SENATE AMENDED

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY STEVENSON, HELM, QUINN, BOYD, BUXTON, CALTAGIRONE, CARROLL, CLYMER, D. COSTA, CREIGHTON, DeLUCA, DENLINGER, ELLIS, J. EVANS, FARRY, GEIST, GIBBONS, GODSHALL, GOODMAN, GRELL, GROVE, HARKINS, HENNESSEY, HORNAMAN, M. K. KELLER, KILLION, KOTIK, KULA, MAJOR, MARKOSEK, MARSICO, MILLER, MURT, O'NEILL, PEIFER, PICKETT, PYLE, READSHAW, REICHLEY, SAYLOR, SCAVELLO, SONNEY, VULAKOVICH, WATSON, YOUNGBLOOD, STURLA, DAVIS, SANTONI, ROCK, KAUFFMAN, BEAR, DAVIDSON, KORTZ AND SANTARSIERO, FEBRUARY 2, 2011

SENATOR TOMLINSON, CONSUMER PROTECTION AND PROFESSIONAL LICENSURE, IN SENATE, AS AMENDED, OCTOBER 25, 2011   

AN ACT

Providing for registration of appraisal management companies,

for powers of the State Board of Certified Real Estate

Appraisers with respect to appraisal management companies,

for the responsibilities and duties of appraisal management

companies, for prohibited activities, for discipline and for

penalties.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Short title.

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This act shall be known and may be cited as the Appraisal

Management Company Registration Act.

Section 2.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Applicant."  A person who files an application for

registration as an appraisal management company.

"Appraisal."  The term has the meaning provided in section 2

of the act of July 10, 1990 (P.L.404, No.98), known as the Real

Estate Appraisers Certification Act.

"Appraisal management company."  A person that provides

appraisal management services and acts as a third-party

intermediary between a person seeking a valuation of real estate

and an appraiser or firm of appraisers.

"Appraisal management services."  Conducting business by

telephone, by electronic means, by mail or in person directly or

indirectly for compensation or in the expectation of

compensation to manage the performance of appraisals for a

client, including, without limitation:

(1)  Recruiting appraisers.

(2)  Contracting with appraisers to perform appraisals.

(3)  Negotiating fees with appraisers.

(4)  Receiving appraisal orders and appraisals.

(5)  Submitting appraisals received from appraisers to

the client.

(6)  Providing related administrative and clerical

duties.

"Appraisal review."  The act or process of developing and

communicating an opinion about the quality, adequacy or

reasonableness of the work of an appraiser, including the

appraiser's opinions or conclusions developed in an appraisal

assignment, such as value.

"Appraiser."  An individual certified under the act of July

10, 1990 (P.L.404, No.98), known as the Real Estate Appraisers

Certification Act, as a certified residential appraiser or

certified general appraiser.

"Appraiser panel."  A group of appraisers that have been

selected by an appraisal management company to perform

appraisals for the appraisal management company.

"Board."  The State Board of Certified Real Estate Appraisers

within the Bureau of Professional and Occupational Affairs in

the Department of State.

"Client."  A person that contracts with or otherwise enters

into an agreement with an appraisal management company for the

performance of appraisal management services.

"Compliance person."  An individual who is employed,

appointed or authorized by an appraisal management company to be

responsible for ensuring compliance with this act.

"Exempt company."  A person that is exempted by Federal law

from registering under this act.

"Key person."  A person other than a compliance person who is

a director, officer, supervisor, manager or other person

performing a similar function in an appraisal management

company. 

"Mortgage Bankers and Brokers and Consumer Equity Protection

Act."  The act of December 22, 1989 (P.L.687, No. 90), known as

the Mortgage Bankers and Brokers and Consumer Equity Protection

Act.

"REACA."  The act of July 10, 1990 (P.L.404, No.98), known as

the Real Estate Appraisers Certification Act.

"Registrant."  An appraisal management company that is

registered under this act.

"RELRA."  The act of February 19, 1980 (P.L.15, No.9), known

as the Real Estate Licensing and Registration Act.

Section 3.  Registration of appraisal management companies

required.

(a)  General rule.--Except as provided in subsection (b), a

person who is not an exempt company or a registrant may not:

(1)  Act as an appraisal management company in this

Commonwealth.

(2)  Hold out as an appraisal management company in this

Commonwealth.

(3)  Advertise or hold out as engaging in or conducting

the business of an appraisal management company in this

Commonwealth. 

(b)  Exceptions.--This act does not apply to:

(1)  An appraiser who:

(i)  in the normal course of business enters into an

agreement, whether written or otherwise, with an

appraiser for the performance of an appraisal; and

(ii)  under the agreement cosigns the appraisal upon

its completion.

(2)  A person authorized to engage in business as a

banking institution, credit union or savings association

organized under the laws of this Commonwealth or any other

jurisdiction.

Section 4.  Powers of the board.

(a)  Regulations.--The board shall have the powers necessary

to implement, administer and enforce this act, including,

without limitation, the power to adopt rules and regulations

consistent with this act.

(b)  Guidelines.--In order to facilitate the speedy

implementation of this act, the board shall have the power and

authority to promulgate, adopt and use guidelines to prescribe

the procedures, forms and standards required for registration

under this section, subject to the following provisions:

(1)  Guidelines promulgated under this subsection shall

be published in the Pennsylvania Bulletin. 

