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H.B. 152

             1     

APPRAISAL MANAGEMENT COMPANY

             2     
REGULATION

             3     
2009 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Michael T. Morley

             6     
Senate Sponsor: John L. Valentine

             7      Cosponsor:Jack R. Draxler              8     
             9      LONG TITLE
             10      General Description:
             11          This bill enacts the Appraisal Management Company Registration and Regulation Act.
             12      Highlighted Provisions:
             13          This bill:
             14          .    defines terms;
             15          .    grants rulemaking authority to the Real Estate Appraiser Licensing and Certification
             16      Board;
             17          .    provides exemptions;
             18          .    requires registration and annual renewal of the registration;
             19          .    imposes operational requirements, including:
             20              .    use of licensed or certified appraisers;
             21              .    monitoring adherence to standards;
             22              .    record keeping;
             23              .    requiring disclosures;
             24              .    imposing requirements of training for certain employees; and
             25              .    prohibiting certain acts or practices;
             26          .    addresses the division's and board's role in enforcement, including immunity;
             27          .    provides for enforcement; and


             28          .    makes technical and conforming amendments.
             29      Monies Appropriated in this Bill:
             30          None
             31      Other Special Clauses:
             32          None
             33      Utah Code Sections Affected:
             34      AMENDS:
             35          61-2-5, as last amended by Laws of Utah 2000, Chapter 329
             36      ENACTS:
             37          61-2e-101, Utah Code Annotated 1953
             38          61-2e-102, Utah Code Annotated 1953
             39          61-2e-103, Utah Code Annotated 1953
             40          61-2e-104, Utah Code Annotated 1953
             41          61-2e-201, Utah Code Annotated 1953
             42          61-2e-202, Utah Code Annotated 1953
             43          61-2e-203, Utah Code Annotated 1953
             44          61-2e-204, Utah Code Annotated 1953
             45          61-2e-301, Utah Code Annotated 1953
             46          61-2e-302, Utah Code Annotated 1953
             47          61-2e-303, Utah Code Annotated 1953
             48          61-2e-304, Utah Code Annotated 1953
             49          61-2e-305, Utah Code Annotated 1953
             50          61-2e-306, Utah Code Annotated 1953
             51          61-2e-307, Utah Code Annotated 1953
             52          61-2e-401, Utah Code Annotated 1953
             53          61-2e-402, Utah Code Annotated 1953
             54     
             55      Be it enacted by the Legislature of the state of Utah:
             56          Section 1. Section 61-2-5 is amended to read:
             57           61-2-5. Division of Real Estate created -- Functions -- Director appointed --
             58      Functions.


             59          (1) There is created within the Department of Commerce a Division of Real Estate. It
             60      is responsible for the administration and enforcement of:
             61          (a) this chapter;
             62          (b) Title 57, Chapter 11, Utah Uniform Land Sales Practices Act;
             63          (c) Title 57, Chapter 19, Timeshare and Camp Resort Act;
             64          (d) Title 57, Chapter 23, Real Estate Cooperative Marketing Act;
             65          (e) Chapter 2a, Real Estate [Education, Research, and] Recovery Fund Act;
             66          (f) Chapter 2b, Real Estate Appraiser Licensing and Certification Act; [and]
             67          (g) Chapter 2c, Utah Residential Mortgage Practices Act[.]; and
             68          (h) Chapter 2e, Appraisal Management Company Registration and Regulation Act.
             69          (2) The division is under the direction and control of a director appointed by the
             70      executive director of the department with the approval of the governor. The director holds the
             71      office of director at the pleasure of the governor.
             72          (3) The director, with the approval of the executive director, may employ personnel
             73      necessary to discharge the duties of the division at salaries to be fixed by the director according
             74      to standards established by the Department of Administrative Services.
             75          (4) On or before October 1 of each year, the director shall, in conjunction with the
             76      department, report to the governor and the Legislature concerning the division's work for the
             77      preceding fiscal year ending June 30.
             78          (5) The director, in conjunction with the executive director, shall prepare and submit to
             79      the governor and the Legislature a budget for the fiscal year next following the convening of
             80      the Legislature.
             81          Section 2. Section 61-2e-101 is enacted to read:
             82     
CHAPTER 2e. APPRAISAL MANAGEMENT COMPANY REGISTRATION AND

