HF 3122

1st Committee Engrossment - 86th Legislature (2009 - 2010)

Posted on 03/19/2013 07:29 p.m.

1.1A bill for an act 1.2relating to commerce; providing for the licensing and regulation of appraisal 1.3management companies; regulating the real estate appraiser advisory board; 1.4appropriating money;amending Minnesota Statutes 2008, sections 82B.05, 1.5subdivision 5, by adding a subdivision; 82B.06; Minnesota Statutes 2009 1.6Supplement, section 82B.05, subdivision 1; proposing coding for new law as 1.7Minnesota Statutes, chapter 82C. 1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.9ARTICLE 1 1.10REAL ESTATE APPRAISAL MANAGEMENT COMPANIES 1.11    Section 1. new text begin [82C.01] TITLE. new text end 1.12 new text begin This chapter shall be known as the Minnesota Appraisal Management Company new text end 1.13 new text begin Licensing and Regulation Act. new text end 1.14    Sec. 2. new text begin [82C.02] DEFINITIONS. new text end 1.15     new text begin Subdivision 1. new text end new text begin Terms. new text end new text begin As used in this chapter, the terms in this section have the new text end 1.16 new text begin meanings given them. new text end 1.17     new text begin Subd. 2. new text end new text begin Appraisal. new text end new text begin In conformance with the Uniform Standards of Professional new text end 1.18 new text begin Appraisal Practice (USPAP), "appraisal" is defined as: (noun) the act or process of new text end 1.19 new text begin developing an opinion of value; an opinion of value; (adjective) of or pertaining to new text end 1.20 new text begin appraising and related functions such as appraisal practice or appraisal services. For new text end 1.21 new text begin purposes of this chapter, all appraisals or assignments that are referred to involve one to new text end 1.22 new text begin four unit single-family properties. new text end 1.23     new text begin Subd. 3. new text end new text begin Appraisal assignment. new text end new text begin "Appraisal assignment" means an engagement for new text end 1.24 new text begin which an appraiser is employed or retained to act, as a disinterested third party in giving new text end 2.1 new text begin an unbiased analysis, opinion, or conclusion relating to the nature, quality, value, or utility new text end 2.2 new text begin of named interests in, or aspects of, identified real estate. new text end 2.3     new text begin Subd. 4. new text end new text begin Appraisal management company. new text end new text begin "Appraisal management company" new text end 2.4 new text begin means a corporation, partnership, sole proprietorship, subsidiary, unit, or other business new text end 2.5 new text begin entity that directly or indirectly performs the following appraisal management services: new text end 2.6 new text begin (1) administers networks of independent contractors and/or employee appraisers to new text end 2.7 new text begin perform residential real estate appraisal assignments for clients; new text end 2.8 new text begin (2) receives requests for residential real estate appraisal services from clients and, for new text end 2.9 new text begin a fee paid by the client, enters into an agreement with one or more independent appraisers new text end 2.10 new text begin to perform the real estate appraisal services contained in the request; or new text end 2.11 new text begin (3) serves as a third-party broker of appraisal management services between clients new text end 2.12 new text begin and appraisers. new text end 2.13     new text begin Subd. 5. new text end new text begin Appraisal management services. new text end new text begin "Appraisal management services" new text end 2.14 new text begin means the process of directly or indirectly performing any of the following functions on new text end 2.15 new text begin behalf of a lender, financial institution, client, or any other person to: new text end 2.16 new text begin (1) administer an appraiser panel; new text end 2.17 new text begin (2) recruit, qualify, verify licensing or certification, and negotiate fees and service new text end 2.18 new text begin level expectations with persons who are part of an appraiser panel; new text end 2.19 new text begin (3) receive an order for an appraisal from one person, and deliver the order for the new text end 2.20 new text begin appraisal to an appraiser that is part of an appraiser panel for completion; new text end 2.21 new text begin (4) track and determine the status of orders for appraisals; new text end 2.22 new text begin (5) conduct quality control of a completed appraisal prior to the delivery of the new text end 2.23 new text begin appraisal to the person that ordered the appraisal; or new text end 2.24 new text begin (6) provide a completed appraisal performed by an appraiser to one or more clients. new text end 2.25     new text begin Subd. 6. new text end new text begin Appraiser. new text end new text begin "Appraiser" means a person who is expected to perform new text end 2.26 new text begin valuation services competently and in a manner that is independent, impartial, and new text end 2.27 new text begin objective, and who is licensed under chapter 82B. new text end 2.28     new text begin Subd. 7. new text end new text begin Appraiser panel. new text end new text begin "Appraiser panel" means a network of licensed or new text end 2.29 new text begin certified appraisers who are independent contractors to the appraisal management new text end 2.30 new text begin company that have: new text end 2.31 new text begin (1) responded to an invitation, request, or solicitation from an appraisal management new text end 2.32 new text begin company, in any form, to perform appraisals for persons that have ordered appraisals new text end 2.33 new text begin through the appraisal management company, or to perform appraisals for the