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Enrolled SB 155: 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 Enrolled SB 155                                                                                                         
01 Relating to the registration and regulation of real estate appraisal management companies;                              
02 relating to the establishment of fees by the Department of Commerce, Community, and                                     
03 Economic Development; relating to the Board of Certified Real Estate Appraisers; relating to                            
04 real estate appraisers; and providing for an effective date.                                                            
05                           _______________                                                                               
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; and                                                                                 
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 (4)  conduct background investigations as provided in AS 08.87.135(c).                                                  
31    * Sec. 5. AS 08.87 is amended by adding new sections to read:                                                        
01             Article 2A. Real Estate Appraisal Management Companies.                                                     
02            Sec. 08.87.130. Registration required. (a) A person shall register as a real                                 
03       estate appraisal management company with the board to perform appraisal                                           
04       management services if the person                                                                                 
05                 (1)  provides an appraisal management service                                                           
06                      (A)  to a creditor or secondary mortgage market participant,                                       
07            including an affiliate; and                                                                                  
08                      (B)  in connection with valuing a borrower's principal dwelling                                    
09            as security for a consumer credit transaction or incorporating consumer credit                               
10            transactions into a securitization; and                                                                      
11                 (2)  oversees an appraiser panel.                                                                       
12 (b)  A person is guilty of a class B misdemeanor if the person engages in                                               
13 business as or holds out as a real estate appraisal management company, or performs                                     
14       or attempts to perform appraisal management services, at a time when the                                          
15                 (1)  person does not hold a registration issued by the board; or                                        
16 (2)  registration issued by the board to the person is suspended,                                                       
17       revoked, lapsed, or surrendered.                                                                                  
18 Sec. 08.87.135. Requirements for registration of real estate appraisal                                                  
19 management companies. (a) The board shall register a real estate appraisal                                              
20 management company operating in the state if the company applies on a form                                              
21 approved by the board, pays the fee required under AS 08.01.065, and presents                                           
22       evidence satisfactory to the board that the company                                                               
23 (1)  has designated a controlling person who will be the main point of                                                  
24 contact between the board and the company and who meets the requirements under (b)                                      
25       of this section;                                                                                                  
26 (2)  has, if the company is not a corporation that is domiciled in this                                                 
27 state, filed with the department a written consent to service of process on a resident of                               
28 this state for any court action arising from an activity regulated under this chapter or                                
29 12 U.S.C. 3331 - 3355 and provided the name and contact information for the                                             
30       company's agent for service of process in this state;                                                             
31 (3)  requires a real estate appraiser to comply with the Uniform                                                        
01       Standards of Professional Appraisal Practice adopted by the Appraisal Standards                                   
02       Board of the Appraisal Foundation when completing appraisals at the company's                                     
03       request;                                                                                                          
04                 (4)  engages only appraisers who are certified under this chapter;                                      
05                 (5)  has a process to verify that a person who is assigned to serve on an                               
06       appraiser panel of the company                                                                                    
07                      (A)  is certified under this chapter and maintains a certification                                 
08            in good standing; and                                                                                        
09                      (B)  is qualified to conduct federally related transactions under                                  
10 federal law; in this subparagraph, "federally related transaction" means a real                                         
11 estate related transaction that involves an insured depository institution                                              
12 regulated by the United States Comptroller of the Currency, the Board of                                                
13 Governors of the Federal Reserve System, the Federal Deposit Insurance                                                  
14 Corporation, or the National Credit Union Administration and requires the                                               
15            services of a real estate appraiser under the interagency appraisal rules;                                   
16 (6)  conducts appraisals independently and free from inappropriate                                                      
17       influence and coercion as required under 12 U.S.C. 3353;                                                          
18 (7)  is not directly or indirectly owned in whole or in part by a person                                                
