2023 -- S 0850

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LC001641

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- REAL ESTATE APPRAISER

CERTIFICATION ACT

     Introduced By: Senator Matthew L. LaMountain

     Date Introduced: March 30, 2023

     Referred To: Senate Judiciary

     (Dept. of Business Regulation)

It is enacted by the General Assembly as follows:

     SECTION 1. Sections 5-20.7-2, 5-20.7-3, 5-20.7-4, 5-20.7-8, 5-20.7-9, 5-20.7-10, 5-20.7-

16 and 5-20.7-17 of the General Laws in Chapter 5-20.7 entitled "Real Estate Appraiser

Certification Act" are hereby amended to read as follows:

     5-20.7-2. Definitions.

     When used in this chapter, unless the context indicates otherwise:

     (1) “Appraisal” or “real estate appraisal” means an analysis, opinion, or conclusion relating

to the nature, quality, value, or utility of specified interests in, or aspects of, identified real estate.

An appraisal may be classified by subject matter into either a valuation or an analysis. A “valuation”

is an estimate of the value of real estate or real property. An “analysis” is a study of real estate or

real property other than estimating value.

     (2) “Appraisal Foundation” means the Appraisal Foundation incorporated as an Illinois

not-for-profit corporation on November 30, 1987. The purposes of the Appraisal Foundation are:

     (i) To establish and improve uniform appraisal standards by defining, issuing, and

promoting such standards;

     (ii) To establish appropriate criteria for the certification, licensing, and recertification of

qualified appraisers by defining, issuing, and promoting that qualification criteria; to disseminate

that qualification criteria to states, governmental entities, and others; and

     (iii) To develop or assist in the development of appropriate examinations for qualified

appraisers.

     (3) “Appraisal report” means any communication, written or oral, of an appraisal.

     (4) “Board” means the real-estate appraisal board established pursuant to the provisions of

this chapter.

     (5) “Certified appraisal” or “certified appraisal report” means an appraisal or appraisal

report given or signed and certified as such by a state-certified real estate appraiser or state-licensed

real estate appraiser. When identifying an appraisal or appraisal report as “certified,” the state-

certified real estate appraiser shall indicate on it whether he or she has been licensed or certified as

a residential or general state-certified real estate appraiser. A certified appraisal or appraisal report

represents to the public that it meets the appraisal standards defined in this chapter.

     (6) “Department” means the department of business regulation.

     (7) “Director” means the director of the department of business regulation.

     (8) “Real estate” means an identified parcel or tract of land, including improvements, if

any.

     (9) “Real property” means one or more defined interests, benefits, and rights inherent in

the ownership of real estate.

     (10) “State-certified real estate appraiser” means a person who develops and communicates

real estate appraisals reports and who holds a current, valid certificate issued to him or her for either

general or residential real estate under the provisions of this chapter. A duly certified appraiser is

not required to hold a real estate broker’s or salesperson’s license under chapter 20.5 of this title.

     (11) "State-licensed real estate appraiser" means a person who develops and communicates

real estate appraisals reports and who holds a current, valid license issued to him or her for

residential real estate under the provisions of this chapter. A duly licensed appraiser is not required

to hold a real estate broker's salesperson's license under chapter 20.5 of this title.

     5-20.7-3. Certification required. Certification or license required.

     (a) No person, other than persons certified or licensed in accordance with the provisions of

this chapter, shall assume or use that title or any title, designation, or abbreviation likely to create

the impression of certification as a real estate appraiser by this state. A person who is not certified

or licensed pursuant to this chapter shall not describe or refer to any appraisal or other valuation of

real estate located in the state by the term “certified or licensed.”

     (b) This chapter precludes any person who is not certified as a state-certified real estate

appraiser from appraising real property for compensation under chapter 20.5 of this title; provided,

however, that this chapter does not preclude any person who holds a license pursuant to chapter

20.5 of this title and, in the ordinary course of business, from giving a written or oral opinion of

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value of real estate for the purposes of a prospective listing, purchase, sale, or business valuation;

provided, however, that such opinion of value shall not be referred to as an appraisal.

