Texas 2017 - 85th Regular

Texas House Bill HB3261 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	85R24208 TSR-F
2	2	By: Geren H.B. No. 3261
3	3	Substitute the following for H.B. No. 3261:
4	4	By: Kuempel C.S.H.B. No. 3261
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the registration and regulation of appraisal management
10	10	companies; authorizing fees; expanding the applicability of an
11	11	occupational registration.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Section 1104.003(b), Occupations Code, is
14	14	amended by adding Subdivision (6-a) to read as follows:
15	15	(6-a) "Federally regulated appraisal management
16	16	company" means an appraisal management company that is:
17	17	(A) owned and controlled by an insured depository
18	18	institution, as defined by 12 U.S.C. Section 1813; and
19	19	(B) regulated by:
20	20	(i) the Board of Governors of the Federal
21	21	Reserve System;
22	22	(ii) the Federal Deposit Insurance
23	23	Corporation;
24	24	(iii) the Office of the Comptroller of the
25	25	Currency; or
26	26	(iv) the successors to any of those
27	27	agencies.
28	28	SECTION 2. Section 1104.004(a), Occupations Code, is
29	29	amended to read as follows:
30	30	(a) This chapter does not apply to:
31	31	(1) a person who exclusively employs appraisers on an
32	32	employer and employee basis for the performance of appraisals;
33	33	(2) a person acting as an appraisal firm as defined by
34	34	board rule that at all times during a calendar year employs on an
35	35	exclusive basis as independent contractors not more than 15
36	36	appraisers for the performance of appraisals;
37	37	(3) a financial institution, including a department or
38	38	unit within the institution, that is regulated by an agency of this
39	39	state or the United States government;
40	40	(4) subject to Subsection (b), a person who enters
41	41	into an agreement with an appraiser for the performance of an
42	42	appraisal that on completion results in a report signed by both the
43	43	appraiser who completed the appraisal and the appraiser who
44	44	requested completion of the appraisal;
45	45	(5) an appraisal management company:
46	46	(A) operating only in this state with an
47	47	appraisal panel of not more than 15 appraisers at all times during a
48	48	calendar year; or
49	49	(B) operating in multiple states, including this
50	50	state, with an appraisal panel of not more than 24 appraisers in all
51	51	states at all times during a calendar year; [or]
52	52	(6) an appraisal management company that is a
53	53	subsidiary owned and controlled by a financial institution that is
54	54	subject to appraisal independence standards at least as stringent
55	55	as those under Section 1104.203 or the Truth in Lending Act (15
56	56	U.S.C. Section 1601 et seq.) through regulation by an agency of this
57	57	state or the United States government; or
58	58	(7) subject to Section 1104.052(c), a federally
59	59	regulated appraisal management company.
60	60	SECTION 3. Section 1104.052, Occupations Code, is amended
61	61	by amending Subsections (b) and (c) and adding Subsections (d) and
62	62	(e) to read as follows:
63	63	(b) The board shall collect from each appraisal management
64	64	company registered under this chapter the national registry fee
65	65	required by the appraisal subcommittee for each person who is on the
66	66	appraisal panel of the company and licensed or certified as an
67	67	appraiser in this state. [The board shall deposit the registry fees
68	68	to the credit of the appraiser registry account in the general
69	69	revenue fund.]
70	70	(c) Notwithstanding Section 1104.004, the board shall
71	71	collect from each federally regulated appraisal management company
72	72	operating in this state:
73	73	(1) the national registry fee required by the
74	74	appraisal subcommittee;
75	75	(2) information regarding the determination of the
76	76	national registry fee as required by the appraisal subcommittee;
77	77	(3) a fee in an amount that is sufficient for the
78	78	administration of this subsection as established by board rule; and
79	79	(4) any other information required by state or federal
80	80	law.
81	81	(d) The board shall deposit the national registry fees
82	82	collected under this section to the credit of the appraiser
83	83	registry account in the general revenue fund.
84	84	(e) The national registry fees collected under this section
85	85	[Subsection (b)] shall be sent to the appraisal subcommittee
86	86	regularly as required by federal law.
