1.1.................... moves to amend H.F. No. 3122 as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. [82C.01] TITLE.
1.4This chapter shall be known as the Minnesota Appraisal Management Company
1.5Licensing and Regulation Act.

1.6    Sec. 2. [82C.02] DEFINITIONS.
1.7    Subdivision 1. Terms. As used in this chapter, the terms in this section have the
1.8meanings given them.
1.9    Subd. 2. Appraisal. In conformance with the Uniform Standards of Professional
1.10Appraisal Practice (USPAP), "appraisal" is defined as: (noun) the act or process of
1.11developing an opinion of value; an opinion of value; (adjective) of or pertaining to
1.12appraising and related functions such as appraisal practice or appraisal services. For
1.13purposes of this chapter, all appraisals or assignments that are referred to involve one to
1.14four unit single-family properties.
1.15    Subd. 3. Appraisal assignment. "Appraisal assignment" means an engagement for
1.16which an appraiser is employed or retained to act, as a disinterested third party in giving
1.17an unbiased analysis, opinion, or conclusion relating to the nature, quality, value, or utility
1.18of named interests in, or aspects of, identified real estate.
1.19    Subd. 4. Appraisal management company. "Appraisal management company"
1.20means a corporation, partnership, sole proprietorship, subsidiary, unit, or other business
1.21entity that directly or indirectly performs the following appraisal management services:
1.22(1) administers networks of independent contractors and/or employee appraisers to
1.23perform residential real estate appraisal assignments for clients;
1.24(2) receives requests for residential real estate appraisal services from clients and, for
1.25a fee paid by the client, enters into an agreement with one or more independent appraisers
1.26to perform the real estate appraisal services contained in the request; or
2.1(3) serves as a third party broker of appraisal management services between clients
2.2and appraisers.
2.3    Subd. 5. Appraisal management services. "Appraisal management services"
2.4means the process of directly or indirectly, performing any of the following functions on
2.5behalf of a lender, financial institution, client, or any other person:
2.6(1) administer an appraiser panel;
2.7(2) to recruit, qualify, verify licensing or certification, and negotiate fees and service
2.8level expectations with persons who are part of an appraiser panel;
2.9(3) receive an order for an appraisal from one person, and deliver the order for the
2.10appraisal to an appraiser that is part of an appraiser panel for completion;
2.11(4) track and determine the status of orders for appraisals;
2.12(5) conduct quality control of a completed appraisal prior to the delivery of the
2.13appraisal to the person that ordered the appraisal; or
2.14(6) provide a completed appraisal performed by an appraiser to one or more clients.
2.15    Subd. 6. Appraiser. "Appraiser" means a person who is expected to perform
2.16valuation services competently and in a manner that is independent, impartial, and
2.17objective and who is licensed under chapter 82B.
2.18    Subd. 7. Appraiser panel. "Appraiser panel" means a network of licensed or
2.19certified appraisers who are independent contractors to the appraisal management
2.20company that have:
2.21(1) responded to an invitation, request, or solicitation from an appraisal management
2.22company, in any form, to perform appraisals for persons that have ordered appraisals
2.23through the appraisal management company, or to perform appraisals for the appraisal
2.24management company directly, on a periodic basis, as requested and assigned by the
2.25appraisal management company; and
2.26(2) been selected, and approved, by an appraisal management company to perform
2.27appraisals for any client of the appraisal management company that has ordered an
2.28appraisal through the appraisal management company, or to perform appraisals for the
2.29appraisal management company directly, on a periodic basis, as assigned by the appraisal
2.30management company.
2.31    Subd. 8. Appraisal review. "Appraisal review" means the act of developing
2.32and communicating an opinion about the quality of another appraiser's work that was
2.33performed as part of an appraisal assignment, except that an examination of an appraisal
2.34for grammatical, typographical, or other similar errors that do not make a substantive
2.35valuation change shall not be an appraisal review.
3.1    Subd. 9. Client. "Client" means any person or entity that contracts with, or
3.2otherwise enters into an agreement with, an appraisal management company for the
3.3performance of real estate appraisal services or appraisal management services. For
3.4purposes of this chapter, the appraisal management company is the party engaging the
3.5independent appraiser and can be the appraiser's client; however, this does not preclude an
3.6appraisal management company from acting as a duly authorized agent for a lender.
3.7    Subd. 10. Commissioner. "Commissioner" means the commissioner of commerce.
3.8    Subd. 11. Controlling person. "Controlling person" means:
3.9(1) any owner, officer, or director of an appraisal management company seeking to
3.10offer appraisal management services in this state;
3.11(2) an individual employed, appointed, or authorized by an appraisal management
3.12company that has the authority to enter into a contractual relationship with other persons
3.13for the performance of appraisal management services and has the authority to enter into
3.14agreements with appraisers for the performance of appraisals;
3.15(3) an individual who possesses, directly or indirectly, the power to direct or cause
3.16the direction of the management or policies of an appraisal management company; or
3.17(4) an individual who enters into:
3.18(i) contractual relationships with clients for the performance of appraisal
3.19management services; and
3.20(ii) agreements with employed and independent appraisers for the performance
3.21of real estate appraisal services.
3.22    Subd. 12. Employee. "Employee" means an individual who is treated as an
3.23employee for purposes of compliance with federal income tax laws.
3.24    Subd. 13. Person. "Person" means a natural person, firm, partnership, limited
3.25liability partnership, corporation, association, limited liability company, or other form of
3.26business organization and the officers, directors, employees, or agents of that person.
3.27    Subd. 14. USPAP. "USPAP" means the Uniform Standards of Professional
3.28Appraisal Practice as established by the Appraisal Foundation. State and federal regulatory
3.29authorities enforce the content of the current or applicable edition of USPAP.

