DEPARTMENT OF LICENSING

[Filed March 4, 2020, 7:31 a.m.]

Preproposal statement of inquiry was filed as WSR 20-01-127.

Title of Rule and Other Identifying Information: Amending WAC 308-409-020 Application process to license as an appraisal management company, 308-409-030 Licensure and renewal, 308-409-050 Fees and charges; and adding new WAC 308-409-075 Standards of practice.

Hearing Location(s): On April 7, 2020, at 1:30 p.m., at the Department of Licensing, Business and Professions Division, 405 Black Lake Boulevard, Building #2, Conference Room #2108, Olympia, WA 98502.

Date of Intended Adoption: April 8, 2020.

Submit Written Comments to: Dee Sharp, Department of Licensing, Appraisal Management Company Program, P.O. Box 9021, Olympia, WA 98507, email dolbpdamc@dol.wa.gov, fax 360-586-0998, by April 6, 2020.

Assistance for Persons with Disabilities: Dee Sharp, phone 360-664-6504, fax 360-570-4981, TTY 711, email dolbpdamc@dol.wa.gov, by April 6, 2020.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: All updates and adoptions are being proposed for Washington state to remain in compliance with state (chapter 18.310 RCW) and federal rules under section 1124 to Title XI of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) as modified by section 1473 of the Dodd-Frank Act.

The proposed updates and adoptions will update existing licensure period to one year to accommodate for 2019 legislative changes; will modify existing rules to allow for the collection and transmission of Appraisal Management Company National Registry data and fees to the Appraisal Subcommittee as required by Title XI, and will adopt a new rule pertaining to standards of practice as required by the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation

Reasons Supporting Proposal: Rule modifications and adoptions are proposed to comply with the final federal rules pertaining to state's requirements to supervise Appraisal Management Companies in compliance with the amendments made to Title XI by the Dodd-Frank Act.

Statutory Authority for Adoption: RCW 18.310.020 (1) and (11).

Statute Being Implemented: None.

Rule is necessary because of federal law, 12 U.S.C. § 3353(d); 12 C.F.R. § 226.28. If changes are not adopted as required, the Appraisal Management Company program would not be in compliance with state and federal laws and could be decertified by the Appraisal Subcommittee which would prohibit Appraisal Management Companies from conducting business pertaining to real property lending transactions in Washington state.

Name of Proponent: Department of licensing, governmental.

Name of Agency Personnel Responsible for Drafting, Implementation, and Enforcement: Dee Sharp, 2000 4th Avenue West, Olympia, WA 98507, 360-664-6504.

A school district fiscal impact statement is not required under RCW 28A.305.135.

A cost-benefit analysis is not required under RCW 34.05.328. A cost-benefit analysis is not required because the changes are required for compliance with state and federal statutes (RCW 34.05.328(5)[(b)](v)).

This rule proposal, or portions of the proposal, is exempt from requirements of the Regulatory Fairness Act because the proposal:

Is exempt under RCW 19.85.061 because this rule making is being adopted solely to conform and/or comply with federal statute or regulations. Citation of the specific federal statute or regulation and description of the consequences to the state if the rule is not adopted: 12 U.S.C. § 3353(d); 12 C.F.R. § 226.28. If changes are not adopted as required, the Appraisal Management Company program would not be in compliance with state and federal laws and could be decertified by the Appraisal Subcommittee which would prohibit Appraisal Management Companies from conducting business pertaining to real property lending transactions in Washington state.

Is exempt under RCW 19-85-020(3).

Explanation of exemptions: Exempt under RCW 19.85.020(3), this rule affects only individual licensees (applies to all above proposed rules).

AMENDATORY SECTION(Amending WSR 16-21-061, filed 10/14/16, effective 11/14/16)

WAC 308-409-020Application process to license as an appraisal management company.

(1) An entity applying for licensure as an appraisal management company shall present to the department:

(a) A completed licensure application form that complies with RCW 18.310.060;

(b) Completed registration forms for the owner(s) of ten percent or more of the company and controlling persons, including a designated controlling person;

(c) Fingerprint background checks that are identified to the appraisal management company program, for owner(s) of ten percent or more of the company and controlling person(s);

(i) An application submitted without the required fingerprint background check is considered incomplete.

