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AN ACT
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relating to the registration and regulation of appraisal management |
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companies; providing penalties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter D, Chapter 1103, Occupations Code, is |
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amended by adding Section 1103.157 to read as follows: |
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Sec. 1103.157. ADVISORY COMMITTEE. (a) The board shall |
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establish an advisory committee to advise the board and make |
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recommendations on matters related to the regulation of appraisal |
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management companies under Chapter 1104. |
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(b) The advisory committee consists of the assistant |
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presiding officer of the board and two persons appointed by the |
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governor as follows: |
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(1) a controlling person of an appraisal management |
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company registered under Chapter 1104; and |
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(2) a public member with recognized business ability. |
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(c) The assistant presiding officer of the board shall serve |
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as the presiding officer of the advisory committee. |
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(d) The members of the advisory committee appointed by the |
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governor serve staggered two-year terms, with the terms of the |
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appraisal management company member and the public member expiring |
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on January 31 of alternating years. |
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SECTION 2. Subtitle A, Title 7, Occupations Code, is |
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amended by adding Chapter 1104 to read as follows: |
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CHAPTER 1104. APPRAISAL MANAGEMENT COMPANIES |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 1104.001. SHORT TITLE. This chapter may be cited as |
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the Texas Appraisal Management Company Registration and Regulation |
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Act. |
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Sec. 1104.002. PURPOSE. The purpose of this chapter is to |
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establish and enforce standards related to appraisal management |
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services for appraisal reports on residential properties located in |
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this state with fewer than five units. |
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Sec. 1104.003. DEFINITIONS. (a) The definitions in |
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Section 1103.003 apply to this chapter. |
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(b) In this chapter: |
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(1) "Appraisal management company" means, in |
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connection with valuing properties collateralizing mortgage loans |
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or mortgages incorporated in a securitization, an external third |
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party authorized either by a creditor of a consumer credit |
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transaction secured by a consumer's principal dwelling or by an |
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underwriter of or other principal in the secondary mortgage markets |
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that directly or indirectly performs appraisal management |
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services. |
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(2) "Appraisal management service" means to directly |
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or indirectly perform any of the following acts: |
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(A) administer an appraisal panel; |
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(B) recruit, retain, or select an appraiser; |
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(C) contract with an appraiser to perform an |
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appraisal assignment; |
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(D) provide a completed appraisal performed by an |
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appraiser to one or more clients; or |
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(E) manage the process of having an appraisal |
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performed, including: |
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(i) receiving and assigning appraisal |
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orders and reports; |
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(ii) tracking and determining the status of |
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orders for appraisals; |
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(iii) conducting quality control of a |
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completed appraisal before delivery of the appraisal to the person |
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who ordered the appraisal; |
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(iv) collecting fees from creditors and |
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underwriters for services provided; or |
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(v) reimbursing appraisers for services |
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performed. |
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(3) "Appraisal panel" means a pool of licensed or |
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certified appraisers who perform appraisals as independent |
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contractors for an appraisal management company. |
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(4) "Appraisal review" means the act or process of |
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developing and communicating an opinion about the quality of |
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another appraiser's work that was performed as part of an appraisal |
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assignment. The term does not include an examination of an |
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appraisal for grammatical, typographical, mathematical, or other |
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similar administrative errors that do not involve the appraiser's |
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professional judgment, including compliance with the elements of |
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the client's statement of work. |
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(5) "Appraiser" means a person licensed or certified |
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under Chapter 1103. |
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(6) "Controlling person" means: |
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(A) an owner, officer, or director of an |
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appraisal management company; |
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(B) an individual employed, appointed, or |
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authorized by an appraisal management company that has the |
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authority to enter into a contractual relationship with other |