(2)  Guidelines promulgated under this subsection shall

be submitted for review pursuant to the procedures set forth

in section 4 of Executive Order 1996-1.

(3)  Guidelines promulgated under this subsection shall

not be subject to review under:

(i)  Section 205 of the act of July 31, 1968

(P.L.769, No.240), referred to as the Commonwealth

Documents Law.

(ii)  Sections 204(b) and 301(10) of the act of

October 15, 1980 (P.L.950, No.164), known as the

Commonwealth Attorneys Act.

(iii)  The act of June 25, 1982 (P.L.633, No.181),

known as the Regulatory Review Act.

(4)  Guidelines promulgated under this subsection shall

be effective for a period not to exceed the effective date of

a final rulemaking promulgated by the board pursuant to the

authority granted in subsection (a), or two years from the

effective date of this act, whichever is earlier.

Section 5.  Requirements for registration.

(a)  Application.--Before acting or offering to act as an

appraisal management company in this Commonwealth, a person that

is not an exempt company shall make written application to the

board for registration accompanied by the required fee and bond.

(b)  Required information.--The application shall contain

such information as the board shall require, including, without

limitation, the following information:

(1)  The name, business street address, telephone number

and other contact information of the applicant.

(2)  If the applicant is not an individual and is

incorporated or otherwise formed under the laws of a

jurisdiction other than this Commonwealth, documentation that

the applicant is authorized to transact business in this

Commonwealth.

(3)  The name, street address, telephone number and other

contact information of any person that owns 10% or more of

the applicant.

(4)  The name, street address, telephone number and other

contact information of the applicant's compliance person.

(5)  A certification that the applicant:

(i)  Has a system in place to verify that a person

being added to an appraiser panel of the applicant or who

will otherwise perform appraisals for the applicant of

property located in this Commonwealth is certified and in

good standing in this Commonwealth under REACA.

(ii)  Has a system in place for the performance of

appraisal reviews with respect to the work of all

appraisers that are performing appraisals for the

applicant of property located in this Commonwealth to

determine whether the appraisals are being conducted in

conformance with the minimum standards under REACA both

on a periodic basis and whenever requested by a client.

(iii)  Maintains a detailed record of each request

for an appraisal that it receives, the appraiser assigned

to perform the appraisal, the fees received from the

client for the appraisal and the payment to the

appraiser.

(6)  Any discipline imposed on the applicant in this

Commonwealth or any other state under any law regulating

appraisers, appraisal management companies or real estate

brokers or salespersons.

(7)  Any other information required by rules and

regulations of the board.

(c)  Requirements for registration.--The board shall register

an applicant as an appraisal management company in this

Commonwealth upon:

(1)  Receipt of a properly completed application.

(2)  Payment of the required fee.

(3)  Posting of the required bond.

(4)  A determination by the board that the activities of

the applicant will be directed and conducted by persons of

good moral character as defined in the rules and regulations

of the board.

(d)  Denial of application.--

(1)  If the board finds that there is reason to deny the

application for registration, the board shall notify the

applicant that the application has been denied and shall

afford the applicant an opportunity for a hearing before the

board to show cause why the application should not be denied.

(2)  All proceedings concerning the denial of an

application for registration shall be governed by 2 Pa.C.S.

(relating to administrative law and procedure).

(e)  Construction.--The acceptance by the board of an

application for registration does not constitute the approval of

its contents or waive the authority of the board to take

disciplinary action under this act.

Section 6.  Fees and renewals.

(a)  Filing fees.--The fee to file an application for

registration or renewal of a registration under this act shall

be $1,000 or such other amounts as are set by the rules and

regulations of the board.

(b)  Bond.--

(1)  In addition to the filing fee, each applicant for

registration shall post with the board and maintain a surety

bond in the amount of $20,000, or such other amount as shall

be set by the rules and regulations of the board.

(2)  The bond shall:

(i)  Be in the form prescribed by the rules and

regulations of the board.

(ii)  Accrue to the Commonwealth for the benefit of a

claimant against the registrant to secure the faithful

performance of the registrant's obligations under this

act.

(3)  The aggregate liability of the surety shall not

exceed the principal sum of the bond.

(4)  A party having a claim against the registrant may

bring suit directly on the surety bond or the board may bring

suit on behalf of the party having a claim against the

registrant.

(5)  A deposit of cash or security may be accepted in

lieu of the bond.

(6)  The amount of the bond shall be restored to the full

amount required within 15 days after the payment of any claim

on the bond.

(c)  Renewal.--

(1)  Registrations under this act shall be renewed on a

biennial basis for persons in good standing.

(2)  Failure to timely renew a registration shall result

in a loss of authority to operate under this act.

(3)  A request to reinstate a registration shall be

accompanied by payment of a penalty of $50 for each month of

delinquency.

(4)  The contents of an application for renewal shall be

prescribed by the rules and regulations of the board.

Section 7.  Responsibilities and duties of appraisal management

companies.

(a)  Conduct of reviews.--All appraisal reviews, as defined

by the Uniform Standards of Professional Appraisal Practice,

must be conducted by a certified or licensed appraiser in good

standing in this Commonwealth or another state.

(b)  Records.--

(1)  An appraisal management company shall maintain or

cause to be maintained:

(i)  in the case of a registrant, complete records of

its compliance with the certifications required under

section 5(b)(5); and

(ii)  in all cases, such accounts, correspondence,

memoranda, papers, books and other records as shall be

required by the rules and regulations of the board.