3.30    Sec. 3. [82C.03] LICENSING.
3.31    Subdivision 1. Requirement. It is unlawful for a person, corporation, partnership,
3.32sole proprietorship, subsidiary, unit, or other business entity to directly or indirectly
3.33engage or attempt to engage in business as an appraisal management company, to directly
3.34or indirectly engage or attempt to perform appraisal management services, or to advertise
3.35or hold itself out as engaging in or conducting business as an appraisal management
4.1company without first obtaining a license issued by the commissioner under the provisions
4.2of this chapter.
4.3    Subd. 2. Owner requirements. (a) An appraisal management company applying to
4.4the commissioner for a license in this state may not be more than ten percent owned by
4.5any person that is currently subject to any cease and desist order or injunctive order that
4.6would preclude involvement with an appraisal management company, or that has ever:
4.7(1) voluntarily surrendered in lieu of disciplinary action an appraiser certification,
4.8registration or license, or an appraisal management company license;
4.9(2) been the subject of a final order revoking or denying an appraiser certification,
4.10registration or license, or an appraisal management company license; or
4.11(3) a final order barring involvement in any industry or profession issued by this or
4.12another state or federal regulatory agency.
4.13(b) A person that owns more than ten percent of an appraisal management company
4.14in this state shall:
4.15(1) be of good moral character, as determined by the commissioner;
4.16(2) submit to a background investigation, as determined by the commissioner; and
4.17(3) certify to the commissioner that the person has never been the subject of an order
4.18of certificate, registration or license suspension, revocation, or denial; cease and desist
4.19order; injunctive order; or order barring involvement in an industry or profession issued
4.20by this or another state or federal regulatory agency.
4.21    Subd. 3. Designated controlling person requirements. (a) Designation. Each
4.22appraisal management company applying to the commissioner for a license in this state
4.23shall designate a controlling person that will be the main contact for all communication
4.24between the commissioner and the appraisal management company.
4.25(b) Requirements. In order to serve as a designated controlling person of an
4.26appraisal management company, a person must:
4.27(1) certify to the commissioner that the person is not currently subject to any cease
4.28and desist order or injunctive order that would preclude involvement with an appraisal
4.29management company, and has never been the subject of an order suspending, revoking
4.30or denying an certification, registration or license for real estate services or a final order
4.31barring involvement in any industry or profession issued by this or another state or federal
4.32regulatory agency;
4.33(2) be of good moral character, as determined by the commissioner; and
4.34(3) submit to a background investigation, as determined by the commissioner.
4.35    Subd. 4. Application for license. Application for an appraisal management
4.36company license must be submitted on a form prescribed by the commissioner.
5.1    Subd. 5. Minimum information. The application must, at a minimum, include
5.2the following information:
5.3(1) the name of the entity seeking registration;
5.4(2) the business address or addresses of the entity seeking registration;
5.5(3) telephone contact and e-mail information of the entity seeking registration;
5.6(4) if the entity is not a corporation that is domiciled in this state, the name and
5.7contact information for the company's agent for service of process in this state;
5.8(5) the name, address, and contact information for an individual or corporation,
5.9partnership, limited liability company, association, or other business entity that owns ten
5.10percent or more of the appraisal management company;
5.11(6) the name, address, and contact information for a controlling person or persons;
5.12(7) a certification that the entity has a system and process in place to verify that a
5.13person being added to the employment or appraiser panel of the appraisal management
5.14company for appraisal services within the this state holds an active appraisal license in this
5.15state pursuant to chapter 82B if a license is required to perform appraisals;
5.16(8) a certification that the entity has a system in place to review the work of all
5.17employed and independent appraisers that are performing real estate appraisal services
5.18for the appraisal management company on a periodic basis to verify that the real estate
5.19appraisal assignments are being conducted in accordance with USPAP and chapter 82B;
5.20(9) a certification that the entity maintains a detailed record of each service request
5.21that it receives and the independent appraiser that performs the real estate appraisal
5.22services for the appraisal management company, pursuant to section 82C.13;
5.23(10) a certification that the employees of the appraisal management company will be
5.24appropriately trained and familiar with the appraisal process;
5.25(11) a certification that the appraisal management company has a system and
5.26process in place to verify that a person being added to the appraiser panel of the appraisal
5.27management company holds a license in good standing in this state pursuant to chapter
5.2882B; and
5.29(12) an irrevocable Uniform Consent to Service of Process, pursuant to section
5.3082C.07.
5.31    Subd. 6. Effective date of license. Initial licenses issued under this chapter are
5.32effective upon issuance and remain valid, subject to denial, suspension, or revocation
5.33under this chapter, until the next following August 31.