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persons for the performance of appraisal management services and |
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the authority to enter into agreements with appraisers for the |
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performance of appraisals; or |
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(C) an individual who possesses, directly or |
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indirectly, the power to direct or cause the direction of the |
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management or policies of an appraisal management company. |
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(7) "Financial institution" means: |
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(A) a bank, savings bank, or savings and loan |
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association or a subsidiary or affiliate of a bank, savings bank, or |
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savings and loan association; |
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(B) a state or federal credit union or a |
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subsidiary, affiliate, or credit union service organization of a |
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state or federal credit union; |
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(C) an insurance company licensed or authorized |
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to do business in this state under the Insurance Code; |
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(D) a mortgage banker registered under Chapter |
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157, Finance Code; |
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(E) a person licensed under Chapter 156, Finance |
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Code; |
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(F) a lender licensed under Chapter 342, Finance |
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Code; |
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(G) a farm credit system institution; or |
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(H) a political subdivision of this state |
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conducting an affordable home ownership program. |
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(8) "Uniform Standards of Professional Appraisal |
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Practice" means the Uniform Standards of Professional Appraisal |
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Practice adopted by the Appraisal Standards Board of the Appraisal |
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Foundation. |
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Sec. 1104.004. EXEMPTIONS. (a) This chapter does not apply |
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to: |
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(1) a person who exclusively employs appraisers on an |
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employer and employee basis for the performance of appraisals; |
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(2) a person acting as an appraisal firm as defined by |
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board rule that at all times during a calendar year employs on an |
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exclusive basis as independent contractors not more than 15 |
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appraisers for the performance of appraisals; |
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(3) a financial institution, including a department or |
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unit within the institution, that is regulated by an agency of this |
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state or the United States government; |
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(4) subject to Subsection (b), a person who enters |
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into an agreement with an appraiser for the performance of an |
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appraisal that on completion results in a report signed by both the |
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appraiser who completed the appraisal and the appraiser who |
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requested completion of the appraisal; |
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(5) an appraisal management company with an appraisal |
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panel of not more than 15 appraisers at all times during a calendar |
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year; or |
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(6) an appraisal management company that is a |
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subsidiary owned and controlled by a financial institution that is |
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subject to appraisal independence standards at least as stringent |
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as those under Section 1104.203 or the Truth in Lending Act (15 |
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U.S.C. Section 1601 et seq.) through regulation by an agency of this |
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state or the United States government. |
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(b) An appraisal management company may not require an |
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employee of the appraisal management company who is an appraiser to |
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sign an appraisal that is completed by another appraiser who |
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contracts with the appraisal management company in order to avoid |
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the requirements of this chapter. |
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[Sections 1104.005-1104.050 reserved for expansion] |
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SUBCHAPTER B. BOARD POWERS AND DUTIES |
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Sec. 1104.051. RULES. The board may adopt rules necessary |
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to administer the provisions of this chapter. |
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Sec. 1104.052. FEES. (a) Subject to Subsection (b), the |
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board by rule shall establish application, renewal, and other fees |
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in amounts so that the sum of the fees paid by all appraisal |
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management companies seeking registration under this chapter is |
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sufficient for the administration of this chapter. |
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(b) The board shall collect from each appraisal management |
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company registered under this chapter the national registry fee |
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required by the appraisal subcommittee for each person who is on the |
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appraisal panel of the company and licensed or certified as an |
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appraiser in this state. The board shall deposit the registry fees |
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to the credit of the appraiser registry account in the general |
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revenue fund. |
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(c) The fees collected under Subsection (b) shall be sent to |
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the appraisal subcommittee regularly as required by federal law. |
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[Sections 1104.053-1104.100 reserved for expansion] |
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SUBCHAPTER C. REGISTRATION REQUIREMENTS |
