75th OREGON LEGISLATIVE ASSEMBLY--2010 Special Session

                            Enrolled

                         House Bill 3624

Sponsored by Representative HOLVEY; Representatives BUCKLEY,
  DEMBROW, KENNEMER, TOMEI, VANORMAN (Presession filed.)

                     CHAPTER ................

                             AN ACT

Relating to appraisal management companies; creating new
  provisions; amending ORS 705.141; and declaring an emergency.

Be It Enacted by the People of the State of Oregon:

  SECTION 1.  { + As used in sections 1 to 8 of this 2010 Act:
  (1)(a) 'Appraisal management company' means a business entity
that:
  (A) Performs appraisal management services;
  (B) Administers networks of independent contractor appraisers
to perform real estate appraisal activity for clients; or
  (C) Otherwise serves as a third-party broker of real estate
appraisal activity between clients and appraisers.
  (b) 'Appraisal management company' does not include:
  (A) An appraiser who in the normal course of business enters
into an agreement with another appraiser for the performance of
real estate appraisal activity that the hiring appraiser cannot
complete;
  (B) An appraiser who in the normal course of business enters
into an agreement with another appraiser for the performance of
real estate appraisal activity and upon the completion of the
activity, jointly signs the appraisal report with the appraiser
performing the activity; or
  (C) A person who contracts for fewer than 10 appraisals in this
state in a calendar year.
  (2) 'Appraisal management services' means the process of
receiving a request for the performance of real estate appraisal
activity from a client and, for a fee paid by the client,
entering into an agreement with an independent contractor
appraiser to perform the real estate appraisal activity contained
in the request.
  (3) 'Appraiser' means a state certified appraiser or state
licensed appraiser certified or licensed under ORS 674.310.
  (4) 'Appraiser panel' means a group of independent contractor
appraisers who have been selected by an appraisal management
company to perform real estate appraisal activity for the
appraisal management company.
  (5) 'Controlling person' means:
  (a) An owner, officer or director of an appraisal management
company;
  (b) An individual employed, appointed or authorized by an
appraisal management company to enter into an agreement with a
client for the performance of appraisal management services or to

Enrolled House Bill 3624 (HB 3624-B)                       Page 1

enter into an agreement with an independent contractor appraiser
for the performance of real estate appraisal activity; or
  (c) An individual who possesses, directly or indirectly, the
power to direct the management or policies of an appraisal
management company.
  (6) 'Financial institution' has the meaning given that term in
ORS 674.010.
  (7) 'Real estate appraisal activity' means the activity
described in ORS 674.100. + }
  SECTION 2.  { + (1)(a) A person may not provide appraisal
management services unless the person is registered as an
appraisal management company with the Department of Consumer and
Business Services.
  (b) Notwithstanding ORS 674.100 (3)(a), an affiliate of a
financial institution or insurance company may not provide
appraisal management services unless the affiliate is registered
as an appraisal management company with the department.
  (2) A business entity may apply for registration as an
appraisal management company on forms prescribed by rule by the
department. The application must include:
  (a) The name, address and contact information of the entity;
  (b) The name, address and contact information of a controlling
person of the entity;
  (c) If the entity is not domiciled in this state, the name and
contact information for the entity's agent for service of process
in this state;
  (d) The name, address and contact information of any person
that owns 10 percent or more of the entity;
  (e) A certification that:
  (A) The entity has a system to verify that each appraiser on
the entity's appraiser panel is licensed or certified under ORS
674.310 and is competent to perform real estate appraisal
activity;
  (B) If the entity reviews real estate appraisal activity
performed by an appraiser, the review is conducted by another
appraiser; and
  (C) The entity maintains and retains for at least five years,
or as required under ORS 674.150, a detailed record of each
appraisal management services request the entity receives and the
appraiser who performs the real estate appraisal activity
contained in the request;
  (f) The surety bond, letter of credit or deposit required by
section 3 of this 2010 Act;
  (g) Fees in an amount prescribed by rule by the department,
which must be sufficient to cover the costs of administering
sections 1 to 8 and 9 of this 2010 Act;
  (h) A description of the dispute resolution process required by
section 7 of this 2010 Act; and
  (i) Any other information required by the department by rule.
  (3) The department may not issue a registration to a business
entity as an appraisal management company unless the department
determines that each individual who owns 10 percent or more of
the entity and the controlling person identified by the entity in
the application:
  (a) Are of good moral character; and
  (b) Have never had a license, certification or registration to
act as an appraiser or appraisal management company refused,
denied, canceled or revoked in this state or in any other state.
  (4) An appraisal management company registration expires two
years after the date of the issuance of the registration. The

