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First Substitute H.B. 86

Representative Gage Froerer proposes the following substitute bill:


             1     
DIVISION OF REAL ESTATE RELATED

             2     
AMENDMENTS

             3     
2009 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 amends provisions administered or enforced by the Division of Real Estate.
             11      Highlighted Provisions:
             12          This bill:
             13          .    increases a civil penalty that the division may impose under the Utah Uniform Land
             14      Sales Practices Act;
             15          .    addresses exemptions under the Utah Uniform Land Sales Practices Act;
             16          .    modifies provisions related to registration of a salesperson under the Timeshare and
             17      Camp Resort Act;
             18          .    addresses grounds under which the division may take action under the Timeshare
             19      and Camp Resort Act;
             20          .    modifies education requirements for a real estate broker or sales agent;
             21          .    modifies reporting requirements for a real estate broker or sales agent;
             22          .    modifies provisions related to renewal of a real estate license;
             23          .    provides for the modification of sanctions for a real estate licensee complying with
             24      court ordered restitution;
             25          .    addresses payments to associate brokers or sales agents;


             26          .    addresses what constitutes grounds for disciplinary action;
             27          .    clarifies criminal penalties against a person required to be licensed as a real estate
             28      licensee;
             29          .    provides definitions related to the Real Estate Education, Research, and Recovery
             30      Fund, including what constitutes a judgment;
             31          .    increases caps on recovery from the Real Estate Education, Research, and Recovery
             32      Fund;
             33          .    clarifies notice requirements for the Real Estate Education, Research, and Recovery
             34      Fund;
             35          .    requires criminal background checks and addresses other requirements for trainees
             36      registered under appraisal provisions;
             37          .    provides for conditional registration of a trainee pending the criminal background
             38      check;
             39          .    modifies renewal provisions for a license or certificate under appraisal provisions;
             40          .    addresses rulemaking of the appraisal board related to the Uniform Standards of
             41      Professional Appraisal Practices;
             42          .    requires notification of the division of certain events by a person licensed, certified,
             43      or registered under appraisal provisions;
             44          .    provides for the modification of sanctions under appraisal provisions for a person
             45      complying with court ordered restitution;
             46          .    clarifies criminal penalties against a person required to be licensed, certified, or
             47      registered under appraisal provisions;
             48          .    modifies renewal provisions for a residential mortgage licensee;
             49          .    addresses disposal of records by a residential mortgage licensee;
             50          .    repeals a requirement that the division by rule provide for certain licensing
             51      processes;
             52          .    provides for the modification of sanctions under residential mortgage provisions for
             53      a person complying with court ordered restitution;
             54          .    clarifies criminal penalties against a person required to be licensed or certified under
             55      residential mortgage provisions;
             56          .    provides that criminal restitution judgments may be recovered from the Residential


             57      Mortgage Loan Education, Research, and Recovery Fund;
             58          .    modifies notification requirements related to the Residential Mortgage Loan
             59      Education, Research, and Recovery Fund;
             60          .    restricts recovery by a lender from the Residential Mortgage Loan Education,
             61      Research, and Recovery Fund; and
             62          .    makes technical and conforming amendments.
             63      Monies Appropriated in this Bill:
             64          None
             65      Other Special Clauses:
             66          None
             67      Utah Code Sections Affected:
             68      AMENDS:
             69          57-11-2, as last amended by Laws of Utah 1987, Chapter 73
             70          57-11-3, as last amended by Laws of Utah 1989, Chapter 225
             71          57-11-4, as last amended by Laws of Utah 2003, Chapter 292
             72          57-11-14, as last amended by Laws of Utah 2008, Chapter 382
             73          57-11-16, as last amended by Laws of Utah 1993, Chapter 38
             74          57-19-5, as last amended by Laws of Utah 1990, Chapter 199
             75          57-19-15, as last amended by Laws of Utah 1990, Chapter 199
             76          57-19-16, as enacted by Laws of Utah 1987, Chapter 73
             77          61-2-6, as last amended by Laws of Utah 2008, Chapter 382
             78          61-2-7.2, as last amended by Laws of Utah 2000, Chapter 86
             79          61-2-9, as last amended by Laws of Utah 2008, Chapter 382
             80          61-2-10, as last amended by Laws of Utah 2008, Chapter 382
             81          61-2-11, as last amended by Laws of Utah 2007, Chapter 325
             82          61-2-12, as last amended by Laws of Utah 2008, Chapters 3 and 382
             83          61-2-17, as last amended by Laws of Utah 1993, Chapter 146
             84          61-2a-2, as last amended by Laws of Utah 1989, Chapter 227
             85          61-2a-3, as last amended by Laws of Utah 2002, Chapter 256
             86          61-2a-4, as last amended by Laws of Utah 1993, Chapter 146
             87          61-2a-5, as last amended by Laws of Utah 2000, Chapter 86


             88          61-2a-6, as enacted by Laws of Utah 1975, Chapter 172
             89          61-2a-7, as enacted by Laws of Utah 1975, Chapter 172
             90          61-2a-9, as last amended by Laws of Utah 1989, Chapter 227
             91          61-2a-11, as last amended by Laws of Utah 1989, Chapter 225
             92          61-2a-12, as last amended by Laws of Utah 2007, Chapter 325
             93          61-2b-6, as last amended by Laws of Utah 2008, Chapters 382 and 387
             94          61-2b-8, as last amended by Laws of Utah 2008, Chapters 382 and 387
             95          61-2b-20, as last amended by Laws of Utah 2005, Chapter 199
             96          61-2b-27, as last amended by Laws of Utah 2008, Chapters 382 and 387
             97          61-2b-29, as last amended by Laws of Utah 2008, Chapter 387
             98          61-2b-33, as last amended by Laws of Utah 2008, Chapters 370 and 387
             99          61-2c-103, as last amended by Laws of Utah 2008, Chapters 158 and 382
             100          61-2c-104, as last amended by Laws of Utah 2008, Chapter 382
             101          61-2c-205, as last amended by Laws of Utah 2008, Chapter 382
             102          61-2c-402, as last amended by Laws of Utah 2007, Chapter 325
             103          61-2c-405, as enacted by Laws of Utah 2008, Chapters 370 and 387
             104          61-2c-501, as enacted by Laws of Utah 2004, Chapter 297
             105          61-2c-502, as last amended by Laws of Utah 2008, Chapter 387
             106          61-2c-503, as enacted by Laws of Utah 2004, Chapter 297
             107     
             108      Be it enacted by the Legislature of the state of Utah:
             109          Section 1. Section 57-11-2 is amended to read:
             110           57-11-2. Definitions.
             111          As used in this chapter:
             112          (1) (a) "Disposition" includes sale, lease, assignment, award by lottery, or any other
             113      transaction concerning a subdivision, if undertaken for gain or profit. [It]
             114          (b) "Disposition" does not include the sale or lease of land held by railroads for right of
             115      way if the land is within 400 feet of the center line of [any] a railroad tract.
             116          (2) "Division" means the Division of Real Estate created in Section 61-2-5 .
             117          [(2)] (3) "Federal act" means the federal Interstate Land Sales Full Disclosure Act [(],
             118      15 U.S.C.[,] Sec. 1701, et seq.[)], or any successor federal act.


             119          [(3)] (4) (a) "Industrial park" means [any] a subdivision or subdivided lands offered as
             120      a part of a common promotional plan of advertising and sale zoned for office, manufacturing,
             121      warehousing, commercial, industrial, distribution, or wholesale use and utilized for one or
             122      more of those purposes. [It]
             123          (b) "Industrial park" does not include [any] land offered for sale [which] that is
             124      designed or intended to be used for recreational, residential, including multiple family
             125      dwellings, or agricultural purposes.
             126          [(4)] (5) "Offer" includes [every] an inducement, solicitation, or attempt to encourage a
             127      person to acquire an interest in land if undertaken for gain or profit.
             128          [(5)] (6) "Person" includes:
             129          (a) a business trust[,];
             130          (b) an estate[,];
             131          (c) a trust[,];
             132          (d) a partnership[,];
             133          (e) an unincorporated association[,];
             134          (f) two or more of any entity having a joint or common interest[,]; or
             135          (g) any other legal or commercial entity.
             136          [(6)] (7) "Purchaser" means a person who acquires or attempts to acquire or succeeds
             137      to an interest in land.
             138          [(7)] (8) "Residential building" means [any] a structure intended for occupation as a
             139      residence which, at the time of an offer or disposition of the unit on which it is situated, or on
             140      which there is a legal obligation on the part of the seller to complete construction of it within
             141      two years from date of disposition, has, or if completed would have, ready access to water, gas,
             142      electricity, and roads.
             143          [(8)] (9) "Subdivider" means [the]:
             144          (a) an owner of [any] an interest in subdivided lands who offers [them] the subdivided
             145      lands for disposition; or [the]
             146          (b) a principal agent of an [inactive] owner of an interest in subdivided lands if the
             147      owner is inactive.
             148          [(9)] (10) (a) "Subdivision" and "subdivided lands" means land [which] that is divided
             149      or is proposed to be divided for the purpose of disposition into ten or more units including


             150      land, whether contiguous or not, if ten or more units are offered as a part of a common
             151      promotional plan of advertising and sale.
             152          (b) If a subdivision is offered by a developer or group of developers, and the land is
             153      contiguous or is known, designated, or advertised as a common tract or by a common name,
             154      that land is presumed, without regard to the number of units covered by each individual
             155      offering, to be part of a common promotional plan.
             156          [(10)] (11) "Unit" includes [any] a lot, parcel, or other interest in land separately
             157      offered for disposition.
             158          Section 2. Section 57-11-3 is amended to read:
             159           57-11-3. Administration by division.
             160          [This] The division shall administer this chapter [shall be administered by the Division
             161      of Real Estate of the Department of Commerce, which hereinafter is referred to as the
             162      division].
             163          Section 3. Section 57-11-4 is amended to read:
             164           57-11-4. Exemptions.
             165          (1) Unless the method of disposition is adopted for the purpose of evasion of this
             166      chapter or the federal act, this chapter does not apply to [offers or dispositions] an offer or
             167      disposition of an interest in land:
             168          (a) by a purchaser of subdivided lands for [his] the person's own account in a single or
             169      isolated transaction;
             170          (b) (i) on [each] a unit of which there is a residential, commercial, or industrial
             171      building[,]; or
             172          (ii) on [each] a unit of which there is a legal obligation on the part of the seller to
             173      complete construction of [such] a residential, commercial, or industrial building within two
             174      years from date of disposition;
             175          (c) [to any person who acquires that interest for use in the business of constructing
             176      residential, commercial, or industrial buildings, or to any person who acquires that type of land
             177      for the purpose of disposition to a person engaged in that business,] unless [the] a person who
             178      acquires land for [these] one of the following purposes sells that land to one or more
             179      individuals as unimproved lots with no legal obligation on the part of the seller to construct a
             180      residential, commercial, or industrial building on that lot within two years from the date of


             181      disposition[;]:
             182          (i) if the person acquires an interest in the land for use in the business of constructing
             183      residential, commercial, or industrial buildings; or
             184          (ii) if the person acquires the type of land described in Subsection (1)(c)(i) for the
             185      purpose of disposition to a person engaged in the business of constructing residential,
             186      commercial, or industrial buildings;
             187          (d) pursuant to court order;
             188          (e) by [any] a government or government agency;
             189          (f) (i) if [at the time of the offer or disposition the subdivider furnishes satisfactory
             190      assurance of completion of the improvements described in Subsections (1)(f)(ii) and (iii) and]
             191      the interest lies within the boundaries of a city or a county which:
             192          [(i)] (A) has a planning and zoning board [utilizing or employing] using at least one
             193      professional planner;
             194          [(ii)] (B) enacts ordinances that require approval of planning, zoning, and plats,
             195      including the approval of plans for streets, culinary water, sanitary sewer, and flood control;
             196      and
             197          [(iii) in which the interest in land]
             198          (C) will have the improvements described in Subsection (1)(f)[(ii)](i)(B) plus
             199      telephone and electricity; and
             200          (ii) if at the time of the offer or disposition the subdivider furnishes satisfactory
             201      assurance of completion of the improvements described in Subsection (1)(f)(i)(C);
             202          (g) in an industrial park;
             203          (h) as cemetery lots; or
             204          (i) if the interest is offered as part of a camp resort as defined in Section 57-19-2 or a
             205      timeshare development as defined in Section 57-19-2 .
             206          (2) Unless the method of disposition is adopted for the purpose of evasion of this
             207      chapter or the provisions of the federal act, [the provisions of] this chapter, except as
             208      specifically designated, [do] does not apply to an offer or disposition of:
             209          (a) [offers or dispositions of evidences of] indebtedness secured by a mortgage or deed
             210      of trust on real estate;
             211          (b) [offers or dispositions of securities or units] a security or unit of interest issued by a