19 that has had a certificate to act as a real estate appraiser denied, cancelled, suspended,                              
20 revoked, put on probation, or surrendered in lieu of a pending revocation in any state                                  
21 unless the person has later had a certificate to act as a real estate appraiser granted or                              
22       reinstated by the same state;                                                                                     
23 (8)  has posted a surety bond in an amount required by the board, not to                                                
24       exceed $50,000; and                                                                                               
25 (9)  is owned by persons who meet the requirements under (c) of this                                                    
26       section.                                                                                                          
27            (b)  A controlling person designated under (a) of this section                                               
28 (1)  must be actively certified in a state as a real estate appraiser at all                                            
29       times that the person is designated as a controlling person;                                                      
30 (2)  may not have had a certificate to act as a real estate appraiser                                                   
31 denied, cancelled, suspended, revoked, put on probation, or surrendered in lieu of a                                    
01       pending revocation in any state unless the person has later had the certificate to act as                         
02       a real estate appraiser granted or reinstated; and                                                                
03                 (3)  must be of good moral character.                                                                   
04 (c)  A person who owns at least 10 percent of a real estate appraisal                                                   
05 management company required to be registered under this chapter must be of good                                         
06 moral character as determined by the board and shall submit to a background                                             
07       investigation conducted by the board.                                                                             
08            (d)  The board shall provide a copy of a registration under this section to the                              
09       Appraisal Subcommittee established under 12 U.S.C. 3310 on a form approved by the                                 
10       subcommittee.                                                                                                     
11 (e)  A registration under this section is valid for two years and may be renewed                                        
12 upon proof of continued compliance with the requirements under (a) - (c) of this                                        
13       section.                                                                                                          
14 Sec. 08.87.140. Mandatory reporting. A real estate appraisal management                                                 
15 company or a controlling person, employee, director, officer, or agent of a real estate                                 
16 appraisal management company that has reasonable cause to believe that a real estate                                    
17 appraiser has failed to comply with the Uniform Standards of Professional Appraisal                                     
18 Practice as adopted under 12 U.S.C. 3339 in a manner that materially affects a                                          
19 valuation appraisal shall report the noncompliance to the board and to the Appraisal                                    
20       Subcommittee established under 12 U.S.C. 3310.                                                                    
21 Sec. 08.87.142. Statement of fees. (a) When reporting to a borrower, an                                                 
22       appraisal management company shall separately state the fees                                                      
23                 (1)  paid to an appraiser for the completion of an appraisal; and                                       
24 (2)  charged to the borrower for appraisal management services by the                                                   
25       appraisal management company.                                                                                     
26 (b)  An appraisal management company may not include any fees for appraisal                                             
27 services listed in (a)(1) of this section as charges for an appraisal management service                                
28       listed in (a)(2) of this section.                                                                                 
29 Sec. 08.87.145. Retention of records and inspection. A registered real estate                                           
30 appraisal management company or a real estate appraisal management company that                                         
31 has applied for registration shall allow the board to inspect and shall retain, for not less                            
01       than the later of either five years after the date a file is submitted to the company or                          
02       two years after final disposition of a related judicial proceeding,                                               
03                 (1)  copies of all records related to requests for the company's appraisal                              
04       management services and the real estate appraisers who perform the appraisals;                                    
05                 (2)  a written record of all substantive communications between a real                                  
06       estate appraisal management company registered under this chapter and a real estate                               
07       appraiser relating to an appraisal or participation in an appraiser panel.                                        
08            Sec. 08.87.150. Reporting requirements for federally regulated real estate                                   
09       appraisal management companies. (a) A real estate appraisal management company                                    
10 that is owned and controlled by an insured depository institution as defined in 12                                      
11 U.S.C. 1813 and regulated by the United States Comptroller of the Currency, the                                         
12 Board of Governors of the Federal Reserve System, or the Federal Deposit Insurance                                      
13 Corporation, shall annually submit to the board information that the board is required                                  
14 to submit to the Appraisal Subcommittee established under 12 U.S.C. 3310, including                                     
15       a                                                                                                                 