87	87	SECTION 4. Section 1104.102(a), Occupations Code, is
88	88	amended to read as follows:
89	89	(a) A person who has had a license or certificate to act as
90	90	an appraiser denied, revoked, or surrendered in lieu of revocation
91	91	in any state may not own in any manner [more than one percent of] an
92	92	appraisal management company registered or applying for
93	93	registration under this chapter unless:
94	94	(1) the person has subsequently had the [a] license or
95	95	certificate to act as an appraiser granted or reinstated; and
96	96	(2) the license or certificate to act as an appraiser
97	97	was denied, revoked, or surrendered for a nonsubstantive reason as
98	98	determined by the board.
99	99	SECTION 5. Sections 1104.103(b) and (c), Occupations Code,
100	100	are amended to read as follows:
101	101	(b) The application must contain:
102	102	(1) the name, business address, and telephone contact
103	103	information of the applicant [entity] seeking registration;
104	104	(2) if the applicant [entity] is not a corporation
105	105	domiciled in this state, the name and contact information for the
106	106	applicant's [company's] agent for service of process in this state;
107	107	(3) the name, address, and contact information for any
108	108	person [individual or any corporation, partnership, or other
109	109	business entity] that owns more than 10 percent of the applicant
110	110	[appraisal management company];
111	111	(4) the name, address, and contact information for at
112	112	least one controlling person;
113	113	(5) the designation of a primary contact under Section
114	114	1104.104;
115	115	(6) the name and contact information of at least one
116	116	appraiser designated by the applicant [company] to respond to and
117	117	communicate with appraisers on the applicant's [company's]
118	118	appraisal panel regarding appraisal assignments;
119	119	(7) a certification that the applicant [entity] has a
120	120	system in place to ensure compliance with Subchapter D and Section
121	121	129E of the Truth in Lending Act (15 U.S.C. Section 1601 et seq.);
122	122	(8) a written irrevocable consent to service of
123	123	process; and
124	124	(9) any other information required by the board to
125	125	approve the application.
126	126	(c) The board shall adopt rules regarding registration and
127	127	the renewal of a registration under this chapter.
128	128	SECTION 6. Section 1104.104(b), Occupations Code, is
129	129	amended to read as follows:
130	130	(b) The controlling person designated under Subsection (a):
131	131	(1) must:
132	132	(A) be certified as an appraiser in at least one
133	133	state at all times during the designation; or
134	134	(B) have completed:
135	135	(i) the 15-hour national Uniform Standards
136	136	of Professional Appraisal Practice course; and
137	137	(ii) the seven-hour national Uniform
138	138	Standards of Professional Appraisal Practice update course not more
139	139	than two years before the renewal of the appraisal management
140	140	company's registration;
141	141	(2) may not have had a license or certificate to act as
142	142	an appraiser denied, revoked, or surrendered in lieu of revocation
143	143	in any state unless:
144	144	(A) the person has subsequently had the [a]
145	145	license or certificate to act as an appraiser granted or
146	146	reinstated; and
147	147	(B) the license or certificate to act as an
148	148	appraiser was denied, revoked, or surrendered for a nonsubstantive
149	149	reason as determined by the board;
150	150	(3) must be of good moral character, as determined by
151	151	the board; and
152	152	(4) shall submit to a background investigation, as
153	153	determined by the board.
154	154	SECTION 7. Section 1104.105, Occupations Code, is amended
155	155	to read as follows:
156	156	Sec. 1104.105. DENIAL OF REGISTRATION OR RENEWAL. (a) The
157	157	board may deny an application for [a] registration or registration
158	158	renewal:
159	159	(1) if [to] an applicant [who] fails to satisfy a
160	160	requirement of this chapter; or
161	161	(2) on a determination by the board that:
162	162	(A) there is reasonable evidence that any person
163	163	who owns an interest in [more than 10 percent of] the appraisal
164	164	management company or any controlling person of the company has[,
165	165	within the 24 months preceding the date of the application,] had a
166	166	license or certification as an appraiser or a registration as an
167	167	appraisal management company suspended, revoked, or put on
168	168	probation in any state;
169	169	(B) the applicant has, while registered under
170	170	this chapter, demonstrated incompetency, untrustworthiness, or
171	171	conduct or practices that render the registrant unfit to perform
172	172	appraisal management services; or
173	173	(C) the applicant no longer performs appraisal
174	174	management services in good faith and is a source of detriment,
175	175	injury, or loss to the public.