             83     
REGULATION ACT

             84     
Part 1. General Provisions

             85          61-2e-101. Title.
             86          This chapter is known as the "Appraisal Management Company Registration and
             87      Regulation Act."
             88          Section 3. Section 61-2e-102 is enacted to read:
             89          61-2e-102. Definitions.


             90          As used in this chapter:
             91          (1) "Applicable appraisal standards" means:
             92          (a) the Uniform Standards for Professional Appraisal Practice:
             93          (i) published by the Appraisal Foundation; and
             94          (ii) as adopted under Section 61-2b-27 ;
             95          (b) Chapter 2b, Real Estate Appraiser Licensing and Certification Act; and
             96          (c) rules made by the board under Chapter 2b, Real Estate Appraiser Licensing and
             97      Certification Act.
             98          (2) "Appraisal" is as defined in Section 61-2b-2 .
             99          (3) "Appraisal foundation" is as defined in Section 61-2b-2 .
             100          (4) "Appraisal management company" means an entity that:
             101          (a) administers a network of appraisers to perform real estate appraisal activities for
             102      one or more clients;
             103          (b) (i) receives a request for a real estate appraisal activity from a client; and
             104          (ii) for a fee paid by the client, enters into an agreement with one or more appraisers to
             105      perform the real estate appraisal activity contained in the request; or
             106          (c) otherwise serves as a third-party broker of an appraisal management service
             107      between a client and an appraiser.
             108          (5) "Appraisal management service" means a process of:
             109          (a) receiving a request for the performance of a real estate appraisal activity from a
             110      client; and
             111          (b) for a fee paid by the client, entering into an agreement with one or more appraisers
             112      to perform the real estate appraisal activity contained in the request.
             113          (6) "Appraisal report" is as defined in Section 61-2b-2 .
             114          (7) "Appraiser" means an individual who engages in a real estate appraisal activity.
             115          (8) "Appraiser panel" means a group of appraisers that are selected by an appraisal
             116      management company to perform real estate appraisal activities for the appraisal management
             117      company.
             118          (9) "Board" means the Real Estate Appraiser Licensing and Certification Board that is
             119      created in Section 61-2b-7 .
             120          (10) "Client" means a person that enters into an agreement with an appraisal


             121      management company for the performance of a real estate appraisal activity.
             122          (11) "Controlling person" means:
             123          (a) an owner, officer, or director of an entity seeking to offer appraisal management
             124      services;
             125          (b) an individual employed, appointed, or authorized by an appraisal management
             126      company who has the authority to:
             127          (i) enter into a contractual relationship with a client for the performance of an appraisal
             128      management service; and
             129          (ii) enter into an agreement with an appraiser for the performance of a real estate
             130      appraisal activity; or
             131          (c) an individual who possesses, directly or indirectly, the power to direct or cause the
             132      direction of the management or policies of an appraisal management company.
             133          (12) "Director" means the director of the division.
             134          (13) "Division" means the Division of Real Estate of the Department of Commerce.
             135          (14) "Entity" means:
             136          (a) a corporation;
             137          (b) a partnership;
             138          (c) a sole proprietorship;
             139          (d) a limited liability company;
             140          (e) another business entity; or
             141          (f) a subsidiary or unit of an entity described in Subsections (14)(a) through (e).
             142          (15) "Person" means an individual or an entity.
             143          (16) "Real estate appraisal activity" is as defined in Section 61-2b-2 .
             144          Section 4. Section 61-2e-103 is enacted to read:
             145          61-2e-103. Rulemaking.
             146          In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             147      board may make rules that are:
             148          (1) consistent with this chapter; and
             149          (2) necessary to implement this chapter.
             150          Section 5. Section 61-2e-104 is enacted to read:
             151          61-2e-104. Exemption.


