education, and examination requirements appropriate for
425 [persons] a person licensed under this chapter;
426 (b) determine the experience, education, and examination requirements appropriate for
427 [persons] a person certified under this chapter in compliance with the minimum requirements
428 of Financial Institutions Reform, Recovery, and Enforcement Act of 1989, and consistent with

429 the intent of this chapter;
430 (c) determine the appraisal related acts that may be performed by:
431 (i) a trainee on the basis of the trainee's education and experience;
432 (ii) clerical staff; and
433 (iii) a person who:
434 (A) does not hold a license or certification; and
435 (B) assists [appraisers] an appraiser licensed or certified under this chapter in providing
436 appraisal services or consultation services;
437 (d) determine the procedures for a trainee [notifying] to register with the division [that
438 the trainee will assist persons licensed or certified under this chapter in providing appraisal
439 services or consultation services]; and
440 (e) develop one or more programs to upgrade and improve the experience, education,
441 and examinations as required under this chapter.
442 [(2)] (3) (a) The experience, education, and examination requirements established by
443 the board for [persons] a person licensed or certified under this chapter shall be the minimum
444 criteria established by the Appraiser Qualification Board of the Appraisal Foundation, unless,
445 after notice and a public hearing held in accordance with Title 63, Chapter 46a, Utah
446 Administrative Rulemaking Act, the board finds that the minimum criteria are not appropriate
447 for a state-licensed [appraisers or] appraiser or a state-certified [appraisers] appraiser in this
448 state.
449 (b) If under Subsection [(2)] (3)(a) the board makes a finding that the minimum criteria
450 are not appropriate, the board shall recommend appropriate criteria to the Legislature.
451 [(3)] (4) The board shall:
452 (a) determine the continuing education requirements appropriate for the renewal of
453 [licenses and certifications] a license or certification issued under this chapter;
454 (b) develop one or more programs to upgrade and improve continuing education; and
455 (c) recommend to the division one or more available continuing education courses that
456 meet the requirements of this chapter.
457 [(4)] (5) (a) The board shall consider the proper interpretation or explanation of the
458 Uniform Standards of Professional Appraisal Practice as required by Section 61-2b-27 when:
459 (i) an interpretation or explanation [becomes] is necessary in the enforcement of this

460 chapter; and
461 (ii) the Appraisal Standards Board of the Appraisal Foundation has not [as yet] issued
462 an interpretation or explanation.
463 (b) If the conditions of Subsection [(4)] (5)(a) are met, the board shall recommend to
464 the division the appropriate interpretation or explanation that the division should adopt as a
465 rule under this chapter.
466 [(5)] (6) The board shall develop and establish or approve the examination
467 specifications and the minimum score required to pass [the examinations] an examination for
468 licensure [and] or certification.
469 [(6)] (7) The board [shall] may review the:
470 (a) bank of questions and answers that comprise the examination for [persons] a person
471 licensed and certified under this chapter;
472 (b) procedure that is established for selecting individual questions from the bank of
473 questions for use in each scheduled examination; and
474 (c) questions in the bank of questions and the related answers to determine whether
475 they meet the examination specifications established by the board.
476 [(7)] (8) (a) The board shall conduct an administrative [hearings] hearing, not
477 delegated by the board to an administrative law judge, in connection with [all] a disciplinary
478 [proceedings] proceeding under Sections 61-2b-30 and 61-2b-31 concerning:
479 (i) a person required to be licensed [or], certified, or registered under this chapter; and
480 (ii) the person's failure to comply with this chapter and the Uniform Standards of
481 Professional Appraisal Practice as adopted under Section 61-2b-27 .
482 (b) The board shall issue in [each] an administrative hearing a decision that contains
483 findings of fact and conclusions of law.
484 (c) When a determination is made that a person required to be licensed [or], certified,
485 or registered under this chapter has violated [any provision of] this chapter, the division shall
486 implement disciplinary action determined by the board.
487 [(8) The members of the board shall be]
488 (9) (a) A member of the board is immune from [any] a civil action or criminal
489 prosecution for [any] a disciplinary proceeding concerning a person required to be registered,
490 licensed, [or] certified, or approved as an expert under this chapter if the action is taken without