appraisal new text end 2.34 new text begin management company directly, on a periodic basis, as requested and assigned by the new text end 2.35 new text begin appraisal management company; and new text end 3.1 new text begin (2) been selected and approved by an appraisal management company to perform new text end 3.2 new text begin appraisals for any client of the appraisal management company that has ordered an new text end 3.3 new text begin appraisal through the appraisal management company, or to perform appraisals for the new text end 3.4 new text begin appraisal management company directly, on a periodic basis, as assigned by the appraisal new text end 3.5 new text begin management company. new text end 3.6     new text begin Subd. 8. new text end new text begin Appraisal review. new text end new text begin "Appraisal review" means the act of developing new text end 3.7 new text begin and communicating an opinion about the quality of another appraiser's work that was new text end 3.8 new text begin performed as part of an appraisal assignment, except that an examination of an appraisal new text end 3.9 new text begin for grammatical, typographical, or other similar errors that do not make a substantive new text end 3.10 new text begin valuation change shall not be an appraisal review. new text end 3.11     new text begin Subd. 9. new text end new text begin Client. new text end new text begin "Client" means any person or entity that contracts with, or new text end 3.12 new text begin otherwise enters into an agreement with, an appraisal management company for the new text end 3.13 new text begin performance of real estate appraisal services or appraisal management services. For new text end 3.14 new text begin purposes of this chapter, the appraisal management company is the party engaging the new text end 3.15 new text begin independent appraiser and can be the appraiser's client. However, this does not preclude new text end 3.16 new text begin an appraisal management company from acting as a duly authorized agent for a lender. new text end 3.17     new text begin Subd. 10. new text end new text begin Commissioner. new text end new text begin "Commissioner" means the commissioner of commerce. new text end 3.18     new text begin Subd. 11. new text end new text begin Controlling person. new text end new text begin "Controlling person" means: new text end 3.19 new text begin (1) any owner, officer, or director of an appraisal management company seeking to new text end 3.20 new text begin offer appraisal management services in this state; new text end 3.21 new text begin (2) an individual employed, appointed, or authorized by an appraisal management new text end 3.22 new text begin company that has the authority to enter into a contractual relationship with other persons new text end 3.23 new text begin for the performance of appraisal management services and has the authority to enter into new text end 3.24 new text begin agreements with appraisers for the performance of appraisals; new text end 3.25 new text begin (3) an individual who possesses, directly or indirectly, the power to direct or cause new text end 3.26 new text begin the direction of the management or policies of an appraisal management company; or new text end 3.27 new text begin (4) an individual who enters into: new text end 3.28 new text begin (i) contractual relationships with clients for the performance of appraisal new text end 3.29 new text begin management services; and new text end 3.30 new text begin (ii) agreements with employed and independent appraisers for the performance new text end 3.31 new text begin of real estate appraisal services. new text end 3.32     new text begin Subd. 12. new text end new text begin Employee. new text end new text begin "Employee" means an individual who is treated as an new text end 3.33 new text begin employee for purposes of compliance with federal income tax laws. new text end 3.34     new text begin Subd. 13. new text end new text begin Person. new text end new text begin "Person" means a natural person, firm, partnership, limited new text end 3.35 new text begin liability partnership, corporation, association, limited liability company, or other form of new text end 3.36 new text begin business organization and the officers, directors, employees, or agents of that person. new text end 4.1     new text begin Subd. 14. new text end new text begin USPAP. new text end new text begin "USPAP" means the Uniform Standards of Professional new text end 4.2 new text begin Appraisal Practice as established by the Appraisal Foundation. State and federal regulatory new text end 4.3 new text begin authorities enforce the content of the current or applicable edition of USPAP. new text end 4.4    Sec. 3. new text begin [82C.03] LICENSING. new text end 4.5     new text begin Subdivision 1. new text end new text begin Requirement. new text end new text begin It is unlawful for a person, corporation, partnership, new text end 4.6 new text begin sole proprietorship, subsidiary, unit, or other business entity to directly or indirectly new text end 4.7 new text begin engage or attempt to engage in business as an appraisal management company, to directly new text end 4.8 new text begin or indirectly engage or attempt to perform appraisal management services, or to advertise new text end 4.9 new text begin or hold itself out as engaging in or conducting business as an appraisal management new text end 4.10 new text begin company without first obtaining a license issued by the commissioner under the provisions new text end 4.11 new text begin of this chapter. new text end 4.12     new text begin Subd. 2. new text end new text begin Owner requirements. new text end new text begin (a) An appraisal management company applying to new text end 4.13 new text begin the commissioner for a license in this state may not be