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NEW JERSEY REGISTER
VOLUME 41, ISSUE 3
ISSUE DATE: FEBRUARY 2, 2009
RULE PROPOSALS
LAW AND PUBLIC SAFETY
DIVISION OF CONSUMER AFFAIRS
STATE BOARD OF REAL ESTATE APPRAISERS

Proposed Amendments: N.J.A.C. 13:40A-1.2, 2.5, 2A.5, 3.6, 5.4 and 5.10

Temporary Visiting Certificate, Certified General Real Estate Appraiser; Temporary Visiting Certificate, Certified Residential Real Estate Appraiser; Temporary Visiting Licenses; Special Course Requirement; Uniform Standards of Professional Appraisal Practice; Extensions Authorized By: State Board of Real Estate Appraisers, Dr. James Hsu, Executive Director. Authority: N.J.S.A. 45:14F-7 and 8. Calendar Reference: See Summary below for explanation of exception to calendar requirement.

Proposal Number: PRN 2009-50.
Submit written comments by April 3, 2009 to:

Dr. James Hsu, Executive Director
State Board of Real Estate Appraisers
Post Office Box 45032
124 Halsey Street
Newark, New Jersey 07101

The agency proposal follows:

Summary

On January 7 and 8, 2008, the Appraisal Subcommittee of the Federal Financial Institutions Examination Council (ASC) visited the State Board of Real Estate Appraisers (Board) office to review its real estate appraiser regulatory program. After the review, the ASC issued a letter to the Board recommending three amendments to the Board's rules to bring them into compliance with Title XI of the Financial Institutions, Reform, Recovery and Enforcement Act of 1989, as amended (Title XI), the ASC's Policy Statements and Appraiser Qualification Board (AQB) criteria. First, ASC advised that the Board's temporary practice procedures did not conform to Title XI and ASC Policy Statement 5. Specifically, ASC found that temporary practice permits were not being issued for the minimum permit term of six months indicated as ASC policy. In addition, the Board did not have the procedures in place to easily grant an extension of the permit if the permit holder needed additional time to complete an assignment. In response to those concerns, the Board is proposing identical amendments to N.J.A.C. 13:40A-2.5, 2A.5 and 3.6, so that its rules are in compliance with Title XI and ASC Policy Statement 5. Each of those sections now will require issuance of a temporary visiting permit for a period of six months, with an extension of time granted upon request to [page=711] the Board by the applicant. In addition, since the Board issues a temporary certificate or license to an appraiser based on satisfactory proof that the applicant holds a valid certificate or license in another jurisdiction, the Board has proposed amendments to each section indicating that the temporary visiting license or certificate will become invalid if the appraiser no longer holds a valid license or certificate in the jurisdiction of origin. The Board has taken this opportunity to amend all three sections by replacing "state" with "jurisdiction" to reflect that the Board will accept applications not only from appraisers in other states, but United States territories as well. The Board proposes to add the definition of "jurisdiction" in N.J.A.C. 13:40A-1.2.

A second issue raised by ASC is that the Board's continuing education rule, which currently allows appraisers additional time to complete required continuing education on a discretionary case-by-case basis, does not conform to AQB criteria. Those criteria currently allow additional time only when an appraiser is returning from active military duty. Specifically, the AQB criteria allow an appraiser returning from active military duty to be placed in active status for up to 90 days in order to complete the necessary continuing education. In response to the ASC's recommendation, the Board proposes an amendment to N.J.A.C. 13:40A-5.10 to allow an extension of time to complete continuing education only where the deferral is consistent with AQB criteria. Proposed new subsection (b) allows an applicant to remain in an active status for 90 days until the continuing education requirements have been completed. The Board proposes to delete subsections (b), (c), (d) and (e) since the proposed amendments to N.J.A.C. 13:40A-5.10(a) and new subsection (b) make those subsections unnecessary. Subsections (a) and (b) make clear that the Board will no longer exercise its discretion to allow an extension to complete continuing education; rather, the Board will follow the procedures prescribed by the AQB criteria.

The final recommendation made by ASC related to N.J.A.C. 13:40A-5.4 in which the Board requires appraisers to attend a seven-hour course on Uniform Standards of Professional Appraisal Practice (USPAP) every two years. The ASC pointed out that the Board's rules should be clarified to avoid implying that a USPAP course of more than seven hours is acceptable. Thus, the Board proposes to amend N.J.A.C. 13:40A-5.4 accordingly. The Board has determined that the comment period for this notice of proposal is 60 days; therefore, pursuant to N.J.A.C. 1:30-3.3(a)5, this notice is excepted from the rulemaking calendar requirement.