491 malicious intent and in the reasonable belief that the action taken was taken pursuant to the
492 powers and duties vested in [the members] a member of the board under this chapter.
493 [(9)] (10) The board shall require and pass upon proof necessary to determine the
494 honesty, competency, integrity, and truthfulness of [each] an applicant for:
495 (a) original [or renewal] licensure [or], certification, or registration; and
496 (b) renewal licensure or certification.
497 Section 8. Section 61-2b-18 is amended to read:
498 61-2b-18. Application for licensure, certification, or registration -- Approval as
499 an expert witness.
500 (1) An application for the following shall be sent to the division on [forms] a form
501 approved by the division:
502 (a) original certification [or], licensure, or registration;
503 (b) [registration] approval as an expert witness; and
504 (c) renewal of certification or licensure.
505 (2) The payment of the appropriate fee, as fixed by the division with the concurrence of
506 the board in accordance with Section 63-38-3.2 , must accompany an application for:
507 (a) [registration] approval as an expert witness;
508 (b) original certification [or], licensure, or registration; and
509 (c) renewal of certification or licensure.
510 (3) At the time of filing an application described in Subsection (1), [each] an applicant
511 shall:
512 (a) sign a pledge to comply with the Uniform Standards of Professional Appraisal
513 Practice and the ethical rules to be observed by an appraiser that are established under Section
514 61-2b-27 for:
515 (i) a certified or licensed [appraisers or registered expert witnesses] appraiser;
516 (ii) a trainee; or
517 (iii) an expert witness approved under this chapter; and
518 (b) certify that the applicant understands the types of misconduct, as set forth in this
519 chapter, for which a disciplinary [proceedings] proceeding may be initiated against [persons] a
520 person certified [or], licensed, or registered under this chapter.
521 Section 9. Section 61-2b-21 is amended to read:

522 61-2b-21. Denial of licensure, certification, or registration.
523 The division may, upon compliance with Title 63, Chapter 46b, Administrative
524 Procedures Act, deny the issuance of a license [or], certification, or registration to an applicant
525 on any of the grounds enumerated in this chapter.
526 Section 10. Section 61-2b-22 is amended to read:
527 61-2b-22. Licensing, certification, registration, or expert witness requirements
528 for nonresidents -- Temporary license or certificate -- Revocation.
529 (1) [Each] An applicant for [registration as an expert witness, licensure, or certification
530 under this chapter] one of the following who is not a resident of this state shall submit with the
531 applicant's application an irrevocable consent that service of process upon the applicant may be
532 made by delivery of the process to the director of the division if, in an action against the
533 applicant in a court of this state arising out of the applicant's activities [as a real estate
534 appraiser] governed by this chapter in this state, the plaintiff cannot, in the exercise of due
535 diligence, obtain personal service upon the applicant[.]:
536 (a) approval as an expert witness; or
537 (b) licensure, certification, or registration under this chapter.
538 (2) A nonresident of this state who [has complied with the provisions of] complies
539 with Subsection (1) may obtain [a registration] approval as an expert witness, a license, [or] a
540 certification, or a registration in this state by complying with [all of] the provisions of this
541 chapter relating to [registration of] approval as an expert [witnesses] witness, licensure, [or]
542 certification, or registration.
543 (3) A nonresident of this state who [has complied with the provisions of] complies
544 with Subsection (1) may obtain a temporary permit for a license or certification to perform a
545 contract relating to the appraisal of real estate or real property in this state. To qualify for the
546 issuance of a temporary permit for a license or certification, an applicant must:
547 (a) submit an application on a form approved by the division;
548 (b) submit evidence that the applicant is licensed or certified in the state in which the
549 applicant primarily conducts business;
550 (c) certify that no formal charges alleging violation of state appraisal licensing or
551 certification laws have been filed against the applicant by the applicant's state of domicile; and
552 (d) pay an application fee in an amount established by the division with the

553 concurrence of the board.
554 (4) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
555 division, with the concurrence of the board, shall make rules establishing:
556 (a) the duration of a temporary permit; and
557 (b) procedures for renewal of a temporary permit.
558 (5) A temporary permit issued under this section shall be immediately and
559 automatically revoked if the appraiser's license or certification is suspended or revoked in the
560 appraiser's state of domicile.
561 (6) [Any] A person whose temporary permit for a license or certification [has been] is
562 revoked under Subsection (5) is entitled to a postrevocation hearing to challenge the
563 revocation. The hearing shall be conducted in accordance with Title 63, Chapter 46b,
564 Administrative Procedures Act.
565 Section 11. Section 61-2b-24 is amended to read:
566 61-2b-24. Expert witness, licensing, certification, registration documents --
567 Assigned number to be used on contracts -- Surrender of documents upon suspension.
568 (1) The division shall issue to [each] a person [registered] approved as an expert
569 witness, licensed, [or] certified, or registered under this chapter a document:
570 (a) stating that the person is [registered] approved as an expert witness, licensed, [or]
571 certified, or registered under this chapter; and
572 (b) specifying the expiration date of [the] a license or certification.
573 (2) (a) [A registration] An approval as an expert witness, a license, [or] a certification,
574 or a registration document issued under this chapter shall bear [a registration] an approval,
575 license, [or] certification, or registration number assigned by the division.
576 (b) [The] An assigned number shall be used in [all statements of qualification,
577 contracts, or other instruments used by the registration, license, or certificate holder] a
578 statement of qualification, a contract, or another instrument used by the holder of the approval,
579 license, certificate, or registration when reference is made to [his] the holder's status as being
580 [registered] approved, licensed, [or] certified, or registered under this chapter.
581 (3) (a) [Licensing, certification, and expert witness registration documents remain] An
582 approval, license, certification, or registration document is the property of the state.
583 (b) Upon [any] a suspension or revocation of a license [or], certification, or registration

