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CSSB 155(FIN): "An Act relating to the registration and regulation of real estate appraisal management companies; relating to the establishment of fees by the Department of Commerce, Community, and Economic Development; relating to the Board of Certified Real Estate Appraisers; relating to real estate appraisers; and providing for an effective date."

00                       CS FOR SENATE BILL NO. 155(FIN)                                                                   
01 "An Act relating to the registration and regulation of real estate appraisal management                                 
02 companies; relating to the establishment of fees by the Department of Commerce,                                         
03 Community, and Economic Development; relating to the Board of Certified Real Estate                                     
04 Appraisers; relating to real estate appraisers; and providing for an effective date."                                   
05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
06    * Section 1. AS 08.01.065(c) is amended to read:                                                                   
07 (c)  Except as provided in (f) - (j) [(f) - (i)] of this section, the department shall                              
08 establish fee levels under (a) of this section so that the total amount of fees collected                               
09 for an occupation approximately equals the actual regulatory costs for the occupation.                                  
10 The department shall annually review each fee level to determine whether the                                            
11 regulatory costs of each occupation are approximately equal to fee collections related                                  
12 to that occupation. If the review indicates that an occupation's fee collections and                                    
13 regulatory costs are not approximately equal, the department shall calculate fee                                        
14 adjustments and adopt regulations under (a) of this section to implement the                                            
01 adjustments. In January of each year, the department shall report on all fee levels and                                 
02 revisions for the previous year under this subsection to the office of management and                                   
03 budget. If a board regulates an occupation covered by this chapter, the department                                      
04 shall consider the board's recommendations concerning the occupation's fee levels and                                   
05 regulatory costs before revising fee schedules to comply with this subsection. In this                                  
06 subsection, "regulatory costs" means costs of the department that are attributable to                                   
07       regulation of an occupation plus                                                                                  
08 (1)  all expenses of the board that regulates the occupation if the board                                               
09       regulates only one occupation;                                                                                    
10 (2)  the expenses of a board that are attributable to the occupation if the                                             
11       board regulates more than one occupation.                                                                         
12    * Sec. 2. AS 08.01.065 is amended by adding a new subsection to read:                                              
13 (j)  The department shall establish for real estate appraisal management                                                
14 companies registered under AS 08.87 a registry fee in an amount that equals the                                         
15 amount determined by the federal Appraisal Subcommittee established under 12                                            
16 U.S.C. 3310 as a national registry fee for each real estate appraiser of the appraiser                                  
17 panel of a real estate appraisal management company under 12 U.S.C. 3338 (Title XI,                                     
18 Financial Institutions Reform, Recovery, and Enforcement Act of 1989), as amended                                       
19 by 12 U.S.C. 5301 - 5641 (Dodd-Frank Wall Street Reform and Consumer Protection                                         
20 Act); the department may annually remit fees paid under this subsection to the                                          
21 Appraisal Subcommittee for participation in the national registry for real estate                                       
22       appraisal management companies.                                                                                   
23    * Sec. 3. AS 08.87.020 is amended to read:                                                                         
24 Sec. 08.87.020. Powers and duties of board. In addition to the powers and                                             
25       duties conferred on the board by AS 08.01, the board shall                                                        
26 (1)  establish the examination specifications for certification as a                                                    
27 general real estate appraiser, as a residential real estate appraiser, and as an                                        
28       institutional real estate appraiser;                                                                              
29 (2)  adopt rules of professional conduct to establish and maintain a high                                               
30       standard of integrity in the real estate appraisal profession; [AND]                                              
31 (3)  adopt regulations necessary to carry out the purposes of this                                                      
01       chapter, including regulations                                                                                    
02                      (A)  necessary to comply with the requirements of                                              
03 (i)  12 U.S.C. 3331 - 3355 [12 U.S.C. 3331 - 3351]                                                                  
04 (Title XI, Financial Institutions Reform, Recovery, and Enforcement                                                     
05 Act of 1989), as amended by 12 U.S.C. 5301 - 5641 (Dodd-Frank Wall                                                      
06 Street Reform and Consumer Protection Act); the regulations adopted                                                     
07 by the board under AS 08.87.110, 08.87.120, 08.87.135, 08.87.220, and                                               
08 08.87.310 may not be more stringent than the corresponding minimum                                                      
09 requirements for receiving approval of the state's program of                                                           