             212      real estate investment trust regulated under any state or federal statute;
             213          (c) [offers or dispositions of] subject to Subsection (5), subdivided lands registered
             214      under the federal act and which the division finds to be in the public interest to exempt from
             215      the registration requirements of this chapter[.]; [A subdivider seeking to qualify under this
             216      exemption shall file with the division a copy of an effective statement of record filed with the
             217      secretary of the Department of Housing and Urban Development together with a filing fee of
             218      $100. In the event the subdivider does not qualify under this exemption, this amount shall be
             219      credited to the filing fee required for registration under this chapter. Nothing in this Subsection
             220      (2)(c) exempts a subdivider from the provisions of Sections 57-11-16 and 57-11-17 or the
             221      requirement to file an annual report with the division under Section 57-11-10 ;]
             222          (d) [offers or dispositions of securities] a security currently registered with the
             223      [Securities] Division of Securities; or
             224          (e) [offers or dispositions of any] an interest in oil, gas, or other minerals or [any] a
             225      royalty interest in these assets if the [offers or dispositions of those interests are regulated as
             226      securities by the United States or by the Securities Division] offer or disposition of the interest
             227      is regulated as a security by the federal government or by the Division of Securities.
             228          (3) (a) Notwithstanding the exemptions in Subsections (1) and (2), [any] a person
             229      making an offer or disposition of an interest in land [which] that is located in Utah shall apply
             230      to the division for an exemption before the offer or disposition is made if:
             231          (i) the person is representing, in connection with the offer or disposition, the
             232      availability of culinary water service to or on the subdivided land; and
             233          (ii) the culinary water service is provided by a water corporation as defined in Section
             234      54-2-1 .
             235          (b) A subdivider seeking to qualify under this exemption shall file with the division [an
             236      application for exemption together with] a filing fee of $50 and an application containing:
             237          (i) information required by the division to show that the offer or disposition is exempt
             238      under [the provisions of] this section;
             239          (ii) a statement as to what entity will be providing culinary water service and the nature
             240      of that entity; and
             241          (iii) (A) a copy of the entity's certificate of convenience and necessity issued by the
             242      Public Service Commission[,]; or


             243          (B) evidence that the entity providing water service is exempt from the jurisdiction of
             244      the Public Service Commission.
             245          (4) (a) The director may by rule or order exempt [any] a person from [any] a
             246      requirement of this chapter if the director finds that the offering of an interest in a subdivision
             247      is essentially noncommercial.
             248          (b) For purposes of this section, the bulk sale of subdivided lands by a subdivider to
             249      another person who will become the subdivider of those lands is considered essentially
             250      noncommercial.
             251          (5) (a) A subdivider seeking to qualify under the exemption described in Subsection
             252      (2)(c) shall file with the division:
             253          (i) a copy of an effective statement of record filed with the secretary of the Department
             254      of Housing and Urban Development; and
             255          (ii) a filing fee of $100.
             256          (b) If a subdivider does not qualify under the exemption described in Subsection (2)(c),
             257      the division shall credit the filing fee described in Subsection (2)(c) to the filing fee required
             258      for registration under this chapter.
             259          (c) Nothing in this Subsection (5) exempts a subdivider from:
             260          (i) Sections 57-11-16 and 57-11-17 ; or
             261          (ii) the requirement to file an annual report with the division under Section 57-11-10 .
             262          (6) Notwithstanding an exemption under this section, the division:
             263          (a) retains jurisdiction over an offer or disposition of an interest in land to determine
             264      whether or not the exemption continues to apply; and
             265          (b) may require compliance with this chapter if an exemption no longer applies.
             266          Section 4. Section 57-11-14 is amended to read:
             267           57-11-14. Revocation, suspension, or denial of registration -- Grounds --
             268      Suspension or revocation of real estate license.
             269          (1) (a) [The] If the division makes a written finding of fact that a subdivider engages in
             270      one or more acts described in Subsection (1)(b), the division may:
             271          (i) deny an application for registration [or may];
             272          (ii) revoke, suspend, or deny reissuance of a registration[,]; or [may]
             273          (iii) impose a [fine of not more than $500 per violation, by following the procedures


             274      and requirements of Title 63G, Chapter 4, Administrative Procedures Act, and by making a
             275      written finding of fact that the subdivider has:] civil penalty not to exceed the greater of:
             276          (A) $2,500 for each violation; or
             277          (B) the amount of any gain or economic benefit derived from each violation.
             278          (b) Subsection (1)(a) applies if the division makes a written finding of fact that a
             279      subdivider:
             280          (i) [failed] fails to comply with the terms of a cease and desist order;
             281          (ii) [been] is convicted in [any] a court prior or subsequent to the filing of the
             282      application for registration of a crime involving:
             283          (A) fraud[,];
             284          (B) deception[,];
             285          (C) false pretenses[,];
             286          (D) misrepresentation[,];
             287          (E) false advertising[,]; or
             288          (F) dishonest dealing in a real estate transactions[, or has been];
             289          (iii) is subject to [any] an injunction or administrative order restraining a false or
             290      misleading promotional plan involving land dispositions[, and that the public interest requires
             291      revocation];
             292          [(iii) disposed of, concealed, or diverted any]
             293          (iv) disposes of, conceals, or diverts funds or assets of any person so as to defeat the
             294      rights of subdivision purchasers;
             295          [(iv) failed] (v) fails to perform faithfully [any] a stipulation or agreement made with
             296      the division as an inducement to:
             297          (A) grant [any] a registration[, to];
             298          (B) reinstate [any] a registration[, to];
             299          (C) revoke [any] a cease and desist order[,]; or [to]
             300          (D) approve any promotional plan or public offering statement;
             301          [(v) made] (vi) makes an intentional [misrepresentations] misrepresentation, or
             302      [concealed] conceals a material [facts] fact, in an application for registration;
             303          [(vi) violated any provision of]
             304          (vii) violates this chapter or the rules adopted under this chapter;


             305          [(vii)] (viii) directly or through an agent or employee knowingly [engaged] engages in
             306      [any] false, deceptive, or misleading advertising, promotional, or sales methods to offer or
             307      dispose of an interest in subdivided lands;
             308          [(viii) engaged] (ix) engages in the offering of subdivided lands [which] that has
             309      constituted or [which] that may constitute a fraud upon purchasers or prospective purchasers of
             310      the subdivided lands; or
             311          [(ix) engaged] (x) engages in a dishonest [practices] practice in any industry involving
             312      sales to consumers.
             313          [(b)] (c) [Findings of fact shall be accompanied by] The division shall accompany with
             314      a finding of fact required by this Subsection (1) a concise and explicit statement of the
             315      underlying facts supporting the [findings] finding.
             316          (2) As an alternative to revoking the registration of a subdivider, the director may issue
             317      a cease and desist order if after notice and a hearing the director finds that the subdivider is
             318      guilty of a violation for which revocation may be ordered.
             319          (3) [Any] (a) The division shall suspend or revoke the license of a real estate broker or
             320      [salesman violating any provisions of] real estate sales agent who violates this chapter [shall
             321      have the real estate broker or salesman's license suspended or revoked by the division] for the
             322      period of time the director determines to be justified under the circumstances. [The]
             323          (b) A suspension or revocation [shall be] under this section is in addition to any other
             324      penalty [which] that may be imposed under this chapter, subject to the provisions of Section
             325      61-2-12 .
             326          Section 5. Section 57-11-16 is amended to read:
             327           57-11-16. Violations -- Criminal penalty -- Limitation -- Duties of attorney
             328      general, county attorney, or district attorney.
             329          (1) (a) [Any] This Subsection (1) applies to a person who willfully:
             330          (i) violates [any provision of this act] this chapter or [of] a rule adopted under [it or any
             331      person who willfully,] this chapter; or
             332          (ii) in an application for registration under this [act] chapter or under the federal act,
             333      makes any untrue statement of a material fact or omits to state a material fact [may be fined not
             334      less than $1,000 or double the amount of gain from the transaction, whichever is the larger, but
             335      not more than $50,000; or he may be].


             336          (b) A person described in Subsection (1)(a) may be:
             337          (i) fined a civil penalty not to exceed the greater of:
             338          (A) $2,500 for each violation; or
             339          (B) double the amount of any gain or economic benefit derived from each violation;
             340          (ii) imprisoned for not more than two years; or
             341          (iii) both fined or imprisoned. [No]
             342          (c) An indictment or information may not be returned or a complaint filed under this
             343      [act] chapter more than five years after the alleged violation.
             344          (2) (a) The attorney general shall advise the division and [its] the division's staff in
             345      matters requiring legal counsel or services in the exercise of the division's power or
             346      performance of [its] the division's duties.
             347          (b) In the prosecution or defense of [any] an action under this section, the attorney
             348      general, the county attorney, or the district attorney of the appropriate county shall perform all
             349      necessary legal services without compensation other than their regular salaries.
             350          Section 6. Section 57-19-5 is amended to read:
             351           57-19-5. Registration -- Filing application.
             352          (1) A person may apply for registration of a project by filing with the director:
             353          (a) an application in the form prescribed by the director;
             354          (b) the written disclosure required to be furnished to prospective purchasers by Section
             355      57-19-11 ; and
             356          (c) financial statements and other information that the director may by rule require as
             357      being reasonably necessary to determine whether the requirements of this chapter have been
             358      met and whether any of the events specified in Subsection 57-19-13 (1)(g) have occurred.
             359          (2) Interests in a project which are encumbered by liens, mortgages, or other
             360      encumbrances may not be accepted for registration or offered for disposition to the public
             361      unless:
             362          (a) adequate release or nondisturbance clauses are contained in the encumbering
             363      instruments to reasonably assure that the purchaser's interest in the project will not be defeated;
             364      or
             365          (b) the division has accepted other equivalent assurances which, in the opinion of the
             366      division, meet the purposes of this Subsection (2).


             367          (3) (a) Each application for registration of a project shall be accompanied by:
             368          [(a)] (i) a filing fee of $500 for up to 100 interests, plus an additional $3 per interest for
             369      each interest over 100, up to a maximum of $2,500 for each application; and
             370          [(b)] (ii) subject to Subsection (3)(b), a deposit of $300 to cover all on-site inspection
             371      costs and expenses incurred by the division.
             372          (b) (i) If the $300 deposit is insufficient to meet the estimated costs and expenses of the
             373      on-site inspection, the applicant shall make an additional deposit sufficient to cover the
             374      estimated costs and expenses before the division will inspect the subdivided lands.
             375          (ii) The deposit shall be refunded to the extent it is not used, together with an itemized
             376      statement from the division of all amounts it has used.
             377          (4) If a person registers additional interests to be offered for disposition, [he] the
             378      person may consolidate the subsequent registration with any earlier registration offering
             379      interests for disposition in the same project by filing an application for consolidation
             380      accompanied by an additional fee of $200 plus $3 for each additional interest, up to a
             381      maximum of $1,250 for each application, if at the time the person makes the application all of
             382      the information required by Subsection (1) has been brought current and covers the additional
             383      interests.
             384          Section 7. Section 57-19-15 is amended to read:
             385           57-19-15. Application for registration of salesperson.
             386          (1) A person may apply for registration as a salesperson under this chapter by filing
             387      with the director an application in the form prescribed by the director, including[, but not
             388      limited to]:
             389          (a) a statement of whether or not the applicant has ever been:
             390          (i) convicted of:
             391          (A) a felony[,]; or [any]
             392          (B) a misdemeanor involving theft, fraud, or dishonesty; or
             393          (ii) enjoined from, assessed a civil penalty for, or found to have engaged in the
             394      violation of [any] a law designed to protect [consumers] a consumer;
             395          (b) (i) a statement describing the applicant's employment history for the [previous] five
             396      years immediately preceding the day on which the application is filed; and
             397          (ii) a statement of whether or not [any] a termination of employment during [that] the


             398      period [was occasioned by any] described in Subsection (1)(b)(i) is as a result of theft, fraud, or
             399      an act of dishonesty; and
             400          (c) any other information that the director, by rule, considers necessary to protect the
             401      interests of [purchasers] a purchaser.
             402          (2) [The] Notwithstanding the requirements for a regulatory fee under Section
             403      63J-1-303 , at the time an applicant files an application, the applicant shall [be accompanied by]
             404      pay to the division a fee of [$50] $100.
             405          (3) (a) Registration as a salesperson is effective for a period for [one year] two years,
             406      unless the director specifies otherwise. [Registration as]
             407          (b) To renew a registration a salesperson [may be renewed by the filing of] shall:
             408          (i) file a form prescribed by the director for that purpose; and [the payment of]
             409          (ii) pay a renewal fee of [$50] $100.
             410          Section 8. Section 57-19-16 is amended to read:
             411           57-19-16. Denial, revocation, or suspension of registration of salesperson -- Fine.
             412          (1) Subject to Section 57-19-17 , if the director finds that an applicant or salesperson
             413      has engaged in an act described in Subsection (2), the director may:
             414          (a) deny an application for registration as a salesperson [may be denied,];
             415          (b) suspend or revoke an existing registration [may be revoked or suspended,]; or [a
             416      fine not to exceed $500 may be imposed by the director, if he]
             417          (c) impose a civil penalty not to exceed $500.
             418          (2) Subsection (1) applies if the director finds that the applicant or salesperson [has]:
             419          [(1) filed, or caused]
             420          (a) files, or causes to be filed, with the director [any] a document [which] that contains
             421      [any] an untrue or misleading information;
             422          [(2) made any]
             423          (b) makes an untrue or misleading statement of material fact[, or failed];
             424          (c) fails to state a material fact [which] that is necessary in order to make the
             425      statements made not misleading in light of the circumstances under which [they] the statements
             426      are made;
             427          [(3) employed any]
             428          (d) employs a device, scheme, or artifice to defraud, or [engaged] engages in [any] an


             429      act, practice, or course of business [which] that operates or would operate as a fraud or deceit
             430      upon [any] a person;
             431          [(4)] (e) subsequent to the effective date of registration as a salesperson, [has been] is:
             432          [(a)] (i) convicted of:
             433          (A) a felony[,]; or [any]
             434          (B) a misdemeanor involving theft, fraud, or dishonesty; or
             435          [(b)] (ii) enjoined from, assessed a civil penalty for, or found to have engaged in [any]
             436      a violation of any law designed to protect consumers;
             437          [(5) violated any provision of]
             438          (f) violates this chapter; [or]
             439          [(6) engaged in any]
             440          (g) engages in an activity [which] that constitutes dishonest dealing[.]; or
             441          (h) engages in unprofessional conduct as defined by statute or rule made by the
             442      director.
             443          Section 9. Section 61-2-6 is amended to read:
             444           61-2-6. Licensing procedures and requirements.
             445          (1) (a) Except as provided in Subsection (5), the commission shall determine the
             446      qualifications and requirements of [applicants] an applicant for:
             447          (i) a principal broker license;
             448          (ii) an associate broker license; or
             449          (iii) a sales agent license.
             450          (b) The division, with the concurrence of the commission, shall require and pass upon
             451      proof necessary to determine the honesty, integrity, truthfulness, reputation, and competency of
             452      each applicant for an initial license or for renewal of an existing license.
             453          (c) (i) The division, with the concurrence of the commission, shall require an applicant
             454      for:
             455          (A) a sales agent license to complete an approved educational program [not to exceed
             456      90 hours] consisting of the number of hours designated by rule made by the commission with
             457      the concurrence of the division, except that the rule may not require less than 120 hours; and
             458          (B) an associate broker or principal broker license to complete an approved educational
             459      program [not to exceed] consisting of the number of hours designated by rule made by the