584 under this chapter, the individual holding the [respective documents] applicable document shall
585 immediately return the document to the division.
586 Section 12. Section 61-2b-25 is amended to read:
587 61-2b-25. Other law unaffected.
588 Nothing contained in this chapter shall be considered to prohibit [any] a person
589 [registered] approved, licensed, or certified under this chapter from engaging in the practice of
590 real estate appraising as a professional corporation or a limited liability company in accordance
591 with [the provisions of]:
592 (1) Title 16, Chapter 11, Professional Corporation Act; or
593 (2) Title 48, Chapter 2c, Utah Revised Limited Liability Company Act.
594 Section 13. Section 61-2b-26 is amended to read:
595 61-2b-26. Principal place of business -- Display of documents -- Notify of changes
596 -- Nonresidents.
597 (1) [Each] A person licensed or certified under this chapter shall:
598 (a) designate and maintain a principal place of business; and [shall]
599 (b) conspicuously display the person's license or certification.
600 (2) (a) Upon [any] a change of a person's principal business location or home address, a
601 person licensed or certified under this chapter shall promptly send the division a signed
602 statement notifying the division of [any] the change within ten business days of the change.
603 (b) Upon [any] a change of an expert witness's address listed on the expert witness's
604 [registration] application for approval, the expert witness shall [promptly] send the division a
605 signed statement notifying the division of [any] the change within ten business days of the
606 change.
607 (3) A nonresident licensee or certificate holder, or a nonresident [registered] approved
608 as an expert witness is not required to maintain a place of business in this state if the
609 nonresident maintains an active place of business in the nonresident's state of domicile.
610 Section 14. Section 61-2b-27 is amended to read:
611 61-2b-27. Professional conduct -- Uniform standards.
612 (1) (a) [Each] A person licensed, certified, [or] registered, or approved as an expert
613 witness under this chapter must comply with:
614 (i) generally accepted standards of professional appraisal practice; and

615 (ii) generally accepted ethical rules to be observed by a real estate appraiser.
616 (b) Generally accepted standards of professional appraisal practice are evidenced by the
617 Uniform Standards of Professional Appraisal Practice promulgated by the Appraisal
618 Foundation.
619 (c) After a public hearing held in accordance with Title 63, Chapter 46a, Utah
620 Administrative Rulemaking Act, the board shall adopt and may make modifications of or
621 additions to the Uniform Standards of Professional Appraisal Practice as the board considers
622 appropriate to comply with the Financial Institutions Reform, Recovery, and Enforcement Act
623 of 1989.
624 [(2) If the Appraisal Standards Board of the Appraisal Foundation modifies the
625 Uniform Standards of Professional Appraisal Practice, issues supplemental appraisal standards
626 which it considers appropriate for residential real estate appraisers or for general real estate
627 appraisers, or issues ethical rules to be observed by a real estate appraiser and requests the
628 board to consider the adoption of the modified or supplemental standards or ethical rules, the]
629 (2) The board shall schedule a public hearing pursuant to Title 63, Chapter 46a, Utah
630 Administrative Rulemaking Act, for the purpose of deciding whether or not the board should
631 require [the] a modified or supplemental [standards] standard or the ethical [rules] rule to be
632 observed by [persons] a person licensed, certified, [or] registered, or approved as an expert
633 witness under this chapter[.] if the Appraisal Standards Board of the Appraisal Foundation:
634 (a) (i) modifies the Uniform Standards of Professional Appraisal Practice;
635 (ii) issues a supplemental appraisal standard which it considers appropriate for:
636 (A) a residential real estate appraiser; or
637 (B) a general real estate appraiser; or
638 (iii) issues an ethical rule to be observed by a real estate appraiser; and
639 (b) requests the board to consider the adoption of the modified or supplemental
640 standard or ethical rule.
641 (3) If, after the notice and public hearing described in Subsection (2), the board finds
642 that [the] a modified or supplemental [standards] standard or the ethical [rules] rule issued by
643 the Appraisal Standards Board of the Appraisal Foundation [are] is appropriate for [persons] a
644 person licensed, certified, [or] registered, or approved as an expert witness under this chapter,
645 the board shall recommend [rules] a rule requiring [all persons] a person licensed, certified,