176	176	(b) The board shall immediately provide written notice to
177	177	the applicant of the board's denial of a registration or of a
178	178	registration renewal under this chapter.
179	179	(c) An appeal of the denial of a registration or of the
180	180	renewal of a registration is governed by Chapter 2001, Government
181	181	Code.
182	182	SECTION 8. Section 1104.151(b), Occupations Code, is
183	183	amended to read as follows:
184	184	(b) An appraisal management company is not in violation of
185	185	Subsection (a) if:
186	186	(1) the person whose license or certification was
187	187	denied, revoked, or surrendered in lieu of revocation has
188	188	subsequently [since that denial, revocation, or surrender] had the
189	189	[a] license or certificate granted or reinstated;
190	190	(2) the license or certification was denied, revoked,
191	191	or surrendered for a nonsubstantive reason as determined by the
192	192	board; and
193	193	(3) the person maintains the license or certificate in
194	194	good standing.
195	195	SECTION 9. Section 1104.153, Occupations Code, is amended
196	196	to read as follows:
197	197	Sec. 1104.153. APPRAISAL REVIEW. A person who performs an
198	198	appraisal review for an appraisal management company as required by
199	199	Section 1104.155 must be:
200	200	(1) licensed as an appraiser [or certified] under
201	201	Chapter 1103, unless exempt by board rule; and
202	202	(2) qualified to perform the appraisal [with at least
203	203	the same certification for the property type as the appraiser who
204	204	completed the report] being reviewed.
205	205	SECTION 10. Section 1104.156, Occupations Code, is amended
206	206	to read as follows:
207	207	Sec. 1104.156. BUSINESS RECORDS. (a) An appraisal
208	208	management company required to register [registered] under this
209	209	chapter or that has applied for registration under this chapter
210	210	shall retain for at least five years all business records relating
211	211	to each service request that the company receives and the appraiser
212	212	who performs the appraisal for the company.
213	213	(b) The board may audit the records of an appraisal
214	214	management company required to register [registered] under this
215	215	chapter to ensure compliance with federal law, this chapter, board
216	216	rules, and the Uniform Standards of Professional Appraisal
217	217	Practice.
218	218	(c) A written record of all substantive communications
219	219	between an appraisal management company required to register
220	220	[registered] under this chapter and an appraiser relating to
221	221	inclusion on an appraisal panel or to an appraisal assignment must
222	222	be maintained as provided under Subsection (a).
223	223	SECTION 11. Section 1104.161(a), Occupations Code, is
224	224	amended to read as follows:
225	225	(a) An appraisal management [Other than during the first 30
226	226	days after the date an appraiser is first added to the appraisal
227	227	panel of an appraisal management company, a] company may not remove
228	228	an appraiser from its panel, or otherwise refuse to assign requests
229	229	for appraisal services to an appraiser without:
230	230	(1) notifying the appraiser in writing of the reasons
231	231	for removal from the company's panel;
232	232	(2) if the appraiser is being removed from the panel
233	233	for illegal conduct, a violation of the Uniform Standards of
234	234	Professional Appraisal Practice, or a violation of this chapter,
235	235	notifying the appraiser of the nature of the alleged conduct or
236	236	violation; and
237	237	(3) providing an opportunity for the appraiser to
238	238	respond in writing to the notification.
239	239	SECTION 12. Section 1104.201, Occupations Code, is amended
240	240	by adding Subsection (c) to read as follows:
241	241	(c) The board may report to the appraisal subcommittee any
242	242	disciplinary action taken by the board against an appraisal
243	243	management company required to register under this chapter.
244	244	SECTION 13. Section 1104.202, Occupations Code, is amended
245	245	by adding Subsection (d) to read as follows:
246	246	(d) Notwithstanding any other law, an administrative
247	247	penalty collected under this section must be deposited in a
248	248	restricted fund maintained and operated by the board to develop
249	249	educational programs for appraisers or to conduct studies that
250	250	enhance consumer protection.