             460      commission with the concurrence of the division, except that the rule may not require less than
             461      120 hours.
             462          (ii) [The hours] An hour required by this section [mean] means 50 minutes of
             463      instruction in each 60 minutes.
             464          (iii) The maximum number of program hours available to an individual is ten hours per
             465      day.
             466          (d) The division, with the concurrence of the commission, shall require the applicant to
             467      pass an examination approved by the commission covering:
             468          (i) the fundamentals of:
             469          (A) the English language;
             470          (B) arithmetic;
             471          (C) bookkeeping; and
             472          (D) real estate principles and practices;
             473          (ii) the provisions of this chapter;
             474          (iii) the rules established by the commission; and
             475          (iv) any other aspect of Utah real estate license law considered appropriate.
             476          (e) (i) Three years' full-time experience as a real estate sales agent or its equivalent is
             477      required before [any] an applicant may apply for, and secure a principal broker or associate
             478      broker license in this state.
             479          (ii) The commission shall establish by rule, made in accordance with Title 63G,
             480      Chapter 3, Utah Administrative Rulemaking Act, the criteria by which the commission will
             481      accept experience or special education in similar fields of business in lieu of the three years'
             482      experience.
             483          (2) (a) The division, with the concurrence of the commission, may require an applicant
             484      to furnish a sworn statement setting forth evidence satisfactory to the division of the applicant's
             485      reputation and competency as set forth by rule.
             486          (b) The division shall require an applicant to provide the applicant's Social Security
             487      number, which is a private record under Subsection 63G-2-302 (1)(h).
             488          (3) (a) A nonresident principal broker may be licensed in this state by [conforming to]
             489      complying with all the provisions of this chapter except that of residency.
             490          (b) A nonresident associate broker or sales agent may become licensed in this state by:


             491          (i) [conforming to] complying with all the provisions of this chapter except that of
             492      residency; and
             493          (ii) being employed or engaged as an independent contractor by or on behalf of a
             494      nonresident or resident principal broker who is licensed in this state.
             495          (4) (a) Except as provided in Subsection 61-2-9 (1)(e)(iv), [the] the division and
             496      commission shall treat an application to be relicensed of an applicant [who has had a] whose
             497      real estate license is revoked [shall be treated] as an original application.
             498          (b) In the case of an applicant for a new license as a principal broker or associate
             499      broker, the applicant is not entitled to credit for experience gained [prior to] before the
             500      revocation of a real estate license.
             501          (5) (a) Notwithstanding Subsection (1), the commission may delegate to the division
             502      the authority to:
             503          (i) review a class or category of applications for initial or renewed licenses;
             504          (ii) determine whether an applicant meets the licensing criteria in Subsection (1); and
             505          (iii) approve or deny a license application without concurrence by the commission.
             506          (b) (i) If the commission delegates to the division the authority to approve or deny an
             507      application without concurrence by the commission and the division denies an application for
             508      licensure, the applicant who is denied licensure may petition the commission for review of the
             509      denial of licensure.
             510          (ii) An applicant who is denied licensure pursuant to this Subsection (5) may seek
             511      agency review by the executive director only after the commission has reviewed the division's
             512      denial of the applicant's application.
             513          Section 10. Section 61-2-7.2 is amended to read:
             514           61-2-7.2. Reporting requirements.
             515          [Principal brokers, associate brokers, and sales agents] A licensee shall [send] notify the
             516      division of the following by sending the division a signed statement [notifying the division of
             517      the following] within ten business days of:
             518          (1) (a) a conviction of [any] a criminal offense; [or]
             519          (b) the entry of a plea in abeyance to a criminal offense; or
             520          (c) the potential resolution of a criminal case by:
             521          (i) a diversion agreement; or


             522          (ii) any other agreement under which a criminal charge is held in suspense for a period
             523      of time; or
             524          (2) filing a personal or brokerage bankruptcy.
             525          Section 11. Section 61-2-9 is amended to read:
             526           61-2-9. Examination and license fees -- Criminal background check -- Renewal of
             527      licenses -- Education requirements -- Activation of inactive licenses -- Recertification --
             528      Licenses of firm, partnership, or association -- Miscellaneous fees.
             529          (1) (a) Upon filing an application for a principal broker, associate broker, or sales agent
             530      license examination, the applicant shall pay a nonrefundable fee as determined by the
             531      commission with the concurrence of the division under Section 63J-1-303 for admission to the
             532      examination.
             533          (b) A principal broker, associate broker, or sales agent applicant shall pay a
             534      nonrefundable fee as determined by the commission with the concurrence of the division under
             535      Section 63J-1-303 for issuance of an initial license or license renewal.
             536          (c) [Each] A license issued under this Subsection (1) shall be issued for a period of not
             537      less than two years as determined by the division with the concurrence of the commission.
             538          (d) (i) Any of the following applicants shall comply with this Subsection (1)(d):
             539          (A) a new sales agent applicant; or
             540          (B) [an out-of-state] a broker applicant.
             541          (ii) An applicant described in this Subsection (1)(d) shall:
             542          (A) submit fingerprint cards in a form acceptable to the division at the time the license
             543      application is filed; and
             544          (B) consent to a criminal background check by the Utah Bureau of Criminal
             545      Identification and the Federal Bureau of Investigation regarding the application.
             546          (iii) The division shall request the Department of Public Safety to complete a Federal
             547      Bureau of Investigation criminal background check for each applicant described in this
             548      Subsection (1)(d) through the national criminal history system or any successor system.
             549          (iv) The applicant shall pay the cost of the criminal background check and the
             550      fingerprinting [shall be borne by the applicant].
             551          (v) [Funds] Monies paid to the division by an applicant for the cost of the criminal
             552      background check [shall be] are nonlapsing.


             553          (e) (i) [Any] A license issued under Subsection (1)(d) [shall be] is conditional, pending
             554      completion of the criminal background check. If the criminal background check discloses the
             555      applicant [has failed] fails to accurately disclose a criminal history, the license shall be
             556      immediately and automatically revoked.
             557          (ii) [Any] A person whose conditional license [has been] is revoked under Subsection
             558      (1)(e)(i) [shall be entitled to] may have a post-revocation hearing to challenge the revocation.
             559      The hearing shall be conducted in accordance with Title 63G, Chapter 4, Administrative
             560      Procedures Act.
             561          (iii) The division director shall designate one of the following to act as the presiding
             562      officer in a postrevocation hearing described in this Subsection (1)(e):
             563          (A) the division; or
             564          (B) the division with the concurrence of the commission.
             565          (iv) The decision on whether relief from the revocation of a license under this
             566      Subsection (1)(e) will be granted shall be made by the presiding officer.
             567          (v) Relief from a revocation under this Subsection (1)(e) may be granted only if:
             568          (A) the criminal history upon which the division based the revocation:
             569          (I) did not occur; or
             570          (II) is the criminal history of another person;
             571          (B) (I) the revocation is based on a failure to accurately disclose a criminal history; and
             572          (II) the applicant [had] has a reasonable good faith belief at the time of application that
             573      there was no criminal history to be disclosed; or
             574          (C) the division [failed] fails to follow the prescribed procedure for the revocation.
             575          (vi) If a license is revoked or a revocation under this Subsection (1)(e) is upheld after a
             576      post-revocation hearing, the person may not apply for a new license until at least 12 months
             577      after the day on which the license is revoked.
             578          (2) (a) (i) A license expires if it is not renewed on or before its expiration date.
             579          (ii) As a condition of renewal, [each] an active licensee shall demonstrate competence[:
             580      (A) by viewing an approved real estate education video program and completing a
             581      supplementary workbook; or (B)] by completing [12] 18 hours of [professional] continuing
             582      education [approved by the division and commission] within [each] a two-year renewal period
             583      subject to rules made by the commission, with the concurrence of the division.


             584          (iii) In making a rule described in Subsection (2)(c)(ii), the division and commission
             585      shall consider:
             586          (A) evaluating continuing education on the basis of competency, rather than course
             587      time;
             588          (B) allowing completion of courses in a significant variety of topic areas that the
             589      division and commission determine are valuable in assisting an individual licensed under this
             590      chapter to increase the individual's competency; and
             591          (C) allowing completion of courses that will increase a licensee's professional
             592      competency in the area of practice of the licensee.
             593          [(iii)] (iv) The division with the concurrence of the commission shall certify the
             594      continuing education required under this Subsection (2)(a) which may include:
             595          (A) state conventions;
             596          (B) home study courses;
             597          (C) video courses; and
             598          (D) closed circuit television courses.
             599          [(iv)] (v) The commission with concurrence of the division may exempt a licensee
             600      from all or a part of the continuing education requirement of this Subsection (2)(a) for a
             601      reasonable period [not to exceed four years] of time:
             602          (A) upon a finding of reasonable cause, including:
             603          (I) military service; [and] or
             604          (II) if an individual is elected or appointed to government service, the individual's
             605      government service during which the individual spends a substantial time addressing real estate
             606      issues; and
             607          (B) under conditions established by rule made in accordance with Title 63G, Chapter 3,
             608      Utah Administrative Rulemaking Act.
             609          (b) For a period of 30 days after the expiration date of a license, the license may be
             610      reinstated upon:
             611          (i) payment of a renewal fee and a late fee determined by the commission with the
             612      concurrence of the division under Section 63J-1-303 ; and
             613          (ii) providing proof acceptable to the division and the commission of the licensee
             614      having:


             615          (A) completed the hours of education required by Subsection (2)(a); or
             616          (B) demonstrated competence as required under Subsection (2)(a).
             617          (c) After the 30-day period described in Subsection (2)(b), and until six months after
             618      the expiration date, the license may be reinstated by:
             619          (i) paying a renewal fee and a late fee determined by the commission with the
             620      concurrence of the division under Section 63J-1-303 ;
             621          (ii) providing to the division proof of satisfactory completion of 12 hours of continuing
             622      education:
             623          (A) in addition to the requirements for a timely renewal; and
             624          (B) on a subject determined by the commission by rule made in accordance with Title
             625      63G, Chapter 3, Utah Administrative Rulemaking Act; and
             626          (iii) providing proof acceptable to the division and the commission of the licensee
             627      having:
             628          (A) completed the hours of education required under Subsection (2)(a); or
             629          (B) demonstrated competence as required under Subsection (2)(a).
             630          (d) After the six-month period described in Subsection (2)(c), and until one year after
             631      the expiration date, the license may be reinstated by:
             632          (i) paying a renewal fee and a late fee determined by the commission with the
             633      concurrence of the division under Section 63J-1-303 ;
             634          (ii) providing to the division proof of satisfactory completion of 24 hours of continuing
             635      education:
             636          (A) in addition to the requirements for a timely renewal; and
             637          (B) on a subject determined by the commission by rule made in accordance with Title
             638      63G, Chapter 3, Utah Administrative Rulemaking Act; and
             639          (iii) providing proof acceptable to the division and the commission of the licensee
             640      having:
             641          (A) completed the hours of education required by Subsection (2)(a); or
             642          (B) demonstrated competence as required under Subsection (2)(a).
             643          [(d) A] (e) The division shall relicense a person who does not renew that person's
             644      license within [six months after the expiration date shall be relicensed] one year as prescribed
             645      for an original application.