646 [or] registered, or approved as an expert witness under this chapter to observe the modified or
647 supplemental [standards] standard or the ethical [rules] rule.
648 Section 15. Section 61-2b-28 is amended to read:
649 61-2b-28. Enforcement -- Investigation -- Orders -- Hearings.
650 (1) (a) The division may investigate the actions of:
651 (i) [any] a person registered, licensed, or certified under this chapter;
652 (ii) an applicant for registration, licensure, or certification;
653 (iii) an applicant for renewal of licensure or certification; or
654 (iv) a person required to be registered, licensed, or certified under this chapter.
655 (b) The division may initiate an agency action against a person described in Subsection
656 (1)(a) in accordance with Title 63, Chapter 46b, Administrative Procedures Act, to:
657 (i) impose disciplinary action;
658 (ii) deny issuance to an applicant of:
659 (A) an original [or renewal] registration, license, or certification; or
660 (B) a renewal of a license or certification; or
661 (iii) issue a cease and desist order as provided in Subsection (3).
662 (2) (a) The division may:
663 (i) administer an oath or affirmation;
664 (ii) subpoena [witnesses] a witness;
665 (iii) take evidence; and
666 (iv) require the production of [books, papers, contracts, records,] a book, paper,
667 contract, record, other [documents] document, or information relevant to the investigation
668 described in Subsection (1).
669 (b) The division may serve [subpoenas] a subpoena by certified mail.
670 (c) [Each] A failure to respond to a request by the division in an investigation
671 authorized under this chapter is considered to be a separate violation of this chapter, including:
672 (i) failing to respond to a subpoena;
673 (ii) withholding evidence; or
674 (iii) failing to produce [documents or records] a document or record.
675 (3) (a) The director shall issue and serve upon a person an order directing that person to
676 cease and desist from an act if:

677 (i) the director has reason to believe that the person has been engaging, is about to
678 engage, or is engaging in the act constituting a violation of this chapter; and
679 (ii) it appears to the director that it would be in the public interest to stop the act.
680 (b) Within ten days after receiving the order, the person upon whom the order is served
681 may request [an adjudicative proceeding] a hearing.
682 (c) Pending [the] a hearing requested under Subsection (3)(b), [the] a cease and desist
683 order shall remain in effect.
684 (d) If a request for hearing is made, the division shall follow the procedures and
685 requirements of Title 63, Chapter 46b, Administrative Procedures Act.
686 (4) (a) After [the] a hearing requested under Subsection (3), if the board agrees that
687 [the acts] an act of the person [violate] violates this chapter, the board:
688 (i) shall issue an order making the cease and desist order permanent; and
689 (ii) may impose [a civil penalty not to exceed the greater of:] another disciplinary
690 action under Section 61-2b-29 .
691 [(A) $2,500 for each violation; or]
692 [(B) the amount of any gain or economic benefit derived from each violation.]
693 (b) The director shall commence an action in the name of the Department of
694 Commerce and Division of Real Estate, in the district court in the county in which an act
695 described in Subsection (3) occurs or where the person resides or carries on business, to enjoin
696 and restrain the person from violating this chapter if:
697 (i) (A) [no] a hearing is not requested under Subsection (3); and
698 (B) the person fails to cease the act described in Subsection (3); or
699 (ii) after discontinuing the act described in Subsection (3), the person again
700 commences the act.
701 (5) [The remedies and action] A remedy or action provided in this section [do] does not
702 limit, interfere with, or prevent the prosecution of [any other remedies or actions] another
703 remedy or action, including a criminal [proceedings] proceeding.
704 Section 16. Section 61-2b-29 is amended to read:
705 61-2b-29. Disciplinary action -- Grounds.
706 (1) (a) The board may order disciplinary action against [any] a person:
707 (i) registered, licensed, or certified under this chapter; or

