Bill Text: TX HB1146 | 2011-2012 | 82nd Legislature | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to the registration and regulation of appraisal management companies; providing penalties.

Sponsorship: Partisan Bill (Republican 3)

Status: (Passed) 2011-06-17 - See remarks for effective date [HB1146 Detail]

Download: Texas-2011-HB1146-Engrossed.html

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82R18164 JAM-F
By: Kuempel, et al. H.B. No. 1146

A BILL TO BE ENTITLED
AN ACT
relating to the registration and regulation of appraisal management
companies and the composition of the Texas Appraiser Licensing and
Certification Board; providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1103.052(a), Occupations Code, is
amended to read as follows:
(a) The board consists of nine members as follows:
(1) the executive secretary of the Veterans' Land
Board or the executive secretary's designee; and
(2) eight members appointed by the governor with the
advice and consent of the senate as follows:
(A) four members who are certified or licensed
appraisers actively engaged in the practice of appraising real
property; [and]
(B) three [four] public members who qualify for
appointment based on their recognized business ability; and
(C) one member who is a controlling person of an
appraisal management company registered under Chapter 1104.
SECTION 2. Section 1103.055(a), Occupations Code, is
amended to read as follows:
(a) Appointed members of the board serve staggered two-year
terms, with the terms of two appraiser members and one or two public
members, as appropriate, expiring on January 31 of each year.
SECTION 3. Subtitle A, Title 7, Occupations Code, is
amended by adding Chapter 1104 to read as follows:
CHAPTER 1104. APPRAISAL MANAGEMENT COMPANIES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1104.001. SHORT TITLE. This chapter may be cited as
the Texas Appraisal Management Company Registration and Regulation
Act.
Sec. 1104.002. PURPOSE. The purpose of this chapter is to
establish and enforce standards related to appraisal management
services for appraisal reports on residential properties located in
this state with fewer than five units.
Sec. 1104.003. DEFINITIONS. (a) The definitions in Section
1103.003 apply to this chapter.
(b) In this chapter:
(1) "Appraisal management company" means, in
connection with valuing properties collateralizing mortgage loans
or mortgages incorporated in a securitization, an external third
party authorized either by a creditor of a consumer credit
transaction secured by a consumer's principal dwelling or by an
underwriter of or other principal in the secondary mortgage markets
that directly or indirectly performs appraisal management
services.
(2) "Appraisal management service" means to directly
or indirectly:
(A) administer an appraisal panel;
(B) recruit, retain, or select an appraiser;
(C) contract with an appraiser to perform an
appraisal assignment;
(D) provide a completed appraisal performed by an
appraiser to one or more clients; or
(E) manage the process of having an appraisal
performed, including:
(i) receiving and assigning appraisal
orders and reports;
(ii) tracking and determining the status of
orders for appraisals;
(iii) conducting quality control of a
completed appraisal before delivery of the appraisal to the person
who ordered the appraisal;
(iv) collecting fees from creditors and
underwriters for services provided; or
(v) reimbursing appraisers for services
performed.
(3) "Appraisal panel" means a pool of licensed or
certified appraisers who perform appraisals as independent
contractors for an appraisal management company.
(4) "Appraisal review" means the act or process of
developing and communicating an opinion about the quality of
another appraiser's work that was performed as part of an appraisal
assignment. The term does not include an examination of an
appraisal for grammatical, typographical, mathematical, or other
similar administrative errors that do not involve the appraiser's
professional judgment, including compliance with the elements of
the client's statement of work.
(5) "Appraiser" means a person licensed or certified
under Chapter 1103.
(6) "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 that has the
authority to enter into a contractual relationship with other
persons for the performance of appraisal management services and
the authority to enter into agreements with appraisers for the
performance of appraisals; or
(C) an individual who possesses, directly or
indirectly, the power to direct or cause the direction of the
management or policies of an appraisal management company.
(7) "Financial institution" means:
(A) a bank, savings bank, or savings and loan
association or a wholly owned subsidiary or affiliate of a bank,
savings bank, or savings and loan association;
(B) a state or federal credit union or a wholly
owned subsidiary, affiliate, or credit union service organization
of a state or federal credit union;
(C) an insurance company licensed or authorized
to do business in this state under the Insurance Code;
(D) a mortgage banker registered under Chapter
157, Finance Code;
(E) a person licensed under Chapter 156, Finance
Code;
(F) a lender licensed under Chapter 342, Finance
Code;
(G) a farm credit system institution; or
(H) a political subdivision of this state
conducting an affordable home ownership program.
