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H.B. 290

             1     

DIVISION OF REAL ESTATE AMENDMENTS

             2     
2013 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Gage Froerer

             5     
Senate Sponsor: J. Stuart Adams

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies provisions relating to real estate.
             10      Highlighted Provisions:
             11          This bill:
             12          .    modifies a provision regarding addresses provided to the Division of Real Estate;
             13          .    modifies a provision relating to criminal background checks of applicants for a
             14      license to transact the business of residential mortgage loans;
             15          .    modifies lending manager licensing provisions;
             16          .    increases the period of reinstatement of an expired registration;
             17          .    modifies a provision relating to the determination of a license examination fee; and
             18          .    authorizes the Division of Real Estate to terminate the registration of an entity if the
             19      entity's registration with the Division of Corporations and Commercial Code has
             20      been expired for a specified period and the entity's license has been inactive for a
             21      specified period.
             22      Money Appropriated in this Bill:
             23          None
             24      Other Special Clauses:
             25          None
             26      Utah Code Sections Affected:
             27      AMENDS:


             28          61-2c-106, as last amended by Laws of Utah 2012, Chapter 166
             29          61-2c-202, as last amended by Laws of Utah 2011, Chapter 289
             30          61-2c-206, as last amended by Laws of Utah 2012, Chapter 166
             31          61-2e-204, as last amended by Laws of Utah 2012, Chapter 166
             32          61-2f-204, as last amended by Laws of Utah 2011, Chapter 289
             33          61-2f-206, as last amended by Laws of Utah 2011, Chapter 289
             34     
             35      Be it enacted by the Legislature of the state of Utah:
             36          Section 1. Section 61-2c-106 is amended to read:
             37           61-2c-106. Addresses provided the division.
             38          (1) (a) A person shall provide a physical location or street address when the person
             39      provides the nationwide database an address required by the division.
             40          (b) The following when provided to and maintained within the division under this
             41      chapter is public information:
             42          (i) a business address; or
             43          (ii) a mailing address other than a home address, unless the person provides no other
             44      address.
             45          (2) A licensee is considered to have received a notification that is mailed to the last
             46      mailing address furnished to the nationwide database by:
             47          (a) the individual, if the licensee is an individual; or
             48          (b) the lending manager who is designated within the nationwide database to act as the
             49      principal lending manager for the entity, if the licensee is an entity.
             50          Section 2. Section 61-2c-202 is amended to read:
             51           61-2c-202. Licensure procedures.
             52          (1) To apply for licensure under this chapter an applicant shall in a manner provided by
             53      the division by rule:
             54          (a) if the applicant is an entity, submit a licensure statement that:
             55          (i) lists any name under which the entity will transact business in this state;
             56          (ii) lists the address of the principal business location of the entity;
             57          (iii) identifies the principal lending manager of the entity;
             58          (iv) contains the signature of the principal lending manager;


             59          (v) identifies the one or more control persons for the entity;
             60          (vi) identifies the jurisdictions in which the entity is registered, licensed, or otherwise
             61      regulated in the business of residential mortgage loans;
             62          (vii) discloses any adverse administrative action taken by an administrative agency
             63      against:
             64          (A) the entity; or
             65          (B) any control person for the entity;
             66          (viii) discloses any history of criminal proceedings involving any control person for the
             67      entity; and
             68          (ix) includes any information required by the division by rule;
             69          (b) if the applicant is an individual:
             70          (i) submit a licensure statement that identifies the entity with which the applicant is
             71      sponsored;
             72          (ii) authorize [a] periodic criminal background [check] checks through the nationwide
             73      database, at times provided by rule that the division makes in accordance with Title 63G,
             74      Chapter 3, Utah Administrative Rulemaking Act, accessing:
             75          (A) the Utah Bureau of Criminal Identification, if the nationwide database is able to
             76      obtain information from the Utah Bureau of Criminal Identification; and
             77          (B) the Federal Bureau of Investigation;
             78          (iii) submit evidence using a method approved by the division by rule of having
             79      successfully completed approved prelicensing education in accordance with Section
             80      61-2c-204.1 ;
             81          (iv) submit evidence using a method approved by the division by rule of having
             82      successfully passed any required licensing examination in accordance with Section
             83      61-2c-204.1 ; [and]
             84          (v) submit evidence using a method approved by the division by rule of having
             85      successfully registered in the nationwide database, including paying a fee required by the
             86      nationwide database; and
             87          (vi) authorize the division to obtain independent credit reports:
             88          (A) through a consumer reporting agency described in Section 603(p) of the Fair Credit
             89      Reporting Act, 15 U.S.C. Sec. 1681a; and