             152          This chapter does not apply to:
             153          (1) an entity that:
             154          (a) exclusively employs an individual on an employer-employee basis for the
             155      performance of a real estate appraisal activity in the normal course of the entity's business; and
             156          (b) is responsible for ensuring that the real estate appraisal activity being performed by
             157      an employee is performed in accordance with applicable appraisal standards;
             158          (2) an individual who:
             159          (a) is an appraiser; and
             160          (b) in the normal course of business enters into an agreement, whether written or
             161      otherwise, with another appraiser for the performance of a real estate appraisal activity that the
             162      individual cannot complete for any reason, including:
             163          (i) competency;
             164          (ii) work load;
             165          (iii) schedule; or
             166          (iv) geographic location;
             167          (3) an individual who:
             168          (a) in the normal course of business enters into an agreement, whether written or
             169      otherwise, with an appraiser for the performance of a real estate appraisal activity; and
             170          (b) under the agreement, cosigns the report of the appraiser performing the real estate
             171      appraisal activity upon the completion of the real estate appraisal activity; or
             172          (4) an appraisal management company that contracts with one or more appraisers for
             173      the performance of fewer than ten appraisals in this state in a calendar year.
             174          Section 6. Section 61-2e-201 is enacted to read:
             175     
Part 2. Registration

             176          61-2e-201. Registration required -- Qualification for registration.
             177          (1) Unless registered under this chapter or exempt under Section 61-2e-104 , an entity
             178      may not with regard to a real estate appraisal activity for real estate located in this state:
             179          (a) directly or indirectly engage or attempt to engage in business as an appraisal
             180      management company;
             181          (b) directly or indirectly engage or attempt to perform an appraisal management
             182      service; or


             183          (c) advertise or hold itself out as engaging in or conducting business as an appraisal
             184      management company.
             185          (2) To qualify to be registered as an appraisal management company under this
             186      chapter:
             187          (a) each individual who owns, directly or indirectly, more than 10% of the appraisal
             188      management company shall:
             189          (i) be of good moral character, as determined by the board; and
             190          (ii) not have had a license or certificate to engage in an act related to a real estate or
             191      mortgage transaction refused, denied, canceled, or revoked in this state or in another state; and
             192          (b) the appraisal management company shall designate a main contact for
             193      communication between the appraisal management company and either the board or division
             194      who:
             195          (i) is a controlling person;
             196          (ii) is of good moral character, as determined by the board; and
             197          (iii) has not had a license or certificate to engage in an act related to a real estate or
             198      mortgage transaction refused, denied, canceled, or revoked in this state or in another state.
             199          (3) This section applies without regard to whether the entity uses the term:
             200          (a) "appraisal management company";
             201          (b) "mortgage technology company"; or
             202          (c) another name.
             203          Section 7. Section 61-2e-202 is enacted to read:
             204          61-2e-202. Initial registration process.
             205          (1) (a) To register under this chapter as an appraisal management company, an entity
             206      shall:
             207          (i) file with the division a registration application in a form prescribed by the division;
             208          (ii) pay to the division a fee determined in accordance with Section 63J-1-303 ;
             209          (iii) if the entity is not a resident of this state, submit an irrevocable consent for service
             210      of process meeting the requirements of Subsection (3); and
             211          (iv) have the application for registration approved by the division.
             212          (b) The division shall approve an application if the division finds that the entity:
             213          (i) complies with this Subsection (1); and