5.34    Sec. 4. [82C.04] TERM OF LICENSE.
6.1Initial licenses issued under this chapter are valid for a period not to exceed two
6.2years. Each initial license must expire on August 31 of the expiration year assigned by
6.3the commissioner.

6.4    Sec. 5. [82C.05] LICENSE RENEWAL.
6.5    Subdivision 1. Term. Licenses renewed under this chapter are valid for a period
6.6of 24 months.
6.7    Subd. 2. Timely renewal. (a) Application for timely renewal of a license is
6.8considered timely filed if received by the commissioner before the date of the license
6.9expiration.
6.10(b) An application for renewal is considered properly filed if made upon a form
6.11prescribed by the commissioner, accompanied by fees prescribed by this chapter, and
6.12containing any information the commissioner requires.
6.13(c) A licensee failing to make timely application for renewal of the license is
6.14unlicensed until the renewal license has been issued by the commissioner and is received
6.15by the licensee.
6.16    Subd. 3. Contents of renewal application. Application for the renewal of an
6.17existing license must contain the information specified in section 3; however, only the
6.18requested information having changed from the most recent prior application need be
6.19submitted.
6.20    Subd. 4. Cancellation. A licensee ceasing an activity or activities regulated by this
6.21chapter and desiring to no longer be licensed shall so inform the commissioner in writing
6.22and, at the same time, surrender the license and all other symbols or indicia of licensure.