     (c) Nothing in this chapter shall preclude a trainee directly supervised by a certified

appraiser from assisting in or preparing a certified an appraisal report and signing such appraisal

provided the appraisal is approved and signed by a certified appraiser as appropriate.

     (d) Any appraisal conducted required by an institution licensed in this state to accept

deposits in connection with a loan transaction shall require an appraisal by a licensed or certified

appraiser, other than those conducted by:

     (1) Federally or NCUA insured banks, savings banks, or credit unions; or

     (2) Persons regulated or licensed under title 19 or any transactions, municipal or state,

regardless of monetary value, shall require an appraisal by a licensed or certified appraiser.

     5-20.7-4. Creation of board — Composition — Appointment, terms, and

compensation of members.

     (a)(1) Within the department of business regulation, there is created the Rhode Island real

estate appraisers board which shall consist of ten (10) members to be appointed by the governor.

Six (6) of the board members shall be practicing appraisers and, for the initial board appointment,

shall be members in good standing of one of the following professional associations or the

successor associations: the American Institute of Real Estate Appraisers, the Society of Real Estate

Appraisers, the International Right of Way Association, the National Association of Independent

Fee Appraisers, or the International Association of Assessing Officers. Where possible, at least one

but not more than two (2) appraiser appointments shall be from the membership of each of these

professional organizations.

     (2) One board member shall be a member of the general public, and shall not be engaged

in the practice of real estate appraisal. One board member shall hold a real estate license under

chapter 20.5 of this title and shall not be a state-certified real estate appraiser. One member shall

be a representative of the Rhode Island banking industry. The director of the department of business

regulation or his or her designee shall serve at all times as a member of the board ex officio without

voting privileges.

     (3) The term of office of the initial members and the powers of the initial board expire on

December 31, 1991.

     (b) Commencing January 1, 1992, and subsequently, the board shall consist of ten (10)

members:

     (1) Six (6) members shall be state-certified appraisers:

     (i) Two (2) appraiser members shall be appointed for a term of three (3) years;

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     (ii) Two (2) members for a term of two (2) years; and

     (iii) Two (2) members for a term of one year;

     (2) One board member shall be a member of the general public, appointed for a term of

three (3) years, and shall not be engaged in the practice of real estate appraisal;

     (3) One board member shall hold a real estate license under chapter 20.5 of this title,

appointed for a term of two (2) years and shall not be a state-certified real estate appraiser;

     (4) One member shall be a representative of the Rhode Island banking industry and shall

be appointed for a term of one year; and

     (5) The director of the department of business regulation, or his or her designee, shall serve

at all times as a member of the board ex officio without voting privileges.

     (c)(1) Successors of all members shall each be appointed for terms of three (3) years and

until their successors are appointed and qualified by subscribing to the constitutional oath of office,

which shall be filed with the secretary of state. Members to fill vacancies shall be appointed for the

unexpired term. No member shall be appointed to succeed himself or herself for more than two (2)

terms. Upon qualification of the appointed members, the board shall organize by selecting from its

members a chairperson and vice-chairperson with a term of office of one year.

     (2) The board shall meet not less than once each month or as necessary in order to conduct

its business, the dates and times of which shall be decided by a vote of the members.

     (3) Each real estate appraiser member of the board appointed as of January 1, 1992, must

be a state-certified real estate appraiser. At least one-half (½) of the appraiser members shall hold

the general appraisal certificate and not less than two (2) shall hold the residential appraisal

certificate.

     (4) Upon expiration of their terms, members of the board shall continue to hold office until

the appointment and qualification of their successors. The appointing authority may remove a

member for cause.

     (5) A quorum of the board is a majority of the voting members of the board members

appointed and/or sitting, whichever is less, with at least three (3) of these members required to be

appraiser members.

     (6) The department of business regulation, with the assistance of the board, shall implement

a program for recertification on or before July 1, 1992, and establish any reasonable rules and

regulations that are appropriate to insure that the examination, education, and experience

requirements of certificate and license holders meet the public interest and the minimum standards

of the Appraisal Foundation.

