Texas 2017 - 85th Regular

Texas Senate Bill SB1516 Compare Versions

OldNewDifferences
1-S.B. No. 1516
1+85R24208 TSR-F
2+ By: Hancock S.B. No. 1516
3+ (Geren)
4+ Substitute the following for S.B. No. 1516: No.
25
36
7+ A BILL TO BE ENTITLED
48 AN ACT
59 relating to the registration and regulation of appraisal management
610 companies; authorizing fees; expanding the applicability of an
711 occupational registration.
812 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
913 SECTION 1. Section 1104.003(b), Occupations Code, is
1014 amended by adding Subdivision (6-a) to read as follows:
1115 (6-a) "Federally regulated appraisal management
1216 company" means an appraisal management company that is:
1317 (A) owned and controlled by an insured depository
1418 institution, as defined by 12 U.S.C. Section 1813; and
1519 (B) regulated by:
1620 (i) the Board of Governors of the Federal
1721 Reserve System;
1822 (ii) the Federal Deposit Insurance
1923 Corporation;
2024 (iii) the Office of the Comptroller of the
2125 Currency; or
2226 (iv) the successors to any of those
2327 agencies.
2428 SECTION 2. Section 1104.004(a), Occupations Code, is
2529 amended to read as follows:
2630 (a) This chapter does not apply to:
2731 (1) a person who exclusively employs appraisers on an
2832 employer and employee basis for the performance of appraisals;
2933 (2) a person acting as an appraisal firm as defined by
3034 board rule that at all times during a calendar year employs on an
3135 exclusive basis as independent contractors not more than 15
3236 appraisers for the performance of appraisals;
3337 (3) a financial institution, including a department or
3438 unit within the institution, that is regulated by an agency of this
3539 state or the United States government;
3640 (4) subject to Subsection (b), a person who enters
3741 into an agreement with an appraiser for the performance of an
3842 appraisal that on completion results in a report signed by both the
3943 appraiser who completed the appraisal and the appraiser who
4044 requested completion of the appraisal;
4145 (5) an appraisal management company:
4246 (A) operating only in this state with an
4347 appraisal panel of not more than 15 appraisers at all times during a
4448 calendar year; or
4549 (B) operating in multiple states, including this
4650 state, with an appraisal panel of not more than 24 appraisers in all
4751 states at all times during a calendar year; [or]
4852 (6) an appraisal management company that is a
4953 subsidiary owned and controlled by a financial institution that is
5054 subject to appraisal independence standards at least as stringent
5155 as those under Section 1104.203 or the Truth in Lending Act (15
5256 U.S.C. Section 1601 et seq.) through regulation by an agency of this
5357 state or the United States government; or
5458 (7) subject to Section 1104.052(c), a federally
5559 regulated appraisal management company.
5660 SECTION 3. Section 1104.052, Occupations Code, is amended
5761 by amending Subsections (b) and (c) and adding Subsections (d) and
5862 (e) to read as follows:
5963 (b) The board shall collect from each appraisal management
6064 company registered under this chapter the national registry fee
6165 required by the appraisal subcommittee for each person who is on the
6266 appraisal panel of the company and licensed or certified as an
6367 appraiser in this state. [The board shall deposit the registry fees
6468 to the credit of the appraiser registry account in the general
6569 revenue fund.]
6670 (c) Notwithstanding Section 1104.004, the board shall
6771 collect from each federally regulated appraisal management company
6872 operating in this state:
6973 (1) the national registry fee required by the
7074 appraisal subcommittee;
7175 (2) information regarding the determination of the
7276 national registry fee as required by the appraisal subcommittee;
7377 (3) a fee in an amount that is sufficient for the
7478 administration of this subsection as established by board rule; and
7579 (4) any other information required by state or federal
7680 law.
7781 (d) The board shall deposit the national registry fees
7882 collected under this section to the credit of the appraiser
7983 registry account in the general revenue fund.
8084 (e) The national registry fees collected under this section
8185 [Subsection (b)] shall be sent to the appraisal subcommittee
8286 regularly as required by federal law.