more than ten percent owned by new text end 4.14 new text begin any person that is currently subject to any cease and desist order or injunctive order that new text end 4.15 new text begin would preclude involvement with an appraisal management company, or that has ever: new text end 4.16 new text begin (1) voluntarily surrendered in lieu of disciplinary action an appraiser certification, new text end 4.17 new text begin registration or license, or an appraisal management company license; new text end 4.18 new text begin (2) been the subject of a final order revoking or denying an appraiser certification, new text end 4.19 new text begin registration or license, or an appraisal management company license; or new text end 4.20 new text begin (3) a final order barring involvement in any industry or profession issued by this or new text end 4.21 new text begin another state or federal regulatory agency. new text end 4.22 new text begin (b) A person that owns more than ten percent of an appraisal management company new text end 4.23 new text begin in this state shall: new text end 4.24 new text begin (1) be of good moral character, as determined by the commissioner; new text end 4.25 new text begin (2) submit to a background investigation, as determined by the commissioner; and new text end 4.26 new text begin (3) certify to the commissioner that the person has never been the subject of an order new text end 4.27 new text begin of certificate, registration or license suspension, revocation, or denial; cease and desist new text end 4.28 new text begin order; injunctive order; or order barring involvement in an industry or profession issued new text end 4.29 new text begin by this or another state or federal regulatory agency. new text end 4.30     new text begin Subd. 3. new text end new text begin Designated controlling person requirements. new text end new text begin (a) new text end new text begin Designation. new text end new text begin Each new text end 4.31 new text begin appraisal management company applying to the commissioner for a license in this state new text end 4.32 new text begin shall designate a controlling person that will be the main contact for all communication new text end 4.33 new text begin between the commissioner and the appraisal management company. new text end 4.34 new text begin (b) new text end new text begin Requirements. new text end new text begin In order to serve as a designated controlling person of an new text end 4.35 new text begin appraisal management company, a person must: new text end 5.1 new text begin (1) certify to the commissioner that the person is not currently subject to any cease new text end 5.2 new text begin and desist order or injunctive order that would preclude involvement with an appraisal new text end 5.3 new text begin management company, and has never been the subject of an order suspending, revoking, new text end 5.4 new text begin or denying a certification, registration, or license for real estate services, or a final order new text end 5.5 new text begin barring involvement in any industry or profession issued by this or another state or federal new text end 5.6 new text begin regulatory agency; new text end 5.7 new text begin (2) be of good moral character, as determined by the commissioner; and new text end 5.8 new text begin (3) submit to a background investigation, as determined by the commissioner. new text end 5.9     new text begin Subd. 4. new text end new text begin Application for license. new text end new text begin Application for an appraisal management new text end 5.10 new text begin company license must be submitted on a form prescribed by the commissioner. new text end 5.11     new text begin Subd. 5. new text end new text begin Minimum information. new text end new text begin The application must, at a minimum, include new text end 5.12 new text begin the following information: new text end 5.13 new text begin (1) the name of the entity seeking registration; new text end 5.14 new text begin (2) the business address or addresses of the entity seeking registration; new text end 5.15 new text begin (3) telephone contact and e-mail information of the entity seeking registration; new text end 5.16 new text begin (4) if the entity is not a corporation that is domiciled in this state, the name and new text end 5.17 new text begin contact information for the company's agent for service of process in this state; new text end 5.18 new text begin (5) the name, address, and contact information for an individual or corporation, new text end 5.19 new text begin partnership, limited liability company, association, or other business entity that owns ten new text end 5.20 new text begin percent or more of the appraisal management company; new text end 5.21 new text begin (6) the name, address, and contact information for a controlling person or persons; new text end 5.22 new text begin (7) a certification that the entity has a system and process in place to verify that a new text end 5.23 new text begin person being added to the employment or appraiser panel of the appraisal management new text end 5.24 new text begin company for appraisal services within this state holds an active appraisal license in this new text end 5.25 new text begin state pursuant to chapter 82B if a license is required to perform appraisals; new text end 5.26 new text begin (8) a certification that the entity has a system in place to review the work of all new text end 5.27 new text begin employed and independent appraisers that are performing real estate appraisal services new text end 5.28 new text begin for the appraisal management company on a periodic basis to verify that the real estate new text end 5.29 new text begin appraisal assignments are being conducted in accordance with USPAP and chapter 82B; new text end 5.30 new text begin (9) a certification that the entity