     (d) The board shall adopt a seal of any design that it prescribes. Copies of all records and

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papers in the office of the board, duly certified and authenticated by its seal, shall be received in all

courts with like effect as the original. All records of the board shall be open to public inspection

under any reasonable rules and regulations that it prescribes.

     (e) No member of the board shall receive compensation for his or her official duties on the

board but shall be reimbursed for his or her actual and necessary expenses incurred in the

performance of his or her official duties.

     5-20.7-8. Classes of certification and licensing — Residential and general.

     (a) There are two (2) classes for state-certified real estate appraisers and two (2) classes of

licensed real estate appraisers.

     (b) State-certified appraisers.

     (1) A state-certified residential real estate appraiser is a person who fulfills the

requirements for certification for the appraisal of residential real property. For the purposes of this

section, residential property means property used for noncomplex single or multi-family dwellings

of 1 — 4 units having no minimum transaction value, or property used for complex 1 — 4

residential units having a transaction value of less than two hundred fifty thousand dollars

($250,000) as required by the appraisal qualifications board of the appraisal foundation.

     (2)(a) A state-certified general real estate appraiser is a person who fulfills the requirements

for certification for the appraisal of all types of real property.

     (c) State-licensed appraisers.

     (b)(1) A state-licensed appraiser is a person who fulfills the requirements for licensing for

the appraisal of residential property as required by the appraisal qualifications board of the appraisal

foundation. For purposes of this section, residential property applies to the appraisal of noncomplex

1 — 4 residential units having a transaction value of less than one million dollars ($1,000,000) and

complex 1 — 4 residential units having a transaction value of less than two hundred fifty thousand

dollars ($250,000).

     (c)(2) A licensed appraiser trainee is an individual who has successfully completed all

requisite core courses as required by the appraisal qualifications board of the Appraisal Foundation.

     (d) [Deleted by P.L. 2013, ch. 54, § 1 and P.L. 2013, ch. 58, § 1].

     5-20.7-9. Requirements prior to certification or licensing examination. Education

requirements prior to examination.

     (a) Residential classification. As a prerequisite to taking the examination for certification

as a state-certified residential real estate appraiser, an applicant shall present evidence satisfactory

to the board that he or she has successfully completed the required classroom hours of courses

promulgated by the appraisal qualifications board of the Appraisal Foundation in subjects related

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to real estate appraisal and the uniform standards of professional appraisal practice from a duly

licensed real estate school pursuant to the provisions of § 5-20.5-19 or a nationally recognized

appraisal organization, college, university, or other school approved by the appraisal qualifications

board of the Appraisal Foundation, or any other school that is approved by the board.

     (b) General classification. As a prerequisite to taking the examination for certification as a

state-certified general real estate appraiser, an applicant shall present evidence satisfactory to the

director that he or she has successfully completed the required classroom hours of courses

promulgated by the appraisal qualifications board of the Appraisal Foundation in subjects related

to real estate appraisal and the uniform standards of professional appraisal practice from a duly

licensed real estate school pursuant to the provisions of § 5-20.5-19, or a nationally recognized

appraisal organization, college, university, or other school approved by the appraisal qualifications

board of the Appraisal Foundation, or such other school as approved by the board.

     (c) Licensed real estate appraiser. As a prerequisite to taking the examination for licensing

as a state-licensed residential real estate appraiser, an applicant shall present evidence satisfactory

to the board that he or she has successfully completed the required classroom hours of courses

promulgated by the appraisal qualifications board of the Appraisal Foundation in subjects related

to real estate appraisal and the uniform standards of professional appraisal practice from a duly

licensed real estate school pursuant to the provisions of § 5-20.5-19 or a nationally recognized

appraisal organization, college, university, or other school approved by the appraisal qualifications

board of the Appraisal Foundation, or any other school that is approved by the board.

     5-20.7-10. Experience requirement. Experience requirements prior to examination.

     (a) An original certification as a state-certified real estate appraiser or licensing as a state-

licensed appraiser shall not be issued to any person who does not possess the requisite experience

in real property appraisal as required by the appraisal qualifications board of the Appraisal

Foundation and supported by adequate written reports or file memoranda. The experience must be

acquired within a period of five (5) years immediately preceding the filing of the application for

certification. The experience shall be of the type of appraisal for which the applicant is seeking

certification/licensing and shall meet the minimum standards of the Appraisal Foundation and/or

applicable federal regulations.