(2)  The records must be retained for the longer of:

(i)  five years after their preparation;

(ii)  two years after final disposition of any

judicial proceeding that involves the actions of the

appraisal management company that are the subject of the

records; or

(iii)  such other period as shall be required by the

rules and regulations of the board with respect to a

particular class or type of records.

(3)  The board may inspect the records required by

paragraph (1) periodically or if the board determines that

the records are pertinent to an investigation of a complaint

against an appraisal management company.

(c)  Compliance person.--

(1)  An appraisal management company shall at all times

have a compliance person.

(2)  A registrant shall file a form with the board

certifying:

(i)  The identity of its compliance person.

(ii)  The individual's acceptance of the

responsibilities of a compliance person.

(3)  A registrant shall notify the board within 30 days

of a change in its compliance person.

(4)  An individual registrant who operates as a sole

proprietorship is considered the compliance person under this

act.

(d)  Updating of board records.--If the information contained

in a document filed with the board is or becomes inaccurate or

incomplete in any material respect, the registrant shall

promptly file an amendment correcting the information contained

in the document.

(e)  Disclosure.--An appraisal management company shall

disclose to its client the fees paid for an appraisal separately

from any other fees or charges for appraisal management

services.

(f)  Notice of discipline.--A registrant must notify the

board in writing within 30 days after its occurrence of any

denial, revocation or suspension of its designation,

registration, certificate or license under any law of any

jurisdiction other than this Commonwealth regulating appraisal

management companies, the imposition of any other form of

discipline under any such law, or the commencement of a

disciplinary or enforcement action against the registrant under

any such law.

(g)  Provision of sales contract.--Whenever an appraisal

management company requests an appraiser to perform an

appraisal, the appraisal management company must make a

reasonable effort to provide in a timely manner to the appraiser

a copy of the contract for the underlying transaction, along

with legal descriptions and any other documents pertinent to the

assignment.

Section 8.  Prohibited activities.

(a)  Improper influence.--An employee, key person, compliance

person or agent of an appraisal management company shall not

improperly influence or attempt to improperly influence the

development, reporting, result or review of an appraisal,

including, without limitation, through the use of intimidation,

coercion, extortion, bribery, blackmail, threat of nonpayment or

withholding payment for an appraisal or threat of exclusion from

future appraisal work.

(b)  Other prohibitions.--A registrant or exempt company

shall not:

(1)  Hire, employ or in any way contract with or pay a

person who is not an appraiser and who holds a license under

the RELRA to perform a valuation of real estate unless it is

a comparative market analysis as defined in section 201 of

the RELRA.

(2)  Require an appraiser to provide the registrant or

exempt company with the appraiser's digital signature or

seal.

(3)  Alter, amend or change an appraisal submitted by an

appraiser, including, without limitation, by:

(i)  removing the appraiser's signature or seal; or

(ii)  adding or removing information to or from the

appraisal.

(4)  Remove an appraiser from an appraiser panel without

prior written notice to the appraiser. The notice must

include evidence of:

(i)  illegal conduct by the appraiser;

(ii)  a violation of the minimum reporting standards

under the REACA or other applicable statute or

regulation;

(iii)  substandard performance; or

(iv)  otherwise improper or unprofessional behavior.

(5)  Enter into a contract or agreement with an appraiser

for the performance of appraisals unless the appraiser is

certified and in good standing with the board.

(6)  Request that an appraiser provide:

(i)  an estimated, predetermined or desired valuation

in an appraisal; or

(ii)  estimated values or comparable sales at any

time before the appraiser completes an appraisal.

(7)  Except as provided in section 7(g), provide to an

appraiser an anticipated, estimated, encouraged or desired

value for a property or a proposed or target amount to be

loaned to the borrower.

(8)  Commit an act or practice that impairs or attempts

to impair an appraiser's independence, objectivity or

impartiality or solicit an appraiser to violate this act or

the RELRA.

(9)  Prohibit an appraiser from recording the fee the

appraiser was paid for the performance of an appraisal in the

appraisal report.

(c)  Construction.--Subsection (a) does not prohibit an

appraisal management company from requesting that an appraiser:

(1)  Provide additional information about the basis for a

valuation.

(2)  Correct objective factual errors in an appraisal.

(3)  Provide further detail, substantiation or

explanation for the appraiser's value conclusion, including,

without limitation, the applicability of additional

comparables as presented.

(d)  Owners and employees.--

(1)  Except as provided in paragraph (2), a person that

has been denied registration under this act or a similar law

of another jurisdiction or that would be disqualified from

eligibility to be certified or licensed under the REACA may

not be:

(i)  a key person or compliance person; or

(ii)  directly involved in the provision of appraisal

services by an appraisal management company as an

employee or in any other capacity.

(2)  Paragraph (1) shall cease to apply at such time as a

person is subsequently registered under this act or becomes

eligible to be certified or licensed under the REACA.

Section 9.  Registry of applicants and roster.

(a)  Registry.--The board shall keep a register of all

applicants for registration showing:

(1)  The date of application.

(2)  The applicant's name.

(3)  The applicant's business street address.

(4)  Whether the registration was granted or denied.

(b)  Roster.--The board shall keep a current roster showing

for each registrant registered at any time with the board:

(1)  Its last known name and street address.

(2)  A unique identification number.