             646          (f) Notwithstanding Subsection (2)(a), the division may extend the term of a license
             647      that would expire under Subsection (2)(a) except for the extension if:
             648          (i) the person complies with the requirements of this section to renew the license; and
             649          (ii) at the time of the extension, there is pending under this chapter:
             650          (A) the application for renewal of the license; or
             651          (B) a disciplinary action.
             652          (3) (a) As a condition for the activation of an inactive license that was in an inactive
             653      status at the time of the licensee's most recent renewal, the licensee shall supply the division
             654      with proof of:
             655          (i) successful completion of the respective sales agent or broker licensing examination
             656      within six months prior to applying to activate the license; or
             657          (ii) the successful completion of [12] the hours of continuing education that the
             658      licensee would have been required to complete under Subsection (2)(a) if the license had been
             659      on active status at the time of the licensee's most recent renewal.
             660          (b) The commission may, in accordance with Title 63G, Chapter 3, Utah
             661      Administrative Rulemaking Act, establish by rule:
             662          (i) the nature or type of continuing education required for reactivation of a license; and
             663          (ii) how long [prior to] before reactivation the continuing education must [have been]
             664      be completed.
             665          (4) (a) A principal broker license may be granted to a corporation, partnership, or
             666      association if the corporation, partnership, or association has affiliated with it an individual
             667      who:
             668          (i) has qualified as a principal broker under the terms of this chapter; and
             669          (ii) serves in the capacity of a principal broker.
             670          (b) Application for the license described in Subsection (4)(a) shall be made in
             671      accordance with the rules adopted by the division with the concurrence of the commission.
             672          (5) The division may charge and collect reasonable fees determined by the commission
             673      with the concurrence of the division under Section 63J-1-303 to cover the costs for:
             674          (a) issuance of a new or duplicate license;
             675          (b) a license [histories or certifications] history or certification;
             676          (c) a certified [copies] copy of an official [documents, orders, and] document, order, or


             677      other [papers and transcripts] paper or transcript;
             678          (d) certifying a real estate [schools, courses, and instructors] school, course, or
             679      instructor, the fees for which shall, notwithstanding Section 13-1-2 , be deposited in the Real
             680      Estate Education, Research, and Recovery Fund; and
             681          (e) other duties required by this chapter.
             682          (6) If a licensee submits or causes to be submitted a check, draft, or other negotiable
             683      instrument to the division for payment of [fees] a fee, and the check, draft, or other negotiable
             684      instrument is dishonored, the transaction for which the payment [was] is submitted is void and
             685      will be reversed by the division if payment of the applicable fee is not received in full.
             686          (7) (a) [The fees] A fee under this chapter and the additional license fee for the Real
             687      Estate Education, Research, and Recovery Fund under Section 61-2a-4 are in lieu of all other
             688      license fees or assessments that might otherwise be imposed or charged by the state or any of
             689      its political subdivisions, upon, or as a condition of, the privilege of conducting the business
             690      regulated by this chapter, except that a political subdivision within the state may charge a
             691      business license fee on a principal broker if the principal broker maintains a place of business
             692      within the jurisdiction of the political subdivision.
             693          (b) Unless otherwise exempt, [each] a licensee under this chapter is subject to all taxes
             694      imposed under Title 59, Revenue and Taxation.
             695          Section 12. Section 61-2-10 is amended to read:
             696           61-2-10. Restriction on commissions -- Affiliation with more than one broker --
             697      Specialized licenses -- Designation of agents or brokers.
             698          (1) [It is unlawful for any] (a) Except as provided in Subsection (1)(b), an associate
             699      broker or sales agent [to] may not accept valuable consideration for the performance of [any of
             700      the acts] an act specified in this chapter from [any] a person except the principal broker with
             701      whom the associate broker or sales agent is affiliated and licensed.
             702          (b) An associate broker or sales agent may receive valuable consideration for the
             703      performance of an act specified in this chapter from a person other than the principal broker
             704      with whom the associate broker or sales agent is affiliated if:
             705          (i) the valuable consideration is paid with a payment instrument prepared by a title
             706      insurance agent;
             707          (ii) the title insurance agent provides the payment instrument to the principal broker;


             708          (iii) the title insurance agent complies with the written instructions of the principal
             709      broker:
             710          (A) in preparing the payment instrument; and
             711          (B) delivering the payment instrument to the principal broker; and
             712          (iv) the principal broker directly delivers the payment instrument to the associate
             713      broker or sales agent.
             714          (c) The commission, with the concurrence of the division, may make rules in
             715      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act:
             716          (i) defining what constitutes a "payment instrument" for purposes of this Subsection
             717      (1); or
             718          (ii) the form and contents of the of the written instructions required by Subsection
             719      (1)(b).
             720          (2) An inactive associate broker or sales agent [is not authorized to] may not conduct a
             721      real estate [transactions] transaction until the inactive associate broker or sales agent becomes
             722      affiliated with a licensed principal broker and submits the required documentation to the
             723      division. An inactive principal broker [is not authorized to] may not conduct a real estate
             724      [transactions] transaction until the principal broker's license is activated with the division.
             725          (3) [No] A sales agent or associate broker may not affiliate with more than one
             726      principal broker at the same time.
             727          (4) (a) Except as provided by rule, a principal broker may not be responsible for more
             728      than one real estate brokerage at the same time.
             729          (b) (i) In addition to issuing principal broker, associate broker, and sales agent licenses
             730      authorizing the performance of all of the acts set forth in Subsection 61-2-2 (12), the division
             731      may issue specialized sales licenses and specialized property management licenses with the
             732      scope of practice limited to the specialty.
             733          (ii) An individual may hold a specialized license in addition to a license to act as a
             734      principal broker, an associate broker, or a sales agent.
             735          (iii) The commission may adopt rules pursuant to Title 63G, Chapter 3, Utah
             736      Administrative Procedures Act, for the administration of this [provision] Subsection (4),
             737      including:
             738          (A) prelicensing and postlicensing education requirements[,];


             739          (B) examination requirements[,];
             740          (C) affiliation with real estate brokerages or property management companies[,]; and
             741          (D) other licensing procedures.
             742          (c) An individual may not be a principal broker of a brokerage and a sales agent or
             743      associate broker for a different brokerage at the same time.
             744          (5) [Any] An owner, purchaser, lessor, or lessee who engages the services of a
             745      principal broker may designate which sales agents or associate brokers affiliated with that
             746      principal broker will also represent that owner, purchaser, lessor, or lessee in the purchase, sale,
             747      lease, or exchange of real estate, or in exercising an option relating to real estate.
             748          Section 13. Section 61-2-11 is amended to read:
             749           61-2-11. Grounds for disciplinary action.
             750          The following acts are unlawful for a person required to be licensed under this chapter:
             751          (1) making [any] a substantial misrepresentation;
             752          (2) making [any] a false [promises] promise of a character likely to influence,
             753      persuade, or induce;
             754          (3) pursuing a continued and flagrant course of misrepresentation, or of making false
             755      promises through agents, sales agents, advertising, or otherwise;
             756          (4) acting for more than one party in a transaction without the informed consent of all
             757      parties;
             758          (5) (a) acting as an associate broker or sales agent while not licensed with a licensed
             759      principal broker;
             760          (b) representing or attempting to represent a broker other than the principal broker with
             761      whom the person is affiliated; or
             762          (c) representing as sales agent or having a contractual relationship similar to that of
             763      sales agent with other than a licensed principal broker;
             764          (6) (a) failing, within a reasonable time, to account for or to remit [any] monies coming
             765      into the person's possession that belong to others;
             766          (b) commingling the [funds] monies described in Subsection (6)(a) with the person's
             767      own [funds] monies; or
             768          (c) diverting the [funds] monies described in Subsection (6)(a) from the purpose for
             769      which they were received;


             770          (7) paying or offering to pay valuable consideration, as defined by the commission, to
             771      [any] a person not licensed under this chapter, except that valuable consideration may be
             772      shared:
             773          (a) with a licensed principal broker of another jurisdiction; or
             774          (b) as provided under:
             775          (i) Title 16, Chapter 10a, Utah Revised Business Corporation Act;
             776          (ii) Title 16, Chapter 11, Professional Corporation Act; or
             777          (iii) Title 48, Chapter 2c, Utah Revised Limited Liability Company Act;
             778          (8) being unworthy or incompetent to act as a principal broker, associate broker, or
             779      sales agent in such manner as to safeguard the interests of the public;
             780          (9) failing to voluntarily furnish [copies of all documents] a copy of a document to all
             781      parties executing the [documents] document;
             782          (10) failing to keep and make available for inspection by the division a record of each
             783      transaction, including:
             784          (a) the names of buyers and sellers or lessees and lessors;
             785          (b) the identification of the property;
             786          (c) the sale or rental price;
             787          (d) [any] monies received in trust;
             788          (e) [any] agreements or instructions from buyers and sellers or lessees and lessors; and
             789          (f) any other information required by rule;
             790          (11) failing to disclose, in writing, in the purchase, sale, or rental of property, whether
             791      the purchase, sale, or rental is made for that person or for an undisclosed principal;
             792          (12) regardless of whether the crime [was] is related to real estate, being convicted of a
             793      criminal offense involving moral turpitude within five years of the most recent application,
             794      including:
             795          (a) a conviction based upon a plea of nolo contendere[,]; or
             796          (b) a plea held in abeyance to a criminal offense involving moral turpitude;
             797          (13) advertising the availability of real estate or the services of a licensee in a false,
             798      misleading, or deceptive manner;
             799          (14) in the case of a principal broker or a licensee who is a branch manager, failing to
             800      exercise reasonable supervision over the activities of the principal broker's or branch manager's


             801      [licensees and any] licensee or unlicensed staff;
             802          (15) violating or disregarding:
             803          (a) this chapter[,];
             804          (b) an order of the commission[,]; or
             805          (c) the rules adopted by the commission and the division;
             806          (16) breaching a fiduciary duty owed by a licensee to the licensee's principal in a real
             807      estate transaction;
             808          (17) any other conduct which constitutes dishonest dealing;
             809          (18) unprofessional conduct as defined by statute or rule;
             810          (19) on the basis of misconduct in a professional capacity that relates to character,
             811      honesty, integrity, or truthfulness, having one of the following suspended, revoked,
             812      surrendered, or cancelled:
             813          (a) a real estate license issued by another jurisdiction; or
             814          (b) another professional license issued by this or another jurisdiction;
             815          (20) failing to respond to a request by the division in an investigation authorized under
             816      this chapter, including:
             817          (a) failing to respond to a subpoena;
             818          (b) withholding evidence; or
             819          (c) failing to produce documents or records; [or]
             820          (21) in the case of a dual licensed title licensee as defined in Section 31A-2-402 :
             821          (a) providing a title insurance product or service without the approval required by
             822      Section 31A-2-405 ; or
             823          (b) knowingly providing false or misleading information in the statement required by
             824      Subsection 31A-2-405 (2)[.]; or
             825          (22) violating an independent contractor agreement between a principal broker and a
             826      sales agent as evidenced by a final judgment of a court.
             827          Section 14. Section 61-2-12 is amended to read:
             828           61-2-12. Disciplinary action -- Judicial review.
             829          (1) (a) On the basis of a violation of this chapter, the commission with the concurrence
             830      of the director, may issue an order:
             831          (i) imposing an educational requirement;


             832          (ii) imposing a civil penalty not to exceed the greater of:
             833          (A) $2,500 for each violation; or
             834          (B) the amount of any gain or economic benefit derived from each violation;
             835          (iii) taking any of the following actions related to a license or certificate:
             836          (A) revoking;
             837          (B) suspending;
             838          (C) placing on probation;
             839          (D) denying the renewal, reinstatement, or application for an original license or
             840      certificate; or
             841          (E) in the case of denial or revocation of a license or certificate, setting a waiting
             842      period for an applicant to apply for a license or certificate under this title;
             843          (iv) issuing a cease and desist order; [or]
             844          (v) modifying an action described in Subsections (1)(a)(i) through (iv) if the
             845      commission finds that the person complies with court ordered restitution; or
             846          [(v)] (vi) doing any combination of Subsections (1)(a)(i) through [(iv)] (v).
             847          (b) If [the] a licensee is an active sales agent or active associate broker, the division
             848      shall inform the principal broker with whom the licensee is affiliated of the charge and of the
             849      time and place of any hearing.
             850          (2) (a) [Any] An applicant, certificate holder, licensee, or person aggrieved, including
             851      the complainant, may obtain agency review by the executive director and judicial review of any
             852      adverse ruling, order, or decision of the division.
             853          (b) If [the] an applicant, certificate holder, or licensee prevails in the appeal and the
             854      court finds that the state action was undertaken without substantial justification, the court may
             855      award reasonable litigation expenses to the applicant, certificate holder, or licensee as provided
             856      under Title 78B, Chapter 8, Part 5, Small Business Equal Access to Justice Act.
             857          (c) (i) An order, ruling, or decision of the division shall take effect and become
             858      operative 30 days after the service of the order, ruling, or decision unless otherwise provided in
             859      the order.
             860          (ii) If an appeal is taken by a licensee, the division may stay enforcement of an order,
             861      ruling, or decision in accordance with Section 63G-4-405 .
             862          (iii) [The] An appeal [shall be] is governed by the Utah Rules of Appellate Procedure.


             863          (3) The commission and the director shall comply with the procedures and
             864      requirements of Title 63G, Chapter 4, Administrative Procedures Act, in [all] an adjudicative
             865      [proceedings] proceeding.
             866          Section 15. Section 61-2-17 is amended to read:
             867           61-2-17. Penalty for violation of chapter.
             868          (1) [Any individual violating] (a) An individual required to be licensed under this
             869      chapter who violates this chapter, in addition to being subject to a license sanction or a fine
             870      ordered by the commission, is, upon conviction of a first violation, guilty of a class A
             871      misdemeanor. [Any] For a conviction under this Subsection (1)(a), imprisonment shall be for a
             872      term not to exceed six months.
             873          (b) If [the] a violator of this chapter is a corporation, [it] the corporation is, upon
             874      conviction of a first violation, guilty of a class A misdemeanor.
             875          (2) (a) Upon conviction of a second or subsequent violation, an individual is guilty of a
             876      third degree felony. Imprisonment for a conviction under this Subsection (2)(a) shall be for a
             877      term not to exceed two years.
             878          (b) If a corporation is convicted of a second or subsequent violation, [it] the
             879      corporation is guilty of a third degree felony.
             880          (3) [Any] An officer or agent of a corporation, or [any] a member or agent of a
             881      partnership or association, who personally participates in or is an accessory to any violation of
             882      this chapter by [such] the corporation, partnership, or association, is subject to the penalties
             883      prescribed for [individuals] an individual.
             884          (4) If [any] a person receives [any] money or its equivalent, as commission,
             885      compensation, or profit by or in consequence of a violation of this chapter, that person is liable
             886      for an additional penalty of not less than the amount of the money received and not more than
             887      three times the amount of money received, as may be determined by the court. This penalty
             888      may be sued for in any court of competent jurisdiction, and recovered by any person aggrieved
             889      for [his] the person's own use and benefit.
             890          (5) [All fines] A fine imposed by the commission and the director under this chapter
             891      shall, notwithstanding Section 13-1-2 , be deposited into the Real Estate Education, Research,
             892      and Recovery Fund to be used in a manner consistent with the requirements of [the] Chapter
             893      2a, Real Estate Recovery Fund Act.