Social Impact

The proposed rule amendments to N.J.A.C. 13:40A-1.2, 2.5, 2A.5 and 3.6 will affect all appraisers who wish to be admitted temporarily for purposes of performing an appraisal project in New Jersey. Ensuring a full six-month period in which to complete an appraisal project and a simple method by which to get an extension, will allow for an adequate period of time for completion of appraisals being performed by out-of-jurisdiction appraisers. The proposed rule amendments to N.J.A.C. 13:40A-5.10 clearly will have a positive impact on those appraisers who are on active military duty, by extending the period in which they can complete continuing education. In contrast, it may have a negative impact on those appraisers who no longer may request an extension to complete continuing education based on other hardships; however, the divergence between the current rule and the AQB requirements results in confusion for licensees, and therefore, this section is being amended consistent with AQB criteria.

Economic Impact

The Board anticipates that the proposed rule amendments will have little economic impact to the public. However, there may be an economic impact on an appraiser who is unable to complete his or her continuing education requirements due to hardship other than active military duty. Those appraisers will no longer be granted an extension to complete the continuing education requirements; the license will be suspended or placed in inactive status and the appraiser will be unable to practice.

Federal Standards Statement

A Federal standards analysis is not required because the proposed rule amendments meet but do not exceed the standards and requirements set forth under Title XI of the Financial Institutions, Reform, Recovery and Enforcement Act of 1989, 12 U.S.C. 3331 et seq., and the AQB criteria, which establish and set forth Federal standards and requirements.

Jobs Impact

The Board does not believe that the proposed amendments will result in the creation or loss of any jobs in the State.

Agriculture Industry Impact

The Board does not believe that the proposed amendments will have any impact on the agriculture industry in the State.

Regulatory Flexibility Analysis

If, for purposes of the Regulatory Flexibility Act, N.J.S.A. 52:14B-16 et seq., the approximately 2,800 New Jersey licensed and certified real estate appraisers and real estate appraisers seeking temporary visiting licenses or certificates are considered "small businesses," then the following analysis applies. The proposed rule amendments do not contain any recordkeeping or reporting requirements; however, the amendments do require compliance with the rules. Applicants for a temporary license or certificate must follow the appropriate procedures and submit necessary documents to be granted a temporary permit. Further, the appraiser must inform the Board when he or she is seeking an extension. Appraisers continue to be required to complete the USPAP update course every 24 months. The Board does not anticipate that there will be any additional costs associated with compliance nor will professional services be required to comply. All affected appraisers will be treated similarly.

Smart Growth Impact

The Board does not believe that the proposed amendments will have any impact upon the achievement of smart growth or upon the implementation of the State Development and Redevelopment Plan.

Housing Affordability Impact

The proposed rule amendments will have an insignificant impact on affordable housing in New Jersey and there is an extreme unlikelihood that the rules would evoke a change in the average costs associated with housing because the proposed rule amendments concern the practice of real estate appraising in the State of New Jersey.

Smart Growth Development Impact

The proposed rule amendments will have an insignificant impact on smart growth and there is an extreme unlikelihood that the rules would evoke a change in housing production in Planning Areas 1 or 2 or within designated centers under the State Development and Redevelopment Plan in New Jersey because the proposed rule amendments concern the practice of real estate appraisal in the State of New Jersey.

Full text of the proposal follows (additions indicated in boldface thus; deletions indicated in brackets [thus]):

SUBCHAPTER 1. PURPOSE AND SCOPE; DEFINITIONS; SCOPE OF PRACTICE

13:40A-1.2 Definitions

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:

"Jurisdiction" means the 50 United States, the District of Columbia, American Samoa, Guam, Mariana Islands, Puerto Rico and the United States Virgin Islands.

SUBCHAPTER 2. CERTIFICATION OF GENERAL REAL ESTATE APPRAISERS

13:40A-2.5 Temporary visiting certificate; certified general real estate appraiser

(a) Upon application to the Board and payment of a registration fee, an appraiser certified as a general real estate appraiser in another [state] jurisdiction may be issued a temporary visiting certificate as a general real estate appraiser for a specific appraisal assignment, provided that the individual submits satisfactory proof to the Board that the individual has a current valid certificate to practice as a general real estate appraiser in another [state] jurisdiction.

[page=712] (b) An appraiser certified by another [state] jurisdiction may apply for no more than three temporary certificates, with a limit of appraising three specific properties per temporary certificate, within one calendar year, except that the Board may waive the limitation based on a showing of good cause by the applicant.

(c) For purposes of this section, the term "Federally related transaction" shall mean any real estate-related financial transaction, which a Federal financial institutions regulatory agency engages in, contracts for, or regulates. An appraiser certified by another [state] jurisdiction shall apply for a temporary visiting certificate without the limitations stated in (b) above if the property to be appraised is part of a Federally related transaction. The temporary visiting certificate issued under this section shall be valid for at least six months and shall be extended upon request for extension to the Board by the applicant.