             214          (ii) meets the qualifications under Section 61-2e-201 .
             215          (c) The division may, upon compliance with Title 63G, Chapter 4, Administrative
             216      Procedures Act, deny the issuance of a registration to an applicant on any ground enumerated
             217      in this chapter.
             218          (2) A registration application shall include the following:
             219          (a) the name of the entity seeking registration;
             220          (b) a business address of the entity seeking registration;
             221          (c) telephone contact information of the entity seeking registration;
             222          (d) if the entity is not an entity domiciled in this state, the name and contact
             223      information for the entity's agent for service of process in this state;
             224          (e) for each individual who owns 10% or more of the entity:
             225          (i) the individual's name, address, and contact information;
             226          (ii) a statement of whether or not the individual has had a license or certificate to
             227      engage in an act related to a real estate or mortgage transaction refused, denied, canceled, or
             228      revoked in this state or in another state; and
             229          (iii) (A) fingerprint cards in a form acceptable to the division at the time the
             230      registration application is filed; and
             231          (B) consent to a criminal background check by the Utah Bureau of Criminal
             232      Identification and the Federal Bureau of Investigation regarding the application;
             233          (f) the name, address, and contact information for each controlling person;
             234          (g) for the controlling person designated as the contact as required by Section
             235      61-2e-201 :
             236          (i) a statement of whether or not the individual has had a license or certificate to
             237      engage in an act related to a real estate or mortgage transaction refused, denied, canceled, or
             238      revoked in this state or in another state; and
             239          (ii) (A) fingerprint cards in a form acceptable to the division at the time the registration
             240      application is filed; and
             241          (B) consent to a criminal background check by the Utah Bureau of Criminal
             242      Identification and the Federal Bureau of Investigation regarding the application;
             243          (h) provide an explanation required by:
             244          (i) Section 61-2e-301 , related to adding an individual to an appraiser panel;


             245          (ii) Section 61-2e-302 , related to the review of the work of an appraiser; and
             246          (iii) Section 61-2e-303 , related to record keeping; and
             247          (i) any other information required by the board.
             248          (3) An irrevocable consent for service of process required to be filed under Subsection
             249      (1) shall provide that process may be served on the entity by delivering the process to the
             250      director if:
             251          (a) the service of process is for an action:
             252          (i) in a court of this state against an entity; and
             253          (ii) arising out of an act governed by this chapter; and
             254          (b) a plaintiff cannot, in the exercise of due diligence, obtain personal service upon the
             255      entity.
             256          Section 8. Section 61-2e-203 is enacted to read:
             257          61-2e-203. Criminal background check -- Conditional registration -- Changes in
             258      ownership or controlling person.
             259          (1) The division shall request the Department of Public Safety to complete a Federal
             260      Bureau of Investigation criminal background check for an individual described in Subsection
             261      61-2e-202 (1)(e) or (g) through the national criminal history system or any successor system.
             262          (2) (a) The entity filing the application under Section 61-2e-202 shall pay the cost of
             263      the criminal background check and the fingerprinting.
             264          (b) Monies paid to the division by an entity for the cost of a criminal background check
             265      are nonlapsing.
             266          (3) (a) A registration issued under Section 61-2e-202 is conditional, pending
             267      completion of a criminal background check.
             268          (b) If a criminal background check discloses that an individual described in Subsection
             269      61-2e-202 (1)(e) or (g) fails to accurately disclose a criminal history, the registration is
             270      immediately and automatically revoked.
             271          (c) An entity whose conditional registration is revoked under this Subsection (3) is
             272      entitled to a post-revocation hearing conducted in accordance with Title 63G, Chapter 4,
             273      Administrative Procedures Act, to challenge the revocation.
             274          (d) The board shall decide whether relief from the revocation of a registration under
             275      this Subsection (3) will be granted, except that relief from a revocation under this Subsection