             90          (B) at times provided by rule that the division makes in accordance with Title 63G,
             91      Chapter 3, Utah Administrative Rulemaking Act; and
             92          (c) pay to the division:
             93          (i) an application fee established by the division in accordance with Section 63J-1-504 ;
             94      and
             95          (ii) the reasonable expenses incurred by the division in processing the application for
             96      licensure.
             97          (2) (a) Upon receiving an application, the division, with the concurrence of the
             98      commission, shall determine whether the applicant:
             99          (i) meets the qualifications for licensure; and
             100          (ii) complies with this section.
             101          (b) If the division, with the concurrence of the commission, determines that an
             102      applicant meets the qualifications for licensure and complies with this section, the division
             103      shall issue the applicant a license.
             104          (c) If the division, with the concurrence of the commission, determines that the
             105      division requires more information to make a determination under Subsection (2)(a), the
             106      division may:
             107          (i) hold the application pending further information about an applicant's criminal
             108      background or history related to adverse administrative action in any jurisdiction; or
             109          (ii) issue a conditional license:
             110          (A) pending the completion of a criminal background check; and
             111          (B) subject to probation, suspension, or revocation if the criminal background check
             112      reveals that the applicant did not truthfully or accurately disclose on the licensing application a
             113      criminal history or other history related to adverse administrative action.
             114          (3) (a) The commission may delegate to the division the authority to:
             115          (i) review a class or category of application for an initial or renewed license;
             116          (ii) determine whether an applicant meets the qualifications for licensure;
             117          (iii) conduct a necessary hearing on an application; and
             118          (iv) approve or deny a license application without concurrence by the commission.
             119          (b) If the commission delegates to the division the authority to approve or deny an
             120      application without concurrence by the commission and the division denies an application for


             121      licensure, the applicant who is denied licensure may petition the commission for a de novo
             122      review of the application.
             123          (c) An applicant who is denied licensure under Subsection (3)(b) may seek agency
             124      review by the executive director only after the commission reviews the division's denial of the
             125      applicant's application.
             126          (d) Subject to Subsection (3)(c) and in accordance with Title 63G, Chapter 4,
             127      Administrative Procedures Act, an applicant who is denied licensure under this chapter may
             128      submit a request for agency review to the executive director within 30 days following the day
             129      on which the commission order denying the licensure is issued.
             130          Section 3. Section 61-2c-206 is amended to read:
             131           61-2c-206. Lending manager licenses.
             132          (1) To qualify for licensure as a lending manager under this chapter, an individual
             133      shall:
             134          (a) meet the standards in Section 61-2c-203 ;
             135          (b) successfully complete the following education:
             136          (i) mortgage loan originator prelicensing education as required by federal licensing
             137      regulations; and
             138          (ii) 40 hours of Utah-specific prelicensing education for a lending manager that is
             139      approved by the division under Section 61-2c-204.1 ;
             140          (c) successfully complete the following examinations:
             141          (i) the mortgage loan originator licensing examination as approved by the nationwide
             142      database; and
             143          (ii) the lending manager licensing examination approved by the commission under
             144      Section 61-2c-204.1 ;
             145          (d) submit proof, on a form approved by the division, of three years of full-time active
             146      experience as a mortgage loan originator licensed in any state in the five years preceding the
             147      day on which the application is submitted, or equivalent experience as approved by the
             148      commission pursuant to rule that the division makes in accordance with Title 63G, Chapter 3,
             149      Utah Administrative Rulemaking Act;
             150          (e) submit an application in a manner established by the division by rule;
             151          (f) establish sponsorship with an entity licensed under this chapter;


             152          (g) [if the individual is not registered in the nationwide database as a mortgage loan
             153      originator at the time of application,] submit to the criminal background check required by
             154      Subsection 61-2c-202 (1)(b); and
             155          (h) pay a fee determined by the division under Section 63J-1-504 .
             156          (2) A lending manager may not:
             157          (a) engage in the business of residential mortgage loans on behalf of more than one
             158      entity at the same time;
             159          (b) be sponsored by more than one entity at the same time; or
             160          (c) act simultaneously as the principal lending manager and branch lending manager
             161      for the individual's sponsoring entity, if the entity operates from more than one office [located
             162      within the state].
             163          (3) An individual who is a lending manager may:
             164          (a) transact the business of residential mortgage loans as a mortgage loan originator;
             165      and
             166          (b) be designated within the nationwide database to act for the individual's sponsoring
             167      entity as the principal lending manager, an associate lending manager, or a branch lending
             168      manager.
             169          Section 4. Section 61-2e-204 is amended to read:
             170           61-2e-204. Renewal of a registration.
             171          (1) (a) A registration under this chapter expires two years from the day on which the
             172      registration is filed.
             173          (b) Notwithstanding Subsection (1)(a), the time period of a registration may be
             174      extended or shortened by as much as one year to maintain or change a renewal cycle
             175      established by rule by the division.
             176          (2) To renew a registration under this chapter, before the day on which the registration
             177      expires, an appraisal management company shall:
             178          (a) file with the division a renewal registration application on a form prescribed by the
             179      division;
             180          (b) pay to the division a fee determined in accordance with Section 63J-1-504 ; and
             181          (c) file with the division a certificate evidencing that the appraisal management
             182      company has secured and will maintain a surety bond with one or more corporate sureties