             894          Section 16. Section 61-2a-2 is amended to read:
             895           61-2a-2. Purpose -- Definitions.
             896          (1) The purposes of this chapter are as follows:
             897          [(1) To establish a] (a)(i) This chapter creates the Real Estate Education, Research,
             898      and Recovery Fund [that shall] to reimburse the public out of the fund for damages up to
             899      [$10,000] $15,000 caused by a real estate [licensees] licensee in a real estate transaction as
             900      provided in Subsection 61-2a-5 (1).
             901          (ii) This chapter applies to damages caused by an individual [licensees] licensee.
             902      Reimbursement may not be made for [judgments] a judgment against [corporations,
             903      partnerships, associations, or other legal entities] a corporation, partnership, association, or
             904      other legal entity.
             905          [(2) To provide] (b) This chapter provides revenue for improving the real estate
             906      profession through education and research with the goal of making [real estate salesmen]
             907      licensees more responsible to the public.
             908          (2) For purposes of this chapter:
             909          (a) "Commission" means the Real Estate Commission.
             910          (b) "Division" means the Division of Real Estate.
             911          (c) "Fund" means the Real Estate Education, Research, and Recovery Fund created in
             912      Section 61-2a-3 .
             913          (d) "Judgment" includes a criminal restitution judgment award.
             914          Section 17. Section 61-2a-3 is amended to read:
             915           61-2a-3. Education, Research, and Recovery Fund.
             916          (1) (a) There is created a restricted special revenue fund to be known as the "Real
             917      Estate Education, Research, and Recovery Fund."
             918          (b) The actual interest earned on the [Real Estate Education, Research, and Recovery
             919      Fund] fund shall be deposited into the fund.
             920          (2) At the commencement of each fiscal year, $100,000 shall be available in the fund
             921      for satisfying judgments rendered against [persons] a person licensed under Title 61, Chapter 2,
             922      Division of Real Estate.
             923          Section 18. Section 61-2a-4 is amended to read:
             924           61-2a-4. Additional license fee -- Purpose.


             925          (1) [Each] A person who applies for or renews a real estate principal broker or
             926      associate broker license shall pay, in addition to the application or renewal fee, a reasonable
             927      annual fee of up to $18, as determined by the [Division of Real Estate] division with the
             928      concurrence of the [Real Estate Commission] commission.
             929          (2) [Each] A person who applies for or renews a real estate sales agent license shall pay
             930      in addition to the application or renewal fee a reasonable annual fee of up to $12, as determined
             931      by the division with the concurrence of the commission.
             932          (3) Notwithstanding Section 13-1-2 , the additional fees under this section shall be paid
             933      into the [Real Estate Education, Research, and Recovery Fund] fund to be used for the
             934      purposes of this chapter.
             935          Section 19. Section 61-2a-5 is amended to read:
             936           61-2a-5. Notice to division -- Judgment against real estate licensee -- Fraud,
             937      misrepresentation, or deceit -- Verified petition for order directing payment from fund --
             938      Limitations and procedure.
             939          (1) [A] (a) Except as provided in Subsection (6), a person may bring a claim against
             940      the [Real Estate Education, Research, and Recovery Fund] fund only if [he] the person sends a
             941      signed notification to the [Division of Real Estate] division at the time [he] the person files an
             942      action against a real estate licensee alleging fraud, misrepresentation, or deceit.
             943          (b) Within 30 days of receipt of the notice, the division [shall have] has an
             944      unconditional right to intervene in the action.
             945          (c) If the person making a claim against the fund obtains a final judgment in a court of
             946      competent jurisdiction in this state against the licensee based upon fraud, misrepresentation, or
             947      deceit in [any] a real estate transaction, the person making the claim may, upon termination of
             948      all proceedings including appeals, file a verified petition in the court where the judgment was
             949      entered for an order directing payment from the [Real Estate Education, Research, and
             950      Recovery Fund] fund for the uncollected actual damages included in the judgment and unpaid.
             951          (d) Recovery from the fund may not include:
             952          (i) punitive damages[, attorney's];
             953          (ii) attorney fees[,];
             954          (iii) interest[,]; or
             955          (iv) court costs.


             956          (e) Regardless of the number of claimants or parcels of real estate involved in a
             957      transaction, the liability of the fund may not exceed [$10,000]:
             958          (i) $15,000 for a single transaction; and
             959          (ii) $50,000 for [any] one licensee.
             960          (2) A copy of the petition shall be served upon the [Division of Real Estate of the
             961      Department of Commerce] division, and an affidavit of the service shall be filed with the court.
             962          (3) The court shall conduct a hearing on the petition within 30 days after service. The
             963      petitioner shall recover from the fund only if [he] the petitioner shows all of the following:
             964          (a) [He] the petitioner is not the spouse of the judgment debtor or the personal
             965      representative of the spouse[.];
             966          (b) [He] the petitioner has complied with this chapter[.];
             967          (c) [He] the petitioner has obtained a final judgment in the manner prescribed under
             968      this section, indicating the amount of the judgment awarded[.];
             969          (d) [He] the petitioner has proved the amount still owing on the judgment at the date of
             970      the petition[.];
             971          (e) [He] the petitioner has had a writ of execution issued upon the judgment, and the
             972      officer executing the writ has made a return showing that no property subject to execution in
             973      satisfaction of the judgment could be found[. If];
             974          (f) if execution is levied against the property of the judgment debtor[, the petitioner
             975      shall show]:
             976          (i) that the amount realized was insufficient to satisfy the judgment[,]; and [shall
             977      indicate]
             978          (ii) the amount realized and the balance remaining on the judgment after application of
             979      the amount realized[.];
             980          [(f) He] (g) the petitioner has made reasonable searches and inquiries to ascertain
             981      whether the judgment debtor has any interest in property, real or personal, that may satisfy the
             982      judgment[,]; and [he]
             983          (h) the petitioner has exercised reasonable diligence to secure payment of the judgment
             984      from the assets of the judgment debtor.
             985          (4) If the petitioner satisfies the court that it is not practicable for [him] the petitioner to
             986      comply with one or more of the requirements enumerated in Subsections (3)(e) [and (f)]


             987      through (h), the court may waive those requirements.
             988          (5) (a) A judgment that is the basis for a claim against the fund may not have been
             989      discharged in bankruptcy.
             990          (b) In the case of a bankruptcy proceeding that is still open or that is commenced
             991      during the pendency of the claim, the claimant shall obtain an order from the bankruptcy court
             992      declaring the judgment and debt to be nondischargeable.
             993          (6) A person may not bring a claim against the fund if the person is substantially
             994      complicit in the fraud, misrepresentation, or deceit that is the basis of the claim.
             995          Section 20. Section 61-2a-6 is amended to read:
             996           61-2a-6. Real Estate Division -- Authority to act upon receipt of petition.
             997          (1) Upon receipt of a petition as required by Section 61-2a-5 , the [Real Estate Division]
             998      division may answer, initiate review proceedings of its own, or appear in any proceeding in the
             999      name of the defendant to the action or on behalf of the fund.
             1000          (2) The division may, subject to court approval, compromise a claim based upon the
             1001      application of a petitioner.
             1002          Section 21. Section 61-2a-7 is amended to read:
             1003           61-2a-7. Court determination and order.
             1004          If the court determines that a claim should be levied against that portion of the fund
             1005      allocated for the purpose of carrying out the provisions of this [act] chapter, the court shall
             1006      enter an order directed to the division requiring payment from the fund of that portion of the
             1007      petitioner's judgment that is payable from the fund pursuant to [the provisions of and in
             1008      accordance with the limitations contained in] Section 61-2a-5 .
             1009          Section 22. Section 61-2a-9 is amended to read:
             1010           61-2a-9. Division subrogated to judgment creditor -- Authority to revoke license.
             1011          (1) If the division makes payment from the fund to a judgment creditor, the division
             1012      shall be subrogated to [all] the rights of the judgment creditor for the amounts paid out of the
             1013      fund and any amount and interest recovered by the division shall be deposited in the fund.
             1014          (2) (a) The license of [any] a real estate licensee for whom payment from the fund is
             1015      made under this chapter shall be automatically revoked. [The]
             1016          (b) A licensee may not apply for a new license until the amount paid out on [his] the
             1017      licensee's account, plus interest at a rate determined by the [Division of Real Estate] division


             1018      with the concurrence of the commission, [has been] is repaid in full.
             1019          Section 23. Section 61-2a-11 is amended to read:
             1020           61-2a-11. Authority to take disciplinary action.
             1021          (1) Nothing contained in this chapter shall limit the authority of the director of the
             1022      [Department of Commerce] division to take disciplinary action against a licensee for a
             1023      violation of [any of the provisions of Title 61,] Chapter 2, Division of Real Estate, or of the
             1024      rules [and regulations of the Division of Real Estate] of the commission and division.
             1025          (2) The repayment in full of all obligations to the fund by [any] a licensee does not
             1026      nullify or modify the effect of any other disciplinary proceeding brought pursuant to [the
             1027      provisions of Title 61,] Chapter 2, Division of Real Estate,or the rules [and regulations
             1028      promulgated by the commission] of the commission.
             1029          Section 24. Section 61-2a-12 is amended to read:
             1030           61-2a-12. Moneys accumulated -- Excess set aside -- Purpose.
             1031          (1) [Any of the money] Money accumulated in the [Real Estate Education, Research
             1032      and Recovery Fund] fund in excess of $100,000 shall be set aside and segregated to be used by
             1033      the [Division of Real Estate] division to:
             1034          (a) investigate violations of this chapter or Chapter 2, Division of Real Estate, related
             1035      to fraud; and
             1036          (b) advance education and research in the field of real estate.
             1037          (2) The division may only use the excess monies described in Subsection (1) only in a
             1038      manner consistent with Subsection (1), including for courses:
             1039          (a) sponsored by the division;
             1040          (b) offered by the division in conjunction with any university or college in the state; or
             1041          (c) provided for by contracting for a particular research project in the field of real estate
             1042      for the state.
             1043          Section 25. Section 61-2b-6 is amended to read:
             1044           61-2b-6. Duties and powers of division.
             1045          (1) The division has the powers and duties listed in this Subsection (1).
             1046          (a) The division shall:
             1047          (i) receive an application for licensing, certification, or registration;
             1048          (ii) establish appropriate administrative procedures for the processing of an application


             1049      for licensure, certification, or registration;
             1050          (iii) issue a license or certification to a qualified applicant pursuant to this chapter; and
             1051          (iv) register an individual who applies and qualifies for registration as a trainee under
             1052      this chapter.
             1053          (b) (i) The division shall require an individual to register as a trainee with the division
             1054      before the individual acts in the capacity of a trainee earning experience for licensure.
             1055          (ii) [The] Subject to Subsection (4), the board shall adopt rules in accordance with
             1056      Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for:
             1057          (A) the trainee registration required by this Subsection (1)(b)[.]; and
             1058          (B) renewal of the trainee registration required by this Subsection (1)(b).
             1059          (c) The division shall hold public hearings under the direction of the board.
             1060          (d) The division may:
             1061          (i) solicit bids and enter into contracts with one or more educational testing services or
             1062      organizations for the preparation of a bank of questions and answers approved by the board for
             1063      licensing and certification examinations; and
             1064          (ii) administer or contract for the administration of licensing and certification
             1065      examinations as may be required to carry out the division's responsibilities under this chapter.
             1066          (e) The division shall provide administrative assistance to the board by providing to the
             1067      board the facilities, equipment, supplies, and personnel that are required to enable the board to
             1068      carry out the board's responsibilities under this chapter.
             1069          (f) The division shall assist the board in upgrading and improving the quality of the
             1070      education and examinations required under this chapter.
             1071          (g) The division shall assist the board in improving the quality of the continuing
             1072      education available to a person licensed and certified under this chapter.
             1073          (h) The division shall assist the board with respect to the proper interpretation or
             1074      explanation of the Uniform Standards of Professional Appraisal Practice as required by Section
             1075      61-2b-27 when an interpretation or explanation becomes necessary in the enforcement of this
             1076      chapter.
             1077          (i) The division shall establish fees in accordance with Section 63J-1-303 :
             1078          (i) for processing:
             1079          (A) a trainee registration;


             1080          (B) an application for licensing and certification; and
             1081          (C) approval of an expert witness; and
             1082          (ii) for all other functions required or permitted by this chapter.
             1083          (j) The division may:
             1084          (i) investigate a complaint against:
             1085          (A) a trainee;
             1086          (B) a person licensed or certified under this chapter; or
             1087          (C) a person required to be licensed, certified, or registered under this chapter;
             1088          (ii) subpoena a witness;
             1089          (iii) subpoena the production of a book, document, record, or other paper;
             1090          (iv) administer an oath; and
             1091          (v) take testimony and receive evidence concerning a matter within the division's
             1092      jurisdiction.
             1093          (k) The division may:
             1094          (i) promote research and conduct studies relating to the profession of real estate
             1095      appraising; and
             1096          (ii) sponsor real estate appraisal educational activities.
             1097          (l) The division shall adopt, with the concurrence of the board, rules for the
             1098      administration of this chapter pursuant to Title 63G, Chapter 3, Utah Administrative
             1099      Rulemaking Act, that are not inconsistent with this chapter or the constitution and laws of this
             1100      state or of the United States.
             1101          (m) The division shall employ an appropriate staff to investigate allegations that a
             1102      person required to be licensed, certified, or registered under this chapter fails to comply with
             1103      this chapter.
             1104          (n) The division may employ other professional, clerical, and technical staff as may be
             1105      necessary to properly administer the work of the division under this chapter.
             1106          (o) The division may make available, at a reasonable cost determined by the division, a
             1107      list of the names and addresses of all persons licensed or certified by the division under this
             1108      chapter to the extent the information is a public record under Title 63G, Chapter 2,
             1109      Government Records Access and Management Act.
             1110          (2) (a) The division shall approve an expert witness who is not otherwise licensed or