8387 SECTION 4. Section 1104.102(a), Occupations Code, is
8488 amended to read as follows:
8589 (a) A person who has had a license or certificate to act as
8690 an appraiser denied, revoked, or surrendered in lieu of revocation
8791 in any state may not own in any manner [more than one percent of] an
8892 appraisal management company registered or applying for
8993 registration under this chapter unless:
9094 (1) the person has subsequently had the [a] license or
9195 certificate to act as an appraiser granted or reinstated; and
9296 (2) the license or certificate to act as an appraiser
9397 was denied, revoked, or surrendered for a nonsubstantive reason as
9498 determined by the board.
9599 SECTION 5. Sections 1104.103(b) and (c), Occupations Code,
96100 are amended to read as follows:
97101 (b) The application must contain:
98102 (1) the name, business address, and telephone contact
99103 information of the applicant [entity] seeking registration;
100104 (2) if the applicant [entity] is not a corporation
101105 domiciled in this state, the name and contact information for the
102106 applicant's [company's] agent for service of process in this state;
103107 (3) the name, address, and contact information for any
104108 person [individual or any corporation, partnership, or other
105109 business entity] that owns more than 10 percent of the applicant
106110 [appraisal management company];
107111 (4) the name, address, and contact information for at
108112 least one controlling person;
109113 (5) the designation of a primary contact under Section
110114 1104.104;
111115 (6) the name and contact information of at least one
112116 appraiser designated by the applicant [company] to respond to and
113117 communicate with appraisers on the applicant's [company's]
114118 appraisal panel regarding appraisal assignments;
115119 (7) a certification that the applicant [entity] has a
116120 system in place to ensure compliance with Subchapter D and Section
117121 129E of the Truth in Lending Act (15 U.S.C. Section 1601 et seq.);
118122 (8) a written irrevocable consent to service of
119123 process; and
120124 (9) any other information required by the board to
121125 approve the application.
122126 (c) The board shall adopt rules regarding registration and
123127 the renewal of a registration under this chapter.
124128 SECTION 6. Section 1104.104(b), Occupations Code, is
125129 amended to read as follows:
126130 (b) The controlling person designated under Subsection (a):
127131 (1) must:
128132 (A) be certified as an appraiser in at least one
129133 state at all times during the designation; or
130134 (B) have completed:
131135 (i) the 15-hour national Uniform Standards
132136 of Professional Appraisal Practice course; and
133137 (ii) the seven-hour national Uniform
134138 Standards of Professional Appraisal Practice update course not more
135139 than two years before the renewal of the appraisal management
136140 company's registration;
137141 (2) may not have had a license or certificate to act as
138142 an appraiser denied, revoked, or surrendered in lieu of revocation
139143 in any state unless:
140144 (A) the person has subsequently had the [a]
141145 license or certificate to act as an appraiser granted or
142146 reinstated; and
143147 (B) the license or certificate to act as an
144148 appraiser was denied, revoked, or surrendered for a nonsubstantive
145149 reason as determined by the board;
146150 (3) must be of good moral character, as determined by
147151 the board; and
148152 (4) shall submit to a background investigation, as
149153 determined by the board.
150154 SECTION 7. Section 1104.105, Occupations Code, is amended
151155 to read as follows:
152156 Sec. 1104.105. DENIAL OF REGISTRATION OR RENEWAL. (a) The
153157 board may deny an application for [a] registration or registration
154158 renewal:
155159 (1) if [to] an applicant [who] fails to satisfy a
156160 requirement of this chapter; or
157161 (2) on a determination by the board that:
158162 (A) there is reasonable evidence that any person
159163 who owns an interest in [more than 10 percent of] the appraisal
160164 management company or any controlling person of the company has[,
161165 within the 24 months preceding the date of the application,] had a
162166 license or certification as an appraiser or a registration as an
163167 appraisal management company suspended, revoked, or put on
164168 probation in any state;
165169 (B) the applicant has, while registered under
166170 this chapter, demonstrated incompetency, untrustworthiness, or
167171 conduct or practices that render the registrant unfit to perform
168172 appraisal management services; or
169173 (C) the applicant no longer performs appraisal
170174 management services in good faith and is a source of detriment,
171175 injury, or loss to the public.
