DAR File No. 32260

Tax Commission, Property Tax

R884-24P-19

Appraiser Designation Program Pursuant to Utah Code Ann. 59-2-701 and 59-2-702

NOTICE OF PROPOSED RULE

DAR File No.: 32260
Filed: 12/31/2008, 01:55
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

These amendments are to update Section R884-24P-19 to reflect proposed changes to the State Tax Commission's Property Tax Division Appraiser Designation Program and recognize increased appraiser education requirements by the Division of Real Estate.

Summary of the rule or change:

The significant changes are to: 1) change all course requirements from letters to numbers including renumbering the five remaining lettered courses in the 500 series; 2) allow two exam re-takes before requiring a student to re-take a course. This is a policy of the Appraiser Qualification Board; and 3) reduce the continuing education requirement for personal property appraisers from 28 to 14 hours every two years. This requirement does not affect the real property appraisers who are required by the State Division of Real Estate to take 28 hours every 2 years, including USPAP. The 500 series courses are those courses required for designation, but not required for Division of Real Estate licensing/certification. The appraisal courses will be numbered as: 1-99 Continuing Education; 100-199 Trainee; 200-299 License; 300-399 Certified Residential; 400-499 Certified General; and 500-599 Designation. Subsection 59-2-701(3) authorizes the commission to prescribe additional requirements for any person performing an appraisal for purposes of establishing fair market value for the assessment roll. Subsection 59-2-701(4) authorizes the commission to promulgate a rule establishing qualifications for personal property appraisers exempt from licensure under the Real Estate Appraiser Licensing and Certification Act. Education increase of ad valorem residential designation, Subsection R884-24P-19(5): The current requirement is courses A, B, C, D, and J (five courses). Because the appraiser must be licensed, the proposed minimum requirement is courses 501, 502, 101, 102, 103, 201, 202, 203, and 204 (nine courses). This is an increase of four required courses. Education increase for ad valorem general designation, Subsection R884-24P-19(6): The current requirement is courses A, B, C, D, E, and J (six courses). The appraiser must be certified, either certified residential or certified general. If the appraiser elects certified residential, the proposed minimum requirement is courses 501, 502, 505, 101, 102, 103, 201, 202, 203, 204, 301, 302 and 303 (13 courses). If the appraiser elects to be certified general, the proposed minimum requirement is courses 501, 502, 505, 101, 102, 103, 201, 202, 203, 204, 301, 401, 402, 403, 404, 405, and 406 (17 courses). This is an increase of 7 courses for certified residential and an increase of 11 courses for certified general. Education increase for ad valorem personal property auditor/appraiser, Subsection R884-24P-19(7): No change in number of courses required. The current requirement is four courses; the proposed requirement is four courses. Education increase for ad valorem centrally assessed valuation analyst, Subsection 19(8): The current requirement is courses A, B, E, H, and J (five courses). The proposed education is courses 501 and 504. In addition, the appraiser must be either licensed or certified. Based on the courses listed above, the total number of courses required is: Licensed appraiser: 9 courses, an increase of 4 courses. Certified Residential: 12 courses, an increase of 7 courses. Certified General: 16 courses, an increase of 11 courses. To summarize, in 2008, the Property Tax Division taught all but six of these courses required for designation. The proposed rule would require the teaching of the additional six courses: i.e., 401, 402, 403, 404, 405, and 406 to satisfy the increased Division of Real Estate's education requirements.

State statutory or constitutional authorization for this rule:

Sections 59-2-701 and 59-2-702

Anticipated cost or savings to:

the state budget:

The total amount of savings or cost to state government is undetermined. However, books and supplies for additional appraisal classes is estimated to be $9,000 (six additional classes will be conducted with an average of 30 students and a book cost of $50 per student).

local governments:

The total amount of savings or cost to local government is undetermined. However, the estimated lodging and per diem cost to local government is $11,250 (six additional classes with 15 students requiring lodging and per diem of $125).

small businesses and persons other than businesses:

Not applicable since this rule applies only to state and local government employees.

Compliance costs for affected persons:

Not applicable since this rule applies only state and local government employees.