708 (ii) required to be registered, licensed, or certified under this chapter.
709 (b) On the basis of [any of the grounds] a ground listed in Subsection (2) for
710 disciplinary action, board action may include:
711 (i) revoking, suspending, or placing a person's registration, license, or certification on
712 probation;
713 (ii) denying a person's original [or renewal] registration, license, or certification;
714 (iii) denying a person's renewal license or certification;
715 [(iii)] (iv) in the case of denial or revocation of a registration, license, or certification,
716 setting a waiting period for an applicant to apply for a registration, license, or certification
717 under this chapter;
718 [(iv)] (v) ordering remedial education;
719 [(v)] (vi) imposing a civil penalty upon a person not to exceed the greater of:
720 (A) $2,500 for each violation; or
721 (B) the amount of any gain or economic benefit from [each] a violation;
722 [(vi)] (vii) issuing a cease and desist order; or
723 [(vii)] (viii) doing any combination of Subsections (1)(b)(i) through [(vi)](vii).
724 (2) The following are grounds for disciplinary action under this section:
725 (a) procuring or attempting to procure a registration, license, or certification under this
726 chapter:
727 (i) by fraud; or
728 (ii) by making a false statement, submitting false information, or making a material
729 misrepresentation in an application filed with the division;
730 (b) paying money or attempting to pay money other than [the fees] a fee provided for
731 by this chapter to [any] a member or employee of the division to procure a registration, license,
732 or certification under this chapter;
733 (c) an act or omission in the practice of real estate appraising that constitutes
734 dishonesty, fraud, or misrepresentation;
735 (d) entry of a judgment against a registrant, licensee, or certificate holder on grounds of
736 fraud, misrepresentation, or deceit in the making of an appraisal of real estate;
737 (e) a guilty plea to a criminal offense involving moral turpitude that is held in
738 abeyance, or a conviction, including a conviction based upon a plea of guilty or nolo

739 contendere, of a criminal offense involving moral turpitude;
740 (f) engaging in the business of real estate appraising under an assumed or fictitious
741 name not properly registered in this state;
742 (g) paying a finder's fee or a referral fee to a person not licensed or certified under this
743 chapter in connection with an appraisal of real estate or real property in this state;
744 (h) making a false or misleading statement in:
745 (i) that portion of a written appraisal report that deals with professional qualifications;
746 or [in any]
747 (ii) testimony concerning professional qualifications;
748 (i) violating or disregarding [any]:
749 (i) a provision of this chapter[,];
750 (ii) an order of the board[,]; or [any]
751 (iii) a rule issued under this chapter;
752 (j) violating the confidential nature of governmental records to which a person
753 registered, licensed, [or] certified, or approved as an expert under this chapter gained access
754 through employment or engagement as an appraiser by a governmental agency;
755 (k) accepting a contingent fee for performing an appraisal as defined in Subsection
756 61-2b-2 (1)(a) if in fact the fee is or was contingent upon:
757 (i) the appraiser reporting a predetermined analysis, opinion, or conclusion [or is or
758 was contingent upon];
759 (ii) the analysis, opinion, conclusion, or valuation reached; or [upon]
760 (iii) the consequences resulting from the appraisal assignment;
761 (l) unprofessional conduct as defined by statute or rule;
762 (m) in the case of a dual licensed title licensee as defined in Section 31A-2-402 :
763 (i) providing a title insurance product or service without the approval required by
764 Section 31A-2-405 ; or
765 (ii) knowingly providing false or misleading information in the statement required by
766 Subsection 31A-2-405 (2); or
767 (n) [any] other conduct that constitutes dishonest dealing.
768 Section 17. Section 61-2b-30.5 is amended to read:
769 61-2b-30.5. Reinstatement of license, certification, registration, approval --

770 Expert witness -- Trainee.
771 (1) An individual who has had [an appraiser registration,] a license, [or] certification,
772 registration, or approval revoked under this chapter:
773 (a) may not apply for renewal of that [registration,] license, [or] certification, [but]
774 registration, or approval; and
775 (b) may apply for licensure [or], certification, registration, or approval as prescribed for
776 an original license or certification subject to the limitations in Subsection (2).
777 (2) An applicant for licensure, certification, [or for] registration, or approval as an
778 expert witness under Subsection (1):
779 (a) may not apply for licensure [or], certification, registration, or approval until at least
780 five years after the date of revocation of the applicant's original license [or], certification,
781 registration, or approval; and
782 (b) is not entitled to credit for experience gained prior to the date of revocation in
783 determining whether the applicant meets the experience requirement for licensure [or],
784 certification, registration, or approval.
785 (3) A person whose license or certification is revoked may not act as a trainee until at
786 least four years after the day on which the person's license or certification is revoked.
787 Section 18. Section 61-2b-31 is amended to read:
788 61-2b-31. Disciplinary hearing process.
789 (1) Before disciplinary action may be taken by the board, the division shall:
790 (a) notify the person against whom the board seeks to take disciplinary action; and
791 (b) commence an adjudicative proceeding.
792 (2) If, after the hearing , the board determines that a person described in Subsection (1)
793 violated this chapter, the board may impose disciplinary action by written order as provided in
794 Section 61-2b-29 .
795 (3) (a) The board may:
796 (i) conduct hearings with the assistance of an administrative law judge; or [may]
797 (ii) delegate hearings to an administrative law judge.
798 (b) If the a hearing is delegated by the board to an administrative law judge, the
799 administrative law judge shall submit to the board for its consideration:
800 (i) written findings of fact[,];