maintains a detailed record of each service request new text end 5.31 new text begin that it receives and the independent appraiser that performs the real estate appraisal new text end 5.32 new text begin services for the appraisal management company, pursuant to section 82C.13; new text end 5.33 new text begin (10) a certification that the employees of the appraisal management company will be new text end 5.34 new text begin appropriately trained and familiar with the appraisal process; new text end 5.35 new text begin (11) a certification that the appraisal management company has a system and new text end 5.36 new text begin process in place to verify that a person being added to the appraiser panel of the appraisal new text end 6.1 new text begin management company holds a license in good standing in this state pursuant to chapter new text end 6.2 new text begin 82B; and new text end 6.3 new text begin (12) an irrevocable Uniform Consent to Service of Process, pursuant to section new text end 6.4 new text begin 82C.07. new text end 6.5     new text begin Subd. 6. new text end new text begin Effective date of license. new text end new text begin Initial licenses issued under this chapter are new text end 6.6 new text begin effective upon issuance and remain valid, subject to denial, suspension, or revocation new text end 6.7 new text begin under this chapter, until the following August 31. new text end 6.8    Sec. 4. new text begin [82C.04] TERM OF LICENSE. new text end 6.9 new text begin Initial licenses issued under this chapter are valid for a period not to exceed one new text end 6.10 new text begin year. Each initial license must expire on August 31 of the expiration year assigned by new text end 6.11 new text begin the commissioner. new text end 6.12    Sec. 5. new text begin [82C.05] LICENSE RENEWAL. new text end 6.13     new text begin Subdivision 1. new text end new text begin Term. new text end new text begin Licenses renewed under this chapter are valid for a period new text end 6.14 new text begin of 12 months. new text end 6.15     new text begin Subd. 2. new text end new text begin Timely renewal. new text end new text begin (a) Application for timely renewal of a license is new text end 6.16 new text begin considered timely filed if received by the commissioner before the date of the license new text end 6.17 new text begin expiration. new text end 6.18 new text begin (b) An application for renewal is considered properly filed if made upon a form new text end 6.19 new text begin prescribed by the commissioner, accompanied by fees prescribed by this chapter, and new text end 6.20 new text begin containing any information the commissioner requires. new text end 6.21 new text begin (c) A licensee failing to make timely application for renewal of the license is new text end 6.22 new text begin unlicensed until the renewal license has been issued by the commissioner and is received new text end 6.23 new text begin by the licensee. new text end 6.24     new text begin Subd. 3. new text end new text begin Contents of renewal application. new text end new text begin Application for the renewal of an new text end 6.25 new text begin existing license must contain the information specified in section 82C.03. However, only new text end 6.26 new text begin the requested information having changed from the most recent prior application need new text end 6.27 new text begin be submitted. new text end 6.28     new text begin Subd. 4. new text end new text begin Cancellation. new text end new text begin A licensee ceasing an activity or activities regulated by this new text end 6.29 new text begin chapter and desiring to no longer be licensed shall so inform the commissioner in writing new text end 6.30 new text begin and, at the same time, surrender the license and all other symbols or indicia of licensure. new text end 6.31    Sec. 6. new text begin [82C.06] EXEMPTIONS. new text end 6.32 new text begin This chapter does not apply to: new text end 7.1 new text begin (1) a person that exclusively employs appraisers on an employer and employee new text end 7.2 new text begin basis for the performance of appraisals, and: new text end 7.3 new text begin (i) the employer is responsible for ensuring that the appraisals are performed by new text end 7.4 new text begin employees in accordance with USPAP; and new text end 7.5 new text begin (ii) the employer accepts all liability associated with the performance of the new text end 7.6 new text begin appraisal by the employee; new text end 7.7 new text begin (2) a department or unit within a financial institution that is subject to direct new text end 7.8 new text begin regulation by an agency of the United States government, or to regulation by an agency of new text end 7.9 new text begin this state, that receives a request for the performance of an appraisal from one employee of new text end 7.10 new text begin the financial institution, and another employee of the same financial institution assigns the new text end 7.11 new text begin request for the appraisal to an appraiser that is an independent contractor to the institution, new text end 7.12 new text begin except that an appraisal management company that is a wholly owned subsidiary of new text end 7.13 new text begin a financial institution shall not be considered a department or unit within a financial new text end 7.14 new text begin institution to which the provisions of this chapter do not apply; new text end 7.15 new text begin (3) a person that enters into an agreement, whether written or otherwise, with an new text end 7.16 new text begin appraiser for the performance of an appraisal, and upon the completion of the appraisal, new text end 7.17 new text begin the report of the appraiser performing the appraisal is signed by both the appraiser who new text end 7.18 new text begin completed the appraisal and