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Sec. 1104.101. REGISTRATION REQUIRED. Unless a person is |
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registered under this chapter, a person may not: |
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(1) act or attempt to act as an appraisal management |
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company; |
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(2) provide or attempt to provide appraisal management |
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services; or |
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(3) advertise or represent or attempt to advertise or |
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represent the person as an appraisal management company. |
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Sec. 1104.102. ELIGIBILITY FOR REGISTRATION; OWNERSHIP. |
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(a) A person who has had a license or certificate to act as an |
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appraiser denied, revoked, or surrendered in lieu of revocation in |
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any state may not own in any manner more than one percent of an |
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appraisal management company registered or applying for |
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registration under this chapter unless the person has subsequently |
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had a license or certificate to act as an appraiser granted or |
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reinstated. |
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(b) An entity more than 10 percent of which is owned by a |
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person who has had a license or certificate to act as an appraiser |
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denied, revoked, or surrendered in lieu of revocation in any state |
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may not own more than 10 percent of an appraisal management company |
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registered or applying for registration under this chapter unless |
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the person has subsequently had a license or certificate to act as |
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an appraiser granted or reinstated. |
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(c) A person owning more than 10 percent of an appraisal |
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management company in this state must: |
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(1) be of good moral character, as determined by the |
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board; and |
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(2) submit to a background investigation, as |
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determined by the board. |
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(d) An appraisal management company applying for |
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registration under this chapter shall certify to the board that: |
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(1) it has reviewed each entity that owns more than 10 |
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percent of the company; and |
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(2) no entity reviewed under Subdivision (1) is more |
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than 10 percent owned by a person who has had a license or |
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certificate to act as an appraiser denied, revoked, or surrendered |
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in lieu of revocation and who has not subsequently had a license or |
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certificate to act as an appraiser granted or reinstated. |
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Sec. 1104.103. APPLICATION FOR REGISTRATION OR RENEWAL. |
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(a) An applicant for registration or registration renewal under |
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this chapter must submit: |
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(1) an application on a form approved by the board; and |
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(2) the application or renewal fee established under |
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Section 1104.052(a). |
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(b) The application must contain: |
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(1) the name, business address, and telephone contact |
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information of the entity seeking registration; |
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(2) if the entity is not a corporation domiciled in |
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this state, the name and contact information for the company's |
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agent for service of process in this state; |
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(3) the name, address, and contact information for any |
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individual or any corporation, partnership, or other business |
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entity that owns more than 10 percent of the appraisal management |
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company; |
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(4) the name, address, and contact information for at |
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least one controlling person; |
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(5) the designation of a primary contact under Section |
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1104.104; |
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(6) the name and contact information of at least one |
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appraiser designated by the company to respond to and communicate |
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with appraisers on the company's appraisal panel regarding |
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appraisal assignments; |
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(7) a certification that the entity has a system in |
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place to ensure compliance with Subchapter D and Section 129E of the |
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Truth in Lending Act (15 U.S.C. Section 1601 et seq.); |
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(8) a written irrevocable consent to service of |
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process; and |
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(9) any other information required by the board to |
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approve the application. |
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(c) The board shall adopt rules regarding the renewal of a |
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registration under this chapter. |
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Sec. 1104.104. DESIGNATION OF PRIMARY CONTACT. (a) An |
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appraisal management company applying for registration under this |
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chapter shall designate one controlling person as the primary |
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contact for all communication between the board and the company. |
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(b) The controlling person designated under Subsection (a): |
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(1) must: |
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(A) be certified as an appraiser in at least one |
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state at all times during the designation; or |
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(B) have completed: |
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(i) the 15-hour national Uniform Standards |