801 (ii) written conclusions of law[,]; and
802 (iii) a recommended order [to the board for its consideration].
803 (4) (a) [Any] An applicant, licensee, certificate holder, registrant, or person aggrieved,
804 including the complainant, may obtain judicial review of [any] an adverse ruling, order, or
805 decision of the board. [Any appeal shall be governed by the Utah Rules of Appellate
806 Procedure.]
807 (b) If [the] an applicant, licensee, [or] certificate holder, or registrant prevails in [the]
808 an appeal and the court finds that the state action [was] is undertaken without substantial
809 justification, the court may award reasonable litigation expenses to the applicant, licensee, [or]
810 certificate holder, or registrant as provided under Title 78, Chapter 27a, Small Business Equal
811 Access to Justice Act.
812 Section 19. Section 61-2b-33 is amended to read:
813 61-2b-33. Penalty for violating this chapter.
814 [(1) Any person required by this chapter to be licensed or certified who engages in real
815 estate appraisal activity in this state without obtaining a license or certification or] In addition
816 to being subject to a disciplinary action by the board, a person who violates [any provision of]
817 this chapter:
818 [(a)] (1) is guilty of a class [B] A misdemeanor [punishable by a $1,000 fine and up to
819 six months in jail], upon a conviction of a first violation of this chapter; and
820 (2) is guilty of a third degree felony, upon conviction of a second or subsequent
821 violation of this chapter.
822 [(b) shall be ineligible to apply for a license or certificate for a period of one year from
823 the date of the person's conviction of the offense.]
824 [(2) The division, in its discretion, may grant a license or certification to a person
825 ineligible pursuant to Subsection (1) within the one-year period upon application and after an
826 administrative hearing.]
827 Section 20. Section 61-2c-202 is amended to read:
828 61-2c-202. Licensure procedures.
829 (1) To apply for licensure under this chapter an applicant shall:
830 (a) submit to the division a licensure statement that:
831 (i) lists any name under which the individual or entity will transact business in this

832 state;
833 (ii) lists the address of the principal business location of the applicant;
834 (iii) if the applicant is an entity:
835 (A) lists the principal lending manager of the entity; and
836 (B) contains the signature of the principal lending manager;
837 (iv) demonstrates that the applicant meets the qualifications listed in Section
838 61-2c-203 ;
839 (v) if the applicant is an entity, lists:
840 (A) all jurisdictions in which the entity is registered, licensed, or otherwise regulated in
841 the business of residential mortgage loans; and
842 (B) the history of any disciplinary action or adverse administrative action taken against
843 the entity by any regulatory agency within the ten years preceding the application; and
844 (vi) includes any information required by the division by rule;
845 (b) pay to the division:
846 (i) an application fee established by the division in accordance with Section 63-38-3.2 ;
847 and
848 (ii) the reasonable expenses incurred in processing the application for licensure,
849 including the costs incurred by the division under Subsection (4); and
850 (c) comply with Subsection (4).
851 (2) (a) The division shall issue a license to an applicant if the division, with the
852 concurrence of the commission, finds that the applicant:
853 (i) meets the qualifications of Section 61-2c-203 ; and
854 (ii) complies with this section.
855 (b) The commission may delegate to the division the authority to:
856 (i) review [any] a class or category of application for an initial or renewed [licenses]
857 license;
858 (ii) determine whether an applicant meets the licensing criteria in Section 61-2c-203 ;
859 (iii) conduct [any] a necessary hearing on an application; and
860 (iv) approve or deny a license application without concurrence by the commission.
861 (c) If the commission delegates to the division the authority to approve or deny an
862 application without concurrence by the commission and the division denies an application for