the appraiser who requested the completion of the appraisal, new text end 7.19 new text begin except that an appraisal management company may not avoid the requirements of this new text end 7.20 new text begin chapter by requiring that an employee of the appraisal management company that is an new text end 7.21 new text begin appraiser to sign an appraisal that is completed by an appraiser that is part of the appraisal new text end 7.22 new text begin panel of the appraisal management company; or new text end 7.23 new text begin (4) any governmental agency performing appraisals on behalf of that level of new text end 7.24 new text begin government or any agency performing ad valorem tax appraisals for county assessors. new text end 7.25    Sec. 7. new text begin [82C.07] CONSENT TO SERVICE OF PROCESS. new text end 7.26 new text begin Each entity applying for a license as an appraisal management company in this state new text end 7.27 new text begin shall complete an irrevocable Uniform Consent to Service of Process as prescribed by new text end 7.28 new text begin the commissioner. new text end 7.29    Sec. 8. new text begin [82C.08] LICENSING FEES. new text end 7.30     new text begin Subdivision 1. new text end new text begin Establishment and retention. new text end new text begin The fees shall be retained by the new text end 7.31 new text begin commissioner for the sole purpose of administering this licensing and regulation program. new text end 7.32     new text begin Subd. 2. new text end new text begin Amounts. new text end new text begin (a) Each application for initial licensure shall be accompanied new text end 7.33 new text begin by a fee of $5,000. new text end 8.1 new text begin (b) Each application for renewal of the license must be received prior to the two-year new text end 8.2 new text begin expiration period with the renewal fee of $2,500. new text end 8.3     new text begin Subd. 3. new text end new text begin Forfeiture. new text end new text begin All fees are nonrefundable except that an overpayment of a fee new text end 8.4 new text begin must be refunded upon proper application. new text end 8.5    Sec. 9. new text begin [82C.09] INVESTIGATIONS AND SUBPOENAS. new text end 8.6 new text begin The commissioner has under this chapter the same powers with respect to chapter new text end 8.7 new text begin 45.027, including the authority to impose a civil penalty not to exceed $10,000 per new text end 8.8 new text begin violation. new text end 8.9    Sec. 10. new text begin [82C.10] EMPLOYEE REQUIREMENTS. new text end 8.10 new text begin An employee of the appraisal management company that has the responsibility to new text end 8.11 new text begin review the work of employed and independent appraisers where the subject properties are new text end 8.12 new text begin located within this state, which include the reviewer's opinion of value or concurrence new text end 8.13 new text begin with the original appraiser's value, must be licensed according to chapter 82B and perform new text end 8.14 new text begin the review assignments in compliance with USPAP and chapter 82B. This requirement new text end 8.15 new text begin does not apply to employees who review appraisals for completeness and compliance in new text end 8.16 new text begin connection with an appraisal management company's internal quality control processes, new text end 8.17 new text begin but who do not perform appraisal reviews that are subject to Standard 3 of USPAP. new text end 8.18    Sec. 11. new text begin [82C.11] LIMITATIONS. new text end 8.19 new text begin An appraisal management company licensed in this state pursuant to this chapter new text end 8.20 new text begin may enter into contracts or agreements for appraisal assignments in this state only with new text end 8.21 new text begin an employee or independent appraiser holding an active Minnesota real estate appraiser new text end 8.22 new text begin license pursuant to chapter 82B. new text end 8.23    Sec. 12. new text begin [82C.12] ADHERENCE TO STANDARDS. new text end 8.24 new text begin An appraisal management company must have a system in place to review the new text end 8.25 new text begin work of all employed and independent appraisers that are performing real estate appraisal new text end 8.26 new text begin assignments for the appraisal management company on a periodic basis to verify that new text end 8.27 new text begin the real estate appraisal services are being conducted in accordance with USPAP and new text end 8.28 new text begin chapter 82B. An appraisal management company is required to make referrals directly to new text end 8.29 new text begin state appraiser regulatory authorities when a state licensed or certified appraiser violates new text end 8.30 new text begin USPAP, applicable state law, or engages in other unethical or unprofessional conduct. new text end 8.31    Sec. 13. new text begin [82C.13] RECORD KEEPING. new text end 9.1 new text begin An appraisal management company must maintain a detailed record of each service new text end 9.2 new text begin request that it receives and the employee appraiser or independent appraiser that performs new text end 9.3 new text begin the appraisal assignment for the appraisal management company. new text end 9.4 new text begin Records must be kept for a period of at least five years after the appraisal assignment new text end 9.5 new text begin request is sent to the independent appraiser or completion of the appraisal report, new text end 9.6 new text begin whichever period expires later. new text end 9.7    Sec. 14. new text begin [82C.14] APPRAISER INDEPENDENCE; PROHIBITIONS. new text end 9.8 new text begin (a) It is unlawful for any employee, director, officer, or agent of an appraisal new text end 9.9 new text begin management company licensed in this state pursuant to this chapter to