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of Professional Appraisal Practice course; and |
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(ii) the seven-hour national Uniform |
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Standards of Professional Appraisal Practice update course not more |
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than two years before the renewal of the appraisal management |
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company's registration; |
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(2) may not have had a license or certificate to act as |
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an appraiser denied, revoked, or surrendered in lieu of revocation |
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in any state unless the person has subsequently had a license or |
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certificate to act as an appraiser granted or reinstated; |
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(3) must be of good moral character, as determined by |
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the board; and |
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(4) shall submit to a background investigation, as |
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determined by the board. |
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Sec. 1104.105. DENIAL OF REGISTRATION. (a) The board may |
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deny a registration: |
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(1) to an applicant who fails to satisfy a requirement |
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of this chapter; or |
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(2) on a determination by the board that: |
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(A) there is reasonable evidence that any person |
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who owns more than 10 percent of the appraisal management company or |
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any controlling person of the company has, within the 24 months |
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preceding the date of the application, had a license or |
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certification as an appraiser or a registration as an appraisal |
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management company suspended, revoked, or put on probation in any |
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state; |
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(B) the applicant has, while registered under |
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this chapter, demonstrated incompetency, untrustworthiness, or |
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conduct or practices that render the registrant unfit to perform |
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appraisal management services; or |
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(C) the applicant no longer performs appraisal |
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management services in good faith and is a source of detriment, |
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injury, or loss to the public. |
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(b) The board shall immediately provide written notice to |
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the applicant of the board's denial of a registration under this |
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chapter. |
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(c) An appeal of the denial of a registration is governed by |
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Chapter 2001, Government Code. |
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Sec. 1104.106. ISSUANCE AND PUBLICATION OF REGISTRATION |
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NUMBER. The board shall: |
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(1) issue a unique registration number to each |
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appraisal management company registered under this chapter; and |
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(2) publish annually a list of the companies |
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registered under this chapter and the registration number of each |
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company. |
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Sec. 1104.107. EXPIRATION OF REGISTRATION. Unless renewed, |
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a registration issued under this chapter expires on the second |
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anniversary of the date the registration is issued. |
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[Sections 1104.108-1104.150 reserved for expansion] |
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SUBCHAPTER D. PRACTICE BY APPRAISAL MANAGEMENT COMPANY |
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Sec. 1104.151. EMPLOYMENT OF CERTAIN PERSONS PROHIBITED. |
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(a) An appraisal management company registered under this chapter |
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may not knowingly: |
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(1) employ a person in a position in which the person |
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has the responsibility to order appraisals or to review completed |
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appraisals if the person has had a license or certificate to act as |
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an appraiser denied, revoked, or surrendered in lieu of revocation |
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in any state; |
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(2) enter into any independent contractor arrangement |
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for the provision of appraisals or appraisal management services |
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with any person who has had a license or certificate to act as an |
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appraiser denied, revoked, or surrendered in lieu of revocation in |
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any state; or |
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(3) enter into any contract, agreement, or other |
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business relationship for the provision of appraisals or appraisal |
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management services with any entity that employs, has entered into |
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an independent contract arrangement, or has entered into any |
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contract, agreement, or other business relationship with any person |
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who has ever had a license or certificate to act as an appraiser |
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denied, revoked, or surrendered in lieu of revocation in any state. |
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(b) An appraisal management company is not in violation of |
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Subsection (a) if the person whose license or certification was |
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denied, revoked, or surrendered in lieu of revocation has since |
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that denial, revocation, or surrender had a license or certificate |
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granted or reinstated and the person maintains the license or |
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certificate in good standing. |
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Sec. 1104.152. VERIFICATION OF LICENSURE OR CERTIFICATION. |
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An appraisal management company registered under this chapter must |
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verify that an individual to whom the company is making an |