172176 (b) The board shall immediately provide written notice to
173177 the applicant of the board's denial of a registration or of a
174178 registration renewal under this chapter.
175179 (c) An appeal of the denial of a registration or of the
176180 renewal of a registration is governed by Chapter 2001, Government
177181 Code.
178182 SECTION 8. Section 1104.151(b), Occupations Code, is
179183 amended to read as follows:
180184 (b) An appraisal management company is not in violation of
181185 Subsection (a) if:
182186 (1) the person whose license or certification was
183187 denied, revoked, or surrendered in lieu of revocation has
184188 subsequently [since that denial, revocation, or surrender] had the
185189 [a] license or certificate granted or reinstated;
186190 (2) the license or certification was denied, revoked,
187191 or surrendered for a nonsubstantive reason as determined by the
188192 board; and
189193 (3) the person maintains the license or certificate in
190194 good standing.
191195 SECTION 9. Section 1104.153, Occupations Code, is amended
192196 to read as follows:
193197 Sec. 1104.153. APPRAISAL REVIEW. A person who performs an
194198 appraisal review for an appraisal management company as required by
195199 Section 1104.155 must be:
196200 (1) licensed as an appraiser [or certified] under
197201 Chapter 1103, unless exempt by board rule; and
198202 (2) qualified to perform the appraisal [with at least
199203 the same certification for the property type as the appraiser who
200204 completed the report] being reviewed.
201205 SECTION 10. Section 1104.156, Occupations Code, is amended
202206 to read as follows:
203207 Sec. 1104.156. BUSINESS RECORDS. (a) An appraisal
204208 management company required to register [registered] under this
205209 chapter or that has applied for registration under this chapter
206210 shall retain for at least five years all business records relating
207211 to each service request that the company receives and the appraiser
208212 who performs the appraisal for the company.
209213 (b) The board may audit the records of an appraisal
210214 management company required to register [registered] under this
211215 chapter to ensure compliance with federal law, this chapter, board
212216 rules, and the Uniform Standards of Professional Appraisal
213217 Practice.
214218 (c) A written record of all substantive communications
215219 between an appraisal management company required to register
216220 [registered] under this chapter and an appraiser relating to
217221 inclusion on an appraisal panel or to an appraisal assignment must
218222 be maintained as provided under Subsection (a).
219223 SECTION 11. Section 1104.161(a), Occupations Code, is
220224 amended to read as follows:
221225 (a) An appraisal management [Other than during the first 30
222226 days after the date an appraiser is first added to the appraisal
223227 panel of an appraisal management company, a] company may not remove
224228 an appraiser from its panel, or otherwise refuse to assign requests
225229 for appraisal services to an appraiser without:
226230 (1) notifying the appraiser in writing of the reasons
227231 for removal from the company's panel;
228232 (2) if the appraiser is being removed from the panel
229233 for illegal conduct, a violation of the Uniform Standards of
230234 Professional Appraisal Practice, or a violation of this chapter,
231235 notifying the appraiser of the nature of the alleged conduct or
232236 violation; and
233237 (3) providing an opportunity for the appraiser to
234238 respond in writing to the notification.
235239 SECTION 12. Section 1104.201, Occupations Code, is amended
236240 by adding Subsection (c) to read as follows:
237241 (c) The board may report to the appraisal subcommittee any
238242 disciplinary action taken by the board against an appraisal
239243 management company required to register under this chapter.
240244 SECTION 13. Section 1104.202, Occupations Code, is amended
241245 by adding Subsection (d) to read as follows:
242246 (d) Notwithstanding any other law, an administrative
243247 penalty collected under this section must be deposited in a
244248 restricted fund maintained and operated by the board to develop
245249 educational programs for appraisers or to conduct studies that
246250 enhance consumer protection.
247251 SECTION 14. Section 1104.203, Occupations Code, is amended
248252 by adding Subsection (a-1) to read as follows:
249253 (a-1) For purposes of Subsection (a), a fee paid by an
250254 appraisal management company to an appraiser for appraisal services
251255 is not a financial benefit.