863 licensure, the applicant who is denied licensure may petition the commission for review of the
864 denial.
865 (d) An applicant who is denied licensure under [this] Subsection (2)(b) may seek
866 agency review by the executive director only after the commission [has reviewed] reviews the
867 division's denial of the applicant's application.
868 (3) Subject to Subsection (2)(d) and in accordance with Title 63, Chapter 46b,
869 Administrative Procedures Act, an applicant who is denied licensure under this chapter may
870 submit a request for agency review to the executive director within 30 days following the
871 [issuance of] day on which the commission order denying the licensure is issued.
872 (4) (a) An individual applying for a license under this chapter shall:
873 (i) submit a fingerprint card in a form acceptable to the division at the time the
874 licensure statement is filed;
875 (ii) consent to a criminal background check by:
876 (A) the Utah Bureau of Criminal Identification; and
877 (B) the Federal Bureau of Investigation;
878 (iii) provide proof using [methods] a method approved by the division of having
879 successfully completed [20 hours of] approved prelicensing education required by the
880 commission under Section 61-2c-104 :
881 (A) before taking the examination required by Subsection (4)(a)(iv); and
882 (B) in the number of hours, not to exceed 90 hours, required by rule made by the
883 division in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act; and
884 (iv) provide proof using [methods] a method approved by the division of having
885 successfully passed an examination approved by the commission under Section 61-2c-104 .
886 (b) The division shall request the Department of Public Safety to complete a Federal
887 Bureau of Investigation criminal background check for [each] an applicant [and each control
888 person of an applicant] through a national criminal history system.
889 (c) The applicant shall pay the cost of:
890 (i) the fingerprinting required by this section; and
891 (ii) the criminal background check required by this section.
892 (d) (i) A license under this chapter is conditional pending completion of the criminal
893 background check required by this Subsection (4).

894 (ii) If a criminal background check discloses that an applicant [failed] fails to
895 accurately disclose a criminal history, the license shall be immediately and automatically
896 revoked.
897 (iii) An individual or entity whose conditional license is revoked under Subsection
898 (4)(d)(ii) may appeal the revocation in a hearing conducted by the commission:
899 (A) after the revocation; and
900 (B) in accordance with Title 63, Chapter 46b, Administrative Procedures Act.
901 (iv) The commission may delegate to the division or an administrative law judge the
902 authority to conduct a hearing described in Subsection (4)(d)(iii).
903 (v) Relief from a revocation may be granted only if:
904 (A) the criminal history upon which the division based the revocation:
905 (I) did not occur; or
906 (II) is the criminal history of another person;
907 (B) (I) the revocation is based on a failure to accurately disclose a criminal history; and
908 (II) the applicant had a reasonable good faith belief at the time of application that there
909 was no criminal history to be disclosed; or
910 (C) the division [failed] fails to follow the prescribed procedure for the revocation.
911 (e) If a license is revoked or a revocation is upheld after a hearing described in
912 Subsection (4)(d)(iii), the person may not apply for a new license for a period of 12 months
913 after the day on which the license is revoked.
914 (f) The funds paid by an applicant for the cost of the criminal background check shall
915 be nonlapsing.
916 (g) The commission may delegate to the division the authority to make a decision on
917 whether relief from a revocation should be granted.
918 Section 21. Section 61-2c-206 is amended to read:
919 61-2c-206. Principal lending manager licenses.
920 (1) [Except as provided in Subsection (2), to] To qualify as a principal lending
921 manager under this chapter, an individual shall, in addition to meeting the standards in Section
922 61-2c-203 :
923 (a) submit an application on a form approved by the division;
924 (b) pay [fees] a fee determined by the division under Section 63-38-3.2 ;

925 (c) submit proof of having successfully completed 40 hours of prelicensing education
926 approved by the commission under Section 61-2c-104 ;
927 (d) submit proof of having successfully completed the principal lending manager
928 examination approved by the commission under Section 61-2c-104 ;
929 (e) submit proof on [forms] a form approved by the division of three years of full-time
930 active experience as a mortgage officer in the five years preceding the day on which the
931 application is submitted, or its equivalent as approved by the commission; and
932 (f) if the individual is not licensed under this chapter at the time of application, submit
933 to the criminal background check required by Subsection 61-2c-202 (4).
934 [(2) (a) Notwithstanding Subsection (1), an individual described in Subsection (2)(b)
935 may qualify as a principal lending manager without:]
936 [(i) meeting the requirements of Subsection (1)(c); and]
937 [(ii) completing the portions of the principal lending manager examination described in
938 Subsection (1)(d) that:]
939 [(A) relate to federal law; and]
940 [(B) do not relate to Utah law.]
941 [(b) An individual may qualify as a principal lending manager pursuant to Subsection
942 (2)(a) if the individual:]
943 [(i) submits to the division an affidavit that the individual has five years of experience
944 in the business of residential mortgage loans;]
945 [(ii) establishes that the individual's experience described in this Subsection (2)(b) was
946 acquired:]
947 [(A) under requirements substantially equivalent to the requirements of this chapter;
948 and]
949 [(B) in compliance with the requirements of this chapter; and]
950 [(iii) provides any other information required by the division by rule under Subsection
951 (2)(c).]
952 [(c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
953 the division shall define the information an individual shall provide to the division pursuant to
954 Subsection (2)(b).]
955 [(3)] (2) A principal lending manager may not engage in the business of residential