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assignment for the completion of an appraisal: |
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(1) is licensed or certified under Chapter 1103; and |
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(2) has not had a license or certificate as an |
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appraiser denied, revoked, or surrendered in lieu of revocation |
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since the last time the company made an assignment for an appraisal |
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to the appraiser. |
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Sec. 1104.153. APPRAISAL REVIEW. A person who performs an |
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appraisal review for an appraisal management company must be |
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licensed or certified under Chapter 1103 with at least the same |
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certification for the property type as the appraiser who completed |
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the report being reviewed. |
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Sec. 1104.154. COMPETENCY OF APPRAISERS. Before making an |
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assignment to an appraiser, an appraisal management company must |
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verify that the appraiser receiving the assignment satisfies each |
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provision of the competency rule of the Uniform Standards of |
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Professional Appraisal Practice for the appraisal being assigned. |
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Sec. 1104.155. PROFESSIONAL STANDARDS. An appraisal |
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management company registered under this chapter shall on a |
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periodic basis perform an appraisal review of the work of |
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appraisers performing appraisal services for the company to ensure |
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that the services comply with: |
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(1) the edition of the Uniform Standards of |
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Professional Appraisal Practice in effect at the time of the |
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appraisal; or |
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(2) other standards prescribed by board rule. |
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Sec. 1104.156. BUSINESS RECORDS. (a) An appraisal |
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management company registered under this chapter or that has |
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applied for registration under this chapter shall retain for at |
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least five years all business records relating to each service |
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request that the company receives and the appraiser who performs |
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the appraisal for the company. |
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(b) The board may audit the records of an appraisal |
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management company registered under this chapter to ensure |
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compliance with this chapter, board rules, and the Uniform |
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Standards of Professional Appraisal Practice. |
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(c) A written record of all substantive communications |
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between an appraisal management company registered under this |
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chapter and an appraiser relating to inclusion on an appraisal |
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panel or to an appraisal assignment must be maintained as provided |
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under Subsection (a). |
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Sec. 1104.157. COMPENSATION OF APPRAISERS. (a) An |
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appraisal management company shall: |
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(1) except in cases of breach of contract or |
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substandard performance of services, pay an appraiser for the |
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completion of an appraisal or valuation assignment not later than |
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the 60th day after the date the appraiser provides the completed |
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appraisal or valuation assignment to the company or its assignee; |
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and |
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(2) compensate appraisers at a rate that is reasonable |
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and customary for appraisals being performed in the market area of |
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the property being appraised consistent with the presumptions under |
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federal law. |
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(b) An appraiser who is aggrieved under this section may |
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file a complaint with the board against the appraisal management |
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company if the matter remains unresolved after the appraiser |
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completes the company's dispute resolution process under Section |
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1104.162. |
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Sec. 1104.158. STATEMENT OF FEES. (a) In reporting to a |
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client, an appraisal management company shall separately state the |
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fees: |
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(1) paid to an appraiser for the completion of an |
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appraisal; and |
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(2) charged by the company for appraisal management |
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services. |
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(b) An appraisal management company may not: |
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(1) prohibit an appraiser from recording in the body |
|
of the report that is submitted by the appraiser to the company the |
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fee that the appraiser was paid by the company for completing the |
|
appraisal; or |
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(2) include any fees for appraisal management services |
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performed by the company in the amount the company reports as |
|
charges for the actual completion of an appraisal by an appraiser. |
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Sec. 1104.159. DISCLOSURE OF REGISTRATION NUMBER. An |
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appraisal management company registered under this chapter shall |
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disclose the company's registration number on all documents used to |
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procure appraisals in this state. |
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Sec. 1104.160. MANDATORY REPORTING. An appraisal |
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management company that has a reasonable basis to believe an |
|
appraiser is failing to comply with the Uniform Standards of |
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Professional Appraisal Practice in a manner that materially affects |
|