             183      authorized to do business in the state in the amount of at least $25,000, as the division provides
             184      by rule.
             185          (3) A renewal registration application shall include substantially similar information to
             186      the information required under Section 61-2e-202 , except that for an individual described in
             187      Subsection 61-2e-202 (2)(e) or (g), the entity is required to report whether the individual has
             188      had:
             189          (a) (i) a conviction of a criminal offense;
             190          (ii) the entry of a plea in abeyance to a criminal offense; or
             191          (iii) the potential resolution of a criminal case by:
             192          (A) a diversion agreement; or
             193          (B) another agreement under which a criminal charge is held in suspense for a period
             194      of time;
             195          (b) a filing of personal bankruptcy or bankruptcy of a business that transacts the
             196      appraisal management services;
             197          (c) the suspension, revocation, surrender, cancellation, or denial of a professional
             198      license or certification, whether the license or registration is issued by this state or another
             199      jurisdiction; or
             200          (d) the entry of a cease and desist order or a temporary or permanent injunction:
             201          (i) against the individual by a court or government agency; and
             202          (ii) on the basis of:
             203          (A) conduct or a practice involving the business of appraisal management services; or
             204          (B) conduct involving fraud, misrepresentation, or deceit.
             205          (4) A registration expires if it is not renewed on or before its expiration date, except
             206      that for a period of [30 days] one year after the expiration date, the registration may be
             207      reinstated upon compliance with this section, including payment of a renewal fee and a late fee
             208      determined by the division and the board.
             209          (5) Notwithstanding Subsection (4), the division may extend the term of a license that
             210      would expire under Subsection (4) except for the extension if:
             211          (a) (i) the person complies with the requirements of this section to renew the
             212      registration; and
             213          (ii) the renewal application remains pending at the time of the extension; or


             214          (b) at the time of the extension, there is pending under this chapter a disciplinary
             215      action.
             216          Section 5. Section 61-2f-204 is amended to read:
             217           61-2f-204. Licensing fees and procedures -- Renewal fees and procedures.
             218          (1) (a) Upon filing an application for an examination for a license under this chapter,
             219      the applicant shall pay a nonrefundable fee [as determined by the commission with the
             220      concurrence of the division under] established in accordance with Section 63J-1-504 for
             221      admission to the examination.
             222          (b) An applicant for a principal broker, associate broker, or sales agent license shall
             223      pay a nonrefundable fee as determined by the commission with the concurrence of the division
             224      under Section 63J-1-504 for issuance of an initial license or license renewal.
             225          (c) A license issued under this Subsection (1) shall be issued for a period of not less
             226      than two years as determined by the division with the concurrence of the commission.
             227          (d) (i) Any of the following applicants shall comply with this Subsection (1)(d):
             228          (A) a new sales agent applicant;
             229          (B) a principal broker applicant; or
             230          (C) an associate broker applicant.
             231          (ii) An applicant described in this Subsection (1)(d) shall:
             232          (A) submit fingerprint cards in a form acceptable to the division at the time the license
             233      application is filed; and
             234          (B) consent to a criminal background check by the Utah Bureau of Criminal
             235      Identification and the Federal Bureau of Investigation regarding the application.
             236          (iii) The division shall request the Department of Public Safety to complete a Federal
             237      Bureau of Investigation criminal background check for each applicant described in this
             238      Subsection (1)(d) through the national criminal history system or any successor system.
             239          (iv) The applicant shall pay the cost of the criminal background check and the
             240      fingerprinting.
             241          (v) Money paid to the division by an applicant for the cost of the criminal background
             242      check is nonlapsing.
             243          (e) (i) A license issued under Subsection (1)(d) is conditional, pending completion of
             244      the criminal background check.