6.23    Sec. 6. [82C.06] EXEMPTIONS.
6.24This chapter does not apply to:
6.25(1) a person that exclusively employs appraisers on an employer and employee
6.26basis for the performance of appraisals and:
6.27(i) the employer is responsible for ensuring that the appraisals are performed by
6.28employees in accordance with USPAP; and
6.29(ii) the employer accepts all liability associated with the performance of the
6.30appraisal by the employee;
6.31(2) a department or unit within a financial institution that is subject to direct
6.32regulation by an agency of the United States government, or to regulation by an agency of
6.33this state, that receives a request for the performance of an appraisal from one employee of
6.34the financial institution, and another employee of the same financial institution assigns the
7.1request for the appraisal to an appraiser that is an independent contractor to the institution,
7.2except that an appraisal management company that is a wholly owned subsidiary of
7.3a financial institution shall not be considered a department or unit within a financial
7.4institution to which the provisions of this chapter do not apply;
7.5(3) a person that enters into an agreement, whether written or otherwise, with an
7.6appraiser for the performance of an appraisal, and upon the completion of the appraisal,
7.7the report of the appraiser performing the appraisal is signed by both the appraiser who
7.8completed the appraisal and the appraiser who requested the completion of the appraisal,
7.9except that an appraisal management company may not avoid the requirements of this
7.10chapter by requiring that an employee of the appraisal management company that is an
7.11appraiser to sign an appraisal that is completed by an appraiser that is part of the appraisal
7.12panel of the appraisal management company; or
7.13(4) any governmental agency performing appraisals on behalf of that level of
7.14government or any agency performing ad valorem tax appraisals for county assessors.

7.15    Sec. 7. [82C.07] CONSENT TO SERVICE OF PROCESS.
7.16Each entity applying for a license as an appraisal management company in this state
7.17shall complete an irrevocable Uniform Consent to Service of Process as prescribed by
7.18the commissioner.

7.19    Sec. 8. [82C.08] LICENSING FEES.
7.20    Subdivision 1. Establishment and retention. The fees shall be retained by the
7.21commissioner for the sole purpose of administering this licensing and regulation program.
7.22    Subd. 2. Amounts. (a) Each application for initial licensure shall be accompanied
7.23by a fee of $2000.
7.24(b) Each application for renewal of the license must be received prior to the two year
7.25expiration with the renewal fee of $1000.
7.26    Subd. 3. Forfeiture. All fees are nonrefundable except that an overpayment of a fee
7.27must be refunded upon proper application.

7.28    Sec. 9. [82C.09] INVESTIGATIONS AND SUBPOENAS.
7.29The commissioner has under this chapter the same powers with respect to chapter
7.3045.027, including the authority to impose a civil penalty not to exceed $10,000 per
7.31violation

7.32    Sec. 10. [82C.10] EMPLOYEE REQUIREMENTS.
8.1An employee of the appraisal management company that has the responsibility to
8.2review the work of employed and independent appraisers where the subject properties are
8.3located within this state, which include the reviewer's opinion of value or concurrence
8.4with the original appraiser's value, must be licensed according to chapter 82B and perform
8.5the review assignments in compliance with USPAP and chapter 82B. This requirement
8.6does not apply to employees who review appraisals for completeness and compliance in
8.7connection with an appraisal management company's internal quality control processes,
8.8but who do not perform appraisal reviews that are subject to Standard 3 of USPAP.

8.9    Sec. 11. [82C.11] LIMITATIONS.
8.10An appraisal management company licensed in this state pursuant to this chapter
8.11may enter into contracts or agreements for appraisal assignments in the this state only with
8.12an employee or independent appraiser holding an active Minnesota real estate appraiser
8.13license pursuant to chapter 82B.

8.14    Sec. 12. [82C.12] ADHERENCE TO STANDARDS.
8.15An appraisal management company must have a system in place to review the
8.16work of all employed and independent appraisers that are performing real estate appraisal
8.17assignments for the appraisal management company on a periodic basis to verify that
8.18the real estate appraisal services are being conducted in accordance with USPAP and
8.19chapter 82B. An appraisal management company is required to make referrals directly to
8.20state appraiser regulatory authorities when a state licensed or certified appraiser violates
8.21USPAP, applicable state law, or engages in other unethical or unprofessional conduct.

8.22    Sec. 13. [82C.13] RECORD KEEPING.
8.23An appraisal management company must maintain a detailed record of each service
8.24request that it receives and the employee appraiser or independent appraiser that performs
8.25the appraisal assignment for the appraisal management company.
8.26Records must be kept for a period of at least five years after the appraisal assignment
8.27request is sent to the independent appraiser or completion of the appraisal report,
8.28whichever period expires later.