a value conclusion, violating applicable laws, or otherwise |
|
engaging in unethical or unprofessional conduct shall refer the |
|
matter to the board in the manner provided by Section 1104.204. |
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Sec. 1104.161. REMOVAL OF APPRAISER FROM APPRAISAL PANEL. |
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(a) Other than during the first 30 days after the date an appraiser |
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is first added to the appraisal panel of an appraisal management |
|
company, a company may not remove an appraiser from its panel, or |
|
otherwise refuse to assign requests for appraisal services to an |
|
appraiser without: |
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(1) notifying the appraiser in writing of the reasons |
|
for removal from the company's panel; |
|
(2) if the appraiser is being removed from the panel |
|
for illegal conduct, a violation of the Uniform Standards of |
|
Professional Appraisal Practice, or a violation of this chapter, |
|
notifying the appraiser of the nature of the alleged conduct or |
|
violation; and |
|
(3) providing an opportunity for the appraiser to |
|
respond in writing to the notification. |
|
(b) An appraiser who is removed from the appraisal panel of |
|
an appraisal management company for alleged illegal conduct, a |
|
violation of the Uniform Standards of Professional Appraisal |
|
Practice, or a violation of this chapter, may file a complaint with |
|
the board for a review of the decision of the company if the matter |
|
remains unresolved after the appraiser completes the company's |
|
dispute resolution process under Section 1104.162. |
|
(c) In a review under Subsection (b), the board may not make |
|
any determination regarding the nature of the business relationship |
|
between the appraiser and the appraisal management company that is |
|
unrelated to the grounds for the removal. |
|
(d) The board shall hear and resolve a complaint filed under |
|
Subsection (b) not later than the 180th day after the date the |
|
complaint is filed with the board. |
|
(e) If after opportunity for hearing and review, the board |
|
determines that an appraiser did not commit the alleged violation, |
|
the board shall order that the appraiser be returned to the |
|
appraisal panel of the appraisal management company. The appraisal |
|
management company may not refuse to make assignments for appraisal |
|
services or otherwise penalize the appraiser after returning the |
|
appraiser to the company's appraisal panel. |
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Sec. 1104.162. DISPUTE RESOLUTION. An appraisal management |
|
company shall make a dispute resolution process available to review |
|
a written request by an appraiser who: |
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(1) is dismissed from the company's appraisal panel |
|
for a reason stated in Section 1104.161(a)(2); |
|
(2) is not paid as required by Section 1104.157; or |
|
(3) alleges a violation by the company of one or more |
|
prohibitions in Section 1104.203. |
|
[Sections 1104.163-1104.200 reserved for expansion] |
|
SUBCHAPTER E. DISCIPLINARY ACTIONS AND PROCEDURES AND |
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ADMINISTRATIVE PENALTIES |
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Sec. 1104.201. DISCIPLINARY POWERS OF BOARD. (a) The board |
|
may reprimand an appraisal management company or conditionally or |
|
unconditionally suspend or revoke any registration issued under |
|
this chapter if the board determines that the appraisal management |
|
company has: |
|
(1) violated or attempted to violate this chapter or |
|
any rule adopted by the board under this chapter; or |
|
(2) procured or attempted to procure a license or |
|
registration by fraud, misrepresentation, or deceit. |
|
(b) The board may probate the suspension or revocation of a |
|
registration under reasonable terms determined by the board. |
|
Sec. 1104.202. ADMINISTRATIVE PENALTY. (a) In addition to |
|
any other disciplinary action under this chapter, the board may |
|
impose an administrative penalty against a person who violates this |
|
chapter or a rule adopted under this chapter. |
|
(b) The amount of the administrative penalty may not exceed |
|
$10,000 for each violation. Each day of a continuing violation is a |
|
separate violation. |
|
(c) The amount of the penalty shall be based on: |
|
(1) the seriousness of the violation; |
|
(2) the history of previous violations; |
|
(3) the amount necessary to deter a future violation; |
|
(4) efforts made to correct the violation; and |
|
(5) any other matter that justice may require. |
|
Sec. 1104.203. PROHIBITED PRACTICES. (a) An appraisal |
|
management company or an employee, director, officer, or agent of |
|
an appraisal management company may not: |
|
(1) cause or attempt to cause the appraised value of a |
|
property assigned under an appraisal to be based on any factor other |
|
than the independent judgment of the appraiser; |
|
(2) cause or attempt to cause the mischaracterization |
|
of the appraised value of a property in conjunction with a consumer |
|
credit transaction; |
|
(3) seek to influence an appraiser or otherwise to |
|
encourage a targeted value in order to facilitate the making or |
|
pricing of a consumer credit transaction; |
|
(4) alter, modify, or otherwise change a completed |
|
appraisal report submitted by an appraiser by: |
|
(A) altering or removing the appraiser's |
|
signature or seal; or |
|
(B) adding information to, removing information |
|
from, or changing information contained in the appraisal report, |
|
including any disclosure submitted by an appraiser in or with the |
|
report; |
|
(5) condition the request for an appraisal or the |
|
payment of an appraisal fee, salary, or bonus on the opinion, |
|
conclusion, or valuation to be reached, or on a preliminary |
|
estimate or opinion requested from an appraiser; |
|
(6) request that an appraiser provide an estimated, |
|
predetermined, or desired valuation in an appraisal report, or |
|
provide estimated values or comparable sales at any time before the |
|
appraiser's completion of an appraisal; |
|
(7) provide to an appraiser an anticipated, estimated, |
|
encouraged, or desired value for a subject property or a proposed or |
|
target amount to be loaned to the borrower, except that a copy of |
|
the sales contract for a purchase transaction may be provided; |
|
(8) make any part of the appraiser's fee or the |
|
appraisal management company's fee contingent on a favorable |
|
outcome, including: |
|
(A) a loan closing; or |
|
(B) a specific valuation being achieved by the |
|
appraiser in the appraisal report; |
|
(9) withhold or threaten to withhold timely payment |
|
for an appraisal report or appraisal services rendered when the |
|
appraisal report or services are provided in accordance with the |
|
contract between the parties; |
|
(10) withhold or threaten to withhold future business |
|
from an appraiser; |
|
(11) demote or terminate or threaten to demote or |
|
terminate an appraiser; |
|
(12) expressly or impliedly promise future business, |
|
promotions, or increased compensation for an appraiser; |
|
(13) provide to an appraiser, or any person related to |
|
the appraiser, stock or other financial or nonfinancial benefits; |
|
(14) allow the removal of an appraiser from an |
|
appraisal panel, without prior written notice to the appraiser; |
|
(15) obtain, use, or pay for a second or subsequent |
|
appraisal or order an automated valuation model in connection with |
|
a mortgage financing transaction unless: |
|
(A) there is a reasonable basis to believe that |
|
the initial appraisal was flawed or tainted and that basis is |
|
clearly and appropriately noted in the loan file; |
|
(B) the subsequent appraisal or automated |
|
valuation model is done under a bona fide pre-funding or |
|
post-funding appraisal review or quality control process; or |
|
(C) the subsequent appraisal or automated |
|
valuation model is otherwise required or permitted by federal or |
|
state law; |
|
(16) prohibit legal and allowable communication |
|
between the appraiser and: |
|
(A) the lender; |
|
(B) a real estate license holder; or |
|