(8) "Uniform Standards of Professional Appraisal
Practice" means the Uniform Standards of Professional Appraisal
Practice adopted by the Appraisal Standards Board of the Appraisal
Foundation.
Sec. 1104.004. EXEMPTIONS. (a) This chapter does not apply
to:
(1) a person who exclusively employs appraisers on an
employer and employee basis for the performance of appraisals;
(2) a person acting as an appraisal firm as defined by
board rule that at all times during a calendar year employs on an
exclusive basis as independent contractors not more than 15
appraisers for the performance of appraisals;
(3) a department or unit within a financial
institution that:
(A) is subject to appraisal independence
standards at least as stringent as those under Section 1104.203 or
the Truth in Lending Act (15 U.S.C. Section 1601 et seq.) through
direct regulation by an agency of this state or the United States
government; and
(B) receives a request for the performance of an
appraisal from one employee of the financial institution and
another employee of the same financial institution assigns the
appraisal request to an appraiser who is an independent contractor
to the institution;
(4) subject to Subsection (b), a person who enters
into an agreement with an appraiser for the performance of an
appraisal that on completion results in a report signed by both the
appraiser who completed the appraisal and the appraiser who
requested completion of the appraisal;
(5) an appraisal management company with an appraisal
panel of not more than 15 appraisers at all times during a calendar
year; or
(6) an appraisal management company that is a
subsidiary owned and controlled by a financial institution that is
subject to appraisal independence standards at least as stringent
as those under Section 1104.203 or the Truth in Lending Act (15
U.S.C. Section 1601 et seq.) through direct regulation by a federal
financial institution regulatory agency.
(b) An appraisal management company may not require an
employee of the appraisal management company who is an appraiser to
sign an appraisal that is completed by another appraiser who
contracts with the appraisal management company in order to avoid
the requirements of this chapter.
[Sections 1104.005-1104.050 reserved for expansion]
SUBCHAPTER B. BOARD POWERS AND DUTIES
Sec. 1104.051. RULES. The board may adopt rules necessary
to administer this chapter.
Sec. 1104.052. FEES. (a) Subject to Subsection (b), the
board by rule shall establish application, renewal, and other fees
in amounts so that the sum of the fees paid by all appraisal
management companies seeking registration under this chapter are
sufficient for the administration of this chapter.
(b) The board shall collect annually from each appraisal
management company registered under this chapter the amount
determined by the appraisal subcommittee to be a national registry
fee for each person who is on the appraisal panel of the company and
licensed or certified as an appraiser in this state. The board shall
deposit the registry fees to the credit of the appraiser registry
account in the general revenue fund.
(c) The fees collected under Subsection (b) shall be sent to
the appraisal subcommittee regularly as required by federal law.
[Sections 1104.053-1104.100 reserved for expansion]
SUBCHAPTER C. REGISTRATION REQUIREMENTS
Sec. 1104.101. REGISTRATION REQUIRED. Unless a person is
registered under this chapter, a person may not:
(1) act or attempt to act as an appraisal management
company;
(2) provide or attempt to provide appraisal management
services; or
(3) advertise or represent or attempt to advertise or
represent the person as an appraisal management company.
Sec. 1104.102. ELIGIBILITY FOR REGISTRATION; OWNERSHIP.
(a) An appraisal management company applying for registration
under this chapter may not be directly or indirectly owned, wholly
or partly, by:
(1) a person who has had a license or certificate to
act as an appraiser denied, revoked, or surrendered in lieu of
revocation in any state; or
(2) another entity more than 10 percent of which is
owned by any person who has had a license or certificate to act as an
appraiser denied, revoked, or surrendered in lieu of revocation in
any state.
(b) A person owning more than 10 percent of an appraisal
management company in this state must:
(1) be of good moral character, as determined by the
board; and
(2) submit to a background investigation, as
determined by the board.
(c) An appraisal management company applying for
registration under this chapter shall certify to the board that:
(1) it has reviewed each entity that owns more than 10
percent of the company; and
(2) no entity reviewed under Subdivision (1) is more
than 10 percent owned by a person who has had a license or
certificate to act as an appraiser denied, revoked, or surrendered
in lieu of revocation.