Enrolled House Bill 3624 (HB 3624-B)                       Page 2

department shall adopt rules establishing the requirements for
renewal or reactivation of a registration. The rules must include
a requirement that the appraisal management company must certify
that:
  (a) The company has a system to verify that each appraiser on
the company's appraiser panel is licensed or certified under ORS
674.310 and is competent to perform real estate appraisal
activity;
  (b) If the company reviews real estate appraisal activity
performed by an appraiser, the review is conducted by another
appraiser; and
  (c) The company maintains and retains for at least five years,
or as required under ORS 674.150, a detailed record of each
appraisal management services request the company receives and
the appraiser who performs the real estate appraisal activity
contained in the request. + }
  SECTION 3.  { + (1) An applicant for issuance or renewal of an
appraisal management company registration shall file with the
Department of Consumer and Business Services a surety bond with
one or more corporate sureties authorized to do business in this
state, or an irrevocable letter of credit issued by an insured
institution, as defined in ORS 706.008, in the amount of $25,000.
  (2) The surety bond or letter of credit required under
subsection (1) of this section must:
  (a) Be conditioned that the applicant pays:
  (A) All amounts owing to persons who perform real estate
appraisal activity for the appraisal management company; and
  (B) All amounts adjudged against the appraisal management
company by reason of negligent or improper real estate appraisal
activity or appraisal management services or breach of contract
in performing real estate appraisal activity or appraisal
management services; and
  (b) Require the surety company to provide written notice to the
department by registered or certified mail:
  (A) At least 30 days before the surety company cancels or
revokes the bond; or
  (B) When the surety company pays for a loss under the bond.
  (3) In lieu of the surety bond or letter of credit required
under subsection (1) of this section, the appraisal management
company may file with the department, under the same terms and
conditions as when a bond is filed, a deposit in cash or
negotiable securities acceptable to the department.
  (4) The surety bond, letter of credit or deposit required by
this section must be continuously on file with the department in
the amount of $25,000 and is for the exclusive purpose of payment
of the obligations listed in subsection (2) of this section. Upon
termination or cancellation of the bond, withdrawal of the
deposit or reduction of the bond, letter of credit or deposit to
less than $25,000, a registered appraisal management company
shall:
  (a) File a replacement bond, letter of credit or deposit within
the time period established by the department by rule; or
  (b) Surrender the company's registration to the department and
cease operating as an appraisal management company.
  (5) Any person damaged by an appraisal management company's
failure to pay an obligation listed in subsection (2) of this
section has a right of action under the bond. An action under the
bond must be commenced within one year after the appraisal
management company fails to pay the amount owing or the amount
adjudged against the appraisal management company. + }

Enrolled House Bill 3624 (HB 3624-B)                       Page 3

  SECTION 4.  { + (1) The Department of Consumer and Business
Services shall adopt rules establishing a procedure for auditing
an appraisal management company registered under section 2 of
this 2010 Act to examine the appraisal management company's
compliance with sections 1 to 8 of this 2010 Act.
  (2) The department shall audit each appraisal management
company registered under section 2 of this 2010 Act at least
every two years.
  (3) The department shall issue written findings on the results
of the audit.
  (4) If an appraisal management company fails an audit, the
department may impose a civil penalty under section 9 of this
2010 Act. + }
  SECTION 5.  { + (1) An appraisal management company or an
employee, controlling person or agent of an appraisal management
company may not:
  (a) Attempt to influence the development, reporting or review
of an appraisal or appraisal review assignment through coercion,
extortion, collusion, compensation, instruction, inducement,
intimidation, bribery or any other manner, including but not
limited to:
  (A) Withholding or threatening to withhold timely payment for
an appraisal;
  (B) Withholding or threatening to withhold future business for
an independent contractor appraiser;
  (C) Expressly or impliedly promising future business,
promotions or increased compensation for an appraiser;
  (D) Conditioning the request for real estate appraisal activity
or any payment on the opinion, conclusion or valuation to be
reached, or on a preliminary estimate or opinion requested from
an appraiser;
  (E) Requesting that an appraiser provide an estimated,
predetermined or desired valuation in an appraisal report, or
provide estimated values or comparable sales at any time prior to
the appraiser's completion of real estate appraisal activity;
  (F) Providing to an appraiser an anticipated, estimated,
encouraged or desired value for a subject property or a proposed
or target amount to be loaned to the borrower, except that a copy
of the sales contract for a purchase transaction may be provided;
  (G) Providing to an appraiser, or any entity or individual
related to the appraiser, stock or other financial or
nonfinancial benefits;
  (H) Allowing the removal of an appraiser from an appraiser
panel without prior written notice to the appraiser;
  (I) Obtaining, using or paying for a second or subsequent
appraisal or ordering an automated valuation model in connection
with a mortgage financing transaction unless there is a
reasonable basis to believe that the initial appraisal was flawed
or tainted and such basis is clearly and appropriately noted in
the loan file, or unless such appraisal or automated valuation
model is done pursuant to an appraisal review or quality control
process that is completed by an appraiser before or after a loan
is funded; or
  (J) Any other act or practice that impairs or attempts to
impair an appraiser's independence, objectivity or impartiality.
  (b) Substantively alter in any way a completed appraisal report
submitted by an appraiser.
  (2) This section does not prohibit an appraisal management
company from requesting, on behalf of a financial institution at
the request of a consumer, that an appraiser:

Enrolled House Bill 3624 (HB 3624-B)                       Page 4

  (a) Provide additional information about the basis for the
valuation;
  (b) Correct objective factual errors in a completed appraisal
report; or
  (c) Consider the values of other comparable properties. + }
  SECTION 6.  { + Except in the case of breach of contract or
substandard performance of real estate appraisal activity, an
appraisal management company shall make payment to an independent
contractor appraiser for the completion of an appraisal or
appraisal review assignment within 60 days after the appraiser
provides the completed appraisal report to the appraisal
management company. + }
  SECTION 7.  { + The Department of Consumer and Business
Services shall adopt rules requiring an appraisal management
company to establish a dispute resolution process that allows a
person with an interest in a real estate transaction for which an
appraisal was arranged by the appraisal management company to
dispute the appraisal. + }
  SECTION 8.  { + (1) The Department of Consumer and Business
Services may suspend or revoke an appraisal management company
registration for a violation of sections 1 to 8 of this 2010 Act
or of rules adopted by the department.
  (2) The revocation, lapsing or suspension of an appraisal
management company registration does not deprive the department
of jurisdiction to proceed with any investigation of or any
action or disciplinary proceedings against the appraisal
management company, or to revise or render null and void an order
suspending or revoking the registration. + }
  SECTION 9.  { + (1) In accordance with ORS chapter 183, the
Department of Consumer and Business Services may impose a civil
penalty not to exceed $15,000 on a person who violates a
provision of sections 1 to 8 of this 2010 Act.
  (2) The civil penalty under this section is in addition to and
not in lieu of any other penalty or sanction provided by law. + }
  SECTION 10. ORS 705.141 is amended to read:
  705.141. For the purpose of requesting a state or nationwide
criminal records check under ORS 181.534, the Department of
Consumer and Business Services may require the fingerprints of a
person who is applying for a license  { + or registration + }, or
renewal of a license  { + or registration + }, under ORS 744.001,
744.059 or 744.326  { + or section 2 of this 2010 Act + } or a
person who:
  (1)(a) Is employed or applying for employment by the
department; or
  (b) Provides services or seeks to provide services to the
department as a contractor, vendor or volunteer; and
  (2) Is, or will be, working or providing services in a
position:
  (a) In which the person is providing information technology
services and has control over, or access to, information
technology systems that would allow the person to harm the
information technology systems or the information contained in
the systems;
  (b) In which the person has access to information that state or
federal laws, rules or regulations prohibit disclosing or define
as confidential;
  (c) That has payroll functions or in which the person has
responsibility for receiving, receipting or depositing money or
negotiable instruments, for billing, collections or other
financial transactions or for purchasing or selling property or

Enrolled House Bill 3624 (HB 3624-B)                       Page 5

has access to property held in trust or to private property in
the temporary custody of the state;
  (d) That has mailroom duties as a primary duty or job function;
  (e) In which the person has responsibility for auditing the
department;
  (f) That has personnel or human resources functions as a
primary responsibility;
  (g) In which the person has access to Social Security numbers,
dates of birth or criminal background information of employees or
members of the public; or
  (h) In which the person has access to tax or financial
information about individuals or business entities.
  SECTION 11.  { + Sections 1 to 8 and 9 of this 2010 Act and the
amendments to ORS 705.141 by section 10 of this 2010 Act apply to
persons who perform appraisal management services as defined in
section 1 of this 2010 Act on or after January 1, 2011. + }
  SECTION 12.  { + (1) Sections 1 to 8 and 9 of this 2010 Act and
the amendments to ORS 705.141 by section 10 of this 2010 Act
become operative on January 1, 2011.
  (2) The Department of Consumer and Business Services may take
any action before the operative date specified in subsection (1)
of this section that is necessary to enable the department to
exercise, on and after the operative date specified in subsection
(1) of this section, all the duties, functions and powers
conferred on the department by sections 1 to 8 and 9 of this 2010
Act and the amendments to ORS 705.141 by section 10 of this 2010
Act. + }
  SECTION 13.  { + This 2010 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2010 Act takes effect on
its passage. + }
                         ----------

Passed by House February 16, 2010

Repassed by House February 23, 2010

      ...........................................................
                                             Chief Clerk of House

      ...........................................................
                                                 Speaker of House

Passed by Senate February 23, 2010

      ...........................................................
                                              President of Senate

Enrolled House Bill 3624 (HB 3624-B)                       Page 6

Received by Governor:

......M.,............., 2010

Approved:

......M.,............., 2010

      ...........................................................
                                                         Governor

Filed in Office of Secretary of State:

......M.,............., 2010

      ...........................................................
                                               Secretary of State

Enrolled House Bill 3624 (HB 3624-B)                       Page 7