             1111      certified under this chapter to appear in an administrative or judicial tax proceeding to provide
             1112      evidence related to the valuation of real property that is assessed by the [tax commission] State
             1113      Tax Commission, provided that the:
             1114          (i) approval is limited to a specific proceeding;
             1115          (ii) approval is valid until the proceeding becomes final;
             1116          (iii) applicant pays an approval fee to the division;
             1117          (iv) applicant provides the applicant's name, address, occupation, and professional
             1118      credentials; and
             1119          (v) applicant provides a notarized statement that:
             1120          (A) the applicant is competent to render an appraisal and to testify as an expert witness
             1121      in the proceeding; and
             1122          (B) the appraisal and testimony to be offered shall be in accordance with the Uniform
             1123      Standards of Professional Appraisal Practice adopted by the board.
             1124          (b) Subsection (2)(a) is effective for an administrative or judicial property tax
             1125      proceeding related to the valuation of real property that is assessed by the [tax commission,
             1126      including those filed but which are not final as of May 3, 1994] State Tax Commission.
             1127          (3) (a) If the conditions of Subsection (3)(b) are met, the division is immune from any
             1128      civil action or criminal prosecution for initiating or assisting in a lawful investigation of an act
             1129      of, or participating in a disciplinary proceeding concerning:
             1130          (i) a person required to be licensed, certified, or registered pursuant to this chapter; or
             1131          (ii) a person approved as an expert witness pursuant to this chapter.
             1132          (b) This Subsection (3) applies if the division takes the action:
             1133          (i) without malicious intent; and
             1134          (ii) in the reasonable belief that the action is taken pursuant to the powers and duties
             1135      vested in the division under this chapter.
             1136          (4) (a) An individual applying to register as a trainee under this chapter shall:
             1137          (i) submit a fingerprint card in a form acceptable to the division at the time of applying
             1138      for registration; and
             1139          (ii) consent to a criminal background check by:
             1140          (A) the Utah Bureau of Criminal Identification; and
             1141          (B) the Federal Bureau of Investigation.


             1142          (b) The division shall request the Department of Public Safety to complete a Federal
             1143      Bureau of Investigation criminal background check for an applicant through a national criminal
             1144      history system.
             1145          (c) The applicant shall pay the cost of:
             1146          (i) the fingerprinting required by this section; and
             1147          (ii) the criminal background check required by this section.
             1148          (d) (i) A registration as a trainee under this chapter is conditional pending completion
             1149      of the criminal background check required by this Subsection (4).
             1150          (ii) If a criminal background check discloses that an applicant fails to accurately
             1151      disclose a criminal history, the registration is immediately and automatically revoked.
             1152          (iii) An individual whose conditional registration is revoked under Subsection (4)(d)(ii)
             1153      may appeal the revocation in a hearing conducted by the board:
             1154          (A) after the revocation; and
             1155          (B) in accordance with Title 63G, Chapter 4, Administrative Procedures Act.
             1156          (iv) The board may delegate to the division or an administrative law judge the authority
             1157      to conduct a hearing described in Subsection (4)(d)(iii).
             1158          (v) Relief from a revocation may be granted only if:
             1159          (A) the criminal history upon which the division based the revocation:
             1160          (I) did not occur; or
             1161          (II) is the criminal history of another person;
             1162          (B) (I) the revocation is based on a failure to accurately disclose a criminal history; and
             1163          (II) the applicant has a reasonable good faith belief at the time of application that there
             1164      was no criminal history to be disclosed; or
             1165          (C) the division fails to follow the prescribed procedure for the revocation.
             1166          (e) If a registration is revoked or a revocation is upheld after a hearing described in
             1167      Subsection (4)(d)(iii), the individual may not apply for a new license for a period of 12 months
             1168      after the day on which the registration is revoked.
             1169          (f) The board may delegate to the division the authority to make a decision on whether
             1170      relief from a revocation should be granted.
             1171          (g) The funds paid by an applicant for the cost of the criminal background check shall
             1172      be nonlapsing.


             1173          Section 26. Section 61-2b-8 is amended to read:
             1174           61-2b-8. Duties of board.
             1175          (1) (a) The board shall provide technical assistance to the division relating to real estate
             1176      appraisal standards and real estate appraiser qualifications.
             1177          (b) The board has the powers and duties listed in this section.
             1178          (2) The board shall:
             1179          (a) determine the experience, education, and examination requirements appropriate for
             1180      a person licensed under this chapter;
             1181          (b) determine the experience, education, and examination requirements appropriate for
             1182      a person certified under this chapter:
             1183          (i) in compliance with the minimum requirements of Financial Institutions Reform,
             1184      Recovery, and Enforcement Act of 1989[,]; and
             1185          (ii) consistent with the intent of this chapter;
             1186          (c) determine the appraisal related acts that may be performed by:
             1187          (i) a trainee on the basis of the trainee's education and experience;
             1188          (ii) clerical staff; and
             1189          (iii) a person who:
             1190          (A) does not hold a license or certification; and
             1191          (B) assists an appraiser licensed or certified under this chapter in providing appraisal
             1192      services or consultation services;
             1193          (d) determine the procedures for a trainee to register with the division; and
             1194          (e) develop one or more programs to upgrade and improve the experience, education,
             1195      and examinations as required under this chapter.
             1196          (3) (a) The experience, education, and examination requirements established by the
             1197      board for a person licensed or certified under this chapter shall be the minimum criteria
             1198      established by the Appraiser Qualification Board of the Appraisal Foundation, unless, after
             1199      notice and a public hearing held in accordance with Title 63G, Chapter 3, Utah Administrative
             1200      Rulemaking Act, the board finds that the minimum criteria are not appropriate for a
             1201      state-licensed appraiser or a state-certified appraiser in this state.
             1202          (b) If under Subsection (3)(a) the board makes a finding that the minimum criteria are
             1203      not appropriate, the board shall recommend appropriate criteria to the Legislature.


             1204          (4) The board shall:
             1205          (a) determine the continuing education requirements appropriate for the renewal of a
             1206      license [or], certification, or registration issued under this chapter;
             1207          (b) develop one or more programs to upgrade and improve continuing education; and
             1208          (c) recommend to the division one or more available continuing education courses that
             1209      meet the requirements of this chapter.
             1210          (5) (a) The board shall consider the proper interpretation or explanation of the Uniform
             1211      Standards of Professional Appraisal Practice as required by Section 61-2b-27 when:
             1212          (i) an interpretation or explanation is necessary in the enforcement of this chapter; and
             1213          (ii) the Appraisal Standards Board of the Appraisal Foundation has not issued an
             1214      interpretation or explanation.
             1215          (b) If the conditions of Subsection (5)(a) are met, the board shall recommend to the
             1216      division the appropriate interpretation or explanation that the division should adopt as a rule
             1217      under this chapter.
             1218          (c) The board may by rule made in accordance with Title 63G, Chapter 3, Utah
             1219      Administrative Rulemaking Act, and Section 61-2b-27 provide for an exemption from a
             1220      provision of the Uniform Standards of Professional Appraisal Practice for an activity engaged
             1221      in on behalf of a governmental entity.
             1222          (6) The board shall develop and establish or approve the examination specifications
             1223      and the minimum score required to pass an examination for licensure or certification.
             1224          (7) The board may review the:
             1225          (a) bank of questions and answers that comprise the examination for a person licensed
             1226      and certified under this chapter;
             1227          (b) procedure that is established for selecting individual questions from the bank of
             1228      questions for use in each scheduled examination; and
             1229          (c) questions in the bank of questions and the related answers to determine whether
             1230      they meet the examination specifications established by the board.
             1231          (8) (a) The board shall conduct an administrative hearing, not delegated by the board to
             1232      an administrative law judge, in connection with a disciplinary proceeding under Sections
             1233      61-2b-30 and 61-2b-31 concerning:
             1234          (i) a person required to be licensed, certified, or registered under this chapter; and


             1235          (ii) the person's failure to comply with this chapter and the Uniform Standards of
             1236      Professional Appraisal Practice as adopted under Section 61-2b-27 .
             1237          (b) The board shall issue in an administrative hearing a decision that contains findings
             1238      of fact and conclusions of law.
             1239          (c) When a determination is made that a person required to be licensed, certified, or
             1240      registered under this chapter has violated this chapter, the division shall implement disciplinary
             1241      action determined by the board.
             1242          (9) A member of the board is immune from a civil action or criminal prosecution for a
             1243      disciplinary proceeding concerning a person required to be registered, licensed, certified, or
             1244      approved as an expert under this chapter if the action is taken without malicious intent and in
             1245      the reasonable belief that the action taken was taken pursuant to the powers and duties vested
             1246      in a member of the board under this chapter.
             1247          (10) The board shall require and pass upon proof necessary to determine the honesty,
             1248      competency, integrity, and truthfulness of an applicant for:
             1249          (a) original licensure, certification, or registration; and
             1250          (b) renewal licensure or certification.
             1251          Section 27. Section 61-2b-20 is amended to read:
             1252           61-2b-20. Renewal of license or certification.
             1253          (1) To obtain a renewal of a license or certification under this chapter, the holder of a
             1254      current, valid license or certification shall, in compliance with procedures established by the
             1255      division and the board, make application and pay the prescribed fee to the division [prior to]
             1256      before the expiration date of the license or certification [then held].
             1257          (2) [The] An application for renewal of a license or certification shall be accompanied
             1258      by evidence in the form prescribed by the division of having completed the continuing
             1259      education requirements for renewal specified in this chapter.
             1260          (3) (a) A license or certification expires if it is not renewed on or before its expiration
             1261      date.
             1262          [(a)] (b) For a period of 30 days after the expiration date, a license or certification may
             1263      be reinstated upon:
             1264          (i) payment of a renewal fee and a late fee determined by the division and the board;
             1265      and


             1266          (ii) satisfying the continuing education requirements specified in Section 61-2b-40 .
             1267          [(b)] (c) After the 30-day period described in Subsection (3)[(a)](b), and until six
             1268      months after the expiration date, the license or certification may be reinstated by:
             1269          (i) paying a renewal fee and a reinstatement fee determined by the division and the
             1270      board; and
             1271          (ii) satisfying the continuing education requirements specified in Section 61-2b-40 .
             1272          (d) After the six-month period described in Subsection (3)(c), and until one year after
             1273      the expiration date, the license or certification may be reinstated by:
             1274          (i) paying a renewal fee and a reinstatement fee determined by the division and the
             1275      board;
             1276          (ii) providing proof acceptable to the division and the board of the person having
             1277      satisfied the continuing education requirements of Section 61-2b-40 ; and
             1278          (iii) providing proof acceptable to the division and the board of the person completing
             1279      24 hours of continuing education:
             1280          (A) in addition to the requirements in Section 61-2b-40 ; and
             1281          (B) on a subject determined by the division by rule made in accordance with Title 63G,
             1282      Chapter 3, Utah Administrative Rulemaking Act.
             1283          [(4) A] (e) The division shall relicense or recertify a person who does not renew that
             1284      person's license or certification within [six months] one year after the expiration date [shall be
             1285      relicensed or recertified] as prescribed for an original application.
             1286          (f) Notwithstanding Subsection (3)(a), the division may extend the term of a license
             1287      that would expire under Subsection (3)(a) except for the extension if:
             1288          (i) the person complies with the requirements of this section to renew the license; and
             1289          (ii) at the time of the extension, there is pending under this chapter:
             1290          (A) the application for renewal of the license; or
             1291          (B) a disciplinary action.
             1292          (4) A person who is licensed, certified, or registered under this chapter shall notify the
             1293      division of the following by sending the division a signed statement within ten business days
             1294      of:
             1295          (a) (i) a conviction of a criminal offense;
             1296          (ii) the entry of a plea in abeyance to a criminal offense; or


             1297          (iii) the potential resolution of a criminal case by:
             1298          (A) a diversion agreement; or
             1299          (B) any other agreement under which a criminal charge is suspended for a period of
             1300      time;
             1301          (b) filing a personal bankruptcy or business bankruptcy;
             1302          (c) the suspension, revocation, surrender, cancellation, or denial of a professional
             1303      license, certification, or registration of the person, whether the license, certification, or
             1304      registration is issued by this state or another jurisdiction; or
             1305          (d) the entry of a cease and desist order or a temporary or permanent injunction:
             1306          (i) against the person by a court or licensing agency; and
             1307          (ii) on the basis of:
             1308          (A) conduct or a practice involving an act regulated by this chapter; or
             1309          (B) conduct involving fraud, misrepresentation, or deceit.
             1310          Section 28. Section 61-2b-27 is amended to read:
             1311           61-2b-27. Professional conduct -- Uniform standards.
             1312          (1) (a) A person licensed, certified, registered, or approved as an expert witness under
             1313      this chapter must comply with:
             1314          (i) generally accepted standards of professional appraisal practice; and
             1315          (ii) generally accepted ethical rules to be observed by a real estate appraiser.
             1316          (b) [Generally] Subject to Subsection (1)(c), generally accepted standards of
             1317      professional appraisal practice are evidenced by the Uniform Standards of Professional
             1318      Appraisal Practice promulgated by the Appraisal Foundation.
             1319          (c) After a public hearing held in accordance with Title 63G, Chapter 3, Utah
             1320      Administrative Rulemaking Act, the board:
             1321          (i) shall adopt and may make modifications of or additions to the Uniform Standards of
             1322      Professional Appraisal Practice as the board considers appropriate to comply with the Financial
             1323      Institutions Reform, Recovery, and Enforcement Act of 1989[.]; or
             1324          (ii) may by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
             1325      Rulemaking Act, exempt a person licensed, certified, registered, or approved as an expert
             1326      witness from complying with a provision of the Uniform Standards of Professional Appraisal
             1327      Practice for an activity that the person engages in on behalf of a governmental entity.