Sec. 1104.103. APPLICATION FOR REGISTRATION OR RENEWAL.
(a) An applicant for registration or registration renewal under
this chapter must submit:
(1) an application on a form prescribed and provided
by the board; and
(2) the application or renewal fee established under
Section 1104.052(a).
(b) The application must contain:
(1) the name, business address, and telephone contact
information of the entity seeking registration;
(2) if the entity is not a corporation domiciled in
this state, the name and contact information for the company's
agent for service of process in this state;
(3) the name, address, and contact information for any
individual or any corporation, partnership, or other business
entity that owns more than 10 percent of the appraisal management
company;
(4) the name, address, and contact information for at
least one controlling person;
(5) the designation of a primary contact under Section
1104.104;
(6) the name and contact information of at least one
appraiser designated by the company to respond to and communicate
with appraisers on the company's appraisal panel regarding
appraisal assignments;
(7) a certification that the entity has a system in
place to ensure compliance with Subchapter D;
(8) a written irrevocable consent to service of
process; and
(9) any other information required by the board.
(c) The board shall adopt rules regarding the renewal of a
registration under this chapter.
Sec. 1104.104. DESIGNATION OF PRIMARY CONTACT. (a) An
appraisal management company applying for registration under this
chapter shall designate one controlling person as the primary
contact for all communication between the board and the company.
(b) The controlling person designated under Subsection (a):
(1) must be certified as an appraiser in at least one
state at all times during the designation;
(2) must have completed the 15-hour national Uniform
Standards of Professional Appraisal Practice course;
(3) must complete the seven-hour national Uniform
Standards of Professional Appraisal Practice course every two
years;
(4) may not have had a license or certificate to act as
an appraiser denied, revoked, or surrendered in lieu of revocation
in any state;
(5) must be of good moral character, as determined by
the board; and
(6) shall submit to a background investigation, as
determined by the board.
Sec. 1104.105. DENIAL OF REGISTRATION. (a) The board may
deny a registration:
(1) to an applicant who fails to satisfy a requirement
of this chapter; or
(2) on a determination by the board that:
(A) there is probable cause to believe that any
person who owns more than 10 percent of the appraisal management
company or any controlling person of the company has, within the 12
months preceding the date of the application, violated a provision
of this chapter to which a registrant would be subject;
(B) the applicant has, while registered under
this chapter, demonstrated incompetency, untrustworthiness, or
conduct or practices that render the registrant unfit to perform
appraisal management services; or
(C) the applicant no longer performs appraisal
management services in good faith and is a source of detriment,
injury, or loss to the public.
(b) The board shall immediately provide written notice to
the applicant of the board's denial of a registration under this
chapter.
(c) An appeal of the denial of a registration is governed by
Chapter 2001, Government Code.
Sec. 1104.106. ISSUANCE AND PUBLICATION OF REGISTRATION
NUMBER. The board shall:
(1) issue a unique registration number to each
appraisal management company registered under this chapter; and
(2) publish annually a list of the companies
registered under this chapter and the registration number of each
company.
Sec. 1104.107. EXPIRATION OF REGISTRATION. Unless renewed,
a registration issued under this chapter expires on the second
anniversary of the date the registration is issued.
[Sections 1104.108-1104.150 reserved for expansion]
SUBCHAPTER D. PRACTICE BY APPRAISAL MANAGEMENT COMPANY
Sec. 1104.151. EMPLOYMENT OF CERTAIN PERSONS PROHIBITED.
(a) An appraisal management company registered under this chapter
may not knowingly:
(1) employ a person in a position in which the person
has the responsibility to order appraisals or to review completed
appraisals if the person has had a license or certificate to act as
an appraiser denied, revoked, or surrendered in lieu of revocation
in any state;
(2) enter into any independent contractor arrangement
with any person who has had a license or certificate to act as an
appraiser denied, revoked, or surrendered in lieu of revocation in
any state; or
(3) enter into any contract, agreement, or other
business relationship with any entity that employs, has entered
into an independent contract arrangement, or has entered into any
contract, agreement, or other business relationship with any person
who has ever had a license or certificate to act as an appraiser
denied, revoked, or surrendered in lieu of revocation in any state.
(b) An appraisal management company is not in violation of
Subsection (a) if the person whose license or certification was
denied, revoked, or surrendered in lieu of revocation has since
that denial, revocation, or surrender had a license or certificate
granted or reinstated and the person maintains the license or
certificate in good standing.