             276      (3) may be granted only if:
             277          (i) the criminal history upon which the revocation is based:
             278          (A) did not occur; or
             279          (B) is the criminal history of another individual;
             280          (ii) (A) the revocation is based on a failure to accurately disclose a criminal history;
             281      and
             282          (B) the entity has a reasonable good faith belief at the time of application that there is
             283      no criminal history to be disclosed; or
             284          (iii) the division fails to follow the prescribed procedure for the revocation.
             285          (e) If a registration is revoked or a revocation under this Subsection (3) is upheld after
             286      a post-revocation hearing, the entity may not apply for a new registration until at least 12
             287      months after the day on which the registration is revoked.
             288          (4) (a) An appraisal management company shall comply with this Subsection (4) if
             289      there is a change in:
             290          (i) an individual who owns 10% or more of the entity; or
             291          (ii) the controlling person designated as the contact as required by Section 61-2e-201 .
             292          (b) If there is a change in an individual described in Subsection (4)(a), within 30 days
             293      of the day on which the change occurs, the appraisal management company shall file with the
             294      division:
             295          (i) the individual's name, address, and contact information;
             296          (ii) a statement of whether or not the individual has had a license or certificate to
             297      engage in an act related to a real estate or mortgage transaction refused, denied, canceled, or
             298      revoked in this state or in another state; and
             299          (iii) (A) fingerprint cards in a form acceptable to the division at the time the
             300      registration application is filed; and
             301          (B) consent to a criminal background check by the Utah Bureau of Criminal
             302      Identification and the Federal Bureau of Investigation regarding the application.
             303          Section 9. Section 61-2e-204 is enacted to read:
             304          61-2e-204. Renewal of a registration.
             305          (1) (a) A registration under this chapter expires two years from the day on which the
             306      registration is filed.


             307          (b) Notwithstanding Subsection (1)(a), the time period of a registration may be
             308      extended or shortened by as much as one year to maintain or change a renewal cycle
             309      established by rule by the division.
             310          (2) To renew a registration under this chapter, before the day on which the registration
             311      expires, an appraisal management company shall:
             312          (a) file with the division a renewal registration application on a form prescribed by the
             313      division; and
             314          (b) pay to the division a fee determined in accordance with Section 63J-1-303 .
             315          (3) A renewal registration application shall include substantially similar information to
             316      the information required under Section 61-2e-202 , except that for an individual described in
             317      Subsection 61-2e-202 (1)(e) or (g), the entity is required to report whether the individual has
             318      had:
             319          (a) (i) a conviction of a criminal offense;
             320          (ii) the entry of a plea in abeyance to a criminal offense; or
             321          (iii) the potential resolution of a criminal case by:
             322          (A) a diversion agreement; or
             323          (B) another agreement under which a criminal charge is held in suspense for a period
             324      of time;
             325          (b) a filing of personal bankruptcy or bankruptcy of a business that transacts the
             326      appraisal management services;
             327          (c) the suspension, revocation, surrender, cancellation, or denial of a professional
             328      license or certification, whether the license or registration is issued by this state or another
             329      jurisdiction; or
             330          (d) the entry of a cease and desist order or a temporary or permanent injunction:
             331          (i) against the individual by a court or government agency; and
             332          (ii) on the basis of:
             333          (A) conduct or a practice involving the business of appraisal management services; or
             334          (B) conduct involving fraud, misrepresentation, or deceit.
             335          (4) A registration expires if it is not renewed on or before its expiration date, except
             336      that for a period of 30 days after the expiration date, the registration may be reinstated upon
             337      compliance with this section, including payment of a renewal fee and a late fee determined by


             338      the division and the board.
             339          Section 10. Section 61-2e-301 is enacted to read:
             340     
Part 3. Operational Requirements