Comments by the department head on the fiscal impact the rule may have on businesses:

There are no anticipated fiscal impacts. D'Arcy Dixon, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Tax Commission
Property Tax
210 N 1950 W
SALT LAKE CITY UT 84134

Direct questions regarding this rule to:

Cheryl Lee at the above address, by phone at 801-297-3900, by FAX at 801-297-3919, or by Internet E-mail at clee@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

02/17/2009

This rule may become effective on:

02/24/2009

Authorized by:

D'Arcy Dixon, Commissioner

R884. Tax Commission, Property Tax.

R884-24P. Property Tax.

R884-24P-19. Appraiser Designation Program Pursuant to Utah Code Ann. Sections 59-2-701 and 59-2-702.

(1) "State certified general appraiser," "state certified residential appraiser," [and ]"state licensed appraiser," and trainee are as defined in Section 61-2b-2.

(2) The ad valorem training and designation program consists of several courses and practica.

(a) Certain courses must be sanctioned by either the Appraiser Qualification Board of the Appraisal Foundation (AQB) or the Western States Association of Tax Administrators (WSATA).

(b) The courses comprising the basic designation program are:

[(i) Course A - Assessment Practice in Utah;

(ii)](i) Course [B]101 - [Fundamentals of Real Property Appraisal]Basic Appraisal Principles;

(ii) Course 103 - Uniform Standards of Professional Appraisal Practice (AQB);

(iii) Course 501 - Assessment Practice in Utah;

[(iii)](iv) Course [C]502 - Mass Appraisal of Land;

[ (iv) Course D - Building Analysis and Valuation;

(v) Course E - Income Approach to Valuation;

] [(vi)](v) Course [G]503 - Development and Use of Personal Property Schedules;

[(vii)](vi) Course [H]504 - Appraisal of Public Utilities and Railroads (WSATA); and

[ (viii) Course J - Uniform Standards of Professional Appraisal Practice (AQB).

] (vii) Course 505 - Income Approach Application.

[ (c) The Tax Commission may allow equivalent appraisal education to be submitted in lieu of Course B, Course D, Course E, and Course J.

] (3) Candidates must attend 90 percent of the classes in each course and pass the final examination for each course with a grade of 70 percent or more to be successful.

(4) There are four recognized ad valorem designations: ad valorem residential appraiser, ad valorem general real property appraiser, ad valorem personal property auditor/appraiser, and ad valorem centrally assessed valuation analyst.

(a) These designations are granted only to individuals employed in a county assessor office or the Property Tax Division, working as appraisers, review appraisers, valuation auditors, or analysts/administrators providing oversight and direction to appraisers and auditors.

(b) An assessor, county employee, or state employee must hold the appropriate designation to value property for ad valorem taxation purposes.

(5) Ad valorem residential appraiser.

(a) To qualify for this designation, an individual must:

(i) successfully complete courses 501 and 502[:];

[ (A) Courses A, B, C, D, and J; or

(B) equivalent appraisal education as allowed under Subsection (2)(c);

] (ii) successfully complete a comprehensive residential field practicum; and

(iii) attain and maintain state licensed or state certified appraiser status.

(b) Upon designation, the appraiser may value residential, vacant, and agricultural property for ad valorem taxation purposes.

(6) Ad valorem general real property appraiser.

(a) In order to qualify for this designation, an individual must:

(i) successfully complete[:]courses 501, 502, and 505;

[ (A) Courses A, B, C, D, E, and J; or

(B) equivalent appraisal education as allowed under Subsection (2)(c);

] (ii) successfully complete a comprehensive field practicum including residential and commercial properties; and

(iii) attain and maintain state [licensed or state ]certified appraiser status.

(b) Upon designation, the appraiser may value all types of locally assessed real property for ad valorem taxation purposes.

(7) Ad valorem personal property auditor/appraiser.

(a) To qualify for this designation, an individual must:

(i) successfully complete[:] courses 101, 103, 501, and 503; and

[ (A) Courses A, B, G, and J; or

(B) equivalent appraisal education as allowed under Subsection (2)(c); and

] (ii) successfully complete a comprehensive auditing practicum.