Sec. 1104.152. VERIFICATION OF LICENSURE OR CERTIFICATION.
An appraisal management company registered under this chapter must
verify that an individual to whom the company is making an
assignment for the completion of an appraisal:
(1) is licensed or certified under Chapter 1103; and
(2) has not had a license or certificate as an
appraiser denied, revoked, or surrendered in lieu of revocation
since the last time the company made an assignment for an appraisal
to the appraiser.
Sec. 1104.153. APPRAISAL REVIEW. A person who performs an
appraisal review for an appraisal management company must be
licensed or certified under Chapter 1103 with at least the same
certification for the property type as the appraiser who completed
the report being reviewed.
Sec. 1104.154. COMPETENCY OF APPRAISERS. Before making an
assignment to an appraiser, an appraisal management company must
verify that the appraiser receiving the assignment satisfies each
provision of the competency rule of the Uniform Standards of
Professional Appraisal Practice for the appraisal being assigned.
Sec. 1104.155. PROFESSIONAL STANDARDS. An appraisal
management company registered under this chapter shall on a
periodic basis perform an appraisal review of the work of
appraisers performing appraisal services for the company to ensure
that the services comply with:
(1) the edition of the Uniform Standards of
Professional Appraisal Practice in effect at the time of the
appraisal; or
(2) other standards prescribed by board rule.
Sec. 1104.156. BUSINESS RECORDS. (a) An appraisal
management company registered under this chapter or that has
applied for registration under this chapter shall retain for at
least five years all business records relating to each service
request that the company receives and the appraiser who performs
the appraisal for the company.
(b) The board may audit the records of an appraisal
management company registered under this chapter to ensure
compliance with this chapter, board rules, and the Uniform
Standards of Professional Appraisal Practice.
(c) A written record of all substantive communications
between an appraisal management company registered under this
chapter and an appraiser relating to inclusion on an appraisal
panel or to an appraisal assignment must be maintained as provided
under Subsection (a).
Sec. 1104.157. COMPENSATION OF APPRAISERS. (a) An
appraisal management company shall:
(1) except in cases of breach of contract or
substandard performance of services, pay an appraiser for the
completion of an appraisal or valuation assignment not later than
the 60th day after the date the appraiser provides the completed
appraisal or valuation assignment to the company or its assignee;
and
(2) compensate appraisers at a rate that is reasonable
and customary for appraisals being performed in the market area of
the property being appraised without the services of an appraisal
management company.
(b) An appraiser who is aggrieved under this section may
file a complaint with the board against the appraisal management
company if the matter remains unresolved after the appraiser
completes the company's dispute resolution process under Section
1104.162.
Sec. 1104.158. STATEMENT OF FEES. (a) In reports to the
board, to a client, or for inclusion in a settlement statement, an
appraisal management company shall separately state the fees:
(1) paid to an appraiser for the completion of an
appraisal; and
(2) charged by the company for appraisal management
services.
(b) An appraisal management company may not:
(1) prohibit an appraiser from recording in the report
that is submitted by the appraiser to the company the fee that the
appraiser was paid by the company for the performance of the
appraisal; or
(2) include any fees for appraisal management services
performed by the company in the amount the company reports as
charges for the actual completion of an appraisal by an appraiser.
Sec. 1104.159. ADVERTISING. An appraisal management
company registered under this chapter shall disclose the company's
registration number on all print and electronic advertising,
including any electronic advertising or communication conducted on
the Internet.
Sec. 1104.160. MANDATORY REPORTING. An appraisal
management company that has a reasonable basis to believe an
appraiser is failing to comply with the Uniform Standards of
Professional Appraisal Practice in a manner that materially affects
a value conclusion, violating applicable laws, or otherwise
engaging in unethical or unprofessional conduct shall refer the
matter to the board.
Sec. 1104.161. REMOVAL OF APPRAISER FROM APPRAISAL PANEL.
(a) Other than during the first 30 days after the date an appraiser
is first added to the appraisal panel of an appraisal management
company, a company may not remove an appraiser from its panel, or
otherwise refuse to assign requests for appraisal services to an
appraiser without:
(1) notifying the appraiser in writing of the reasons
for removal from the company's panel;
(2) if the appraiser is being removed from the panel
for illegal conduct, a violation of the Uniform Standards of
Professional Appraisal Practice, or a violation of this chapter,
notifying the appraiser of the nature of the alleged conduct or
violation; and
(3) providing an opportunity for the appraiser to
respond in writing to the notification.