influence or attempt new text end 9.10 new text begin to influence the development, reporting, or review of an appraisal through coercion, new text end 9.11 new text begin extortion, collusion, compensation, inducement, intimidation, or bribery, including but new text end 9.12 new text begin not limited to: new text end 9.13 new text begin (1) withholding or threatening to withhold timely payment for an appraisal; new text end 9.14 new text begin (2) withholding or threatening to withhold future business or assignments for an new text end 9.15 new text begin employed or independent appraiser, or demoting or terminating or threatening to demote new text end 9.16 new text begin or terminate an employed or independent appraiser; new text end 9.17 new text begin (3) expressly or impliedly promising future business, assignments, promotions, or new text end 9.18 new text begin increased compensation for an employed or independent appraiser; new text end 9.19 new text begin (4) conditioning the request for an appraisal assignment on the payment of an new text end 9.20 new text begin appraisal fee or salary or bonus on the opinion, conclusion, or valuation to be reached, new text end 9.21 new text begin or on a preliminary estimate or opinion requested from an employed or independent new text end 9.22 new text begin appraiser; new text end 9.23 new text begin (5) requesting that an employed or independent appraiser provide an estimated, new text end 9.24 new text begin predetermined, or desired valuation in an appraisal report, or provide estimated values or new text end 9.25 new text begin comparable sales at any time prior to the completion of an appraisal assignment; new text end 9.26 new text begin (6) providing to an employed or independent appraiser an anticipated, estimated, new text end 9.27 new text begin encouraged, or desired value for a subject property or a proposed or target amount to be new text end 9.28 new text begin loaned to the borrower, except that a copy of the sales contract for purchase transactions new text end 9.29 new text begin may be provided; new text end 9.30 new text begin (7) providing to an employed or independent appraiser, or any entity or person new text end 9.31 new text begin related to the appraiser, stock, or other financial or nonfinancial benefits; new text end 9.32 new text begin (8) allowing the removal of an employed or independent appraiser from a list of new text end 9.33 new text begin qualified appraisers used by any entity, without prior written notice to the appraiser, which new text end 9.34 new text begin notice must include documented evidence of the appraiser's violation of USPAP, chapter new text end 9.35 new text begin 82B, substandard performance, or otherwise improper or unprofessional behavior; new text end 10.1 new text begin (9) request or require any employed or independent appraiser to provide the new text end 10.2 new text begin appraisal management company or any of its employees, or any of its clients, with the new text end 10.3 new text begin appraiser's digital signature; new text end 10.4 new text begin (10) alter, amend, or change an appraisal report submitted by an appraiser, to include new text end 10.5 new text begin removing or applying a signature, adding or deleting information from the appraisal report; new text end 10.6 new text begin (11) require the appraiser to collect the fee from a borrower, homeowner, or other new text end 10.7 new text begin person; new text end 10.8 new text begin (12) require an appraiser to sign any indemnification agreement that would require new text end 10.9 new text begin the appraiser to defend and hold harmless the appraisal management company or any of its new text end 10.10 new text begin agents, or employees for any liability, damage, losses, or claims arising out of the services new text end 10.11 new text begin performed by the appraisal management company or its agents, employees, or independent new text end 10.12 new text begin contractors and not the services performed by the appraiser; new text end 10.13 new text begin (13) use an appraiser directly selected or referred by any member of a loan new text end 10.14 new text begin production staff for an individual assignment; or new text end 10.15 new text begin (14) any other act or practice that impairs or attempts to impair an appraiser's new text end 10.16 new text begin independence, objectivity, or impartiality. new text end 10.17 new text begin (b) Nothing in paragraph (a) prohibits the appraisal management company from new text end 10.18 new text begin requesting that an independent appraiser: new text end 10.19 new text begin (1) consider additional appropriate property information; new text end 10.20 new text begin (2) provide further detail, substantiation, or explanation for the appraiser's value new text end 10.21 new text begin conclusion; or new text end 10.22 new text begin (3) correct objective factual errors in an appraisal report. new text end 10.23    Sec. 15. new text begin [82C.15] ADJUDICATION OF DISPUTES BETWEEN AN APPRAISAL new text end 10.24 new text begin MANAGEMENT COMPANY AND AN INDEPENDENT APPRAISER. new text end 10.25 new text begin Except within the first 30 days after an independent appraiser is first added to the new text end 10.26 new text begin appraiser panel of an appraisal management company, an appraisal management company new text end 10.27 new text begin may not remove an appraiser from its appraiser panel, or otherwise refuse to assign new text end 10.28 new text begin requests for real estate appraisal services to an independent appraiser without: new text end 10.29 new text begin (1) notifying the appraiser in writing of the reasons why the appraiser is being new text end 10.30 new text begin removed from the appraiser panel or is not receiving appraisal requests from the appraisal new text end 10.31 new text