             245          (ii) A license is immediately and automatically revoked if the criminal background
             246      check discloses the applicant fails to accurately disclose a criminal history involving:
             247          (A) the real estate industry; or
             248          (B) a felony conviction on the basis of an allegation of fraud, misrepresentation, or
             249      deceit.
             250          (iii) If a criminal background check discloses that an applicant fails to accurately
             251      disclose a criminal history other than one described in Subsection (1)(e)(ii), the division:
             252          (A) shall review the application; and
             253          (B) in accordance with rules made by the division pursuant to Title 63G, Chapter 3,
             254      Utah Administrative Rulemaking Act, may:
             255          (I) place a condition on a license;
             256          (II) place a restriction on a license;
             257          (III) revoke a license; or
             258          (IV) refer the application to the commission for a decision.
             259          (iv) A person whose conditional license is automatically revoked under Subsection
             260      (1)(e)(ii) or whose license is conditioned, restricted, or revoked under Subsection (1)(e)(iii)
             261      may have a hearing after the action is taken to challenge the action. The hearing shall be
             262      conducted in accordance with Title 63G, Chapter 4, Administrative Procedures Act.
             263          (v) The director shall designate one of the following to act as the presiding officer in a
             264      hearing described in Subsection (1)(e)(iv):
             265          (A) the division; or
             266          (B) the division with the concurrence of the commission.
             267          (vi) The decision on whether relief from an action under this Subsection (1)(e) will be
             268      granted shall be made by the presiding officer.
             269          (vii) Relief from an automatic revocation under Subsection (1)(e)(ii) may be granted
             270      only if:
             271          (A) the criminal history upon which the division based the revocation:
             272          (I) did not occur; or
             273          (II) is the criminal history of another person;
             274          (B) (I) the revocation is based on a failure to accurately disclose a criminal history; and
             275          (II) the applicant has a reasonable good faith belief at the time of application that there


             276      was no criminal history to be disclosed; or
             277          (C) the division fails to follow the prescribed procedure for the revocation.
             278          (viii) If a license is revoked or a revocation under this Subsection (1)(e) is upheld after
             279      a hearing, the individual may not apply for a new license until at least 12 months after the day
             280      on which the license is revoked.
             281          (2) (a) (i) A license expires if it is not renewed on or before its expiration date.
             282          (ii) As a condition of renewal, an active licensee shall demonstrate competence by
             283      completing 18 hours of continuing education within a two-year renewal period subject to rules
             284      made by the commission, with the concurrence of the division.
             285          (iii) In making a rule described in Subsection (2)(c)(ii), the division and commission
             286      shall consider:
             287          (A) evaluating continuing education on the basis of competency, rather than course
             288      time;
             289          (B) allowing completion of courses in a significant variety of topic areas that the
             290      division and commission determine are valuable in assisting an individual licensed under this
             291      chapter to increase the individual's competency; and
             292          (C) allowing completion of courses that will increase a licensee's professional
             293      competency in the area of practice of the licensee.
             294          (iv) The division may award credit to a licensee for a continuing education requirement
             295      of this Subsection (2)(a) for a reasonable period of time upon a finding of reasonable cause,
             296      including:
             297          (A) military service; or
             298          (B) if an individual is elected or appointed to government service, the individual's
             299      government service during which the individual spends a substantial time addressing real estate
             300      issues subject to conditions established by rule made in accordance with Title 63G, Chapter 3,
             301      Utah Administrative Rulemaking Act.
             302          (b) For a period of 30 days after the expiration date of a license, the license may be
             303      reinstated upon:
             304          (i) payment of a renewal fee and a late fee determined by the commission with the
             305      concurrence of the division under Section 63J-1-504 ; and
             306          (ii) providing proof acceptable to the division and the commission of the licensee


             307      having:
             308          (A) completed the hours of education required by Subsection (2)(a); or
             309          (B) demonstrated competence as required under Subsection (2)(a).
             310          (c) After the 30-day period described in Subsection (2)(b), and until six months after
             311      the expiration date, the license may be reinstated by:
             312          (i) paying a renewal fee and a late fee determined by the commission with the
             313      concurrence of the division under Section 63J-1-504 ;
             314          (ii) providing to the division proof of satisfactory completion of six hours of continuing
             315      education:
             316          (A) in addition to the requirements for a timely renewal; and
             317          (B) on a subject determined by the commission by rule made in accordance with Title
             318      63G, Chapter 3, Utah Administrative Rulemaking Act; and
             319          (iii) providing proof acceptable to the division and the commission of the licensee
             320      having:
             321          (A) completed the hours of education required under Subsection (2)(a); or
             322          (B) demonstrated competence as required under Subsection (2)(a).
             323          (d) After the six-month period described in Subsection (2)(c), and until one year after
             324      the expiration date, the license may be reinstated by:
             325          (i) paying a renewal fee and a late fee determined by the commission with the
             326      concurrence of the division under Section 63J-1-504 ;
             327          (ii) providing to the division proof of satisfactory completion of 24 hours of continuing
             328      education:
             329          (A) in addition to the requirements for a timely renewal; and
             330          (B) on a subject determined by the commission by rule made in accordance with Title
             331      63G, Chapter 3, Utah Administrative Rulemaking Act; and
             332          (iii) providing proof acceptable to the division and the commission of the licensee
             333      having:
             334          (A) completed the hours of education required by Subsection (2)(a); or
             335          (B) demonstrated competence as required under Subsection (2)(a).
             336          (e) The division shall relicense a person who does not renew that person's license
             337      within one year as prescribed for an original application.