(b) An appraiser who is removed from the appraisal panel of
an appraisal management company for alleged illegal conduct, a
violation of the Uniform Standards of Professional Appraisal
Practice, or a violation of this chapter, may file a complaint with
the board for a review of the decision of the company if the matter
remains unresolved after the appraiser completes the company's
dispute resolution process under Section 1104.162.
(c) In a review under Subsection (b), the board may not make
any determination regarding the nature of the business relationship
between the appraiser and the appraisal management company that is
unrelated to the grounds for the removal.
(d) The board shall hear and resolve a complaint filed under
Subsection (b) not later than the 180th day after the date the
complaint is filed with the board.
(e) If after opportunity for hearing and review, the board
determines that an appraiser did not commit the alleged violation,
the board shall order that the appraiser be returned to the
appraisal panel of the appraisal management company. The appraisal
management company may not refuse to make assignments for appraisal
services or otherwise penalize the appraiser after returning the
appraiser to the company's appraisal panel.
(f) The board may enter an order requiring the appraiser to
reimburse the appraisal management company for the actual cost of a
third-party dispute resolution process if after opportunity for
hearing and review the board determines that the appraiser
committed the alleged violation.
Sec. 1104.162. MANDATORY DISPUTE RESOLUTION. (a) An
appraisal management company shall make an internal independent or
external third-party dispute resolution process available on
written request of an appraiser who:
(1) is dismissed from the company's appraisal panel
for a reason stated in Section 1104.161(b);
(2) is aggrieved under Section 1104.157; or
(3) alleges a violation of one or more prohibitions
contained in Section 1104.203.
(b) Except as provided by Section 1104.161(f), an appraisal
management company may not charge an appraiser for using the
dispute resolution process under this section.
(c) The board by rule may establish requirements for an
appraisal management company's dispute resolution process.
[Sections 1104.163-1104.200 reserved for expansion]
SUBCHAPTER E. DISCIPLINARY ACTIONS AND PROCEDURES AND
ADMINISTRATIVE PENALTIES
Sec. 1104.201. DISCIPLINARY POWERS OF BOARD. (a) The board
may reprimand an appraisal management company or conditionally or
unconditionally suspend or revoke any registration issued under
this chapter if the board determines that the appraisal management
company has:
(1) violated or attempted to violate this chapter or
any rule adopted by the board under this chapter; or
(2) procured or attempted to procure a license or
registration by fraud, misrepresentation, or deceit.
(b) The board may probate the suspension or revocation of a
registration under reasonable terms determined by the board.
Sec. 1104.202. ADMINISTRATIVE PENALTY. (a) In addition to
any other disciplinary action under this chapter, the board may
impose an administrative penalty against a person who violates this
chapter or a rule adopted under this chapter.
(b) The amount of the administrative penalty may not exceed
$10,000 for each violation. Each day of a continuing violation is a
separate violation.
(c) The amount of the penalty shall be based on:
(1) the seriousness of the violation;
(2) the history of previous violations;
(3) the amount necessary to deter a future violation;
(4) efforts made to correct the violation; and
(5) any other matter that justice may require.