10 certification of real estate appraisers and registration of real estate                                             
11 appraisal management companies under 12 U.S.C. 3331 - 3355 [12                                                  
12                 U.S.C. 3331 - 3351] or other federal law; and                                                       
13                           (ii)  15 U.S.C. 1639e (Truth in Lending Act);                                             
14 (B)  establishing registration procedures and standards for a                                                       
15            real estate appraisal management company; and                                                            
16 (C)  establishing the standards for the real estate appraisal                                                       
17 management company's appraiser panel, including panel size and                                                      
18            member qualifications;                                                                                   
19 (4)  report relevant information regarding a real estate appraisal                                                  
20 management company's operations, including a disciplinary action under this                                         
21 chapter or a violation of state or federal law, to the Appraisal Subcommittee                                       
22       established under 12 U.S.C. 3310.                                                                             
23    * Sec. 4. AS 08.87.020 is amended by adding a new subsection to read:                                              
24            (b)  The board may                                                                                           
25 (1)  examine the records of a real estate appraisal management                                                          
26       company operating in the state;                                                                                   
27 (2)  require a real estate appraisal management company to submit                                                       
28       reports, information, and documents to the board;                                                                 
29                 (3)  investigate alleged violations of this chapter.                                                    
30    * Sec. 5. AS 08.87 is amended by adding new sections to read:                                                      
31             Article 2A. Real Estate Appraisal Management Companies.                                                   
01            Sec. 08.87.130. Registration required. (a) A person shall register as a real                               
02       estate appraisal management company with the board to perform appraisal                                           
03       management services if the person                                                                                 
04                 (1)  provides an appraisal management service                                                           
05                      (A)  to a creditor or secondary mortgage market participant,                                       
06            including an affiliate; and                                                                                  
07                      (B)  in connection with valuing a consumer's principal dwelling                                    
08            as security for a consumer credit transaction or incorporating consumer credit                               
09            transactions into a securitization; and                                                                      
10                 (2)  oversees an appraiser panel.                                                                       
11 (b)  A person is guilty of a class B misdemeanor if the person engages in                                               
12 business as or holds out as a real estate appraisal management company, or performs                                     
13       or attempts to perform appraisal management services, at a time when the                                          
14                 (1)  person does not hold a registration issued by the board; or                                        
15 (2)  registration issued by the board to the person is suspended,                                                       
16       revoked, lapsed, or surrendered.                                                                                  
17 Sec. 08.87.135. Requirements for registration of real estate appraisal                                                
18 management companies. (a) The board shall register a real estate appraisal                                            
19 management company operating in the state if the company applies on a form                                              
20 approved by the board, pays the fee required under AS 08.01.065, and presents                                           
21       evidence satisfactory to the board that the company                                                               
22 (1)  has designated a controlling person who will be the main point of                                                  
23 contact between the board and the company and who meets the requirements under (b)                                      
24       of this section;                                                                                                  
25 (2)  has, if the company is not a corporation that is domiciled in this                                                 
26 state, filed with the department a written consent to service of process on a resident of                               
27 this state for any court action arising from an activity regulated under this chapter or                                
28 12 U.S.C. 3331 - 3355 and provided the name and contact information for the                                             
29       company's agent for service of process in this state;                                                             
30 (3)  requires a real estate appraiser to comply with the Uniform                                                        
31 Standards of Professional Appraisal Practice adopted by the Appraisal Standards                                         
01       Board of the Appraisal Foundation when completing appraisals at the company's                                     
02       request;                                                                                                          
03                 (4)  engages only appraisers who are certified under this chapter;                                      
04                 (5)  has a process to verify that a person who is assigned to serve on an                               
05       appraiser panel of the company                                                                                    