252256 SECTION 15. Section 1104.204(b), Occupations Code, is
253257 amended to read as follows:
254258 (b) The board, on its own motion, may file a complaint
255259 against:
256260 (1) an appraisal management company registered under
257261 this chapter;
258262 (2) a controlling person; or
259263 (3) a person who engages in an activity for which
260264 registration is required under this chapter without being
261265 registered.
262266 SECTION 16. Section 1104.205, Occupations Code, is amended
263267 by adding Subsection (d) to read as follows:
264268 (d) An investigation of an alleged violation by a person
265269 registered under this chapter may not be terminated solely on the
266270 basis that the person fails to renew the registration.
267271 SECTION 17. Section 1104.208(a), Occupations Code, is
268272 amended to read as follows:
269273 (a) Based on the report submitted under Section 1104.207,
270274 the board may:
271275 (1) order further investigation of the complaint;
272276 (2) permit the person who is the subject of the
273277 complaint to participate in a voluntary discussion of the facts and
274278 circumstances of the alleged violation;
275279 (3) determine that there is not probable cause to
276280 believe that a violation occurred and dismiss the case; or
277281 (4) [(3)] determine that there is probable cause to
278282 believe that a violation occurred and enter into an agreed order
279283 with the respondent under Section 1104.2081 or proceed as the
280284 complainant with a contested case hearing under Chapter 2001,
281285 Government Code.
282286 SECTION 18. Subchapter E, Chapter 1104, Occupations Code,
283287 is amended by adding Sections 1104.2081 and 1104.2082 to read as
284288 follows:
285289 Sec. 1104.2081. AGREED ORDER. (a) The board may negotiate
286290 a settlement and enter into an agreed order with an appraisal
287291 management company or other person who is the subject of a complaint
288292 under this subchapter.
289293 (b) An agreed order must be:
290294 (1) approved by the board; and
291295 (2) signed by the commissioner and the appraisal
292296 management company or other person who is the subject of the
293297 complaint.
294298 (c) A board member who participates in negotiating an agreed
295299 order under this section is disqualified from participating in the
296300 adjudication of a contested case that results from the negotiation.
297301 (d) An appraisal management company or other person who
298302 consents to negotiate under this section waives the right to notice
299303 and the opportunity to be heard under Chapter 2001, Government
300304 Code, during the negotiation.
301305 (e) An appraisal management company or other person who
302306 enters into an agreed order under this section may be disciplined
303307 for failure to comply with the agreed order.
304308 Sec. 1104.2082. CONFIDENTIALITY OF INVESTIGATION MATERIAL.
305309 (a) Information or material, including any investigation file, is
306310 confidential and not subject to disclosure under Chapter 552,
307311 Government Code, or any other means of legal compulsion for
308312 release, including disclosure, discovery, or subpoena, if the
309313 information or material is prepared or compiled by the board in
310314 connection with a complaint, investigation, or audit of any person
311315 subject to the jurisdiction of the board.
312316 (b) Notwithstanding Subsection (a), information or material
313317 prepared or compiled by the board in connection with a complaint,
314318 investigation, or audit may be disclosed:
315319 (1) to the respondent;
316320 (2) to a person providing a service to the board,
317321 including an expert or other witness, or an investigator, if the
318322 information is necessary for preparation for, or a presentation in,
319323 a disciplinary proceeding against an applicant or license holder,
320324 or a subsequent trial or appeal taken from a disciplinary
321325 proceeding;
322326 (3) to an entity in another jurisdiction that
323327 licenses, registers, credentials, or disciplines any person
324328 subject to the jurisdiction of the board;
325329 (4) to a law enforcement agency;
326330 (5) to the State Office of Administrative Hearings; or
327331 (6) to the board, or a panel of the board, for use
328332 during any proceeding conducted by the State Office of
329333 Administrative Hearings or in a subsequent trial or appeal of a
330334 board action or order.
331335 (c) The release of information under Subsection (b) is not a
332336 voluntary disclosure for purposes of Section 552.007, Government
333337 Code.
334338 (d) The board may require that a confidentiality agreement
335339 be signed by a person entitled to receive information under
336340 Subsection (b) before releasing the information.
337341 (e) The board may withhold information or material
338342 described by Subsection (a) without requesting a decision from the
339343 attorney general under Subchapter G, Chapter 552, Government Code.