Sec. 1104.203. PROHIBITED PRACTICES. (a) An appraisal
management company or an employee, director, officer, or agent of
an appraisal management company may not:
(1) cause or attempt to cause the appraised value of a
property assigned under an appraisal to be based on any factor other
than the independent judgment of the appraiser;
(2) cause or attempt to cause the mischaracterization
of the appraised value of a property in conjunction with a consumer
credit transaction;
(3) seek to influence an appraiser or otherwise to
encourage a targeted value in order to facilitate the making or
pricing of a consumer credit transaction;
(4) alter, modify, or otherwise change a completed
appraisal report submitted by an appraiser by:
(A) altering or removing the appraiser's
signature or seal; or
(B) adding information to, removing information
from, or changing information contained in the appraisal report,
including any disclosure submitted by an appraiser in or with the
report;
(5) condition the request for an appraisal or the
payment of an appraisal fee, salary, or bonus on the opinion,
conclusion, or valuation to be reached, or on a preliminary
estimate or opinion requested from an appraiser;
(6) request that an appraiser provide an estimated,
predetermined, or desired valuation in an appraisal report, or
provide estimated values or comparable sales at any time before the
appraiser's completion of an appraisal;
(7) provide 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;
(8) make any part of the appraiser's fee or the
appraisal management company's fee contingent on a favorable
outcome, including:
(A) a loan closing; or
(B) a specific valuation being achieved by the
appraiser in the appraisal report;
(9) withhold or threaten to withhold timely payment
for an appraisal report or appraisal services rendered when the
appraisal report or services are provided in accordance with the
contract between the parties;
(10) withhold or threaten to withhold future business
from an appraiser;
(11) demote or terminate or threaten to demote or
terminate an appraiser;
(12) expressly or impliedly promise future business,
promotions, or increased compensation for an appraiser;
(13) provide to an appraiser, or any person related to
the appraiser, stock or other financial or nonfinancial benefits;
(14) allow the removal of an appraiser from an
appraisal panel, without prior written notice to the appraiser;
(15) obtain, use, or pay for a second or subsequent
appraisal or order an automated valuation model in connection with
a mortgage financing transaction unless:
(A) there is a reasonable basis to believe that
the initial appraisal was flawed or tainted and that basis is
clearly and appropriately noted in the loan file;
(B) the subsequent appraisal or automated
valuation model is done under a bona fide pre-funding or
post-funding appraisal review or quality control process; or
(C) the subsequent appraisal or automated
valuation model is otherwise required or permitted by federal or
state law;
(16) prohibit or inhibit communication between the
appraiser and:
(A) the lender;
(B) a real estate license holder;
(C) an appraiser designated by the company to
respond to appraisers regarding appraisal assignments; or
(D) any other person from whom the appraiser, in
the appraiser's own professional judgment, believes information
would be relevant;
(17) refuse to accept an appraisal report prepared by
more than one appraiser if an appraiser provides substantial
assistance to another appraiser in the preparation of the report,
unless the appraisal assignment names an individual appraiser or
the statement of work requires an unassisted report; or
(18) require an appraiser to:
(A) prepare an appraisal report if the appraiser,
in the appraiser's own professional judgment, believes the
appraiser does not have the necessary expertise for the specific
geographic area;
(B) prepare an appraisal report under a schedule
that the appraiser, in the appraiser's own professional judgment,
believes does not afford the appraiser the ability to meet all the
relevant legal and professional obligations;
(C) provide the appraisal management company
with the appraiser's digital signature or seal;
(D) modify any aspect of an appraisal report
without the appraiser's agreement that the modification is
appropriate;
(E) engage in any act or practice that does not
comply with:
(i) the Uniform Standards of Professional
Appraisal Practice; or
(ii) any assignment conditions and
certifications required by the client;
(F) engage in any other act or practice that
impairs or attempts to impair an appraiser's independence,
objectivity, or impartiality;
(G) enter into an agreement to not serve on the
panel of another appraisal management company;
(H) indemnify or hold harmless the appraisal
management company against liability except liability for errors
and omissions by the appraiser; or
(I) pay a fee imposed on the appraisal management
company under Section 1104.052.
(b) Subsection (a) may not be construed as prohibiting:
(1) an appraiser from reimbursing an appraisal
management company for the actual cost of discretionary services
provided to the appraiser;
(2) an appraiser from voluntarily providing the
appraiser's digital signature to another person;
(3) an appraisal management company from asking an
appraiser, after a report is delivered, to:
(A) consider additional appropriate property
information, including the consideration of additional comparable
properties to make or support an appraisal;
(B) provide further detail, substantiation, or
explanation for the appraiser's value conclusion; or
(C) correct errors in the appraisal report; or
(4) an appraisal management company from requiring an
appraiser to provide advance notice of and an opportunity for the
appraisal management company to participate in any communications
between the appraiser and a lender.
(c) The board may institute a disciplinary action or impose
an administrative penalty under Chapter 1103 against an appraiser
who, while acting as an employee, officer, or agent of an appraisal
management company, engages in conduct prohibited by Subsection
(a).
Sec. 1104.204. COMPLAINT. (a) Any person, including a
member of the board, may file with the board a written complaint on
a form prescribed by the board.
(b) The board, on its own motion, may file a complaint
against an appraisal management company registered under this
chapter.