begin management company; new text end 10.32 new text begin (2) if the appraiser is being removed from the panel for illegal conduct, having new text end 10.33 new text begin determined that the appraiser has violated USPAP, or chapter 82B, taking into account the new text end 10.34 new text begin nature of the alleged conduct or violation; and new text end 11.1 new text begin (3) providing an opportunity for the appraiser to respond and appeal the notification new text end 11.2 new text begin of the appraisal management company. new text end 11.3    Sec. 16. new text begin [82C.16] DENIAL, SUSPENSION, REVOCATION OF LICENSES. new text end 11.4     new text begin Subdivision 1. new text end new text begin Powers of commissioner. new text end new text begin The commissioner may by order take any new text end 11.5 new text begin or all of the following actions: new text end 11.6 new text begin (1) bar a person from serving as an officer, director, partner, controlling person, new text end 11.7 new text begin or any similar role at an appraisal management company, if such person has ever been new text end 11.8 new text begin the subject of a final order suspending, revoking or denying a certification, registration new text end 11.9 new text begin or license as a realtor, broker, or appraiser, or a final order barring involvement in any new text end 11.10 new text begin industry or profession issued by this or another state or federal regulatory agency; new text end 11.11 new text begin (2) deny, suspend, or revoke an appraisal management company license; new text end 11.12 new text begin (3) censure an appraisal management company license; and new text end 11.13 new text begin (4) impose a civil penalty as provided for in chapter 45.027. new text end 11.14 new text begin (b) In order to take the action in paragraph (a), the commissioner must find: new text end 11.15 new text begin (1) that the order is in the public interest; and new text end 11.16 new text begin (2) that an officer, director, partner, employee, agent, controlling person or persons, new text end 11.17 new text begin or any person occupying a similar status or performing similar functions, has: new text end 11.18 new text begin (i) violated any provision of this chapter; new text end 11.19 new text begin (ii) filed an application for a license that is incomplete in any material respect or new text end 11.20 new text begin contains a statement that, in light of the circumstances under which it is made, is false or new text end 11.21 new text begin misleading with respect to a material fact; new text end 11.22 new text begin (iii) failed to maintain compliance with the affirmations made under section 80C.03, new text end 11.23 new text begin subdivision 5; new text end 11.24 new text begin (iv) violated a standard of conduct or engaged in a fraudulent, coercive, deceptive, new text end 11.25 new text begin or dishonest act or practice, whether or not the act or practice involves the appraisal new text end 11.26 new text begin management company; new text end 11.27 new text begin (v) engaged in an act or practice, whether or not the act or practice involves the new text end 11.28 new text begin business of appraisal management, appraisal assignments, or real estate mortgage related new text end 11.29 new text begin practices, that demonstrates untrustworthiness, financial irresponsibility, or incompetence; new text end 11.30 new text begin (vi) pled guilty, with or without explicitly admitting guilt, pled nolo contendere, new text end 11.31 new text begin or been convicted of a felony, gross misdemeanor, or a misdemeanor involving moral new text end 11.32 new text begin turpitude; new text end 11.33 new text begin (vii) paid a civil penalty or been the subject of disciplinary action by the new text end 11.34 new text begin commissioner, or an order of suspension or revocation, cease and desist order, or new text end 11.35 new text begin injunction order, or an order barring involvement in an industry or profession issued by new text end 12.1 new text begin this or any other state or federal regulatory agency or government-sponsored enterprise, new text end 12.2 new text begin or by the secretary of Housing and Urban Development; new text end 12.3 new text begin (viii) been found by a court of competent jurisdiction to have engaged in conduct new text end 12.4 new text begin evidencing gross negligence, fraud, misrepresentation, or deceit; new text end 12.5 new text begin (ix) refused to cooperate with an investigation or examination by the commissioner; new text end 12.6 new text begin (x) failed to pay any fee or assessment imposed by the commissioner; or new text end 12.7 new text begin (xi) failed to comply with state and federal tax obligations. new text end 12.8     new text begin Subd. 2. new text end new text begin Orders of the commissioner. new text end new text begin To begin a proceeding under this section, new text end 12.9 new text begin the commissioner shall issue an order requiring the subject of the proceeding to show new text end 12.10 new text begin cause why action should not be taken against the licensee according to this section. The new text end 12.11 new text begin order must be calculated to give reasonable notice of the time and place for the hearing new text end 12.12 new text begin and must state the reasons for entry of the order. The commissioner may by order new text end 12.13 new text begin summarily suspend a license pending a final determination of an order to show cause. If a new text end 12.14 new text begin license is summarily suspended, pending final determination of an order to show cause, a new text end 12.15 new text begin hearing on the merits must be held within 30 days of the issuance of the order of summary new text end 12.16 new text begin suspension. All hearings must be conducted under chapter 14. After