16                 (1)  report of intent to operate in the state; and                                                      
17 (2)  disclosure of whether the company is directly or indirectly owned                                                  
18 in whole or in part by any person that has had a certificate to act as a real estate                                    
19 appraiser denied, cancelled, suspended, revoked, put on probation, or surrendered in                                    
20       lieu of a pending revocation in any state.                                                                        
21 (b)  If a person has had disciplinary action taken against the person under                                             
22 (a)(2) of this section, the board shall collect information related to whether the                                      
23 certificate to act as a real estate appraiser was denied, cancelled, suspended, revoked,                                
24 put on probation, or surrendered in lieu of a pending revocation for a substantive cause                                
25 and whether the person has later had the certificate to act as a real estate appraiser                                  
26       reinstated by the same state.                                                                                     
27 Sec. 08.87.155. Exemptions. AS 08.87.130 - 08.87.150, 08.87.215, and                                                    
28       08.87.220 do not apply to a                                                                                       
29 (1)  person who is employed by a department or division of an entity                                                    
30       that provides appraisal management services only to that entity;                                                  
31                 (2)  real estate appraisal management company that is                                                   
01 (A)  owned and controlled by an insured depository institution;                                                         
02            and                                                                                                          
03 (B)  regulated by the Consumer Financial Protection Bureau,                                                             
04 the Federal Housing Finance Agency, the Board of Governors of the Federal                                               
05 Reserve System, the Federal Deposit Insurance Corporation, the United States                                            
06            Comptroller of the Currency, or the National Credit Union Administration; or                                 
07 (3)  real estate appraiser who enters into an agreement with another real                                               
08 estate appraiser for the performance of an appraisal that upon completion results in a                                  
09 report signed by both the real estate appraiser who completed the appraisal and the                                     
10       real estate appraiser who requested completion of the appraisal.                                                  
11    * Sec. 6. AS 08.87 is amended by adding new sections to article 3 to read:                                           
12 Sec. 08.87.215. Prohibited practices; real estate appraisal management                                                  
13 companies. (a) A real estate appraisal management company may not, while                                                
14 registered in the state, retain or enter into a business relationship with an employee,                                 
15 contractor, or agent whose certificate to act as a real estate appraiser is denied,                                     
16 cancelled, suspended, revoked, put on probation, or surrendered in lieu of a pending                                    
17 revocation in any state unless the employee, contractor, or agent has later had a                                       
18       certificate to act as a real estate appraiser granted or reinstated by the same state.                            
19 (b)  A real estate appraisal management company or a controlling person,                                                
20 employee, director, officer, or agent of a real estate appraisal management company                                     
21       may not                                                                                                           
22 (1)  seek to influence a real estate appraiser through intimidation,                                                    
23       coercion, extortion, or bribery;                                                                                  
24 (2)  condition payment of an appraisal fee on a real estate appraiser's                                                 
25       opinion, conclusion, or valuation;                                                                                
26 (3)  request that a real estate appraiser report a predetermined opinion,                                               
27       conclusion, or valuation;                                                                                         
28 (4)  alter, amend, or change an appraisal report submitted by a real                                                    
29       estate appraiser without the real estate appraiser's written consent;                                             
30 (5)  require a real estate appraiser to sign an indemnification agreement                                               
31       for a claim that does not arise from a service performed by the real estate appraiser;                            
01                 (6)  prohibit an appraiser from recording in the body of the report                                     
02       submitted by the appraiser to the appraisal management company the fee that the                                   
03       appraiser was paid by the company for the performance of the appraisal;                                           
04                 (7)  prohibit lawful communication between a real estate appraiser and                                  
05       any other person who the real estate appraiser determines possesses information                                   
06       relevant to the appraisal;                                                                                        
07                 (8)  engage in an act or practice with intent to impair a real estate                                   
08       appraiser's independence, objectivity, and impartiality;                                                          
09                 (9)  knowingly make a false statement, submit false information, or fail                                
10 to provide complete information in response to a question in an application for                                         
11       registration or renewal of a registration; or                                                                     
12                 (10)  violate this chapter or a regulation adopted under this chapter.                                  