(d) The temporary visiting certificate issued under (c) above shall become invalid if the appraiser certified as a general real estate appraiser in another jurisdiction no longer holds a valid license in that jurisdiction.

[(d)] (e) (No change in text.)

13:40A-2A.5 Temporary visiting certificate; certified residential real estate appraiser

(a) Upon application to the Board and payment of a registration fee, an appraiser certified as a residential real estate appraiser in another [state] jurisdiction may be issued a temporary visiting certificate as a residential real estate appraiser for a specific appraisal assignment, provided that the individual submits satisfactory proof to the Board that the individual has a current valid certificate to practice as a residential real estate appraiser in another [state] jurisdiction.

(b) An appraiser certified by another [state] jurisdiction may apply for no more than three temporary certificates, with a limit of appraising three specific properties per temporary certificate, within one calendar year, except that the Board may waive the limitation based on a showing of good cause by the applicant.

(c) For purposes of this section, the term "Federally related transaction" shall mean any real estate-related financial transaction, which a Federal financial institutions regulatory agency engages in, contracts for, or regulates. An appraiser certified by another [state] jurisdiction shall apply for a temporary visiting certificate without the limitations stated in (b) above if the property to be appraised is part of a Federally related transaction. The temporary visiting certificate issued under this section shall be valid for at least six months and shall be extended upon request for extension to the Board by the applicant.

(d) The temporary visiting certificate issued under (c) above shall become invalid if the appraiser certified as a residential real estate appraiser in another jurisdiction no longer holds a valid license in that jurisdiction.

[(d)] (e) (No change in text.)

SUBCHAPTER 3. LICENSING OF REAL ESTATE APPRAISERS

13:40A-3.6 Temporary visiting licenses

(a) Upon application to the Board and payment of a registration fee, an appraiser licensed in another [state] jurisdiction may be issued a temporary visiting license for a specific appraisal assignment, provided that the individual submits satisfactory proof to the Board that the individual has a current valid license to practice in another [state] jurisdiction.

(b) An appraiser licensed by another [state] jurisdiction may apply for no more than three temporary licenses, with a limit of appraising three specific properties per temporary license, within one calendar year, except that the Board may waive the limitation based on a showing of good cause by the applicant.

(c) For purposes of this section, the term "Federally related transaction" shall mean any real estate-related financial transaction, which a Federal financial institutions regulatory agency engages in, contracts for, or regulates. An appraiser licensed by another [state] jurisdiction shall apply for a temporary visiting license without the limitations stated in (b) above if the property to be appraised is part of a Federally related transaction. The temporary visiting license issued under this section shall be valid for at least six months and shall be extended upon request for extension to the Board by the applicant.

(d) The temporary visiting license issued under (c) above shall become invalid if the appraiser licensed by another jurisdiction no longer holds a valid license in that jurisdiction.

[(d)] (e) (No change in text.)

SUBCHAPTER 5. CONTINUING PROFESSIONAL EDUCATION

13:40A-5.4 Special course requirement; Uniform Standards of Professional Appraisal Practice

All licensed and certified real estate appraisers shall be required to [attend a minimum] complete the seven hour [length course] National Update Course on the Uniform Standards of Professional Appraisal Practice [every two years] or its equivalent at least once every 24 months.

13:40A-5.10 Extensions

(a) An applicant for biennial renewal may [request in writing] not obtain an extension of time within which to satisfy continuing education requirements, except where a deferral is authorized pursuant to the Real Property Appraiser Qualification Criteria and Interpretations of the Criteria, effective January 1, 2008, as promulgated by the AQB of the Appraisal Foundation as amended and supplemented and incorporated herein by reference as part of this rule and can be found at http://appraisalfoundation.org/s_appraisal.

[(b) An extension may be granted at the sole discretion of the Board if the applicant provides evidence satisfactory to the Board that he or she was unable to obtain the required education because of an incapacitating illness, military assignment or other extraordinary circumstance.

(c) Whether to grant an extension request and the length of time of any extension shall be discretionary determinations made on a case-by-case basis by the Board.

(d) The licensee or certificate holder granted an extension of time to satisfy continuing education requirements will be permitted to renew his or her license or certificate for the period of time for which the extension is granted.

(e) If the Board grants an extension of time to satisfy continuing education requirements to a licensee or certificate holder, that extension of time only applies to the continuing education requirements in New Jersey.]

(b) In the event that an applicant for biennial renewal is not able to satisfy continuing education requirements for the preceding cycle due to extenuating circumstances as set forth in (a) above, the credential holder shall be placed in active status for a period of up to 90 days pending completion of all continuing education requirements, as set forth in the Real Property Appraiser Qualification Criteria and Interpretations of the Criteria, as promulgated by the AQB of the Appraisal Foundation as amended and supplemented and incorporated herein by reference as part of this rule.

   
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