251	251	SECTION 14. Section 1104.203, Occupations Code, is amended
252	252	by adding Subsection (a-1) to read as follows:
253	253	(a-1) For purposes of Subsection (a), a fee paid by an
254	254	appraisal management company to an appraiser for appraisal services
255	255	is not a financial benefit.
256	256	SECTION 15. Section 1104.204(b), Occupations Code, is
257	257	amended to read as follows:
258	258	(b) The board, on its own motion, may file a complaint
259	259	against:
260	260	(1) an appraisal management company registered under
261	261	this chapter;
262	262	(2) a controlling person; or
263	263	(3) a person who engages in an activity for which
264	264	registration is required under this chapter without being
265	265	registered.
266	266	SECTION 16. Section 1104.205, Occupations Code, is amended
267	267	by adding Subsection (d) to read as follows:
268	268	(d) An investigation of an alleged violation by a person
269	269	registered under this chapter may not be terminated solely on the
270	270	basis that the person fails to renew the registration.
271	271	SECTION 17. Section 1104.208(a), Occupations Code, is
272	272	amended to read as follows:
273	273	(a) Based on the report submitted under Section 1104.207,
274	274	the board may:
275	275	(1) order further investigation of the complaint;
276	276	(2) permit the person who is the subject of the
277	277	complaint to participate in a voluntary discussion of the facts and
278	278	circumstances of the alleged violation;
279	279	(3) determine that there is not probable cause to
280	280	believe that a violation occurred and dismiss the case; or
281	281	(4) [(3)] determine that there is probable cause to
282	282	believe that a violation occurred and enter into an agreed order
283	283	with the respondent under Section 1104.2081 or proceed as the
284	284	complainant with a contested case hearing under Chapter 2001,
285	285	Government Code.
286	286	SECTION 18. Subchapter E, Chapter 1104, Occupations Code,
287	287	is amended by adding Sections 1104.2081 and 1104.2082 to read as
288	288	follows:
289	289	Sec. 1104.2081. AGREED ORDER. (a) The board may negotiate
290	290	a settlement and enter into an agreed order with an appraisal
291	291	management company or other person who is the subject of a complaint
292	292	under this subchapter.
293	293	(b) An agreed order must be:
294	294	(1) approved by the board; and
295	295	(2) signed by the commissioner and the appraisal
296	296	management company or other person who is the subject of the
297	297	complaint.
298	298	(c) A board member who participates in negotiating an agreed
299	299	order under this section is disqualified from participating in the
300	300	adjudication of a contested case that results from the negotiation.
301	301	(d) An appraisal management company or other person who
302	302	consents to negotiate under this section waives the right to notice
303	303	and the opportunity to be heard under Chapter 2001, Government
304	304	Code, during the negotiation.
305	305	(e) An appraisal management company or other person who
306	306	enters into an agreed order under this section may be disciplined
307	307	for failure to comply with the agreed order.
308	308	Sec. 1104.2082. CONFIDENTIALITY OF INVESTIGATION MATERIAL.
309	309	(a) Information or material, including any investigation file, is
310	310	confidential and not subject to disclosure under Chapter 552,
311	311	Government Code, or any other means of legal compulsion for
312	312	release, including disclosure, discovery, or subpoena, if the
313	313	information or material is prepared or compiled by the board in
314	314	connection with a complaint, investigation, or audit of any person
315	315	subject to the jurisdiction of the board.
316	316	(b) Notwithstanding Subsection (a), information or material
317	317	prepared or compiled by the board in connection with a complaint,
318	318	investigation, or audit may be disclosed:
319	319	(1) to the respondent;
320	320	(2) to a person providing a service to the board,
321	321	including an expert or other witness, or an investigator, if the
322	322	information is necessary for preparation for, or a presentation in,
323	323	a disciplinary proceeding against an applicant or license holder,
324	324	or a subsequent trial or appeal taken from a disciplinary
325	325	proceeding;
326	326	(3) to an entity in another jurisdiction that
327	327	licenses, registers, credentials, or disciplines any person
328	328	subject to the jurisdiction of the board;
329	329	(4) to a law enforcement agency;
330	330	(5) to the State Office of Administrative Hearings; or
331	331	(6) to the board, or a panel of the board, for use
332	332	during any proceeding conducted by the State Office of
333	333	Administrative Hearings or in a subsequent trial or appeal of a
334	334	board action or order.