Sec. 1104.205. REVIEW AND INVESTIGATION. (a) On receipt
of a complaint or on its own motion, the board shall review and
investigate an alleged act or omission that the board believes is a
ground for disciplinary action.
(b) An investigator designated by the presiding officer of
the board shall investigate each allegation in a complaint to
determine whether probable cause exists for a hearing on the
complaint.
(c) If the board determines that a complaint does not
present facts that are grounds for disciplinary action, the board
or the commissioner shall dismiss the complaint and may not take
further action.
Sec. 1104.206. GENERAL SUBPOENA AUTHORITY. (a) The board
may request and, if necessary, compel by subpoena:
(1) the attendance of witnesses for examination under
oath; and
(2) the production of records, documents, and other
evidence relevant to the investigation of an alleged violation of
this chapter for inspection and copying.
(b) The board may also issue a subpoena for purposes of an
investigation of a complaint to determine whether the board should
institute a contested case proceeding.
(c) If a person does not comply with a subpoena, the board,
acting through the attorney general, may file suit to enforce the
subpoena in a district court in Travis County or in the county in
which a hearing conducted by the board may be held.
(d) The court shall order compliance with the subpoena if
the court finds that good cause exists for the issuance of the
subpoena.
Sec. 1104.207. REPORT OF INVESTIGATION REQUIRED. (a) At
the conclusion of the investigation of a complaint, the
investigator shall submit to the board a written report to enable
the board to determine what further action is necessary.
(b) The report must contain:
(1) statements of fact;
(2) the recommendations of the investigator; and
(3) the position or defense of the investigated
appraisal management company.
Sec. 1104.208. ACTION BASED ON REPORT. (a) Based on the
report submitted under Section 1104.207, the board may:
(1) order further investigation of the complaint;
(2) determine that there is not probable cause to
believe that a violation occurred and dismiss the case; or
(3) determine that there is probable cause to believe
that a violation occurred and enter into an agreed order with the
respondent or proceed as the complainant with a contested case
hearing under Chapter 2001, Government Code.
(b) The board by rule may delegate any of its authority
under Subsection (a) to the commissioner.
Sec. 1104.209. NOTICE OF VIOLATION AND PENALTY. (a) If,
after investigating a possible violation and the facts surrounding
that possible violation, the board determines that a violation
occurred, the board shall give written notice of the violation to
the person alleged to have committed the violation.
(b) The notice must:
(1) include a summary of the alleged violation;
(2) state the recommended sanction, including the
amount of the proposed administrative penalty; and
(3) inform the person of the person's right to a
hearing on the occurrence of the violation, the amount of the
penalty, or both.
(c) Not later than the 20th day after the date the person
receives the notice, the person may:
(1) accept the board's determination, including the
proposed administrative penalty; or
(2) make a written request for a hearing on that
determination.
Sec. 1104.210. PENALTY TO BE PAID OR HEARING REQUESTED. If
the person accepts the board's determination or fails to respond to
the notice in a timely manner, the board by order shall approve the
determination and impose the proposed penalty.
Sec. 1104.211. TEMPORARY SUSPENSION. (a) The presiding
officer of the board shall appoint a three-member disciplinary
panel consisting of board members to determine whether a person's
registration under this chapter should be temporarily suspended.
(b) If the disciplinary panel determines from the
information presented to the panel that a person registered under
this chapter would, by the person's continuation in practice,
constitute a continuing threat to the public welfare, the
disciplinary panel shall temporarily suspend the person's
registration.
(c) A registration may be suspended under this section
without notice or hearing on the complaint if:
(1) institution of proceedings for a contested case
hearing is initiated simultaneously with the temporary suspension;
and
(2) a hearing is held under Chapter 2001, Government
Code, and this chapter as soon as possible.
(d) A temporary suspension under this section automatically
expires after 45 days if the board has not scheduled a hearing to
take place within that time or if, at the board's request, the
hearing is continued beyond the 45th day.
(e) Notwithstanding Chapter 551, Government Code, the
disciplinary panel may hold a meeting by telephone conference call
if immediate action is required and convening the panel at one
location is inconvenient for any member of the panel.
Sec. 1104.212. NOTICE OF HEARING. Not later than the 30th
day before the hearing date of a contested case involving an
appraisal management company, the board shall personally deliver or
send by certified mail to the company notice of the hearing.