     (b) Each applicant for certification and licensing shall furnish, under oath, a detailed listing

of the real estate appraisal reports or file memoranda for each year for which experience is claimed

by the applicant. For an applicant for general certification at least fifty percent (50%) of the

prepared reports must demonstrate knowledge and working understanding of income capitalization

or other nonresidential reports. Upon request, the applicant shall make available to the director or

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board for examination a sample of appraisal reports, which the applicant has prepared in the course

of his or her practice.

     (c) In order for a licensed trainee appraiser to be issued certification as a state-certified

appraiser or licensing as a state-licensed appraiser, the trainee must have completed the requisite

experience in real property appraisal as required by the appraisal qualifications board and supported

by adequate written reports or file memoranda. That experience must be completed under the direct

supervision of certified real estate appraisers. The trainee may rely on more than one supervising

appraiser in order to complete this experience requirement, and no certified appraiser shall

supervise more than three (3) trainees.

     5-20.7-16. Nonresident certified or licensed real estate appraisers — Secretary of state

as agent for service of process — Reciprocity.

     (a) Every applicant for certification or licensing under this chapter who is not a resident of

this state shall submit, with the application for certification or licensing, an irrevocable consent that

service of process upon him or her may be made by delivery of the process to the secretary of state,

if in an action against the applicant in a court of this state arising out of the applicant’s activities as

a state-certified or licensed real estate appraiser, the plaintiff cannot, in the exercise of due

diligence, effect personal service upon the applicant.

     (b) A nonresident of the state who has complied with the provisions of subsection (a) may

obtain a certificate as a state-certified real estate appraiser or a licensed real estate appraiser by

conforming to all of the provisions of this chapter relating to state-certified or licensed real estate

appraisers. If, in the determination by the board, another state is deemed to have substantially

equivalent certification requirements, an applicant who is certified under the laws of that other state

may obtain a certificate as a state-certified or licensed real estate appraiser in this state upon any

terms and conditions that are determined by the board.

     5-20.7-17. Continuing education prerequisite to renewal.

     (a) As a prerequisite to certificate or license renewal, a state-certified or licensed real estate

appraiser shall present evidence satisfactory to the director of having met the continuing education

requirements of this section.

     (b) The basic continuing education requirement for renewal of a certificate or license is the

completion by the applicant, during the immediately preceding term of certification, of not less

than twenty-eight (28) hours of instruction in courses or seminars from a duly licensed real estate

school pursuant to the provisions of § 5-20.5-19 or a nationally recognized appraisal organization,

college, university, or other school approved by the appraiser qualifications board of the Appraisal

Foundation or such other school as approved by the board.

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     (c) In lieu of meeting the requirements of subsection (b) of this section, an applicant for

certificate or license renewal may satisfy all or part of the recertification requirements by presenting

evidence of the following:

     (1) Completion of an educational program of study determined by the board to be

equivalent, for continuing education purposes, to courses meeting the requirements of subsection

(b) of this section; or

     (2) Participation Up to one-half (1/2) of an individual's continuing education requirement

may be completed by participation other than as a student in educational processes and programs

approved by the board that relate to appraisal theory, practices, or techniques, including, but not

necessarily limited to, teaching, program development, and preparation of textbooks, monographs,

articles, and other instructional materials.

     (3) [Deleted by P.L. 2013, ch. 54, § 1 and P.L. 2013, ch. 58, § 1].

     SECTION 2. Sections 5-20.9-2, 5-20.9-4, 5-20.9-8, 5-20.9-9, 5-20.9-11 and 5-20.9-15 of

the General Laws in Chapter 5-20.9 entitled "Real Estate Appraisal Management Company

Registration Act" are hereby amended to read as follows:

     5-20.9-2. Definitions.

     (a) All definitions set forth in § 5-20.7-2 are herein incorporated by reference.