335	335	(c) The release of information under Subsection (b) is not a
336	336	voluntary disclosure for purposes of Section 552.007, Government
337	337	Code.
338	338	(d) The board may require that a confidentiality agreement
339	339	be signed by a person entitled to receive information under
340	340	Subsection (b) before releasing the information.
341	341	(e) The board may withhold information or material
342	342	described by Subsection (a) without requesting a decision from the
343	343	attorney general under Subchapter G, Chapter 552, Government Code.
344	344	(f) Notwithstanding Subsection (a), on the dismissal or
345	345	final resolution of a complaint, investigation, or audit,
346	346	information or material prepared or compiled by the board in
347	347	connection with the complaint, investigation, or audit, including a
348	348	completed audit report or a final order of the board, is subject to
349	349	disclosure under Chapter 321 or 552, Government Code.
350	350	SECTION 19. The heading to Section 1104.210, Occupations
351	351	Code, is amended to read as follows:
352	352	Sec. 1104.210. PENALTY TO BE PAID [OR HEARING REQUESTED].
353	353	SECTION 20. Section 1104.212, Occupations Code, is amended
354	354	to read as follows:
355	355	Sec. 1104.212. NOTICE OF HEARING. Not later than the 30th
356	356	day before the [hearing] date of a contested case hearing
357	357	[involving an appraisal management company], the board shall
358	358	personally deliver or send by certified mail [to the company]
359	359	notice of the hearing to the parties to the hearing.
360	360	SECTION 21. Subchapter E, Chapter 1104, Occupations Code,
361	361	is amended by adding Sections 1104.2121, 1104.2122, 1104.2131, and
362	362	1104.2132 to read as follows:
363	363	Sec. 1104.2121. ATTORNEY GENERAL REPRESENTATION. The
364	364	attorney general may not represent the board in a contested case
365	365	before the State Office of Administrative Hearings.
366	366	Sec. 1104.2122. IMMUNITY OF WITNESSES. (a) The board in a
367	367	contested case hearing may grant a witness immunity from
368	368	disciplinary action by the board.
369	369	(b) The official record of the hearing must include the
370	370	reason for granting immunity.
371	371	Sec. 1104.2131. RECORD OF PROCEEDINGS. (a) Contested case
372	372	proceedings shall be recorded by:
373	373	(1) mechanical or electrical means; or
374	374	(2) a certified shorthand reporter.
375	375	(b) At the request of a party, the proceedings or any part of
376	376	the proceedings shall be transcribed. The expense of the
377	377	transcription shall be charged to the requesting party.
378	378	(c) The recording, stenographic notes, or transcription of
379	379	oral proceedings shall be maintained by the board until at least the
380	380	fifth anniversary of the date of the decision in the contested case.
381	381	Sec. 1104.2132. FAILURE TO APPEAR; COSTS. (a) If a
382	382	respondent receives proper notice of a contested case hearing but
383	383	does not appear in person at the hearing, the administrative law
384	384	judge may conduct the hearing or enter an order, as the
385	385	administrative law judge determines appropriate.
386	386	(b) The respondent is bound by the results of the hearing to
387	387	the same extent as if the respondent had appeared.
388	388	(c) The administrative law judge may award reasonable costs
389	389	to the board on a request for and proof of costs incurred if the
390	390	respondent fails to appear at the hearing. In this subsection, the
391	391	term "costs" means all costs associated with the hearing, including
392	392	the costs charged by the State Office of Administrative Hearings
393	393	and any costs related to hearing preparation, discovery,
394	394	depositions, subpoenas, service of process, witness expenses,
395	395	travel expenses, and investigation expenses.