(c)  Effect and availability of records.--The register and

roster shall be prima facie evidence of all matters contained

therein. The register and roster shall be kept on file in the

office of the board and shall be open for public inspection. The

board shall also post the roster on its Internet website.

Section 10.  Disciplinary and corrective measures.

(a)  Authority of board.--The board may impose disciplinary

or corrective action as set forth in subsection (b) upon an

applicant, registrant, exempt company, person acting as an

appraisal management company, person holding out as an appraisal

management company or person advertising or holding out as

engaging in or conducting the business of an appraisal

management company, for any of the following causes: 

(1)  The appraisal management company's application for

registration or renewal of registration when filed contained

a statement that in light of the circumstances under which it

was made is false or misleading with respect to a material

fact.

(2)  The applicant, registrant, exempt company, its

compliance person or key person, has violated or failed to

comply with:

(i)  This act, or the regulations or guidelines

promulgated by the board for the administration and

enforcement of this act.

(ii)  The REACA or the regulations or guidelines

promulgated by the board for the administration and

enforcement of the REACA.

(3)  The State Real Estate Commission has found the

applicant, registrant, exempt company, compliance person or

key person in violation of RELRA or the regulations to

administer and effectuate the purposes of the RELRA.

(4)  The Department of Banking or a court of competent

jurisdiction has found the applicant, registrant, exempt

company, compliance person or key person in violation of the

provisions of 7 Pa.C.S. Ch.61 (relating to mortgage loan

industry licensing and consumer protection) or the Mortgage

Bankers and Brokers and Consumer Equity Protection Act. 

(5)  The applicant, registrant, exempt company,

compliance person or key person has been convicted of:

(i)  A felony.

(ii)  Within the past ten years, a misdemeanor

involving mortgage lending or real estate appraising,

breach of trust, moral turpitude or fraudulent or

dishonest dealing.

(6)  The applicant, registrant, exempt company,

compliance person or key person is permanently or temporarily

enjoined by a court of competent jurisdiction from engaging

in or continuing any conduct or practice involving appraisal

management services or operating an appraisal management

company.

(7)  The applicant, registrant, exempt company,

compliance person or key person is the subject of an order of

the board or any other state appraisal management company

regulatory agency denying, suspending or revoking the

person's privilege to operate as an appraisal management

company, or other disciplinary actions by an agency of

another jurisdiction responsible for regulating appraisers,

mortgage brokers, real estate salespersons or real estate

brokers.

(8)  The person was not an exempt company or registrant

and:

(i)  Acted as an appraisal management company.

(ii)  Held out as an appraisal management company

within this Commonwealth.

(iii)  Advertised or held out as engaging in or

conducting the business of an appraisal management

company

(b)  Board action.--When the board finds any of the causes

listed in subsection (a) supported by substantial evidence the

board may:

(1)  Deny, suspend, revoke or refuse to issue or renew

the registration of an appraisal management company under

this act.

(2)  Restrict, reprimand, limit or suspend enforcement of

its findings and place the appraisal management company on

probation with the right to vacate the probation for

noncompliance.

(3)  In lieu of imposing a sanction authorized by

paragraph (1), the board may order the removal, replacement

or restriction of a compliance person or a key person found

to have committed any of the violations of subsection (a) as

a condition of approving, renewing or retaining an

applicant's or registrant's registration.

(4)  In lieu of imposing a sanction authorized by

paragraph (1), the board may order a person found to have

committed any of the violations of subsection (a) and that

owns an interest in or participates in the business of an

appraisal management company to divest partially or wholly of

such interest or participation as a condition of granting,

renewing or retaining an applicant's or registrant's

registration.

(5)  Levy a civil penalty or costs of investigation under

subsection (d) or the act of July 2, 1993, (P.L.345, No.48),

entitled "An act empowering the General Counsel or his

designee to issue subpoenas for certain licensing board

activities; providing for hearing examiners in the Bureau of

Professional and Occupational Affairs; providing additional

powers to the Commissioner of Professional and Occupational

Affairs; and further providing for civil penalties and

license suspension."

(6)  Require bond or other security in addition to the

requirements of section 6 (b) and regulations of the board

promulgated pursuant to that subsection.

(c)  Criminal penalties.--A person that violates this act

commits a misdemeanor of the third degree and shall, upon

conviction, be sentenced to pay a fine of up to $1,000 or to

imprisonment for not more than 90 days, or both.

(d)  Civil penalty.--In addition to any other civil remedy or

criminal penalty provided for in this act, the board may levy a

civil penalty of up to $10,000 on any person that violates any

provision of this act or any person that acts as an appraisal

management company, holds out as an appraisal management company

in this Commonwealth or advertises or holds out as engaging in

or conducting the business of an appraisal management company at

a time when the person is not an exempt company or registered

under this act. The board shall levy this penalty only after

affording the accused party the opportunity for a hearing, as

provided in 2 Pa.C.S. (relating to administrative law and

procedure). All civil penalties imposed in accordance with this

section shall be paid into the Professional Licensure

Augmentation Account.

(e)  Procedures.--The investigation and prosecution of

disciplinary proceedings under this section shall be conducted

by the board under the provisions of the REACA.

Section 11.  Effective date.

This act shall take effect in 60 days.

Section 1.  Short title.

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This act shall be known and may be cited as the Appraisal

Management Company Registration Act.