     (b) As used in this chapter, the following terms shall have the following meanings unless

the context clearly specifies otherwise:

     (1) “Appraisal” means an analysis, opinion, or conclusion relating to the nature, quality,

value, or utility of specified interests in, or aspects of, identified real estate. An appraisal may be

classified by subject matter into either a valuation or an analysis.

     (i) A “valuation” is an estimate of the value of real estate or real property.

     (ii) An “analysis” is a study of real estate or real property other than estimating value.

     (2) “Appraisal management company” means:

     (i) In connection with valuing properties collateralizing mortgage loans or mortgages

incorporated into a securitization, any external third party authorized either by a creditor of a

consumer credit transaction secured by a consumer’s principal dwelling, or by an underwriter of or

other principal in the secondary mortgage markets, that oversees a network or panel of more than

fifteen (15) certified or licensed appraisers in Rhode Island or twenty-five (25) or more nationally,

excluding those appraisers who do not provide appraisal services for covered transactions, within

a given year to:

     (A) Recruit, select, and retain appraisers;

     (B) Contract with licensed and certified appraisers to perform appraisal assignments;

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     (C) Manage the process of having an appraisal performed, including providing

administrative duties such as receiving appraisal orders and appraisal reports, submitting completed

appraisal reports to creditors and underwriters, collecting fees from creditors and underwriters for

services provided, and reimbursing appraisers for services performed; or

     (D) Review and verify the work of appraisers.

     (ii) An appraisal management company does not include any entity that employs real estate

appraisers as employees for the performance of real estate appraisal services in a manner consistent

with federal regulations promulgated in accordance with § 1473 of the Dodd-Frank Wall Street

Reform and Consumer Protection Act.

     (3) “Appraisal review” means the act or process of developing and communicating an

opinion about the quality of another appraiser’s work that was performed as part of an appraisal

assignment related to the appraiser’s data collection, analysis, opinions, conclusions, opinion of

value, or compliance with the Uniform Standards of Professional Appraisal Practice; provided

however, that “appraisal review” shall not include:

     (i) A general examination for grammatical, typographical, or similar errors; or

     (ii) A general examination for completeness, including regulatory or client requirements as

specified in an agreement that does not communicate an opinion of value.

     (4) “Appraiser panel” means a group of independent fee appraisers that have been selected

by an appraisal management company to perform residential real estate appraisal services for the

appraisal management company.

     (5) “Client” means any person or entity who or that contracts with, or otherwise enters into

an agreement with, an appraisal management company for the management of residential real estate

appraisal services.

     (6) “Controlling person” means:

     (i) An owner, officer, or director of a corporation, partnership, or other business entity

seeking to offer appraisal management services in this state; or

     (ii) An individual employed, appointed, or authorized by an appraisal management

company who has the authority to enter into a contractual relationship with clients for the

performance of appraisal management services and has the authority to enter into agreements with

independent appraisers for the performance of residential real estate appraisal services; or

     (iii) An individual who possesses, directly or indirectly, the power to direct or cause the

direction of the management or policies of an appraisal management company.

     (7) "Covered transaction" means any consumer credit transaction secured by the

consumer's principal dwelling.

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     (7)(8) “Department” means the department of business regulation.

     (8)(9) “Director” means the director of the department of business regulation.

     (9)(10) “Independent fee appraiser” means:

     (i) A natural person who is a state-licensed or state-certified appraiser and receives a fee

for performing an appraisal, but who is not an employee of the person engaging the appraiser; or

     (ii) An organization that, in the ordinary course of business, employs state-licensed or state-

certified appraisers to perform appraisals, receives a fee for performing the appraisals, and is not

subject to § 1124 of the federal Financial Institutions Reform, Recovery and Enforcement Act of

1989 (“FIRREA”), 12 U.S.C. § 3353.

     (10)(11) “Real estate appraisal services” means the practice of developing an appraisal by

a licensed or certified appraiser in conformance with the USPAP.

     (11)(12) “USPAP” mean the Uniform Standards for Professional Appraisal Practice

published by the Appraisal Foundation.

     5-20.9-4. Requirements for registration.