396	396	SECTION 22. Section 1104.214, Occupations Code, is amended
397	397	to read as follows:
398	398	Sec. 1104.214. ACTION AFTER HEARING. On conclusion of a
399	399	contested case hearing under this subchapter, the administrative
400	400	law judge shall:
401	401	(1) make findings of fact and conclusions of law; and
402	402	(2) issue to the board a proposal for decision that the
403	403	board [shall] take one or more of the following actions:
404	404	(A) dismiss the charges;
405	405	(B) revoke the appraisal management company's
406	406	registration;
407	407	(C) suspend the registration of the appraisal
408	408	management company for a period of not more than five years;
409	409	(D) impose a period of probation, with or without
410	410	conditions;
411	411	(E) issue a public or private reprimand or a
412	412	warning;
413	413	(F) impose an administrative penalty; or
414	414	(G) require the payment of costs expended by the
415	415	board associated with the contested case, including:
416	416	(i) attorney's [legal] fees;
417	417	(ii) the costs charged by the State Office
418	418	of Administrative Hearings; and
419	419	(iii) any administrative costs associated
420	420	with the hearing, including witness expenses, travel expenses, and
421	421	investigation expenses.
422	422	SECTION 23. Section 1104.215, Occupations Code, is amended
423	423	to read as follows:
424	424	Sec. 1104.215. DECISION BY BOARD. (a) Based on the
425	425	findings of fact, [and] conclusions of law, and proposal for
426	426	decision of the administrative law judge [the recommendations of
427	427	the hearings examiner], the board by order may determine that:
428	428	(1) a violation has occurred and may impose an
429	429	administrative penalty or another sanction; or
430	430	(2) a violation did not occur.
431	431	(b) The board shall give notice of the order to the person
432	432	who is the subject of the order. The notice must include:
433	433	(1) [separate statements of] the findings of fact and
434	434	conclusions of law separately stated;
435	435	(2) the amount of any penalty imposed or a description
436	436	of any sanction imposed; [and]
437	437	(3) a statement of the right of the person to judicial
438	438	review of the order; and
439	439	(4) any other information required by law.
440	440	SECTION 24. Section 1104.216, Occupations Code, is amended
441	441	to read as follows:
442	442	Sec. 1104.216. MOTION [APPLICATION] FOR REHEARING. (a) A
443	443	[Not later than the 20th day after the date a final decision is
444	444	issued in a contested case, a] party may file a motion for rehearing
445	445	[an application] with the board [for a rehearing]. The motion
446	446	[application] must state:
447	447	(1) the specific grounds for rehearing; and
448	448	(2) the relief sought.
449	449	(b) A motion for rehearing filed under this section is
450	450	governed by Chapter 2001, Government Code [The application is
451	451	denied if the board does not grant it before the 120th day after the
452	452	date the commissioner is served with the application].
453	453	SECTION 25. Sections 1104.102(b) and (d), Occupations Code,
454	454	are repealed.
455	455	SECTION 26. As soon as practicable after the effective date
456	456	of this Act, the Texas Appraiser Licensing and Certification Board
457	457	shall adopt rules and fees necessary to implement Chapter 1104,
458	458	Occupations Code, as amended by this Act.
459	459	SECTION 27. The changes in law made by this Act relating to
460	460	the eligibility for a registration under Chapter 1104, Occupations
461	461	Code, or to the requirements for an application under that chapter
462	462	apply only to an application submitted to the Texas Appraiser
463	463	Licensing and Certification Board on or after the effective date of
464	464	this Act. An application submitted before that date is governed by
465	465	the law in effect on the date the application was submitted, and the
466	466	former law is continued in effect for that purpose.
467	467	SECTION 28. The changes in law made by this Act relating to
468	468	the requirements for renewal of a registration under Chapter 1104,
469	469	Occupations Code, apply only to an application for renewal of a
470	470	registration that expires on or after the effective date of this
471	471	Act. A registration that expires before that date is governed by the
472	472	law in effect immediately before the effective date of this Act, and
473	473	the former law is continued in effect for that purpose.
474	474	SECTION 29. The changes in law made by this Act apply only
475	475	to a disciplinary proceeding or a contested case hearing under
476	476	Chapter 1104, Occupations Code, for conduct that occurs on or after
477	477	the effective date of this Act. Conduct that occurs before the
478	478	effective date of this Act is governed by the law in effect on the
479	479	date the conduct occurred, and the former law is continued in effect
480	480	for that purpose.
481	481	SECTION 30. This Act takes effect September 1, 2017.