Section 2.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Applicant."  A person who files an application for

registration as an appraisal management company.

"Appraisal."  The term has the meaning provided in section 2

of the act of July 10, 1990 (P.L.404, No.98), known as the Real

Estate Appraisers Certification Act.

"Appraisal management company."  A person that provides

appraisal management services and acts as a third-party

intermediary between a person seeking a valuation of real estate

located in this Commonwealth and an appraiser or firm of

appraisers.

"Appraisal management services."  Conducting business by

telephone, by electronic means, by mail or in person directly or

indirectly for compensation or in the expectation of

compensation to manage the performance of appraisals for a

client, including, without limitation:

(1)  Recruiting appraisers.

(2)  Contracting with appraisers to perform appraisals.

(3)  Negotiating fees with appraisers.

(4)  Receiving appraisal orders and appraisals.

(5)  Submitting appraisals received from appraisers to

the client.

(6)  Providing related administrative and clerical

duties.

"Appraisal review." An appraisal review as defined by the

Uniform Standards of Professional Appraisal Practice issued by

the Appraisal Standards Board.

"Appraiser."  An individual certified under the act of July

10, 1990 (P.L.404, No.98), known as the Real Estate Appraisers

Certification Act, as a certified residential appraiser or

certified general appraiser.

"Appraiser panel."  A group of appraisers that have been

selected by an appraisal management company to perform

appraisals for the appraisal management company.

"Board."  The State Board of Certified Real Estate Appraisers

within the Bureau of Professional and Occupational Affairs in

the Department of State.

"Client."  A person that contracts with or otherwise enters

into an agreement with an appraisal management company for the

performance of appraisal management services.

"Compliance person."  An individual who is employed,

appointed or authorized by an appraisal management company to be

responsible for ensuring compliance with this act.

"Exempt company."  A person that is exempted from registering

under this act under section 1124 of the Financial Institutions

Reform, Recovery, and Enforcement Act of 1989 (Public Law

101-73, 103 Stat. 183).

"Key person."  A person other than a compliance person who is

a director, officer, supervisor, manager or other person

performing a similar function in an appraisal management

company. 

"Mortgage Bankers and Brokers and Consumer Equity Protection

Act."  The act of December 22, 1989 (P.L.687, No. 90), known as

the Mortgage Bankers and Brokers and Consumer Equity Protection

Act.

"REACA."  The act of July 10, 1990 (P.L.404, No.98), known as

the Real Estate Appraisers Certification Act.

"Registrant."  An appraisal management company that is

registered under this act.

"RELRA."  The act of February 19, 1980 (P.L.15, No.9), known

as the Real Estate Licensing and Registration Act.

Section 3.  Registration of appraisal management companies

required.

Except as provided in section 11, a person who is not an

exempt company or a registrant may not:

(1)  Act as an appraisal management company in this

Commonwealth.

(2)  Hold out as an appraisal management company in this

Commonwealth.

(3)  Advertise or hold out as engaging in or conducting

the business of an appraisal management company in this

Commonwealth. 

Section 4.  Powers of the board.

(a)  Regulations.--The board shall have the powers necessary

to implement, administer and enforce this act, including the

power to adopt rules and regulations consistent with this act.

(b)  Temporary regulations.--In order to facilitate the

prompt implementation of this act, regulations promulgated by

the board shall be deemed temporary regulations which shall

expire no later than three years following the effective date of

this section. The board may promulgate temporary regulations

which shall not be subject to:

(1)  Sections 201, 202 and 203 of the act of July 31,

1968 (P.L.769, No.240), referred to as the Commonwealth

Documents Law.

(2)  The act of June 25, 1982 (P.L.633, No.181), known as

the Regulatory Review Act.

(c)  Expiration.--The authority provided to the board to

adopt temporary regulations under subsection (b) shall expire

three years from the effective date of this section. Regulations

adopted after that date shall be promulgated as provided by law.

Section 5.  Requirements for registration.

(a)  Application.--Before acting or offering to act as an

appraisal management company in this Commonwealth, a person that

is not an exempt company shall make written application to the

board for registration accompanied by the required fee and bond

or letter of credit.

(b)  Required information.--The application shall contain

such information as the board shall require, including the

following information:

(1)  The name, business street address, telephone number

and other contact information of the applicant.

(2)  If the applicant is not an individual and is

incorporated or otherwise formed under the laws of a

jurisdiction other than this Commonwealth, documentation that

the applicant is authorized to transact business in this

Commonwealth.

(3)  The name, street address, telephone number and other

contact information of any person that owns 10% or more of

the applicant.

(4)  The name, street address, telephone number and other

contact information of the applicant's compliance person.

(5)  A certification that the applicant:

(i)  Has a system in place to verify that a person

being added to an appraiser panel of the applicant or who

will otherwise perform appraisals for the applicant of

property located in this Commonwealth is a certified

appraiser and in good standing in this Commonwealth under

REACA.

(ii)  Has a system in place for the performance of

appraisal reviews with respect to the work of all

appraisers that are performing appraisals for the

applicant of property located in this Commonwealth to

determine whether the appraisals are being conducted in

conformance with the minimum standards under REACA both

on a periodic basis and whenever requested by a client.

(iii)  Maintains a detailed record of each request

for an appraisal that it receives, the appraiser assigned

to perform the appraisal, the fees received from the

client for the appraisal and the fees paid to the

appraiser.