06                      (A)  is certified under this chapter and maintains a certification                                 
07            in good standing; and                                                                                        
08                      (B)  is qualified to conduct federally related transactions under                                  
09            federal law; in this subparagraph, "federally related transaction" means a real                              
10 estate related transaction that involves an insured depository institution                                              
11 regulated by the United States Comptroller of the Currency, the Board of                                                
12 Governors of the Federal Reserve System, the Federal Deposit Insurance                                                  
13 Corporation, or the National Credit Union Administration and requires the                                               
14            services of a real estate appraiser under the interagency appraisal rules;                                   
15 (6)  conducts appraisals independently and free from inappropriate                                                      
16       influence and coercion as required under 12 U.S.C. 3353;                                                          
17 (7)  is not directly or indirectly owned in whole or in part by a person                                                
18 that has had a certificate to act as a real estate appraiser denied, cancelled, suspended,                              
19 revoked, put on probation, or surrendered in lieu of a pending revocation in any state                                  
20 unless the person has later had a certificate to act as a real estate appraiser granted or                              
21       reinstated by the same state; and                                                                                 
22 (8)  has posted a surety bond in an amount required by the board, not to                                                
23       exceed $50,000.                                                                                                   
24            (b)  A controlling person designated under (a) of this section                                               
25 (1)  must be actively certified in a state as a real estate appraiser at all                                            
26       times that the person is designated as a controlling person;                                                      
27 (2)  may not have had a certificate to act as a real estate appraiser                                                   
28 denied, cancelled, suspended, revoked, put on probation, or surrendered in lieu of a                                    
29 pending revocation in any state unless the person has later had the certificate to act as                               
30       a real estate appraiser granted or reinstated; and                                                                
31                 (3)  must be of good moral character.                                                                   
01 (c)  The board shall provide a copy of a registration under this section to the                                         
02 Appraisal Subcommittee under 12 U.S.C. 3310 on a form approved by the                                                   
03       subcommittee.                                                                                                     
04 (d)  A registration under this section is valid for two years and may be renewed                                        
05 upon proof of continued compliance with the requirements of (a) and (b) of this                                         
06       section.                                                                                                          
07 Sec. 08.87.140. Mandatory reporting. A real estate appraisal management                                               
08 company or a controlling person, employee, director, officer, or agent of a real estate                                 
09 appraisal management company that has reasonable cause to believe that a real estate                                    
10 appraiser has failed to comply with the Uniform Standards of Professional Appraisal                                     
11 Practice as adopted under 12 U.S.C. 3339 in a manner that materially affects a                                          
12 valuation appraisal shall report the noncompliance to the board and to the Appraisal                                    
13       Subcommittee established under 12 U.S.C. 3310.                                                                    
14 Sec. 08.87.145. Retention of records and inspection. A registered real estate                                         
15 appraisal management company or a real estate appraisal management company that                                         
16 has applied for registration shall allow the board to inspect and shall retain, for not less                            
17 than the later of either five years after the date a file is submitted to the company or                                
18       two years after final disposition of a related judicial proceeding,                                               
19 (1)  copies of all records related to requests for the company's appraisal                                              
20       management services and the real estate appraisers who perform the appraisals;                                    
21 (2)  a written record of all substantive communications between a real                                                  
22 estate appraisal management company registered under this chapter and a real estate                                     
23       appraiser relating to an appraisal or participation in an appraiser panel.                                        
24 Sec. 08.87.150. Reporting requirements for federally regulated real estate                                            
25 appraisal management companies. (a) A real estate appraisal management company                                        
26 that is owned and controlled by an insured depository institution as defined in 12                                      
27 U.S.C. 1813 and regulated by the United States Comptroller of the Currency, the                                         
28 Board of Governors of the Federal Reserve System, or the Federal Deposit Insurance                                      
29 Company, shall annually submit to the board information that the board is required to                                   
30       submit to the Appraisal Subcommittee under 12 U.S.C. 3310, including a                                            
31                 (1)  report of intent to operate in the state; and                                                      