the hearing, the new text end 12.17 new text begin commissioner shall enter an order disposing of the matter as the facts require. If the new text end 12.18 new text begin subject of the order fails to appear at a hearing after having been duly notified of it, the new text end 12.19 new text begin subject is considered in default, and the proceeding may be determined against the subject new text end 12.20 new text begin of the order upon consideration of the order to show cause, the allegations of which may new text end 12.21 new text begin be considered to be true. new text end 12.22     new text begin Subd. 3. new text end new text begin Actions against lapsed license. new text end new text begin If a license lapses, is surrendered, new text end 12.23 new text begin withdrawn, terminated, or otherwise becomes ineffective, the commissioner may institute new text end 12.24 new text begin a proceeding under this subdivision within two years after the license was last effective new text end 12.25 new text begin and enter a revocation or suspension order as of the last date which the license was in new text end 12.26 new text begin effect, and may impose a civil penalty as provided for in this section or section 45.027. new text end 12.27    Sec. 17. new text begin APPROPRIATION. new text end 12.28     new text begin $223,000 in fiscal year 2011 is appropriated from the general fund to the new text end 12.29 new text begin commissioner of commerce for implementing this article. The base appropriation for this new text end 12.30 new text begin program is $119,000 in fiscal year 2012 and $123,000 in fiscal year 2013. new text end 12.31ARTICLE 2 12.32REAL ESTATE APPRAISER ADVISORY BOARD 12.33    Section 1. Minnesota Statutes 2009 Supplement, section 82B.05, subdivision 1, is 12.34amended to read: 13.1    Subdivision 1. Members. The Real Estate Appraiser Advisory Board consists of 13.215 new text begin nine new text end members appointed by the commissioner of commerce. Three of the members 13.3must be public members, four must be consumers of appraisal services, and eight new text begin three new text end 13.4must be real estate appraisers of whom not less than two members must be trainee real 13.5property appraisers, licensed real property appraisers, or certified residential real property 13.6appraisers, not less than two members new text begin and three new text end must be certified general real property 13.7appraisers, and not less than one member new text begin of those members new text end must be certified by the 13.8Appraisal Qualification Board of the Appraisal Foundation to teach the Uniform Standards 13.9of Professional Appraisal Practice. new text begin Each of the three categories of members must include new text end 13.10 new text begin at least one member who lives or works outside of the seven-county metropolitan area. new text end 13.11The board is governed by section 15.0575. 13.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective August 1, 2010. new text end 13.13    Sec. 2. Minnesota Statutes 2008, section 82B.05, subdivision 5, is amended to read: 13.14    Subd. 5. Conduct of meetings. Places of regular board meetings must be decided 13.15by the vote of members. Written notice must be given to each member of the time and 13.16place of each meeting of the board at least ten days before the scheduled date of regular 13.17board meetings. The board shall establish procedures for emergency board meetings and 13.18other operational procedures, subject to the approval of the commissioner. 13.19The members of the board shall elect a chair from among the members to preside 13.20at board meetings. 13.21A quorum of the board is eight new text begin five new text end members. 13.22The board shall meet at least once every six months as determined by a majority vote 13.23of the members or a call of the commissioner. new text begin The chair of the board may call a meeting at new text end 13.24 new text begin any other time, subject to the notice requirements of this section. new text end 13.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective August 1, 2010. new text end 13.26    Sec. 3. Minnesota Statutes 2008, section 82B.05, is amended by adding a subdivision 13.27to read: 13.28     new text begin Subd. 7. new text end new text begin Enforcement reports. new text end new text begin The commissioner shall, on a regular basis, provide new text end 13.29 new text begin the board with the commissioner's enforcement reports. new text end 13.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective August 1, 2010. new text end 14.1    Sec. 4. Minnesota Statutes 2008, section 82B.06, is amended to read: 14.282B.06 POWERS OF THE BOARD. 14.3The board shall make recommendations to the commissioner as the commissioner 14.4requests new text begin or at the board's own initiative new text end on: 14.5(1) rules with respect to each category of licensed real estate appraiser, the type of 14.6educational experience, appraisal experience, and equivalent experience that will meet 14.7the requirements of this chapter; 14.8(2) examination specifications for each category of licensed real estate appraiser, 14.9to assist in providing or obtaining appropriate examination questions and answers, and 14.10procedures for grading examinations; 14.11(3) rules with respect to each category of licensed real estate appraiser, the 14.12continuing education requirements for the renewal of licensing that will meet the 14.13requirements provided in this chapter; 14.14(4) periodic review of the standards for the development and communication of 14.15real estate appraisals provided in this chapter and rules explaining and interpreting the 14.16standards; and 14.17(5) other matters necessary in carrying out the provisions of this chapter. 14.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective August 1, 2010. new text end