Sec. 1104.213. APPLICABILITY OF ADMINISTRATIVE PROCEDURE
LAW. Except as otherwise provided by this chapter, a proceeding
under this subchapter is subject to Chapter 2001, Government Code.
Sec. 1104.214. ACTION AFTER HEARING. On conclusion of a
contested case hearing under this subchapter, the administrative
law judge shall:
(1) make findings of fact and conclusions of law; and
(2) issue to the board a proposal for decision that the
board shall take one or more of the following actions:
(A) dismiss the charges;
(B) revoke the appraisal management company's
registration;
(C) suspend the registration of the appraisal
management company for a period of not more than five years;
(D) impose a period of probation, with or without
conditions;
(E) issue a public or private reprimand or a
warning;
(F) impose an administrative penalty; or
(G) require the payment of costs expended by the
board associated with the contested case, including legal fees and
administrative costs.
Sec. 1104.215. DECISION BY BOARD. (a) Based on the
findings of fact and conclusions of law and the recommendations of
the hearings examiner, the board by order may determine that:
(1) a violation has occurred and may impose an
administrative penalty or another sanction; or
(2) a violation did not occur.
(b) The board shall give notice of the order to the person.
The notice must include:
(1) separate statements of the findings of fact and
conclusions of law;
(2) the amount of any penalty imposed or a description
of any sanction imposed; and
(3) a statement of the right of the person to judicial
review of the order.
Sec. 1104.216. APPLICATION FOR REHEARING. (a) Not later
than the 20th day after the date a final decision is issued in a
contested case, a party may file an application with the board for a
rehearing. The application must state:
(1) the specific grounds for rehearing; and
(2) the relief sought.
(b) The application is denied if the board does not grant it
before the 20th day after the date the commissioner is served with
the application.
Sec. 1104.217. DECISION ON REHEARING. (a) The decision
made at the conclusion of the original contested case hearing may
not be reversed or modified for a procedural, evidentiary, or other
error that did not cause substantial injustice to the parties.
(b) The decision made on a rehearing may incorporate by
reference any part of the decision made at the conclusion of the
original hearing.
(c) On rehearing, the administrative law judge shall
consider facts not presented in the original hearing if:
(1) the facts arose after the original hearing was
concluded;
(2) the party offering the evidence could not
reasonably have provided the evidence at the original hearing; or
(3) the party offering the evidence was misled by a
party regarding the necessity for offering the evidence at the
original hearing.
[Sections 1104.218-1104.250 reserved for expansion]
SUBCHAPTER F. OTHER ENFORCEMENT PROVISIONS
Sec. 1104.251. INJUNCTION. (a) The board may institute an
action in its own name against any person, including a person who is
not registered under this chapter, to enjoin a violation of this
chapter or a rule adopted by the board under this chapter.
(b) An action under this section must be brought in a
district court in Travis County. The attorney general shall act as
legal advisor to the board and provide necessary legal assistance.
Sec. 1104.252. CIVIL PENALTY FOR ENGAGING IN ACTIVITY
WITHOUT REQUIRED REGISTRATION. (a) A person who receives
consideration for engaging in an activity for which registration is
required under this chapter and who is not registered is liable for
a civil penalty.
(b) The amount of a civil penalty imposed under this section
may not be less than the amount of money equal to the value of the
consideration received or more than three times the amount of money
equal to the value of the consideration received.
(c) At the request of the board, the attorney general or a
district or county attorney may bring an action in district court to
recover a civil penalty under this section.
(d) A civil penalty recovered in an action under this
section shall be deposited in the state treasury.
Sec. 1104.253. CRIMINAL PENALTY FOR ENGAGING IN ACTIVITY
WITHOUT REQUIRED REGISTRATION. (a) A person commits an offense if
the person engages in an activity for which registration is
required under this chapter without being registered.
(b) An offense under this section is a Class A misdemeanor.
SECTION 4. Not later than January 1, 2012, the Texas
Appraiser Licensing and Certification Board shall adopt all rules,
fees, and forms as required by Chapter 1104, Occupations Code, as
added by this Act.
SECTION 5. (a) Except as provided by Subsections (b) and
(c) of this section, this Act takes effect September 1, 2011.
(b) Sections 1103.052(a) and 1103.055(a), Occupations Code,
as amended by this Act, take effect January 31, 2012.
(c) Section 1104.101 and Subchapters E and F, Chapter 1104,
Occupations Code, as added by this Act, take effect March 1, 2012.