             341          61-2e-301. Use of licensed or certified appraisers.
             342          (1) An appraisal management company required to be registered under this chapter may
             343      not enter into an agreement with an appraiser for the performance of a real estate appraisal
             344      activity unless the appraiser is licensed or certified in good standing pursuant to Chapter 2b,
             345      Real Estate Appraiser Licensing and Certification Act.
             346          (2) (a) An appraisal management company required to be registered under this chapter
             347      shall have a system to verify that an individual added to the appraiser panel of the appraisal
             348      management company holds a license or certificate in good standing in this state pursuant to
             349      Chapter 2b, Real Estate Appraiser Licensing and Certification Act.
             350          (b) As part of the registration process under Part 2, Registration, an appraisal
             351      management company shall biennially provide an explanation of the system described in
             352      Subsection (2)(a) in the form prescribed by the division.
             353          Section 11. Section 61-2e-302 is enacted to read:
             354          61-2e-302. Adherence to standards.
             355          (1) An appraisal management company required to be registered under this chapter shall
             356      have a system in place to review the work of an appraiser who performs a real estate appraisal
             357      activity for the appraisal management company on a periodic basis to ensure that a real estate
             358      appraisal activity is conducted in accordance with applicable appraisal standards.
             359          (2) As part of the registration process under Part 2, Registration, an appraisal
             360      management company shall biennially provide an explanation of the system described in
             361      Subsection (1) in the form prescribed by the division.
             362          Section 12. Section 61-2e-303 is enacted to read:
             363          61-2e-303. Record keeping.
             364          (1) An appraisal management company required to be registered under this chapter shall
             365      maintain a detailed record of the following for the same time period an appraiser is required to
             366      maintain an appraisal record for the same real estate appraisal activity:
             367          (a) a real estate appraisal activity request that the appraisal management company
             368      receives; and


             369          (b) the appraiser that performs the real estate appraisal activity described in Subsection
             370      (1) for the appraisal management company.
             371          (2) As part of the registration process under Part 2, Registration, an appraisal
             372      management company shall biennially provide an explanation of its record keeping described
             373      in Subsection (1) in the form prescribed by the division.
             374          Section 13. Section 61-2e-304 is enacted to read:
             375          61-2e-304. Required disclosure.
             376          (1) Before an appraisal management company may receive monies from a client for a
             377      real estate appraisal activity requested by the client, the appraisal management company shall
             378      disclose to the client the total compensation that the appraisal management company pays to
             379      the appraiser who performs the real estate appraisal activity.
             380          (2) The board may define by rule made in accordance with Title 63G, Chapter 3, Utah
             381      Administrative Rulemaking Act:
             382          (a) what constitutes the total compensation that an appraisal management company
             383      pays to an appraiser who performs a real estate appraisal activity, except that the rules shall
             384      provide for disclosing this amount:
             385          (i) as a dollar amount; or
             386          (ii) as a percentage of the total amount charged to a client by an appraisal management
             387      company;
             388          (b) the method an appraisal management company is required to use in calculating the
             389      figures described in Subsection (2)(a); and
             390          (c) the form and content of the disclosure required by Subsection (1).
             391          Section 14. Section 61-2e-305 is enacted to read:
             392          61-2e-305. Employee requirements.
             393          (1) Subsection (2) applies to an individual who:
             394          (a) (i) is an employee of an appraisal management company; or
             395          (ii) works on behalf of an appraisal management company; and
             396          (b) (i) selects an appraiser for the performance of a real estate appraisal activity for the
             397      appraisal management company; or
             398          (ii) reviews a completed appraisal.
             399          (2) (a) An individual described in Subsection (1) is required to be appropriately trained


             400      and qualified in the performance of an appraisal, as determined by the board by rule made in
             401      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             402          (b) For purposes of an individual described in Subsection (1) who reviews the work of
             403      an appraiser, to comply with this Subsection (2), the individual shall demonstrate knowledge of
             404      the applicable appraisal standards, as determined by the board by rule made in accordance with
             405      Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             406          Section 15. Section 61-2e-306 is enacted to read:
             407          61-2e-306. Removal of appraiser from appraisal panel.
             408          Except within the first 30 days after the day on which an appraiser is first added to the
             409      appraiser panel of an appraisal management company, an appraisal management company may
             410      not remove the appraiser from its appraiser panel, or otherwise refuse to assign a request for a
             411      real estate appraisal activity to an appraiser without:
             412          (1) notifying the appraiser in writing of:
             413          (a) the reason why the appraiser is being removed from the appraiser panel of the
             414      appraisal management company; and
             415          (b) the nature of the alleged conduct or violation if the appraiser is being removed from
             416      the appraiser panel for:
             417          (i) illegal conduct; or
             418          (ii) a violation of the applicable appraisal standards; and
             419          (2) providing an opportunity for the appraiser to respond to the notification of the
             420      appraisal management company.
             421          Section 16. Section 61-2e-307 is enacted to read:
             422          61-2e-307. Prohibitions related to an appraiser.
             423          (1) An appraisal management company required to be registered under this chapter, or a
             424      controlling person, employee, or agent of the appraisal management company may not
             425      influence or attempt to influence the development, reporting, or review of an appraisal through:
             426          (a) coercion;
             427          (b) extortion;
             428          (c) collusion;
             429          (d) compensation;
             430          (e) instruction;