(6)  Any discipline imposed on the applicant in this

Commonwealth or any other state under any law regulating

appraisers, appraisal management companies or real estate

brokers or salespersons.

(7)  Any criminal conviction of the applicant during the

previous ten years in this Commonwealth or any other state or

federal jurisdiction.

(8)  Any other information required by rules and

regulations of the board.

(c)  Requirements for registration.--The board shall register

an applicant as an appraisal management company in this

Commonwealth upon:

(1)  Receipt of a properly completed application.

(2)  Payment of the required fee.

(3)  Posting of the required bond or letter of credit.

(4)  A determination by the board that the activities of

the applicant will be directed and conducted by persons of

good moral character as defined in the rules and regulations

of the board.

(d)  Denial of application.--

(1)  If the board finds that there is reason to deny the

application for registration, the board shall notify the

applicant that the application has been denied and shall

afford the applicant an opportunity for a hearing before the

board to show cause why the application should not be denied.

(2)  All proceedings concerning the denial of an

application for registration shall be governed by 2 Pa.C.S.

(relating to administrative law and procedure).

(e)  Construction.--The acceptance by the board of an

application for registration does not constitute the approval of

its contents or waive the authority of the board to take

disciplinary action under this act.

Section 6.  Fees and renewals.

(a)  Filing fees.--The fee to file an application for

registration or renewal of a registration under this act shall

be $1,000 or such other amounts as are set by the rules and

regulations of the board.

(b)  Bond or letter of credit.--

(1)  In addition to the filing fee, each applicant for

registration shall either comply with:

(i)  paragraph (2) regarding the posting of a bond;

or

(ii)  paragraph (3) regarding the posting of a letter

of credit.

(2)  The requirements for posting a bond shall be:

(i)  The bond shall be in the amount of $20,000 or

any other amount as set by the rules and regulations of

the board.

(ii)  The bond shall be in the form prescribed by the

rules and regulations of the board.

(iii)  The bond shall accrue to the Commonwealth for

the benefit of:

(A)  a claimant against the registrant to secure

the faithful performance of the registrant's

obligations under this act; or

(B)  an appraiser who has performed an appraisal

for the registrant for which the appraiser has not

been paid.

(iv)  The aggregate liability of the surety shall not

exceed the principal sum of the bond.

(v)  A party having a claim against the registrant

may bring suit directly on the surety bond or the board

may bring suit on behalf of the party having a claim

against the registrant.

(vi)  The amount of the bond shall be restored to the

full amount required within 15 days after the payment of

any claim on the bond.

(3)  The requirements for posting a letter of credit

shall be:

(i)  The letter of credit shall be in the amount of

$20,000 or any other amount as set by the rules and

regulations of the board.

(ii)  The letter of credit shall be irrevocable and

in a form approved by the board. The letter of credit

shall be payable to the Bureau of Professional and

Occupational Affairs in the Department of State.

(iii)  The letter of credit shall be for the use and

the benefit of:

(A)  a person suffering damages for failure of

the registrant to perform its obligations under this

act; or

(B)  An appraiser who has performed an appraisal

for the registrant for which the appraiser has not

been paid.

(iv)  A person described under subparagraph (iii) may

file with the bureau a complaint against the registrant

and request a draw upon the registrant's letter of

credit. Upon receipt of a complaint, the bureau shall

notify the registrant and investigate the complaint. Upon

determination by the bureau that the registrant is liable

to the complainant, the bureau may, after providing

notice to the registrant, draw upon the irrevocable

letter of credit to satisfy the complaint.

(v)  Upon a draw against a letter of credit, the

registrant must provide a new letter of credit in the

amount required under subparagraph (i).

(c)  Renewal.--

(1)  Registrations under this act shall be renewed on a

biennial basis for persons in good standing.

(2)  Failure to timely renew a registration shall result

in a loss of authority to operate under this act.

(3)  A request to reinstate a registration shall be

accompanied by payment of a penalty of $50 for each month of

delinquency.

(4)  The contents of an application for renewal shall be

prescribed by the rules and regulations of the board.

Section 7.  Responsibilities and duties of appraisal management

companies.

(a)  Conduct of reviews.--All appraisal reviews in this

Commonwealth must be conducted for an appraisal management

company by:

(1)  a certified appraiser in good standing in this

Commonwealth; or

(2)  a certified or licensed appraiser in good standing

in another state.

(b)  Records.--

(1)  An appraisal management company shall maintain or

cause to be maintained:

(i)  in the case of a registrant, complete records of

its compliance with the certifications required under

section 5(b)(5); and

(ii)  in the case of registrants and exempt

companies, such accounts, correspondence, memoranda,

papers, books and other records as shall be required by

the rules and regulations of the board.

(2)  The records must be retained for:

(i)  five years after their preparation;

(ii)  two years after final disposition of any

judicial proceeding that involves the actions of the

appraisal management company that are the subject of the

records; or

(iii)  such other period as shall be required by the

rules and regulations of the board with respect to a

particular class or type of records.

(3)  The board may inspect the records required under

paragraph (1) at any time.

(c)  Compliance person.--

(1)  An appraisal management company shall at all times

have a compliance person.

(2)  A registrant shall file a certification with the

board in a form approved by the board certifying:

(i)  The identity of its compliance person.

(ii)  The individual's acceptance of the

responsibilities of a compliance person.

(3)  A registrant shall notify the board within 30 days

of a change in its compliance person.