(b) Upon designation, the auditor/appraiser may value locally assessed personal property for ad valorem taxation purposes.

(8) Ad valorem centrally assessed valuation analyst.

(a) In order to qualify for this designation, an individual must:

(i) successfully complete[:]courses 501 and 504;

[ (A) Courses A, B, E, H, and J; or

(B) equivalent appraisal education as allowed under Subsection (2)(c);

] (ii) successfully complete a comprehensive valuation practicum; and

(iii) attain and maintain state licensed or state certified appraiser status.

(b) Upon designation, the analyst may value centrally assessed property for ad valorem taxation purposes.

(9) If a candidate fails to receive a passing grade on a final examination, [one re-examination is]two re-examinations are allowed. If the [re-examination is]re-examinations are not successful, the individual must retake the failed course. The cost to retake the failed course will not be borne by the Tax Commission.

(10) A practicum involves the appraisal or audit of selected properties. The candidate's supervisor must formally request that the Property Tax Division administer a practicum.

(a) Emphasis is placed on those types of properties the candidate will most likely encounter on the job.

(b) The practicum will be administered by a designated appraiser assigned from the Property Tax Division.

(11) An appraiser trainee referred to in Section 59-2-701 shall be designated an ad valorem associate if the appraiser trainee:

(a) has completed all [Tax Commission appraiser ]education and practicum requirements for designation under Subsections (5), (6), [and]or (8); and

(b) has not completed the non-education requirements for licensure or certification under Title [71]61, Chapter 2b, Real Estate Appraiser Licensing and Certification.

(12) An individual holding a specified designation can qualify for other designations by meeting the additional requirements [outlined above]under Subsections (5), (6), (7), or (8).

(13)(a) Maintaining designated status for individuals designated under Subsection (7) requires completion of [28]14 hours of Tax Commission approved classroom work every two years.

(b) Maintaining designated status for individuals designated under Subsections (5), (6), and (8) requires maintaining their appraisal license or certification under Title 61, Chapter 2b, Real Estate Appraiser Licensing and Certification.

(14) Upon termination of employment from any Utah assessment jurisdiction, or if the individual no longer works primarily as an appraiser, review appraiser, valuation auditor, or analyst/administrator in appraisal matters, designation is automatically revoked.

(a) Ad valorem designation status may be reinstated if the individual secures employment in any Utah assessment jurisdiction within four years from the prior termination.

(b) If more than four years elapse between termination and rehire, and:

(i) the individual has been employed in a closely allied field, then the individual may challenge the course examinations. Upon successfully challenging all required course examinations, the prior designation status will be reinstated; or

(ii) if the individual has not been employed in real estate valuation or a closely allied field, the individual must retake all required courses and pass the final examinations with a score of 70 percent or more.

(15) All appraisal work performed by Tax Commission designated appraisers shall meet the standards set forth in section 61-2b-27.

(16) If appropriate Tax Commission designations are not held by assessor's office personnel, the appraisal work must be contracted out to qualified private appraisers. An assessor's office may elect to contract out appraisal work to qualified private appraisers even if personnel with the appropriate designation are available in the office. If appraisal work is contracted out, the following requirements must be met:

(a) The private sector appraisers [contracting the]performing the contracted work must hold the state certified residential appraiser or state certified general appraiser license issued by the Division of Real Estate of the Utah Department of Commerce. Only state certified general appraisers may appraise nonresidential properties.

(b) All appraisal work shall meet the standards set forth in Section 61-2b-27.

(17) The completion and delivery of the assessment roll required under Section 59-2-311 is an administrative function of the elected assessor.

(a) There are no specific licensure, certification, or educational requirements related to this function.

(b) An elected assessor may complete and deliver the assessment roll as long as the valuations and appraisals included in the assessment roll were completed by persons having the required designations.

 

KEY: taxation, personal property, property tax, appraisals

Date of Enactment or Last Substantive Amendment: [December 1, 2008]2009

Notice of Continuation: March 12, 2007

Authorizing, and Implemented or Interpreted Law: 59-2-701; 59-2-702