340344 (f) Notwithstanding Subsection (a), on the dismissal or
341345 final resolution of a complaint, investigation, or audit,
342346 information or material prepared or compiled by the board in
343347 connection with the complaint, investigation, or audit, including a
344348 completed audit report or a final order of the board, is subject to
345349 disclosure under Chapter 321 or 552, Government Code.
346350 SECTION 19. The heading to Section 1104.210, Occupations
347351 Code, is amended to read as follows:
348352 Sec. 1104.210. PENALTY TO BE PAID [OR HEARING REQUESTED].
349353 SECTION 20. Section 1104.212, Occupations Code, is amended
350354 to read as follows:
351355 Sec. 1104.212. NOTICE OF HEARING. Not later than the 30th
352356 day before the [hearing] date of a contested case hearing
353357 [involving an appraisal management company], the board shall
354358 personally deliver or send by certified mail [to the company]
355359 notice of the hearing to the parties to the hearing.
356360 SECTION 21. Subchapter E, Chapter 1104, Occupations Code,
357361 is amended by adding Sections 1104.2121, 1104.2122, 1104.2131, and
358362 1104.2132 to read as follows:
359363 Sec. 1104.2121. ATTORNEY GENERAL REPRESENTATION. The
360364 attorney general may not represent the board in a contested case
361365 before the State Office of Administrative Hearings.
362366 Sec. 1104.2122. IMMUNITY OF WITNESSES. (a) The board in a
363367 contested case hearing may grant a witness immunity from
364368 disciplinary action by the board.
365369 (b) The official record of the hearing must include the
366370 reason for granting immunity.
367371 Sec. 1104.2131. RECORD OF PROCEEDINGS. (a) Contested case
368372 proceedings shall be recorded by:
369373 (1) mechanical or electrical means; or
370374 (2) a certified shorthand reporter.
371375 (b) At the request of a party, the proceedings or any part of
372376 the proceedings shall be transcribed. The expense of the
373377 transcription shall be charged to the requesting party.
374378 (c) The recording, stenographic notes, or transcription of
375379 oral proceedings shall be maintained by the board until at least the
376380 fifth anniversary of the date of the decision in the contested case.
377381 Sec. 1104.2132. FAILURE TO APPEAR; COSTS. (a) If a
378382 respondent receives proper notice of a contested case hearing but
379383 does not appear in person at the hearing, the administrative law
380384 judge may conduct the hearing or enter an order, as the
381385 administrative law judge determines appropriate.
382386 (b) The respondent is bound by the results of the hearing to
383387 the same extent as if the respondent had appeared.
384388 (c) The administrative law judge may award reasonable costs
385389 to the board on a request for and proof of costs incurred if the
386390 respondent fails to appear at the hearing. In this subsection, the
387391 term "costs" means all costs associated with the hearing, including
388392 the costs charged by the State Office of Administrative Hearings
389393 and any costs related to hearing preparation, discovery,
390394 depositions, subpoenas, service of process, witness expenses,
391395 travel expenses, and investigation expenses.
392396 SECTION 22. Section 1104.214, Occupations Code, is amended
393397 to read as follows:
394398 Sec. 1104.214. ACTION AFTER HEARING. On conclusion of a
395399 contested case hearing under this subchapter, the administrative
396400 law judge shall:
397401 (1) make findings of fact and conclusions of law; and
398402 (2) issue to the board a proposal for decision that the
399403 board [shall] take one or more of the following actions:
400404 (A) dismiss the charges;
401405 (B) revoke the appraisal management company's
402406 registration;
403407 (C) suspend the registration of the appraisal
404408 management company for a period of not more than five years;
405409 (D) impose a period of probation, with or without
406410 conditions;
407411 (E) issue a public or private reprimand or a
408412 warning;
409413 (F) impose an administrative penalty; or
410414 (G) require the payment of costs expended by the
411415 board associated with the contested case, including:
412416 (i) attorney's [legal] fees;
413417 (ii) the costs charged by the State Office
414418 of Administrative Hearings; and
415419 (iii) any administrative costs associated
416420 with the hearing, including witness expenses, travel expenses, and
417421 investigation expenses.