             1328          (2) The board shall schedule a public hearing pursuant to Title 63G, Chapter 3, Utah
             1329      Administrative Rulemaking Act, for the purpose of deciding whether or not the board should
             1330      require a modified or supplemental standard or the ethical rule to be observed by a person
             1331      licensed, certified, registered, or approved as an expert witness under this chapter if the
             1332      Appraisal Standards Board of the Appraisal Foundation:
             1333          (a) (i) modifies the Uniform Standards of Professional Appraisal Practice;
             1334          (ii) issues a supplemental appraisal standard which it considers appropriate for:
             1335          (A) a residential real estate appraiser; or
             1336          (B) a general real estate appraiser; or
             1337          (iii) issues an ethical rule to be observed by a real estate appraiser; and
             1338          (b) requests the board to consider the adoption of the modified or supplemental
             1339      standard or ethical rule.
             1340          (3) If, after the notice and public hearing described in Subsection (2), the board finds
             1341      that a modified or supplemental standard or the ethical rule issued by the Appraisal Standards
             1342      Board of the Appraisal Foundation is appropriate for a person licensed, certified, registered, or
             1343      approved as an expert witness under this chapter, the board shall recommend a rule requiring a
             1344      person licensed, certified, registered, or approved as an expert witness under this chapter to
             1345      observe the modified or supplemental standard or the ethical rule.
             1346          Section 29. Section 61-2b-29 is amended to read:
             1347           61-2b-29. Disciplinary action -- Grounds.
             1348          (1) (a) The board may order disciplinary action against a person:
             1349          (i) registered, licensed, or certified under this chapter; or
             1350          (ii) required to be registered, licensed, or certified under this chapter.
             1351          (b) On the basis of a ground listed in Subsection (2) for disciplinary action, board
             1352      action may include:
             1353          (i) revoking, suspending, or placing a person's registration, license, or certification on
             1354      probation;
             1355          (ii) denying a person's original registration, license, or certification;
             1356          (iii) denying a person's renewal license or certification;
             1357          (iv) in the case of denial or revocation of a registration, license, or certification, setting
             1358      a waiting period for an applicant to apply for a registration, license, or certification under this


             1359      chapter;
             1360          (v) ordering remedial education;
             1361          (vi) imposing a civil penalty upon a person not to exceed the greater of:
             1362          (A) $2,500 for each violation; or
             1363          (B) the amount of any gain or economic benefit from a violation;
             1364          (vii) issuing a cease and desist order; [or]
             1365          (viii) modifying an action described in Subsections (1)(b)(i) through (vii) if the board
             1366      finds that the person complies with court ordered restitution; or
             1367          [(viii)] (ix) doing any combination of Subsections (1)(b)(i) through [(vii)] (viii).
             1368          (2) The following are grounds for disciplinary action under this section:
             1369          (a) procuring or attempting to procure a registration, license, or certification under this
             1370      chapter:
             1371          (i) by fraud; or
             1372          (ii) by making a false statement, submitting false information, or making a material
             1373      misrepresentation in an application filed with the division;
             1374          (b) paying money or attempting to pay money other than a fee provided for by this
             1375      chapter to a member or employee of the division to procure a registration, license, or
             1376      certification under this chapter;
             1377          (c) an act or omission in the practice of real estate appraising that constitutes
             1378      dishonesty, fraud, or misrepresentation;
             1379          (d) entry of a judgment against a registrant, licensee, or certificate holder on grounds of
             1380      fraud, misrepresentation, or deceit in the making of an appraisal of real estate;
             1381          (e) a guilty plea to a criminal offense involving moral turpitude that is held in
             1382      abeyance, or a conviction, including a conviction based upon a plea of guilty or nolo
             1383      contendere, of a criminal offense involving moral turpitude;
             1384          (f) engaging in the business of real estate appraising under an assumed or fictitious
             1385      name not properly registered in this state;
             1386          (g) paying a finder's fee or a referral fee to a person not licensed or certified under this
             1387      chapter in connection with an appraisal of real estate or real property in this state;
             1388          (h) making a false or misleading statement in:
             1389          (i) that portion of a written appraisal report that deals with professional qualifications;


             1390      or
             1391          (ii) testimony concerning professional qualifications;
             1392          (i) violating or disregarding:
             1393          (i) a provision of this chapter;
             1394          (ii) an order of the board; or
             1395          (iii) a rule issued under this chapter;
             1396          (j) violating the confidential nature of governmental records to which a person
             1397      registered, licensed, certified, or approved as an expert under this chapter gained access
             1398      through employment or engagement as an appraiser by a governmental agency;
             1399          (k) accepting a contingent fee for performing an appraisal as defined in Subsection
             1400      61-2b-2 (1)(a) if in fact the fee is or was contingent upon:
             1401          (i) the appraiser reporting a predetermined analysis, opinion, or conclusion;
             1402          (ii) the analysis, opinion, conclusion, or valuation reached; or
             1403          (iii) the consequences resulting from the appraisal assignment;
             1404          (l) unprofessional conduct as defined by statute or rule;
             1405          (m) in the case of a dual licensed title licensee as defined in Section 31A-2-402 :
             1406          (i) providing a title insurance product or service without the approval required by
             1407      Section 31A-2-405 ; or
             1408          (ii) knowingly providing false or misleading information in the statement required by
             1409      Subsection 31A-2-405 (2); or
             1410          (n) other conduct that constitutes dishonest dealing.
             1411          Section 30. Section 61-2b-33 is amended to read:
             1412           61-2b-33. Penalty for violating this chapter -- Automatic revocation.
             1413          (1) In addition to being subject to a disciplinary action by the board, a person required
             1414      to be licensed, certified, or registered under this chapter who violates this chapter:
             1415          (a) is guilty of a class A misdemeanor, upon a conviction of a first violation of this
             1416      chapter; and
             1417          (b) is guilty of a third degree felony, upon conviction of a second or subsequent
             1418      violation of this chapter.
             1419          (2) [Any] A license or registration issued by the division to [any] a person [or entity]
             1420      convicted of a violation of Section 76-6-1203 is automatically revoked.


             1421          Section 31. Section 61-2c-103 is amended to read:
             1422           61-2c-103. Powers and duties of the division.
             1423          (1) The division shall administer this chapter.
             1424          (2) In addition to any power or duty expressly provided in this chapter, the division
             1425      may:
             1426          (a) receive and act on a complaint including:
             1427          (i) taking action designed to obtain voluntary compliance with this chapter; or
             1428          (ii) commencing an administrative or judicial proceeding on the division's own
             1429      initiative;
             1430          (b) establish one or more programs for the education of consumers with respect to
             1431      residential mortgage loans;
             1432          (c) (i) make one or more studies appropriate to effectuate the purposes and policies of
             1433      this chapter; and
             1434          (ii) make the results of the studies described in Subsection (2)(c)(i) available to the
             1435      public;
             1436          (d) visit and investigate an entity licensed under this chapter, regardless of whether the
             1437      entity is located in Utah; and
             1438          (e) employ one or more necessary hearing examiners, investigators, clerks, and other
             1439      employees and agents.
             1440          (3) The division shall make rules for the administration of this chapter in accordance
             1441      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, including:
             1442          (a) licensure procedures for:
             1443          (i) an individual or entity required by this chapter to obtain a license with the division;
             1444      and
             1445          (ii) the establishment of a branch office by an entity;
             1446          (b) proper handling of funds received by a licensee;
             1447          (c) record-keeping requirements by a licensee, including proper disposal of a record;
             1448      and
             1449          (d) standards of conduct for a licensee.
             1450          (4) The division may make available to the public a list of the names and mailing
             1451      addresses of all licensees:


             1452          (a) either directly or through a third party; and
             1453          (b) at a reasonable cost.
             1454          (5) The division shall:
             1455          (a) certify an education provider who offers:
             1456          (i) prelicensing education to candidates for licensure under this chapter; or
             1457          (ii) continuing education to individuals licensed under this chapter; and
             1458          (b) make available to the public, licensees, and candidates for licensure a list of the
             1459      names and addresses of all education providers certified under this Subsection (5).
             1460          (6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1461      division shall make rules establishing:
             1462          (a) certification criteria and procedures for a provider of prelicensing education and
             1463      continuing education; and
             1464          (b) standards of conduct for a certified education provider.
             1465          (7) The division may charge a fee established in accordance with Section 63J-1-303 for
             1466      processing a change that a licensee is required by Section 61-2c-205 to report to the division.
             1467          [(8) (a) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             1468      and this Subsection (8), the division shall make rules establishing a licensure procedure for
             1469      obtaining both a principal lending manager license and an entity license at the same time that
             1470      applies if the principal lending manager is the only individual that transacts the business of
             1471      residential mortgage loans on behalf of the entity, including as an employee or agent of the
             1472      entity.]
             1473          [(b) A rule made under this Subsection (8) shall require that to obtain or renew both a
             1474      principal lending manager license and an entity license, an individual described in Subsection
             1475      (8)(a) is required to only:]
             1476          [(i) complete one licensing process for the term of a license; and]
             1477          [(ii) pay one licensing fee for the term of a license.]
             1478          Section 32. Section 61-2c-104 is amended to read:
             1479           61-2c-104. Residential Mortgage Regulatory Commission.
             1480          (1) (a) There is created within the division the "Residential Mortgage Regulatory
             1481      Commission" consisting of the following members appointed by the executive director with the
             1482      approval of the governor:


             1483          (i) four members:
             1484          (A) having at least three years of experience in transacting the business of residential
             1485      mortgage loans; and
             1486          (B) who are [currently] licensed under this chapter at the time of and during
             1487      appointment; and
             1488          (ii) one member from the general public.
             1489          (b) (i) The executive director with the approval of the governor may appoint an
             1490      alternate member to the board.
             1491          (ii) The alternate member shall:
             1492          (A) at the time of the appointment, have at least three years of experience in transacting
             1493      the business of residential mortgage loans; and
             1494          (B) be licensed under this chapter at the time of and during appointment.
             1495          (2) (a) Except as required by Subsection (2)(b), the executive director shall appoint
             1496      each new member or reappointed member subject to appointment by the executive director to a
             1497      four-year term ending June 30.
             1498          (b) Notwithstanding the requirements of Subsection (2)(a), the executive director shall,
             1499      at the time of appointment or reappointment, adjust the length of terms to ensure that the terms
             1500      of commission members are staggered so that approximately half of the commission is
             1501      appointed every two years.
             1502          (c) If a vacancy occurs in the membership of the commission for any reason, the
             1503      [replacement shall be appointed] executive director shall appoint a replacement for the
             1504      unexpired term.
             1505          (d) A member shall remain on the commission until the member's successor is
             1506      appointed and qualified.
             1507          (3) Members of the commission shall annually select one member to serve as chair.
             1508          (4) (a) The commission shall meet at least quarterly.
             1509          (b) The director may call a meeting in addition to the meetings required by Subsection
             1510      (4)(a):
             1511          (i) at the discretion of the director;
             1512          (ii) at the request of the chair of the commission; or
             1513          (iii) at the written request of three or more commission members.


             1514          (5) (a) Three members of the commission constitute a quorum for the transaction of
             1515      business.
             1516          (b) If a quorum of members is unavailable for any meeting and an alternate member
             1517      has been appointed to the commission by the executive director with the approval of the
             1518      governor, the alternate member shall serve as a regular member of the commission for that
             1519      meeting if with the presence of the alternate member there is a quorum present at the meeting.
             1520          (c) The action of a majority of a quorum present is an action of the commission.
             1521          (6) (a) (i) A member who is not a government employee [shall] may not receive [no]
             1522      compensation or benefits for the member's services, but may receive per diem and expenses
             1523      incurred in the performance of the member's official duties at the rates established by the
             1524      Division of Finance under Sections 63A-3-106 and 63A-3-107 .
             1525          (ii) A member who is not a government employee may decline to receive per diem and
             1526      expenses for the member's service.
             1527          (b) (i) A state government officer and employee member who does not receive salary,
             1528      per diem, or expenses from the member's agency for the member's service may receive per
             1529      diem and expenses incurred in the performance of the member's official duties from the
             1530      commission at the rates established by the Division of Finance under Sections 63A-3-106 and
             1531      63A-3-107 .
             1532          (ii) A state government officer and employee member may decline to receive per diem
             1533      and expenses for the member's service.
             1534          (7) The commission shall:
             1535          (a) except as provided in Subsection 61-2c-202 (2), concur in the licensure or denial of
             1536      licensure of individuals and entities under this chapter in accordance with Part 2, Licensure;
             1537          (b) take disciplinary action with the concurrence of the director in accordance with Part
             1538      4, Enforcement;
             1539          (c) advise the division concerning matters related to the administration and
             1540      enforcement of this chapter; and
             1541          (d) with the concurrence of the division, determine the requirements for:
             1542          (i) the examination required under Section 61-2c-202 , covering at least:
             1543          (A) the fundamentals of the English language;
             1544          (B) arithmetic;


             1545          (C) the provisions of this chapter;
             1546          (D) rules adopted by the division;
             1547          (E) basic residential mortgage principles and practices; and
             1548          (F) any other aspect of Utah law the commission determines is appropriate;
             1549          (ii) [with the concurrence of the division,] the continuing education requirements under
             1550      Section 61-2c-205 , including:
             1551          (A) except as provided in Subsection 61-2c-202 (4)(a)(iii) and Subsection
             1552      61-2c-206 (1)(c), the appropriate number of hours of prelicensing education and required
             1553      continuing education; and
             1554          (B) the subject matter of courses the division may accept for continuing education
             1555      purposes;
             1556          (iii) with the concurrence of the division, the prelicensing education required under
             1557      Sections 61-2c-202 and 61-2c-206 , including online education or distance learning options; and
             1558          (iv) the examination required under Section 61-2c-206 covering:
             1559          (A) advanced residential mortgage principles and practices; and
             1560          (B) other aspects of Utah law the commission, with the concurrence of the division,
             1561      determines appropriate.
             1562          (8) The commission may appoint a committee to make recommendations to the
             1563      commission concerning approval of prelicensing education and continuing education courses.
             1564          (9) The commission and the division shall make the examination and prelicensing
             1565      education and continuing education requirements described in this section available through
             1566      the Internet or other distance education methods approved by the commission and division
             1567      when reasonably practicable.
             1568          (10) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             1569      the commission, with the concurrence of the division, shall make rules establishing procedures
             1570      under which a licensee may be exempted from continuing education requirements:
             1571          (a) for a period not to exceed four years; and
             1572          (b) upon a finding of reasonable cause.
             1573          Section 33. Section 61-2c-205 is amended to read:
             1574           61-2c-205. Term of licensure -- Renewal -- Reporting of changes.
             1575          (1) (a) A license under this chapter is valid for a two-year period.