             431          (f) inducement;
             432          (g) intimidation;
             433          (h) bribery; or
             434          (i) any other manner.
             435          (2) A violation of Subsection (1) includes doing one or more of the following for a
             436      purpose listed in Subsection (1):
             437          (a) withholding or threatening to withhold timely payment for an appraisal;
             438          (b) withholding or threatening to withhold future business for an appraiser;
             439          (c) taking adverse action or threatening to take adverse action against an appraiser
             440      regarding use of the appraiser for a real estate appraisal activity;
             441          (d) expressly or by implication promising future business or increased compensation
             442      for an appraiser;
             443          (e) conditioning one or more of the following on the opinion, conclusion, or valuation
             444      to be reached, or on a preliminary estimate or opinion requested from an appraiser:
             445          (i) a request for a real estate appraisal activity; or
             446          (ii) the payment of consideration;
             447          (f) requesting that an appraiser provide at any time before the appraiser's completion of
             448      a real estate appraisal activity:
             449          (i) an estimated, predetermined, or desired valuation in an appraisal report; or
             450          (ii) an estimated value or comparable sale;
             451          (g) except for a copy of a sales contract for a purchase transaction, providing to an
             452      appraiser:
             453          (i) an anticipated, estimated, encouraged, or desired value for a subject property; or
             454          (ii) a proposed or target amount to be loaned to the borrower;
             455          (h) providing to an appraiser, or an individual related to the appraiser, stock or other
             456      financial or non-financial benefits;
             457          (i) allowing the removal of an appraiser from an appraiser panel, without prior written
             458      notice to the appraiser as required by Section 61-2e-306 ;
             459          (j) obtaining, using, or paying for a subsequent appraisal or ordering an automated
             460      valuation model in connection with a mortgage financing transaction unless:
             461          (i) (A) there is a reasonable basis to believe that the initial appraisal does not meet


             462      applicable appraisal standards; and
             463          (B) the reasonable basis is noted in the loan file; or
             464          (ii) the subsequent appraisal or automated valuation model is done pursuant to a pre- or
             465      post-funding appraisal review or quality control process in accordance with applicable
             466      appraisal standards;
             467          (k) compensating an appraiser in a manner that the person should reasonably have
             468      known would result in the appraiser not conducting a real estate appraisal activity in a manner
             469      consistent with applicable appraisal standards;
             470          (l) engaging in the business of an appraisal management company under an assumed or
             471      fictitious name not properly registered in this state;
             472          (m) accepting a contingent fee for performing an appraisal management service if the
             473      fee is contingent on:
             474          (i) the appraiser report having a predetermined analysis, opinion, or conclusion;
             475          (ii) the analysis, opinion, conclusion, or valuation reached in an appraisal report; or
             476          (iii) the consequences resulting from the appraisal assignment; or
             477          (n) any other act or practice that impairs or attempts to impair an appraiser's
             478      independence, objectivity, or impartiality.
             479          (3) This section may not be construed to prohibit an appraisal management company
             480      from requesting that an appraiser:
             481          (a) provide additional information about the basis for a valuation; or
             482          (b) correct an objective factual error in an appraisal report.
             483          (4) An appraisal management company required to be registered under this chapter, or
             484      a controlling person, employee, or agent of the appraisal management company may not alter,
             485      modify, or otherwise change a completed appraisal report submitted by an appraiser.
             486          Section 17. Section 61-2e-401 is enacted to read:
             487     
Part 4. Enforcement