8.29    Sec. 14. [82C.14] APPRAISER INDEPENDENCE; PROHIBITIONS.
8.30(a) It is unlawful for any employee, director, officer, or agent of an appraisal
8.31management company licensed in this state pursuant to this chapter to influence or attempt
8.32to influence the development, reporting, or review of an appraisal through coercion,
9.1extortion, collusion, compensation, inducement, intimidation, or bribery, including but
9.2not limited to:
9.3(1) withholding or threatening to withhold timely payment for an appraisal;
9.4(2) withholding or threatening to withhold future business or assignments for an
9.5employed or independent appraiser, or demoting or terminating or threatening to demote
9.6or terminate an employed or independent appraiser;
9.7(3) expressly or impliedly promising future business, assignments, promotions, or
9.8increased compensation for an employed or independent appraiser;
9.9(4) conditioning the request for an appraisal assignment on the payment of an
9.10appraisal fee or salary or bonus on the opinion, conclusion, or valuation to be reached,
9.11or on a preliminary estimate or opinion requested from an employed or independent
9.12appraiser;
9.13(5) requesting that an employed or independent appraiser provide an estimated,
9.14predetermined, or desired valuation in an appraisal report, or provide estimated values or
9.15comparable sales at any time prior to the completion of an appraisal assignment;
9.16(6) providing to an employed or independent appraiser an anticipated, estimated,
9.17encouraged, or desired value for a subject property or a proposed or target amount to be
9.18loaned to the borrower, except that a copy of the sales contract for purchase transactions
9.19may be provided;
9.20(7) providing to an employed or independent appraiser, or any entity or person
9.21related to the appraiser, stock , or other financial or nonfinancial benefits;
9.22(8) allowing the removal of an employed or independent appraiser from a list of
9.23qualified appraisers used by any entity, without prior written notice to the appraiser, which
9.24notice must include documented evidence of the appraiser's violation of USPAP, chapter
9.2582B, substandard performance, or otherwise improper or unprofessional behavior;
9.26(9) request or require any employed or independent appraiser to provide the
9.27appraisal management company or any of its employees, or any of its clients, with the
9.28appraiser's digital signature;
9.29(10) alter, amend, or change an appraisal report submitted by an appraiser, to include
9.30removing or applying a signature, adding or deleting information from the appraisal report;
9.31(11) require the appraiser to collect the fee from a borrower, homeowner, or other
9.32person;
9.33(12) require an appraiser to sign any indemnification agreement that would require
9.34the appraiser to defend and hold harmless the appraisal management company or any its
9.35agents, or employees for any liability, damage, losses, or claims arising out of the services
10.1performed by the appraisal management company or its agents, employees or independent
10.2contractors and not the services performed by the appraiser;
10.3(13) use an appraiser directly selected or referred by any member of a loan
10.4production staff for an individual assignment; or
10.5(14) any other act or practice that impairs or attempts to impair an appraiser's
10.6independence, objectivity, or impartiality.
10.7(b) Nothing in paragraph (a) prohibits the appraisal management company from
10.8requesting that an independent appraiser:
10.9(1) consider additional appropriate property information;
10.10(2) provide further detail, substantiation, or explanation for the appraiser's value
10.11conclusion; or
10.12(3) correct objective factual errors in an appraisal report.

10.13    Sec. 15. [82C.15] ADJUDICATION OF DISPUTES BETWEEN AN APPRAISAL
10.14MANAGEMENT COMPANY AND AN INDEPENDENT APPRAISER.
10.15Except within the first 30 days after an independent appraiser is first added to the
10.16appraiser panel of an appraisal management company, an appraisal management company
10.17may not remove an appraiser from its appraiser panel, or otherwise refuse to assign
10.18requests for real estate appraisal services to an independent appraiser without:
10.19(1) notifying the appraiser in writing of the reasons why the appraiser is being
10.20removed from the appraiser panel or is not receiving appraisal requests from the appraisal
10.21management company;
10.22(2) if the appraiser is being removed from the panel for illegal conduct, violation of
10.23USPAP, or a violation of chapter 82B, the nature of the alleged conduct or violation; and
10.24(3) providing an opportunity for the appraiser to respond and appeal the notification
10.25of the appraisal management company.