(ii) If a fingerprint submission is rejected, the owner or controlling person must follow the department's authorized vendor's procedures for resubmitting fingerprints within twenty-one calendar days of the date the department notifies the applicant.

(iii) Failure to follow the vendor's fingerprint procedures within twenty-one days may result in a suspension of the appraisal management company license until the vendor's fingerprint procedures are followed. The applicant will be responsible for any fingerprinting fees due to the department's authorized vendor.

(iv) If the fingerprint submission is rejected, the applicant must pay a new fee for fingerprinting and background processing. After three failed submissions, the program may use other sources/methods to satisfy the background check requirement.

(d) Proof of surety bond; and

(e) Appropriate fees.

(2) A change in ownership or controlling person(s) of the appraisal management company will require the new owner(s) or controlling person(s) to submit owner or controlling person registration form(s) to the department together with fingerprint background check(s), that are identified to the appraisal management company program within fourteen business days of change.

(3) Appraisal management company applications for licensure and renewal must include:

(a) A certification under penalty of perjury to the department to include:

(i) Has the appraisal management company overseen a panel of sixteen or more licensed appraisers in Washington within one year immediately preceding application;

(ii) Has the appraisal management company overseen a panel of twenty-five or more licensed appraisers in more than one state within one year immediately preceding application;

(iii) Is the appraisal management company a federally regulated AMC.

(b) A report to the department providing the actual number of appraisers the appraisal management company has overseen on their panel within the one year immediately preceding the application; and

(c) A report to the department providing the number of appraisers on their appraisal management company panel that performed appraisals for covered transactions within one year immediately preceding the application. Covered transactions are any appraisals that were performed for consumer credit transactions secured by the consumer's principal dwelling unit.

AMENDATORY SECTION(Amending WSR 16-21-061, filed 10/14/16, effective 11/14/16)

WAC 308-409-030Licensure and renewal.

(1) ((Appraisal management companies must be licensed by January 1, 2012.

(2))) Each original and renewal license issued under chapter 18-310 RCW shall expire ((two))one year((s)) from date of issue.

(((3)))(2) To be renewed as an appraisal management company, the holder of a valid license shall submit an application to include the information required in WAC 308-409-020(3) and pay the prescribed fee to the director no earlier than one hundred twenty days prior to the expiration date.

(((4)))(3) If a company fails to renew a license prior to its expiration and no more than one year has passed since the company last held a valid license, the company may obtain a renewed license by paying the renewal fee and late renewal penalty fee.

(((5)))(4) The director shall cancel the license of any company whose renewal fee is not received within one year from the date of expiration. A company may obtain a new license by applying for original licensure as an appraisal management company.

AMENDATORY SECTION(Amending WSR 16-21-061, filed 10/14/16, effective 11/14/16)

WAC 308-409-050Fees and charges.

The following fees shall be paid under the provisions of chapter 18.310 RCW:

Title of Fee	Fee
Original licensure	$((2,400.00)) 1,200.00
Renewal	((1,200.00)) 600.00
Late renewal ((penalty))	38.00
Duplicate license	30.00
Fingerprint processing	per vendor schedule*
Appraisal management company national registry	25.00 per appraiser on the AMC panel who performed an appraisal in a covered transaction as defined in WAC 308-409-020 (2)(c) **

*	Fees for the category marked with an asterisk are determined by contract with an outside vendor.
**	Fees are initial licensure and renewal fees for an appraisal management company national registry in an amount determined by the appraisal subcommittee to be submitted by the state. Title XI requires each state to submit a roster listing of licensed appraisal management companies to the appraisal subcommittee.

WAC 308-409-075Standards of practice.

The standard of practice governing real estate appraisal activities coordinated by appraisal management companies will be the edition of the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation in effect on the date of the appraisal report. Appraisals coordinated by real estate appraisal management companies must comply with these standards of practice. A copy of the Uniform Standards of Professional Appraisal Practice is available for review and inspection at the office of the Real Estate Appraiser Unit Office, Olympia, Washington. The Uniform Standards of Professional Appraisal Practice is a copyright document. Copy of the full text may be obtained from the appraisal foundation at The Appraisal Foundation, P.O. Box 96734, Washington, DC 20090-6734.