01 (2)  disclosure of whether the company is directly or indirectly owned                                                  
02 in whole or in part by any person that has had a certificate to act as a real estate                                    
03 appraiser denied, cancelled, suspended, revoked, put on probation, or surrendered in                                    
04       lieu of a pending revocation in any state.                                                                        
05 (b)  If a person has had disciplinary action taken against the person under                                             
06 (a)(2) of this section, the board shall collect information related to whether the                                      
07 certificate to act as a real estate appraiser was denied, cancelled, suspended, revoked,                                
08 put on probation, or surrendered in lieu of a pending revocation for a substantive cause                                
09 and whether the person has later had the certificate to act as a real estate appraiser                                  
10       reinstated by the same state.                                                                                     
11 Sec. 08.87.155. Exemptions. AS 08.87.130 - 08.87.150, 08.87.215, and                                                  
12       08.87.220 do not apply to a                                                                                       
13 (1)  person who is employed by a department or division of an entity                                                    
14       that provides appraisal management services only to that entity;                                                  
15                 (2)  real estate appraisal management company that is                                                   
16 (A)  owned and controlled by an insured depository institution;                                                         
17            and                                                                                                          
18 (B)  regulated by the Consumer Financial Protection Bureau,                                                             
19 the Federal Housing Finance Agency, the Board of Governors of the Federal                                               
20 Reserve System, the Federal Deposit Insurance Corporation, the United States                                            
21            Comptroller of the Currency, or the National Credit Union Administration; or                                 
22 (3)  real estate appraiser who enters into an agreement with another real                                               
23 estate appraiser for the performance of an appraisal that upon completion results in a                                  
24 report signed by both the real estate appraiser who completed the appraisal and the                                     
25       real estate appraiser who requested completion of the appraisal.                                                  
26    * Sec. 6. AS 08.87 is amended by adding new sections to article 3 to read:                                         
27 Sec. 08.87.215. Prohibited practices; real estate appraisal management                                                
28 companies. (a) A real estate appraisal management company may not, while                                              
29 registered in the state, retain or enter into a business relationship with an employee,                                 
30 contractor, or agent whose certificate to act as a real estate appraiser is denied,                                     
31 cancelled, suspended, revoked, put on probation, or surrendered in lieu of a pending                                    
01       revocation in any state unless the employee, contractor, or agent has later had a                                 
02       certificate to act as a real estate appraiser granted or reinstated by the same state.                            
03            (b)  A real estate appraisal management company or a controlling person,                                     
04       employee, director, officer, or agent of a real estate appraisal management company                               
05       may not                                                                                                           
06                 (1)  seek to influence a real estate appraiser through intimidation,                                    
07       coercion, extortion, or bribery;                                                                                  
08                 (2)  condition payment of an appraisal fee on a real estate appraiser's                                 
09       opinion, conclusion, or valuation;                                                                                
10 (3)  request that a real estate appraiser report a predetermined opinion,                                               
11       conclusion, or valuation;                                                                                         
12 (4)  alter, amend, or change an appraisal report submitted by a real                                                    
13       estate appraiser without the real estate appraiser's written consent;                                             
14 (5)  require a real estate appraiser to sign an indemnification agreement                                               
15       for a claim that does not arise from a service performed by the real estate appraiser;                            
16 (6)  prohibit a real estate appraiser who is part of an appraiser panel                                                 
17 from recording within the appraisal communication the fee that the appraiser was paid                                   
18       by the company for the performance of the appraisal;                                                              
19 (7)  prohibit lawful communication between a real estate appraiser and                                                  
20 any other person who the real estate appraiser determines possesses information                                         
21       relevant to the appraisal;                                                                                        
22 (8)  engage in an act or practice with intent to impair a real estate                                                   
23       appraiser's independence, objectivity, and impartiality;                                                          
24 (9)  knowingly make a false statement, submit false information, or fail                                                
25 to provide complete information in response to a question in an application for                                         
26       registration or renewal of a registration; or                                                                     
27                 (10)  violate this chapter or a regulation adopted under this chapter.                                  