(4)  An individual registrant who operates as a sole

proprietorship is considered the compliance person under this

act.

(d)  Updating of board records.--If the information contained

in a document filed with the board is or becomes inaccurate or

incomplete in any material respect, the registrant shall

promptly file an amendment correcting the information contained

in the document.

(e)  Disclosure.--An appraisal management company shall

disclose to its lender the fees paid for an appraisal separately

from any other fees or charges for appraisal management

services.

(f)  Notice of discipline.--A registrant must notify the

board in writing within 30 days after its occurrence of any

denial, revocation or suspension of its designation,

registration, certificate or license under any law of any

jurisdiction other than this Commonwealth regulating appraisal

management companies, the imposition of any other form of

discipline under any such law, or the commencement of a

disciplinary or enforcement action against the registrant under

any such law.

(g)  Provision of sales contract.--Whenever an appraisal

management company requests an appraiser to perform an

appraisal, the appraisal management company must make a

reasonable effort to provide in a timely manner to the appraiser

a copy of the contract for the sale of the property, if

available, along with legal descriptions and any other documents

pertinent to the assignment.

Section 8.  Prohibited activities.

(a)  Improper influence.--An employee, key person, compliance

person or agent of an appraisal management company shall not

improperly influence or attempt to improperly influence the

development, reporting, result or review of an appraisal,

including, without limitation, through the use of intimidation,

coercion, extortion, bribery, blackmail, threat of nonpayment or

withholding payment for an appraisal or threat of exclusion from

future appraisal work.

(b)  Other prohibitions.--A registrant or exempt company

shall not:

(1)  Hire, employ or in any way contract with or pay a

person who is not an appraiser and who holds a license under

the RELRA to perform a valuation of real estate unless it is

a comparative market analysis as defined in section 201 of

the RELRA.

(2)  Require an appraiser to provide the registrant or

exempt company with the appraiser's digital signature or

seal.

(3)  Alter, amend or change an appraisal submitted by an

appraiser, including, without limitation, by:

(i)  removing the appraiser's signature or seal; or

(ii)  adding or removing information to or from the

appraisal.

(4)  Remove an appraiser from an appraiser panel without

prior written notice to the appraiser. The notice must

include evidence of:

(i)  illegal or unlawful conduct by the appraiser;

(ii)  a violation of the minimum reporting standards

under the REACA or other applicable statute or

regulation;

(iii)  failure to satisfy minimum standards required

by the appraisal management company or any contract

between the appraiser and the appraisal management

company;

(iv)  otherwise improper or unprofessional behavior;

or

(v)  a legitimate business reason for the removal

that is not related to the appraiser's performance.

(5)  Enter into a contract or agreement with an appraiser

for the performance of appraisals unless the appraiser is

certified and in good standing with the board.

(6)  Request that an appraiser provide:

(i)  an estimated, predetermined or desired valuation

in an appraisal; or

(ii)  estimated values or comparable sales at any

time before the appraiser completes an appraisal.

(7)  Except as provided in section 7(g), provide to an

appraiser:

(i)  an anticipated, estimated, encouraged or desired

value for a property; or

(ii)  a proposed or target amount to be loaned to the

borrower.

(8)  Commit an act or practice that impairs or attempts

to impair an appraiser's independence, objectivity or

impartiality or solicit an appraiser to violate this act or

the RELRA or REACA.

(9)  Prohibit an appraiser from recording the fee the

appraiser was paid for the performance of an appraisal in the

appraisal report.

(c)  Construction.--Subsection (a) does not prohibit an

appraisal management company from requesting that an appraiser:

(1)  Correct objective factual errors in an appraisal.

(2)  Provide additional detail, substantiation or

explanation for the appraiser's value conclusion, including,

without limitation, the applicability of additional

comparables as presented.

(d)  Owners and employees.--

(1)  Except as provided in paragraph (2), a person that

has been denied registration under this act or a similar law

of another jurisdiction or that would be disqualified from

eligibility to be certified or licensed under the REACA may

not be:

(i)  a key person or compliance person; or

(ii)  directly involved in the provision of appraisal

services by an appraisal management company as an

employee or in any other capacity.

(2)  Paragraph (1) shall cease to apply at such time as a

person is subsequently registered under this act or becomes

eligible to be certified or licensed under the REACA.

Section 9.  Registry of applicants and roster.

(a)  Registry.--The board shall keep a register of all

applicants for registration showing:

(1)  The date of application.

(2)  The applicant's name.

(3)  The applicant's business street address.

(4)  Whether the registration was granted or denied.

(b)  Roster.--The board shall keep a current roster showing

for each registrant registered at any time with the board:

(1)  Its last known name and street address.

(2)  An identification number.

(c)  Availability of records.--The register and roster shall

be kept on file in the office of the board and shall be open for

public inspection. The board shall also post the roster on its

Internet website.

Section 10.  Disciplinary measures.

(a)  Authority of board.--The board may impose disciplinary

action as set forth in subsection (b) upon an applicant,

registrant, exempt company, person acting as an appraisal

management company, person holding out as an appraisal

management company or person advertising or holding out as

engaging in or conducting the business of an appraisal

management company, for any of the following causes: 

(1)  The appraisal management company's application for

registration or renewal of registration when filed contained

a statement that in light of the circumstances under which it

was made is false or misleading with respect to a material

fact.