10.26    Sec. 16. [82C.16] DENIAL, SUSPENSION, REVOCATION OF LICENSES.
10.27    Subdivision 1. Powers of commissioner. The commissioner may by order take any
10.28or all of the following actions:
10.29(1) bar a person from serving as an officer, director, partner, controlling person,
10.30or any similar role at an appraisal management company, if such person has ever been
10.31the subject of a final order suspending, revoking or denying a certification, registration
10.32or license as a realtor, broker or appraiser, or a final order barring involvement in any
10.33industry or profession issued by this or another state or federal regulatory agency;
10.34(2) deny, suspend, or revoke an appraisal management company license;
11.1(3) censure an appraisal management company license; and
11.2(4) impose a civil penalty as provided for in chapter 45.027.
11.3(b) In order to take the action in paragraph (a), the commissioner must find:
11.4(1) that the order is in the public interest; and
11.5(2) that an officer, director, partner, employee, agent, controlling person or persons,
11.6or any person occupying a similar status or performing similar functions, has:
11.7(i) violated any provision of this chapter;
11.8(ii) filed an application for a license that is incomplete in any material respect or
11.9contains a statement that, in light of the circumstances under which it is made, is false or
11.10misleading with respect to a material fact;
11.11(iii) failed to maintain compliance with the affirmations made under section 80C.03,
11.12subdivision 5;
11.13(iv) violated a standard of conduct or engaged in a fraudulent, coercive, deceptive,
11.14or dishonest act or practice, whether or not the act or practice involves the appraisal
11.15management company;
11.16(v) engaged in an act or practice, whether or not the act or practice involves the
11.17business of appraisal management, appraisal assignments or real estate mortgage related
11.18practices that demonstrates untrustworthiness, financial irresponsibility, or incompetence;
11.19(vi) pled guilty, with or without explicitly admitting guilt, pled nolo contendere,
11.20or been convicted of a felony, gross misdemeanor, or a misdemeanor involving moral
11.21turpitude;
11.22(vii) paid a civil penalty or been the subject of disciplinary action by the
11.23commissioner, or an order of suspension or revocation, cease and desist order or injunction
11.24order or order barring involvement in an industry or profession issued by this or any other
11.25state or federal regulatory agency, government sponsored enterprise or by the secretary of
11.26Housing and Urban Development;
11.27(viii) been found by a court of competent jurisdiction to have engaged in conduct
11.28evidencing gross negligence, fraud, misrepresentation, or deceit;
11.29(ix) refused to cooperate with an investigation or examination by the commissioner;
11.30(x) failed to pay any fee or assessment imposed by the commissioner; or
11.31(xi) failed to comply with state and federal tax obligations.
11.32    Subd. 2. Orders of the commissioner. To begin a proceeding under this section,
11.33the commissioner shall issue an order requiring the subject of the proceeding to show
11.34cause why action should not be taken against the licensee according to this section. The
11.35order must be calculated to give reasonable notice of the time and place for the hearing
11.36and must state the reasons for entry of the order. The commissioner may by order
12.1summarily suspend a license pending a final determination of an order to show cause. If a
12.2license is summarily suspended, pending final determination of an order to show cause, a
12.3hearing on the merits must be held within 30 days of the issuance of the order of summary
12.4suspension. All hearings must be conducted under chapter 14. After the hearing, the
12.5commissioner shall enter an order disposing of the matter as the facts require. If the
12.6subject of the order fails to appear at a hearing after having been duly notified of it, the
12.7subject is considered in default, and the proceeding may be determined against the subject
12.8of the order upon consideration of the order to show cause, the allegations of which may
12.9be considered to be true.
12.10    Subd. 3. Actions against lapsed license. If a license lapses, is surrendered,
12.11withdrawn, terminated, or otherwise becomes ineffective, the commissioner may institute
12.12a proceeding under this subdivision within two years after the license was last effective
12.13and enter a revocation or suspension order as of the last date which the license was in
12.14effect, and may impose a civil penalty as provided for in this section or section 45.027."
12.15Amend the title accordingly