28 Sec. 08.87.220. Disciplinary proceedings; real estate appraisal                                                       
29 management companies. The board may take disciplinary action under AS 08.01.075                                       
30 or suspend or revoke a registration of a real estate appraisal management company if it                                 
31       finds that the                                                                                                    
01                 (1)  company or a controlling person, employee, director, officer, or                                   
02       agent of a real estate appraisal management company has violated a provision of this                              
03       chapter or a regulation adopted by the board under this chapter;                                                  
04 (2)  company or a controlling person of the company has had a                                                           
05 certificate to act as a real estate appraiser or a registration as a real estate appraisal                              
06 management company denied, cancelled, suspended, revoked, put on probation, or                                          
07       surrendered in lieu of a pending revocation in any state;                                                         
08                 (3)  company fails to comply with the Uniform Standards of                                              
09       Professional Appraisal Practice under 12 U.S.C. 3339;                                                             
10 (4)  company performs appraisal management services in a manner that                                                    
11       causes injury or loss to the public;                                                                              
12 (5)  company has ceased to operate in the state as a real estate appraisal                                              
13       management company;                                                                                               
14 (6)  company used fraud, deception, misrepresentation, or bribery in                                                    
15       securing a registration under this chapter.                                                                       
16    * Sec. 7. AS 08.87.900 is amended by adding new paragraphs to read:                                                
17 (14)  "appraisal management services" includes the performance of any                                                   
18       of the following functions on behalf of a lender, financial institution, or other person:                         
19                      (A)  administration of an appraiser panel;                                                         
20 (B)  recruitment, retention, or selection of real estate appraisers                                                     
21            for the performance of appraisal services;                                                                   
22 (C)  contracting with real estate appraisers to perform                                                                 
23            appraisals;                                                                                                  
24 (D)  review of a completed appraisal before the delivery of the                                                         
25            appraisal or review assignment to the person that ordered the appraisal;                                     
26 (15)  "appraiser panel" means a group of licensed or certified real estate                                              
27 appraisers who perform appraisals as independent contractors for a real estate                                          
28       appraisal management company;                                                                                     
29 (16)  "company" means a real estate appraisal management company                                                        
30       required to register under AS 08.87.130 that performs appraisal management services;                              
31                 (17)  "controlling person" includes a person who                                                        
01                      (A)  owns more than 10 percent of a real estate appraisal                                          
02            management company or an officer or director of a real estate appraisal                                      
03            management company;                                                                                          
04 (B)  is employed and authorized by a real estate appraisal                                                              
05 management company to enter into a contractual relationship with another                                                
06 person for the performance of appraisal management services or with a real                                              
07            estate appraiser to perform an appraisal; and                                                                
08                      (C)  has the authority to direct the management or policies of a                                   
09            real estate appraisal management company;                                                                    
10 (18)  "principal dwelling" means a residential structure or mobile home                                                 
11 that contains one to four units but does not include a vacation or second home unless                                   
12 the consumer buys or builds a new dwelling that will become the primary location that                                   
13       the consumer inhabits within a year after the purchase or completion of construction.                             
14    * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to                          
15 read:                                                                                                                   
16 APPLICABILITY. (a) This Act applies to a person offering or engaged in providing                                        
17 appraisal management services for an appraisal on or after the effective date of secs. 1 - 7 of                         
18 this Act. In this section, "appraisal management services" has the meaning given in                                     
19 AS 08.87.900.                                                                                                           
20 (b)  If, under sec. 11(1) of this Act, this Act takes effect January 1, 2019, the                                       
21 Department of Commerce, Community, and Economic Development and the Board of                                            
22 Certified Real Estate Appraisers may not enforce the registration requirement under                                     
23 AS 08.87.130, added by sec. 5 of this Act, until March 1, 2019.                                                         
24    * Sec. 9.  The uncodified law of the State of Alaska is amended by adding a new section to                         
25 read:                                                                                                                   
26 TRANSITION: REGULATIONS. The Department of Commerce, Community, and                                                     
27 Economic Development and the Board of Certified Real Estate Appraisers may adopt                                        
28 regulations necessary to implement the changes made by this Act. The regulations take effect                            
29 under AS 44.62 (Administrative Procedure Act), but not before the effective date of the law                             
30 implemented by the regulation.                                                                                          
31    * Sec. 10. The uncodified law of the State of Alaska is amended by adding a new section to                         
01 read:                                                                                                                   
02 NOTIFICATION TO REVISOR OF STATUTES. Not later than June 30, 2018, the                                                  
03 commissioner of commerce, community, and economic development shall notify the revisor                                  
04 of statutes in writing if the Appraisal Subcommittee of the Federal Financial Institutions                              
05 Examination Council has issued a decision that extends the deadline for compliance with 12                              
06 U.S.C. 3338 (Title XI, Financial Institutions Reform, Recovery, and Enforcement Act of                                  
07 1989), as amended by 12 U.S.C. 5301 - 5641 (Dodd-Frank Wall Street Reform and Consumer                                  
08 Protection Act).                                                                                                        
09    * Sec. 11. If the commissioner of commerce, community, and economic development                                    
10            (1)  notifies the revisor of statutes as required by sec. 10 of this Act, secs. 1 - 8                        
11 of this Act take effect January 1, 2019;                                                                                
12            (2)  does not notify the revisor of statutes as required by sec. 10 of this Act,                             
13 secs. 1 - 8 of this Act take effect August 10, 2018.                                                                    
14    * Sec. 12. Sections 9 and 10 of this Act take effect immediately under AS 01.10.070(c).