(2)  The applicant, registrant, exempt company, its

compliance person or key person, has violated or failed to

comply with:

(i)  This act, or the regulations or guidelines

promulgated by the board for the administration and

enforcement of this act.

(ii)  The REACA or the regulations or guidelines

promulgated by the board for the administration and

enforcement of the REACA.

(3)  The State Real Estate Commission has found the

applicant, registrant, exempt company, compliance person or

key person in violation of RELRA or the regulations to

administer and effectuate the purposes of the RELRA.

(4)  The Department of Banking or a court of competent

jurisdiction has found the applicant, registrant, exempt

company, compliance person or key person in violation of the

provisions of 7 Pa.C.S. Ch.61 (relating to mortgage loan

industry licensing and consumer protection) or the Mortgage

Bankers and Brokers and Consumer Equity Protection Act. 

(5)  The applicant, registrant, exempt company,

compliance person or key person has been convicted of:

(i)  A felony.

(ii)  Within the past ten years, a misdemeanor

involving mortgage lending or real estate appraising,

breach of trust, moral turpitude or fraudulent or

dishonest dealing.

(6)  The applicant, registrant, exempt company,

compliance person or key person is permanently or temporarily

enjoined by a court of competent jurisdiction from engaging

in or continuing any conduct or practice involving appraisal

management services or operating an appraisal management

company.

(7)  The applicant, registrant, exempt company,

compliance person or key person is the subject of an order of

the board or any other state appraisal management company

regulatory agency denying, suspending or revoking the

person's privilege to operate as an appraisal management

company, or other disciplinary actions by an agency of

another jurisdiction responsible for regulating appraisers,

mortgage brokers, real estate salespersons or real estate

brokers.

(8)  The person was not an exempt company or registrant

and:

(i)  Acted as an appraisal management company.

(ii)  Held out as an appraisal management company

within this Commonwealth.

(iii)  Advertised or held out as engaging in or

conducting the business of an appraisal management

company

(b)  Board action.--When the board finds any of the causes

listed in subsection (a) supported by substantial evidence the

board may:

(1)  Deny, suspend, revoke or refuse to issue or renew

the registration of an appraisal management company under

this act.

(2)  Restrict, reprimand, limit or suspend enforcement of

its findings and place the appraisal management company on

probation with the right to vacate the probation for

noncompliance.

(3)  In lieu of imposing a sanction authorized by

paragraph (1), the board may order the removal, replacement

or restriction of a compliance person or a key person found

to have committed any of the violations of subsection (a) as

a condition of approving, renewing or retaining an

applicant's or registrant's registration.

(4)  In lieu of imposing a sanction authorized by

paragraph (1), the board may order a person found to have

committed any of the violations of subsection (a) and that

owns an interest in or participates in the business of an

appraisal management company to divest partially or wholly of

such interest or participation as a condition of granting,

renewing or retaining an applicant's or registrant's

registration.

(5)  Levy a civil penalty or costs of investigation under

subsection (d) or the act of July 2, 1993, (P.L.345, No.48),

entitled "An act empowering the General Counsel or his

designee to issue subpoenas for certain licensing board

activities; providing for hearing examiners in the Bureau of

Professional and Occupational Affairs; providing additional

powers to the Commissioner of Professional and Occupational

Affairs; and further providing for civil penalties and

license suspension."

(6)  Require a surety bond or letter of credit in

addition to the requirements of section 6 (b) and regulations

of the board promulgated pursuant to that subsection.

(c)  Criminal penalties.--A person that violates this act

commits a misdemeanor of the third degree and shall, upon

conviction, be sentenced to pay a fine of up to $1,000 or to

imprisonment for not more than 90 days, or both.

(d)  Civil penalty.--In addition to any other civil remedy or

criminal penalty provided for in this act, the board may levy a

civil penalty of up to $10,000 on any person that violates any

provision of this act or any person that acts as an appraisal

management company, holds out as an appraisal management company

in this Commonwealth or advertises or holds out as engaging in

or conducting the business of an appraisal management company at

a time when the person is not an exempt company or registered

under this act. The board shall levy this penalty only after

affording the accused party the opportunity for a hearing, as

provided in 2 Pa.C.S. (relating to administrative law and

procedure). All civil penalties imposed in accordance with this

section shall be paid into the Professional Licensure

Augmentation Account.

(e)  Procedures.--The investigation and prosecution of

disciplinary proceedings under this section shall be conducted

by the board under the provisions of the REACA.

Section 11.  Application.

This act shall not apply to:

(1)  An appraiser who:

(i)  in the normal course of business enters into an

agreement, whether written or otherwise, with an

appraiser for the performance of an appraisal; and

(ii)  under the agreement cosigns the appraisal upon

its completion.

(2)  A person authorized to engage in business as a

banking institution, credit union or savings association

organized under the laws of this Commonwealth or any other

jurisdiction and whose employees perform appraisals for the

person or arrange for the performance of appraisals for the

person by an independent contractor to the person.

Section 12.  Effective date.

This act shall take effect as follows:

(1)  The following provisions shall take effect

immediately:

(i)  This section.

(ii)  Section 4.

(2)  The remainder of this act shall take effect on the

earlier of:

(i)  Sixty days after the effective date of temporary

regulations promulgated under section 4(b) that provide

for registration of appraisal management companies; or

(ii)  One hundred eighty days after the effective

date of this section.