             1576          (b) Notwithstanding Subsection (1)(a), the time period of a license may be extended or
             1577      shortened by as much as one year to maintain or change a renewal cycle established by rule by
             1578      the division.
             1579          (2) To renew a license, no later than the date the license expires, a licensee shall:
             1580          (a) (i) file the renewal form required by the division; and
             1581          (ii) furnish the information required by Subsection 61-2c-202 (1);
             1582          (b) pay a fee to the division established by the division in accordance with Section
             1583      63J-1-303 ; and
             1584          (c) if the licensee is an individual and the individual's license is in active status at the
             1585      time of application for renewal, submit proof using forms approved by the division of having
             1586      completed during the two years prior to application the continuing education required by the
             1587      commission under Section 61-2c-104 .
             1588          (3) (a) A licensee under this chapter shall notify the division using the form required by
             1589      the division within ten days of the date on which there is a change in:
             1590          (i) a name under which the licensee transacts the business of residential mortgage loans
             1591      in this state;
             1592          (ii) (A) if the licensee is an entity, the business location of the licensee; or
             1593          (B) if the licensee is an individual, the home and business addresses of the individual;
             1594          (iii) the principal lending manager of the entity;
             1595          (iv) the entity with which an individual licensee is licensed to conduct the business of
             1596      residential mortgage loans; or
             1597          (v) any other information that is defined as material by rule made by the division.
             1598          (b) Failure to notify the division of a change described in Subsection (3)(a) is separate
             1599      grounds for disciplinary action against a licensee.
             1600          (4) A licensee shall notify the division by sending the division a signed statement
             1601      within ten business days of:
             1602          (a) (i) a conviction of any criminal offense;
             1603          (ii) the entry of a plea in abeyance to any criminal offense; or
             1604          (iii) the potential resolution of any criminal case by:
             1605          (A) a diversion agreement; or
             1606          (B) any other agreement under which criminal charges are held in suspense for a period


             1607      of time;
             1608          (b) filing a personal bankruptcy or bankruptcy of a business that transacts the business
             1609      of residential mortgage loans;
             1610          (c) the suspension, revocation, surrender, cancellation, or denial of a professional
             1611      license or professional registration of the licensee, whether the license or registration is issued
             1612      by this state or another jurisdiction; or
             1613          (d) the entry of a cease and desist order or a temporary or permanent injunction:
             1614          (i) against the licensee by a court or licensing agency; and
             1615          (ii) based on:
             1616          (A) conduct or a practice involving the business of residential mortgage loans; or
             1617          (B) conduct involving fraud, misrepresentation, or deceit.
             1618          (5) (a) A license under this chapter expires if the licensee does not apply to renew the
             1619      license on or before the expiration date of the license.
             1620          (b) Within 30 calendar days after the expiration date, a licensee whose license has
             1621      expired may apply to reinstate the expired license upon:
             1622          (i) payment of a renewal fee and a late fee determined by the division under Section
             1623      63J-1-303 ; and
             1624          (ii) if the licensee is an individual and is applying to reinstate a license to active status,
             1625      providing proof using forms approved by the division of having completed, during the two
             1626      years prior to application, the continuing education required by the commission under Section
             1627      61-2c-104 .
             1628          (c) After the 30 calendar days described in Subsection (5)(b) and within six months
             1629      after the expiration date, a licensee whose license has expired may apply to reinstate an expired
             1630      license upon:
             1631          (i) payment of a renewal fee and a late fee determined by the division under Section
             1632      63J-1-303 ;
             1633          (ii) if the licensee is an individual and is applying to reinstate a license to active status,
             1634      providing proof using forms approved by the division of having completed, during the two
             1635      years prior to application, the continuing education required by the commission under Section
             1636      61-2c-104 ; and
             1637          (iii) in addition to the continuing education required for a timely renewal, completing


             1638      an additional 12 hours of continuing education approved by the commission under Section
             1639      61-2c-104 .
             1640          (d) A licensee whose license has been expired for more than six months shall be
             1641      relicensed as prescribed for an original application under Section 61-2c-202 .
             1642          (e) Notwithstanding Subsection (5)(a), the division may extend the term of a license
             1643      that would expire under Subsection (5)(a) except for the extension if:
             1644          (i) the person complies with the requirements of this section to renew the license; and
             1645          (ii) at the time of the extension, there is pending under this chapter:
             1646          (A) the application for renewal of the license; or
             1647          (B) a disciplinary action.
             1648          Section 34. Section 61-2c-402 is amended to read:
             1649           61-2c-402. Disciplinary action.
             1650          Subject to the requirements of Section 61-2c-402.1 , if [an individual or entity] a person
             1651      required to be licensed under this chapter violates this chapter, or an education provider
             1652      required to be certified under this chapter violates this chapter, the commission, with the
             1653      concurrence of the director, may:
             1654          (1) impose an educational requirement;
             1655          (2) impose a civil penalty against the individual or entity in an amount not to exceed
             1656      the greater of:
             1657          (a) $2,500 for each violation; or
             1658          (b) the amount equal to any gain or economic benefit derived from each violation;
             1659          (3) deny an application for an original license;
             1660          (4) do any of the following to a license under this chapter:
             1661          (a) suspend;
             1662          (b) revoke;
             1663          (c) place on probation;
             1664          (d) deny renewal;
             1665          (e) deny reinstatement; or
             1666          (f) in the case of a denial or revocation of a license, set a waiting period for [an
             1667      applicant] a person to apply for a license under this chapter;
             1668          (5) issue a cease and desist order; [or]


             1669          (6) require the reimbursement of the division of costs incurred by the division related
             1670      to the recovery, storage, or destruction of a record that the person disposes of in a manner that
             1671      violates this chapter or a rule made under this chapter;
             1672          (7) modify a sanction described in Subsections (1) through (6) if the commission finds
             1673      that the person complies with court ordered restitution; or
             1674          [(6)] (8) do any combination of Subsections (1) through [(5)] (7).
             1675          Section 35. Section 61-2c-405 is amended to read:
             1676           61-2c-405. Penalty for violating this chapter -- Automatic revocation.
             1677          (1) In addition to being subject to a disciplinary action by the commission, a person
             1678      required to be licensed or certified under this chapter who violates this chapter:
             1679          (a) is guilty of a class A misdemeanor upon conviction of a first violation of this
             1680      chapter; and
             1681          (b) is guilty of a third degree felony upon conviction of a second or subsequent
             1682      violation of this chapter.
             1683          (2) [Any] A license or [registration] certification issued by the division to [any] a
             1684      person [or entity] convicted of a violation of Section 76-6-1203 is automatically revoked.
             1685          Section 36. Section 61-2c-501 is amended to read:
             1686           61-2c-501. Fund created -- Minimum balance.
             1687          (1) (a) There is created a restricted special revenue fund known as the "Residential
             1688      Mortgage Loan Education, Research, and Recovery Fund."
             1689          (b) As used in this part, "fund" means the Residential Mortgage Loan Education,
             1690      Research, and Recovery Fund.
             1691          (2) The interest earned on the fund shall be deposited into the fund.
             1692          (3) (a) At the beginning of each state fiscal year, $100,000 shall remain available in the
             1693      fund to satisfy judgments rendered against [individuals and entities] a person licensed under
             1694      this chapter.
             1695          (b) For purposes of this part, a "judgment" includes a criminal restitution judgment.
             1696          Section 37. Section 61-2c-502 is amended to read:
             1697           61-2c-502. Additional license fee.
             1698          (1) An individual who applies for or renews a license shall pay, in addition to the
             1699      application or renewal fee, a reasonable annual fee:


             1700          (a) determined by the division with the concurrence of the commission; and
             1701          (b) not to exceed $18.
             1702          (2) An entity that applies for or renews an entity license shall pay, in addition to the
             1703      application or renewal fee, a reasonable annual fee:
             1704          (a) determined by the division with the concurrence of the commission; and
             1705          (b) not to exceed $25.
             1706          (3) Notwithstanding Section 13-1-2 , the following shall be paid into the [Residential
             1707      Mortgage Loan Education, Research, and Recovery Fund] fund to be used as provided in this
             1708      part:
             1709          (a) a fee provided in this section;
             1710          (b) a fee for certifying:
             1711          (i) a mortgage school;
             1712          (ii) a mortgage course; or
             1713          (iii) a mortgage instructor; and
             1714          (c) a civil penalty imposed under this chapter.
             1715          (4) If the balance in the [Residential Mortgage Loan Education, Research, and
             1716      Recovery Fund] fund that is available to satisfy a judgment against a licensee decreases to less
             1717      than $100,000, the division may make an additional assessment to a licensee to maintain the
             1718      balance available at $100,000 to satisfy judgments.
             1719          Section 38. Section 61-2c-503 is amended to read:
             1720           61-2c-503. Notice to division -- Judgment against mortgage licensee -- Fraud,
             1721      misrepresentation, or deceit -- Verified petition for order directing payment from fund --
             1722      Limitations and procedure.
             1723          (1) (a) [A] Subject to Subsection (6), a person may bring a claim against the fund if the
             1724      person sends a signed notification to the division at the time the person files an action:
             1725          (i) against a licensee; and
             1726          (ii) alleging fraud, misrepresentation, or deceit.
             1727          (b) Within 30 calendar days of receipt of the notice described in Subsection (1)(a), the
             1728      division may intervene in the action.
             1729          (c) If a person making a claim against the fund obtains a final judgment in a court of
             1730      competent jurisdiction in Utah against a licensee based on fraud, misrepresentation, or deceit in


             1731      a residential mortgage loan transaction, the person making the claim may, upon termination of
             1732      all proceedings including appeals, file a verified petition in the court where the judgment was
             1733      entered for an order directing payment from the fund for the uncollected actual damages
             1734      included in the judgment.
             1735          (d) A recovery from the fund may not include punitive damages, interest, or court
             1736      costs.
             1737          (e) Regardless of the number of claimants or number of loans involved in a transaction,
             1738      the liability of the fund may not exceed:
             1739          (i) $15,000 for a single transaction;
             1740          (ii) $45,000 for an individual licensee; or
             1741          (iii) $45,000 for an entity.
             1742          (2) A person making a claim against the fund shall:
             1743          (a) serve a copy of the petition on the division; and
             1744          (b) file a copy of the affidavit of the service of the petition described in Subsection
             1745      (2)(a) with the court.
             1746          (3) (a) The court shall conduct a hearing on the petition within 30 calendar days after
             1747      service.
             1748          (b) The petitioner shall recover from the fund only if the petitioner shows:
             1749          (i) that the petitioner is not:
             1750          (A) the spouse of the judgment debtor; or
             1751          (B) the personal representative of the spouse of the judgment debtor;
             1752          (ii) that the petitioner has complied with this chapter;
             1753          (iii) that the petitioner has obtained a final judgment in the manner prescribed under
             1754      this section, indicating the amount of the judgment awarded;
             1755          (iv) that the petitioner has proved the amount still owing on the judgment at the date of
             1756      the petition;
             1757          (v) (A) that:
             1758          (I) the petitioner has a writ of execution issued upon the judgment; and
             1759          (II) the officer executing the writ has made a return showing that no property subject to
             1760      execution in satisfaction of the judgment could be found; and
             1761          (B) if execution is levied against the property of the judgment debtor, that:


             1762          (I) the amount realized was insufficient to satisfy the judgment; and
             1763          (II) a balance remains on the judgment after application of the amount realized; and
             1764          (vi) that the petitioner has:
             1765          (A) made reasonable searches and inquiries to ascertain whether the judgment debtor
             1766      has any interest in property, real or personal, that may satisfy the judgment; and
             1767          (B) has exercised reasonable diligence to secure payment of the judgment from the
             1768      assets of the judgment debtor.
             1769          (4) If the petitioner satisfies the court that it is not practicable for the petitioner to
             1770      comply with one or more of the requirements in Subsections (3)(b)(v) and (3)(b)(vi), the court
             1771      may waive those requirements.
             1772          (5) (a) A judgment that is the basis for a claim against the fund may not have been
             1773      discharged in bankruptcy.
             1774          (b) In the case of a bankruptcy proceeding that is open or that is commenced during the
             1775      pendency of the claim, the claimant shall, prior to obtaining a claim against the fund, obtain an
             1776      order from the bankruptcy court declaring the judgment and debt to be nondischargeable.
             1777          (6) (a) The division may not make a payment from the fund to a lender who:
             1778          (i) makes a residential mortgage loan originated by a licensee; or
             1779          (ii) acquires a residential mortgage loan originated by a licensee.
             1780          (b) A person may not bring a claim against the fund if the person is substantially
             1781      complicit in the fraud, misrepresentation, or deceit that is the basis of the claim.


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