     (a) Appraisal management companies shall provide the following information upon

registration:

     (1) Name and contact information of the entity seeking registration;

     (2) Name and contact information of the controlling person for the entity;

     (3) If the entity is not a corporation domiciled in this state, the name and contact

information for the company’s agent for service of process in this state; and

     (4) Name, address, and contact information for any individual or any corporation,

partnership, or other business entity who or that owns 10% or more of the appraisal management

company.

     (b) Contact information shall include the entity’s business and mailing address, telephone

number, facsimile number, and electronic mail (email) address.

     (c) An appraisal management company shall certify that the following is true upon its initial

registration and upon each renewal of its registration:

     (1) The registered entity has a system and process in place to verify that a person being

added to the appraiser panel of the appraisal management company holds a certification or license

in good standing in this state any jurisdiction to perform appraisals;

     (2) The registered entity has a system in place to periodically perform a quality assurance

review of the work of independent fee appraisers who or that are performing real estate appraisal

services on its behalf to ensure that appraisal services are being conducted in accordance with

USPAP;

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     (3) The registered entity maintains a detailed record of each service request that it receives

for five (5) years;

     (4) The registered entity maintains a system to assure that the appraiser selected for an

appraisal assignment is independent of the transaction and has the requisite education, expertise,

and experience necessary to competently complete the appraisal assignment for the particular

market and property type; and

     (5) The registered entity will have a system in place to ensure that real estate appraisal

services are provided independently and free from inappropriate influence and coercion under the

appraisal independence standards established under § 129E of the Truth in Lending Act, 15 U.S.C.

§ 1639e, including the requirement that independent fee appraisers be compensated at a customary

and reasonable rate when the appraisal management company is providing services for a consumer

credit transaction secured by the principal dwelling of a consumer.

     (d) A person who, directly or indirectly, owns more than ten percent (10%) of an applicant,

or any officer, controlling person, employee in charge, or managing principal of an applicant, shall

furnish to the department authorization for a state or national criminal history background check.

An appraisal management company that has an owner of more than ten percent (10%), directly or

indirectly, or any officer, controlling person, employee in charge, or managing principal, who has

had a license or certificate to act as an appraiser or to engage in any activity related to the transfer

of real property refused, denied, canceled, or revoked in this state or in any other state, whether on

a temporary or permanent basis, or who is not of good moral character as determined by the

director, shall not be eligible for licensure.

     Ownership requirements. An AMC shall not be registered in this state if:

     (1) Any person who owns, in whole or in part, directly or indirectly, more than ten percent

(10%) of the AMC fails to submit to a background investigation, and/or is determined by the

director not to have good moral character as determined by an analysis of the factors in § 28-5.1-

14.

     (2) The AMC is owned in whole or in part, directly or indirectly, by an person who has had

a license or certificate to act as an appraiser refused, denied, canceled, surrendered in lieu of

revocation, or revoked in this state or in any other state for substantive cause, as determined the

appropriate certifying and licensing agency. However, and AMC is not barred from registration if

the license or certificate of the appraiser with an ownership interest was not revoked or a substantive

cause and has been reinstated by the state or states in which the appraiser was licensed or certified.

     5-20.9-8. Expiration of registration.

     A registration granted by the department pursuant to this chapter shall be valid for two (2)

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years one year from the date on which it is issued.

     5-20.9-9. Grounds for denial, suspension, or revocation of registration — Fines and

penalties.

     (a) The department may deny, censure, suspend, or revoke a registration of an appraisal

management company issued under this chapter, levy fines or impose civil penalties not to exceed

five thousand dollars ($5,000) per violation, if in the opinion of the department, an appraisal

management company is attempting to perform, has performed, or has attempted to perform any of

the following acts:

     (1) The appraisal management company has filed an application for registration that, as of

its effective date or as of any date after filing, contained any statement that, in light of the

circumstances under which it was made, is false or misleading with respect to any material fact;

     (2) The appraisal management company has violated or failed to comply with any provision

of this chapter, or any rule adopted by the department;

     (3) The appraisal management company is permanently or temporarily enjoined by any

court of competent jurisdiction from engaging in or continuing any conduct or practice involving

any aspect of the real estate appraisal management business;