             488          61-2e-401. Division authority -- Immunity.
             489          (1) (a) In addition to a power or duty expressly provided in this chapter, the division
             490      may:
             491          (i) receive and act on a complaint including:
             492          (A) taking action designed to obtain voluntary compliance with this chapter; or


             493          (B) commencing an administrative or judicial proceeding on the division's own
             494      initiative;
             495          (ii) investigate an entity required to be registered under this chapter, regardless of
             496      whether the entity is located in Utah; and
             497          (iii) employ one or more investigators, clerks, or other employees or agents if:
             498          (A) approved by the executive director; and
             499          (B) within the budget of the division.
             500          (b) A failure to respond to a request by the division in an investigation under this
             501      chapter is considered to be a separate violation of this chapter, including:
             502          (i) failing to respond to a subpoena;
             503          (ii) withholding evidence; or
             504          (iii) failing to produce a document or record.
             505          (2) The division is immune from a civil action or criminal prosecution for initiating or
             506      assisting in a lawful investigation of an act or participating in a disciplinary proceeding under
             507      this chapter if the division takes the action:
             508          (a) without malicious intent; and
             509          (b) in the reasonable belief that the action is taken pursuant to the powers and duties
             510      vested in the division under this chapter.
             511          Section 18. Section 61-2e-402 is enacted to read:
             512          61-2e-402. Enforcement -- Immunity for board.
             513          (1) (a) The board may order disciplinary action against:
             514          (i) an entity registered under this chapter;
             515          (ii) an entity required to be registered under this chapter; or
             516          (iii) a controlling person of an entity described in this Subsection (1)(a).
             517          (b) If the board makes a finding described in Subsection (2) pursuant to an adjudicative
             518      proceeding conducted in accordance with Title 63G, Chapter 4, Administrative Procedures Act,
             519      the board may:
             520          (i) revoke, suspend, or place an entity's registration on probation;
             521          (ii) deny an entity's original registration;
             522          (iii) deny an entity's renewal registration;
             523          (iv) in the case of denial or revocation of a registration, set a waiting period for an


             524      applicant to apply for a registration under this chapter;
             525          (v) order remedial education;
             526          (vi) impose a civil penalty upon a person not to exceed the greater of:
             527          (A) $2,500 for each violation; or
             528          (B) the amount of any gain or economic benefit from a violation;
             529          (vii) issue a cease and desist order; or
             530          (viii) do a combination of Subsections (1)(b)(i) through (vii).
             531          (2) Subsection (1) applies if the board finds that a person has engaged in, is attempting
             532      to, or has attempted to engage in:
             533          (a) an act that violates this chapter;
             534          (b) an act that violates a rule made by the board under this chapter;
             535          (c) procuring a registration for the person or another person by fraud,
             536      misrepresentation, or deceit;
             537          (d) paying money or attempting to pay money other than a fee provided for by this
             538      chapter to an employee of the division to procure a registration under this chapter;
             539          (e) an act or omission in the business of an appraisal management company that
             540      constitutes dishonesty, fraud, or misrepresentation;
             541          (f) unprofessional conduct as defined by statute or rule; or
             542          (g) other conduct that constitutes dishonest dealing.
             543          (3) A member of the board is immune from a civil action or criminal prosecution for a
             544      disciplinary proceeding under this chapter if:
             545          (a) the action is taken without malicious intent; and
             546          (b) in the reasonable belief that the action taken was taken pursuant to the powers and
             547      duties vested in a member of the board under this chapter.




Legislative Review Note
    as of 1-29-09 6:26 AM


Office of Legislative Research and General Counsel


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