13 Sec. 08.87.220. Disciplinary proceedings; real estate appraisal                                                         
14 management companies. The board may take disciplinary action under AS 08.01.075                                         
15 or suspend or revoke a registration of a real estate appraisal management company if it                                 
16       finds that the                                                                                                    
17 (1)  company or a controlling person, employee, director, officer, or                                                   
18 agent of a real estate appraisal management company has violated a provision of this                                    
19       chapter or a regulation adopted by the board under this chapter;                                                  
20 (2)  company or a controlling person of the company has had a                                                           
21 certificate to act as a real estate appraiser or a registration as a real estate appraisal                              
22 management company denied, cancelled, suspended, revoked, put on probation, or                                          
23       surrendered in lieu of a pending revocation in any state;                                                         
24 (3)  company fails to comply with the Uniform Standards of                                                              
25       Professional Appraisal Practice under 12 U.S.C. 3339;                                                             
26 (4)  company performs appraisal management services in a manner that                                                    
27       causes injury or loss to the public;                                                                              
28 (5)  company has ceased to operate in the state as a real estate appraisal                                              
29       management company; or                                                                                            
30 (6)  company used fraud, deception, misrepresentation, or bribery in                                                    
31       securing a registration under this chapter.                                                                       
01    * Sec. 7. AS 08.87.900 is amended by adding new paragraphs to read:                                                  
02                 (14)  "appraisal management services" includes the performance of any                                   
03       of the following functions on behalf of a lender, financial institution, or other person:                         
04                      (A)  administration of an appraiser panel;                                                         
05                      (B)  recruitment, retention, or selection of real estate appraisers                                
06            for the performance of appraisal services;                                                                   
07                      (C)  contracting with real estate appraisers to perform                                            
08            appraisals;                                                                                                  
09                      (D)  review of a completed appraisal before the delivery of the                                    
10            appraisal or review assignment to the person that ordered the appraisal;                                     
11 (15)  "appraiser panel" means a group of licensed or certified real estate                                              
12 appraisers who perform appraisals as independent contractors for a real estate                                          
13       appraisal management company;                                                                                     
14                 (16)  "borrower" means a person who applies for a mortgage loan;                                        
15 (17)  "company" means a real estate appraisal management company                                                        
16       required to register under AS 08.87.130 that performs appraisal management services;                              
17                 (18)  "controlling person" means a person who                                                           
18 (A)  owns more than 10 percent of a real estate appraisal                                                               
19            management company;                                                                                          
20 (B)  is an officer or director of a real estate appraisal                                                               
21            management company;                                                                                          
22 (C)  is employed and authorized by a real estate appraisal                                                              
23 management company to enter into a contractual relationship with another                                                
24 person for the performance of appraisal management services or with a real                                              
25            estate appraiser to perform an appraisal; or                                                                 
26 (D)  has the authority to direct the management or policies of a                                                        
27            real estate appraisal management company;                                                                    
28 (19)  "principal dwelling" means a residential structure or mobile home                                                 
29 that contains one to four units but does not include a vacation or second home unless                                   
30 the borrower buys or builds a new dwelling that will become the primary location that                                   
31       the borrower inhabits within a year after the purchase or completion of construction.                             
01    * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to                            
02 read:                                                                                                                   
03 APPLICABILITY. (a) This Act applies to a person offering or engaged in providing                                        
04 appraisal management services for an appraisal on or after the effective date of secs. 1 - 7 of                         
05 this Act. In this subsection, "appraisal management services" has the meaning given in                                  
06 AS 08.87.900.                                                                                                           
07 (b)  Notwithstanding the effective date of sec. 5 this Act, the Department of                                           
08 Commerce, Community, and Economic Development and the Board of Certified Real Estate                                    
09 Appraisers may not enforce the registration requirement under AS 08.87.130, added by sec. 5                             
10 of this Act, until March 1, 2019.                                                                                       
11    * Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section to                            
12 read:                                                                                                                   
13 TRANSITION: REGULATIONS. The Department of Commerce, Community, and                                                     
14 Economic Development and the Board of Certified Real Estate Appraisers may adopt                                        
15 regulations necessary to implement the changes made by this Act. The regulations take effect                            
16 under AS 44.62 (Administrative Procedure Act), but not before the effective date of the law                             
17 implemented by the regulation.                                                                                          
18    * Sec. 10. Section 9 of this Act takes effect immediately under AS 01.10.070(c).                                     
19    * Sec. 11. Except as provided in sec. 10 of this Act, this Act takes effect January 1, 2019.