     (4) The appraisal management company or a controlling person thereof is the subject of an

order of the department or any other state appraiser regulatory agency denying, suspending, or

revoking that person’s license as a real estate appraiser;

     (5) The appraisal management company acted as an appraisal management company while

not properly registered with the department;

     (6) The appraisal management company has failed to pay the proper filing or renewal fee

under this chapter;

     (7) The appraisal management company has demonstrated incompetence,

untrustworthiness, or conduct or practices that render the applicant unfit to perform appraisal

management services; or

     (8) The appraisal management company has committed any of the prohibited practices set

forth in this chapter or in the department’s regulations.

     (b) The department shall provide written notice of the denial, suspension, or revocation of

a registration under this chapter. Any party aggrieved by the department’s decision regarding

registration issuance or renewal may, within ten (10) days of the decision, appeal the matter to the

director by submitting a written request for a formal hearing to be conducted in accordance with

the provisions of § 5-20.9-17 5-20.9-18.

     5-20.9-11. Controlling person and review appraiser employees.

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     (a) Each appraisal management company applying to the department for a registration in

this state shall designate one controlling person who will be the principal contact for all

communication between the department and the appraisal management company.

     (b) Any employee of the appraisal management company who has the responsibility to

conduct an appraisal review, as defined in § 5-20.9-2, of the work of independent fee appraisers

must have a current USPAP certification be a licensed residential or certified appraiser.

     5-20.9-15. Adjudication of disputes between an appraisal management company and

an appraiser.

     (a) Except within the first thirty (30) days after an independent appraiser is added to the

appraiser panel of an An appraisal management company, an appraisal management company may

not remove an appraiser from its appraiser panel, or otherwise refuse to assign requests for real

estate appraisal services to an independent appraiser without:

     (1) Notifying the appraiser in writing of the reasons why the appraiser is being removed

from the appraiser panel of the appraisal management company, including the alleged statutory or

USPAP violation, if any; and

     (2) Providing an opportunity for the appraiser to respond to the notification of the appraisal

management company.

     (b) An appraiser that is removed from the appraiser panel of an appraisal management

company for alleged illegal conduct, violation of the USPAP, or violation of state licensing statutes,

may file a complaint with the department for a review of the decision of the appraisal management

company. The review of the department in any such case is limited to determining whether the

appraisal management company has complied with subsection (a) of this section and whether the

appraiser has committed a violation of state law, state licensing standards, or a violation of the

USPAP.

     (c) If, after opportunity for hearing and review, the department determines that an appraisal

management company acted improperly in removing an appraiser from the appraiser panel, or that

an appraiser did not commit a violation of law, a violation of the USPAP, or a violation of state

licensing standards, the department may order that an appraiser be restored to the appraiser panel

of the appraisal management company that was the subject of the complaint, or impose any other

administrative penalties set forth in regulations.

     (d) Hearings will be conducted in accordance with § 5-20.9-17 5-20.9-18, chapter 35 of

title 42, and the department’s rules of procedure for administrative hearings.

     SECTION 3. Section 5-20.9-10 of the General Laws in Chapter 5-20.9 entitled "Real Estate

Appraisal Management Company Registration Act" is hereby repealed.

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     5-20.9-10. Owner requirements.

     (a) An appraisal management company applying for a registration in this state may not be

owned or controlled by a person if such person has had a license or certification to act as an

appraiser denied or revoked in this state or in any other state, or who is not of good moral character

as determined by the director.

     (b) Each owner or controlling person of an appraisal management company in this state

shall certify to the department that such person has never had a license to act as an appraiser denied,

suspended, or revoked in this state or in any other state.

     SECTION 4. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- REAL ESTATE APPRAISER

CERTIFICATION ACT

***

     This act would amend the Real Estate Appraiser Certification Act and the Real Estate

Appraisal Management Company ("AMC") Registration Act by updating provisions for

consistency with federal laws and based on recommendations from the appraisal subcommittee, the

federal regulator of state appraiser licensing and certification programs and AMC registration.

     This act would take effect upon passage.

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