956 mortgage loans on behalf of more than one entity at the same time.
957 Section 22. Section 61-2c-403 is amended to read:
958 61-2c-403. Cease and desist orders.
959 (1) (a) The director may issue and serve by certified mail, or by personal service, on an
960 individual or entity an order to cease and desist from an act if:
961 (i) the director has reason to believe that the individual or entity has been engaged, is
962 engaging in, or is about to engage in [acts] the act constituting a violation of this chapter; and
963 (ii) it appears to the director that it would be in the public interest to stop the [acts] act.
964 (b) Within ten days after service of the order, the party named in the order may request
965 [an adjudicative proceeding] a hearing to be held in accordance with Title 63, Chapter 46b,
966 Administrative Procedures Act.
967 (c) Pending [the] a hearing requested under Subsection (1)(b), [the] a cease and desist
968 order shall remain in effect.
969 (2) (a) After the hearing described in Subsection (1), if the director finds that [the acts]
970 an act of the individual or entity [violate] violates this chapter, the director:
971 (i) shall issue an order making the cease and desist order permanent; and
972 (ii) may impose [a civil penalty not to exceed the greater of:] another disciplinary
973 action under Section 61-2c-402 .
974 [(A) $2,500 for each violation; or]
975 [(B) the amount of any gain or economic benefit derived from each violation.]
976 (b) (i) The director may file suit in the name of the division to enjoin and restrain an
977 individual or entity on whom an order is served under this section from violating this chapter
978 if:
979 (A) (I) the individual or entity [did] does not request a hearing under Subsection (1); or
980 (II) a permanent cease and desist order is issued against the individual or entity
981 following a hearing or stipulation; and
982 (B) (I) the individual or entity fails to cease the [acts] act; or
983 (II) after discontinuing the [acts] act, the individual or entity again commences the
984 [acts] the act.
985 (ii) The suit described in Subsection (2)(b)(i) shall be filed in the district court in the
986 county:

987 (A) in which the [acts occurred] act occurs;
988 (B) where the individual resides; or
989 (C) where the individual or entity carries on business.
990 (3) The cease and desist order issued under this section may not interfere with or
991 prevent the prosecution of a remedy or action enforcement under this chapter.
992 (4) An individual who violates a cease and desist order issued under this section is
993 guilty of a class A misdemeanor.
994 Section 23. Section 61-2c-405 is enacted to read:
995 61-2c-405. Penalty for violation of chapter.
996 In addition to being subject to a disciplinary action by the commission, a person who
997 violates this chapter:
998 (1) is guilty of a class A misdemeanor, upon conviction of a first violation of this
999 chapter; and
1000 (2) is guilty of a third degree felony, upon conviction of a second or subsequent
1001 violation of this chapter.
1002 Section 24. Section 61-2c-502 is amended to read:
1003 61-2c-502. Additional license fee.
1004 (1) An individual who applies for or renews a license shall pay, in addition to the
1005 application or renewal fee, a reasonable annual fee:
1006 (a) determined by the division with the concurrence of the commission; and
1007 (b) not to exceed $18.
1008 (2) An entity that applies for or renews an entity license shall pay, in addition to the
1009 application or renewal fee, a reasonable annual fee:
1010 (a) determined by the division with the concurrence of the commission; and
1011 (b) not to exceed $25.
1012 (3) Notwithstanding Section 13-1-2 , the following shall be paid into the [fund]
1013 Residential Mortgage Loan Education, Research, and Recovery Fund to be used as provided in
1014 this part:
1015 (a) [fees] a fee provided in this section; [and]
1016 (b) a fee for certifying:
1017 (i) a mortgage school;

1018 (ii) a mortgage course; or
1019 (iii) a mortgage instructor; and
1020 [(b)] (c) a civil [penalties] penalty imposed under this chapter.
1021 (4) If the balance in the [fund] Residential Mortgage Loan Education, Research, and
1022 Recovery Fund that is available to satisfy [judgments] a judgment against [licensees] a licensee
1023 decreases to less than $100,000, the division may make an additional [assessments] assessment
1024 to [licensees] a licensee to maintain the balance available at $100,000 to satisfy judgments.