(C) any other person from whom the appraiser, in |
|
the appraiser's own professional judgment, believes information |
|
would be relevant; |
|
(17) refuse to accept an appraisal report prepared by |
|
more than one appraiser if an appraiser provides substantial |
|
assistance to another appraiser in the preparation of the report, |
|
unless the appraisal assignment names an individual appraiser or |
|
the statement of work requires an unassisted report; or |
|
(18) require an appraiser to: |
|
(A) prepare an appraisal report if the appraiser, |
|
in the appraiser's own professional judgment, believes the |
|
appraiser does not have the necessary expertise for the specific |
|
geographic area and the appraiser has notified the company of this |
|
belief; |
|
(B) prepare an appraisal report under a schedule |
|
that the appraiser, in the appraiser's own professional judgment, |
|
believes does not afford the appraiser the ability to meet all the |
|
relevant legal and professional obligations if the appraiser has |
|
notified the company of this belief; |
|
(C) provide the appraisal management company |
|
with the appraiser's digital signature or seal; |
|
(D) modify any aspect of an appraisal report |
|
without the appraiser's agreement that the modification is |
|
appropriate; |
|
(E) engage in any act or practice that does not |
|
comply with: |
|
(i) the Uniform Standards of Professional |
|
Appraisal Practice; or |
|
(ii) any assignment conditions and |
|
certifications required by the client; |
|
(F) engage in any other act or practice that |
|
impairs or attempts to impair an appraiser's independence, |
|
objectivity, or impartiality; |
|
(G) enter into an agreement to not serve on the |
|
panel of another appraisal management company; |
|
(H) indemnify or hold harmless the appraisal |
|
management company against liability except liability for errors |
|
and omissions by the appraiser; or |
|
(I) pay a fee imposed on the appraisal management |
|
company under Section 1104.052. |
|
(b) Subsection (a) may not be construed to prohibit: |
|
(1) an appraiser from reimbursing an appraisal |
|
management company for the actual cost of discretionary services |
|
provided to the appraiser; |
|
(2) an appraiser from voluntarily providing the |
|
appraiser's digital signature to another person; |
|
(3) an appraisal management company from asking an |
|
appraiser, after a report is delivered, to: |
|
(A) consider additional appropriate property |
|
information, including the consideration of additional comparable |
|
properties to make or support an appraisal; |
|
(B) provide further detail, substantiation, or |
|
explanation for the appraiser's value conclusion; or |
|
(C) correct errors in the appraisal report; |
|
(4) an appraisal management company from requiring an |
|
appraiser to provide advance notice of and an opportunity for the |
|
appraisal management company to participate in any legal and |
|
allowable communications between the appraiser and a lender; or |
|
(5) a copy of an executed contract for a purchase |
|
transaction being provided to an appraiser. |
|
(c) The board may institute a disciplinary action or impose |
|
an administrative penalty under Chapter 1103 against an appraiser |
|
who, while acting as an employee, officer, or agent of an appraisal |
|
management company, engages in conduct prohibited by Subsection |
|
(a). |
|
Sec. 1104.204. COMPLAINT. (a) Any person, including a |
|
member of the board, may file with the board a written complaint on |
|
a form prescribed by the board. |
|
(b) The board, on its own motion, may file a complaint |
|
against an appraisal management company registered under this |
|
chapter. |
|
Sec. 1104.205. REVIEW AND INVESTIGATION. (a) On receipt of |
|
a complaint or on its own motion, the board shall review and |
|
investigate an alleged act or omission that the board believes is a |
|
ground for disciplinary action. |
|
(b) An investigator designated by the presiding officer of |
|
the board or commissioner shall investigate each allegation in a |
|
complaint to determine whether probable cause exists for a hearing |
|
on the complaint. |
|
(c) If the board determines that a complaint does not |
|
present facts that are grounds for disciplinary action, the board |
|
or the commissioner shall dismiss the complaint and may not take |
|
further action. |
|
Sec. 1104.206. GENERAL SUBPOENA AUTHORITY. (a) The board |
|
may request and, if necessary, compel by subpoena: |
|
(1) the attendance of witnesses for examination under |
|
oath; and |
|
(2) the production of records, documents, and other |
|
evidence relevant to the investigation of an alleged violation of |
|
this chapter for inspection and copying. |
|
(b) The board may also issue a subpoena for purposes of an |
|
investigation of a complaint to determine whether the board should |
|
institute a contested case proceeding. |
|
(c) If a person does not comply with a subpoena, the board, |
|
acting through the attorney general, may file suit to enforce the |
|
subpoena in a district court in Travis County or in the county in |
|
which a hearing conducted by the board may be held. |
|
(d) The court shall order compliance with the subpoena if |
|
the court finds that good cause exists for the issuance of the |
|
subpoena. |
|
Sec. 1104.207. REPORT OF INVESTIGATION REQUIRED. (a) At |
|
the conclusion of the investigation of a complaint, the |
|
investigator shall submit to the board a written report to enable |
|
the board to determine what further action is necessary. |
|
(b) The report must contain: |
|
(1) statements of fact; |
|
(2) the recommendations of the investigator; and |
|
(3) the position or defense of the investigated |
|
appraisal management company. |
|
Sec. 1104.208. ACTION BASED ON REPORT. (a) Based on the |
|
report submitted under Section 1104.207, the board may: |
|
(1) order further investigation of the complaint; |
|
(2) determine that there is not probable cause to |
|
believe that a violation occurred and dismiss the case; or |
|
(3) determine that there is probable cause to believe |
|
that a violation occurred and enter into an agreed order with the |
|
respondent or proceed as the complainant with a contested case |
|
hearing under Chapter 2001, Government Code. |
|
(b) The board by rule may delegate any of its authority |
|
under Subsection (a) to the commissioner. |
|
Sec. 1104.209. NOTICE OF VIOLATION AND PENALTY. (a) If, |
|
after investigating a possible violation and the facts surrounding |
|
that possible violation, the board determines that a violation |
|
occurred, the board shall give written notice of the violation to |
|
the person alleged to have committed the violation. |
|
(b) The notice must: |
|
(1) include a summary of the alleged violation; |
|
(2) state the recommended sanction, including the |
|
amount of the proposed administrative penalty; and |
|
(3) inform the person of the person's right to a |
|
hearing on the occurrence of the violation, the amount of the |
|
penalty, or both. |
|
(c) Not later than the 20th day after the date the person |
|
receives the notice, the person may: |
|
(1) accept the board's determination, including the |
|
proposed administrative penalty; or |
|
(2) make a written request for a hearing on that |
|
determination. |
|
Sec. 1104.210. PENALTY TO BE PAID OR HEARING REQUESTED. If |
|
the person accepts the board's determination or fails to respond to |
|
the notice in a timely manner, the board by order shall approve the |
|
determination and impose the proposed penalty. |
|
Sec. 1104.211. TEMPORARY SUSPENSION. (a) The presiding |
|
officer of the board shall appoint a three-member disciplinary |
|
panel consisting of board members to determine whether a person's |
|
registration under this chapter should be temporarily suspended. |
|
(b) If the disciplinary panel determines from the |
|
information presented to the panel that a person registered under |
|
this chapter would, by the person's continuation in practice, |
|
constitute a continuing threat to the public welfare, the |
|
disciplinary panel shall temporarily suspend the person's |
|
registration. |
|
(c) A registration may be suspended under this section |
|
without notice or hearing on the complaint if: |
|
(1) institution of proceedings for a contested case |