418422 SECTION 23. Section 1104.215, Occupations Code, is amended
419423 to read as follows:
420424 Sec. 1104.215. DECISION BY BOARD. (a) Based on the
421425 findings of fact, [and] conclusions of law, and proposal for
422426 decision of the administrative law judge [the recommendations of
423427 the hearings examiner], the board by order may determine that:
424428 (1) a violation has occurred and may impose an
425429 administrative penalty or another sanction; or
426430 (2) a violation did not occur.
427431 (b) The board shall give notice of the order to the person
428432 who is the subject of the order. The notice must include:
429433 (1) [separate statements of] the findings of fact and
430434 conclusions of law separately stated;
431435 (2) the amount of any penalty imposed or a description
432436 of any sanction imposed; [and]
433437 (3) a statement of the right of the person to judicial
434438 review of the order; and
435439 (4) any other information required by law.
436440 SECTION 24. Section 1104.216, Occupations Code, is amended
437441 to read as follows:
438442 Sec. 1104.216. MOTION [APPLICATION] FOR REHEARING. (a) A
439443 [Not later than the 20th day after the date a final decision is
440444 issued in a contested case, a] party may file a motion for rehearing
441445 [an application] with the board [for a rehearing]. The motion
442446 [application] must state:
443447 (1) the specific grounds for rehearing; and
444448 (2) the relief sought.
445449 (b) A motion for rehearing filed under this section is
446450 governed by Chapter 2001, Government Code [The application is
447451 denied if the board does not grant it before the 120th day after the
448452 date the commissioner is served with the application].
449453 SECTION 25. Sections 1104.102(b) and (d), Occupations Code,
450454 are repealed.
451455 SECTION 26. As soon as practicable after the effective date
452456 of this Act, the Texas Appraiser Licensing and Certification Board
453457 shall adopt rules and fees necessary to implement Chapter 1104,
454458 Occupations Code, as amended by this Act.
455459 SECTION 27. The changes in law made by this Act relating to
456460 the eligibility for a registration under Chapter 1104, Occupations
457461 Code, or to the requirements for an application under that chapter
458462 apply only to an application submitted to the Texas Appraiser
459463 Licensing and Certification Board on or after the effective date of
460464 this Act. An application submitted before that date is governed by
461465 the law in effect on the date the application was submitted, and the
462466 former law is continued in effect for that purpose.
463467 SECTION 28. The changes in law made by this Act relating to
464468 the requirements for renewal of a registration under Chapter 1104,
465469 Occupations Code, apply only to an application for renewal of a
466470 registration that expires on or after the effective date of this
467- Act. A registration that expires before that date is governed by
468- the law in effect immediately before the effective date of this Act,
469- and the former law is continued in effect for that purpose.
471+ Act. A registration that expires before that date is governed by the
472+ law in effect immediately before the effective date of this Act, and
473+ the former law is continued in effect for that purpose.
470474 SECTION 29. The changes in law made by this Act apply only
471475 to a disciplinary proceeding or a contested case hearing under
472476 Chapter 1104, Occupations Code, for conduct that occurs on or after
473477 the effective date of this Act. Conduct that occurs before the
474478 effective date of this Act is governed by the law in effect on the
475479 date the conduct occurred, and the former law is continued in effect
476480 for that purpose.
477481 SECTION 30. This Act takes effect September 1, 2017.
478- ______________________________ ______________________________
479- President of the Senate Speaker of the House
480- I hereby certify that S.B. No. 1516 passed the Senate on
481- April 26, 2017, by the following vote: Yeas 31, Nays 0; and that
482- the Senate concurred in House amendment on May 16, 2017, by the
483- following vote: Yeas 30, Nays 0.
484- ______________________________
485- Secretary of the Senate
486- I hereby certify that S.B. No. 1516 passed the House, with
487- amendment, on May 11, 2017, by the following vote: Yeas 130,
488- Nays 13, one present not voting.
489- ______________________________
490- Chief Clerk of the House
491- Approved:
492- ______________________________
493- Date
494- ______________________________
495- Governor