             338          (f) Notwithstanding Subsection (2)(a), the division may extend the term of a license
             339      that would expire under Subsection (2)(a) except for the extension if:
             340          (i) (A) the person complies with the requirements of this section to renew the license;
             341      and
             342          (B) the renewal application remains pending at the time of the extension; or
             343          (ii) at the time of the extension, there is pending a disciplinary action under this
             344      chapter.
             345          (3) (a) As a condition for the activation of an inactive license that was in an inactive
             346      status at the time of the licensee's most recent renewal, the licensee shall supply the division
             347      with proof of:
             348          (i) successful completion of the respective sales agent or principal broker licensing
             349      examination within six months before applying to activate the license; or
             350          (ii) the successful completion of the hours of continuing education that the licensee
             351      would have been required to complete under Subsection (2)(a) if the license had been on active
             352      status at the time of the licensee's most recent renewal.
             353          (b) The commission may, in accordance with Title 63G, Chapter 3, Utah
             354      Administrative Rulemaking Act, establish by rule:
             355          (i) the nature or type of continuing education required for reactivation of a license; and
             356          (ii) how long before reactivation the continuing education must be completed.
             357          Section 6. Section 61-2f-206 is amended to read:
             358           61-2f-206. Registration of entity or branch office -- Certification of education
             359      providers and courses -- Specialized licenses.
             360          (1) (a) An entity may not engage in an activity described in Section 61-2f-201 , unless it
             361      is registered with the division.
             362          (b) To register with the division under this Subsection (1), an entity shall submit to the
             363      division:
             364          (i) an application in a form required by the division;
             365          (ii) evidence of an affiliation with a principal broker;
             366          (iii) evidence that the entity is registered and in good standing with the Division of
             367      Corporations and Commercial Code; and
             368          (iv) a registration fee established by the commission with the concurrence of the


             369      division under Section 63J-1-504 .
             370          (c) The division may terminate an entity's registration if:
             371          (i) the entity's registration with the Division of Corporations and Commercial Code has
             372      been expired for at least three years; and
             373          (ii) the entity's license with the division has been inactive for at least three years.
             374          (2) (a) A principal broker shall register with the division each of the principal broker's
             375      branch offices.
             376          (b) To register a branch office with the division under this Subsection (2), a principal
             377      broker shall submit to the division:
             378          (i) an application in a form required by the division; and
             379          (ii) a registration fee established by the commission with the concurrence of the
             380      division under Section 63J-1-504 .
             381          (3) (a) In accordance with rules made by the commission, the division shall certify:
             382          (i) a real estate school;
             383          (ii) a course provider; or
             384          (iii) an instructor.
             385          (b) In accordance with rules made by the commission, and with the concurrence of the
             386      commission, the division shall certify a continuing education course that is required under this
             387      chapter.
             388          (4) (a) Except as provided by rule, a principal broker may not be responsible for more
             389      than one registered entity at the same time.
             390          (b) (i) In addition to issuing a principal broker license, associate broker license, or sales
             391      agent license authorizing the performance of an act set forth in Section 61-2f-201 , the division
             392      may issue a specialized sales license or specialized property management license with the
             393      scope of practice limited to the specialty.
             394          (ii) An individual may hold a specialized license in addition to a license as a principal
             395      broker, associate broker, or a sales agent.
             396          (iii) The commission may adopt rules pursuant to Title 63G, Chapter 3, Utah
             397      Administrative Rulemaking Act, for the administration of this Subsection (4), including:
             398          (A) prelicensing and postlicensing education requirements;
             399          (B) examination requirements;


             400          (C) affiliation with real estate brokerages or property management companies; and
             401          (D) other licensing procedures.




Legislative Review Note
    as of 1-25-13 11:26 AM


Office of Legislative Research and General Counsel


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