|
hearing is initiated simultaneously with the temporary suspension; |
|
and |
|
(2) a hearing is held under Chapter 2001, Government |
|
Code, and this chapter as soon as possible. |
|
(d) A temporary suspension under this section automatically |
|
expires after 45 days if the board has not scheduled a hearing to |
|
take place within that time or if, at the board's request, the |
|
hearing is continued beyond the 45th day. |
|
(e) Notwithstanding Chapter 551, Government Code, the |
|
disciplinary panel may hold a meeting by telephone conference call |
|
if immediate action is required and convening the panel at one |
|
location is inconvenient for any member of the panel. |
|
Sec. 1104.212. NOTICE OF HEARING. Not later than the 30th |
|
day before the hearing date of a contested case involving an |
|
appraisal management company, the board shall personally deliver or |
|
send by certified mail to the company notice of the hearing. |
|
Sec. 1104.213. APPLICABILITY OF ADMINISTRATIVE PROCEDURE |
|
LAW. Except as otherwise provided by this chapter, a proceeding |
|
under this subchapter is subject to Chapter 2001, Government Code. |
|
Sec. 1104.214. ACTION AFTER HEARING. On conclusion of a |
|
contested case hearing under this subchapter, the administrative |
|
law judge shall: |
|
(1) make findings of fact and conclusions of law; and |
|
(2) issue to the board a proposal for decision that the |
|
board shall take one or more of the following actions: |
|
(A) dismiss the charges; |
|
(B) revoke the appraisal management company's |
|
registration; |
|
(C) suspend the registration of the appraisal |
|
management company for a period of not more than five years; |
|
(D) impose a period of probation, with or without |
|
conditions; |
|
(E) issue a public or private reprimand or a |
|
warning; |
|
(F) impose an administrative penalty; or |
|
(G) require the payment of costs expended by the |
|
board associated with the contested case, including legal fees and |
|
administrative costs. |
|
Sec. 1104.215. DECISION BY BOARD. (a) Based on the |
|
findings of fact and conclusions of law and the recommendations of |
|
the hearings examiner, the board by order may determine that: |
|
(1) a violation has occurred and may impose an |
|
administrative penalty or another sanction; or |
|
(2) a violation did not occur. |
|
(b) The board shall give notice of the order to the person. |
|
The notice must include: |
|
(1) separate statements of the findings of fact and |
|
conclusions of law; |
|
(2) the amount of any penalty imposed or a description |
|
of any sanction imposed; and |
|
(3) a statement of the right of the person to judicial |
|
review of the order. |
|
Sec. 1104.216. APPLICATION FOR REHEARING. (a) Not later |
|
than the 20th day after the date a final decision is issued in a |
|
contested case, a party may file an application with the board for a |
|
rehearing. The application must state: |
|
(1) the specific grounds for rehearing; and |
|
(2) the relief sought. |
|
(b) The application is denied if the board does not grant it |
|
before the 120th day after the date the commissioner is served with |
|
the application. |
|
Sec. 1104.217. DECISION ON REHEARING. (a) The decision |
|
made at the conclusion of the original contested case hearing may |
|
not be reversed or modified for a procedural, evidentiary, or other |
|
error that did not cause substantial injustice to the parties. |
|
(b) The decision made on a rehearing may incorporate by |
|
reference any part of the decision made at the conclusion of the |
|
original hearing. |
|
(c) On rehearing, the administrative law judge shall |
|
consider facts not presented in the original hearing if: |
|
(1) the facts arose after the original hearing was |
|
concluded; |
|
(2) the party offering the evidence could not |
|
reasonably have provided the evidence at the original hearing; or |
|
(3) the party offering the evidence was misled by a |
|
party regarding the necessity for offering the evidence at the |
|
original hearing. |
|
[Sections 1104.218-1104.250 reserved for expansion] |
|
SUBCHAPTER F. OTHER ENFORCEMENT PROVISIONS |
|
Sec. 1104.251. INJUNCTION. (a) The board may institute an |
|
action in its own name against any person, including a person who is |
|
not registered under this chapter, to enjoin a violation of this |
|
chapter or a rule adopted by the board under this chapter. |
|
(b) An action under this section must be brought in a |
|
district court in Travis County. The attorney general shall act as |
|
legal advisor to the board and provide necessary legal assistance. |
|
Sec. 1104.252. CIVIL PENALTY FOR ENGAGING IN ACTIVITY |
|
WITHOUT REQUIRED REGISTRATION. (a) A person who receives |
|
consideration for engaging in an activity for which registration is |
|
required under this chapter and who is not registered is liable for |
|
a civil penalty. |
|
(b) The amount of a civil penalty imposed under this section |
|
may not be less than the amount of money equal to the value of the |
|
consideration received or more than three times the amount of money |
|
equal to the value of the consideration received. |
|
(c) At the request of the board, the attorney general or a |
|
district or county attorney may bring an action in district court to |
|
recover a civil penalty under this section. |
|
(d) A civil penalty recovered in an action under this |
|
section shall be deposited in the state treasury. |
|
Sec. 1104.253. CRIMINAL PENALTY FOR ENGAGING IN ACTIVITY |
|
WITHOUT REQUIRED REGISTRATION. (a) A person commits an offense if |
|
the person engages in an activity for which registration is |
|
required under this chapter without being registered. |
|
(b) An offense under this section is a Class A misdemeanor. |
|
SECTION 3. Not later than January 31, 2013, the governor |
|
shall appoint the members of the advisory committee established |
|
under Section 1103.157, Occupations Code, as added by this Act. |
|
SECTION 4. Not later than January 1, 2012, the Texas |
|
Appraiser Licensing and Certification Board shall adopt all rules, |
|
fees, and forms as required by Chapter 1104, Occupations Code, as |
|
added by this Act. |
|
SECTION 5. (a) The Real Estate Center at Texas A&M |
|
University shall conduct a study of the reasonable and customary |
|
rates of compensation for appraisals performed by appraisers in |
|
various market areas of this state. |
|
(b) Not later than November 1, 2012, the Real Estate Center |
|
at Texas A&M University shall submit to the appropriate standing |
|
committees of the legislature a report containing the findings of |
|
the study conducted under Subsection (a) of this section. |
|
SECTION 6. Notwithstanding Section 7(b) of this Act, an |
|
appraisal management company conducting business in this state on |
|
or before the effective date of this Act may continue to conduct |
|
business in this state without registering under Chapter 1104, |
|
Occupations Code, as added by this Act, until the 120th day after |
|
the date the registration process created by the Texas Appraiser |
|
Licensing and Certification Board under Chapter 1104, Occupations |
|
Code, as added by this Act, takes effect if that process is not in |
|
effect on March 1, 2012. |
|
SECTION 7. (a) Except as provided by Subsection (b) of |
|
this section, this Act takes effect September 1, 2011. |
|
(b) Section 1104.101 and Subchapters E and F, Chapter 1104, |
|
Occupations Code, as added by this Act, take effect March 1, 2012. |
|
|
|
______________________________ |
______________________________ |
|
President of the Senate |
Speaker of the House |
|
|
|
I certify that H.B. No. 1146 was passed by the House on April |
|
27, 2011, by the following vote: Yeas 124, Nays 17, 2 present, not |
|
voting; and that the House concurred in Senate amendments to H.B. |
|
No. 1146 on May 18, 2011, by the following vote: Yeas 145, Nays 0, |
|
2 present, not voting. |
|
|
|
______________________________ |
|
Chief Clerk of the House |
|
|
I certify that H.B. No. 1146 was passed by the Senate, with |
|
amendments, on May 16, 2011, by the following vote: Yeas 27, Nays |
|
4. |
|
|
|
|
|
______________________________ |
|
Secretary of the Senate |
|
APPROVED: __________________ |
|
Date |
|
|
|
__________________ |
|
Governor |