BEFORE THE DEPARTMENT OF REVENUE
OF THE STATE OF MONTANA
TO: All Concerned Persons
1. On August 24, 2010, at 9:00 a.m., a public hearing will be held in the Third Floor Reception Area Conference Room of the Sam W. Mitchell Building, at Helena, Montana, to consider the amendment of the above-stated rules.
Individuals planning to attend the hearing shall enter the building through the east doors of the Sam W. Mitchell Building, 125 North Roberts, Helena, Montana.
2. The Department of Revenue will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice. If you require an accommodation, contact the Department of Revenue no later than 5:00 p.m., August 16, 2010, to advise us of the nature of the accommodation that you need. Please contact Cleo Anderson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-5828; fax (406) 444-4375; or e-mail canderson@mt.gov.
3. The rules proposed to be amended provide as follows, stricken matter interlined, new matter underlined:
42.18.205 DEFINITIONS The following definitions apply to this subchapter:
(1) "Agricultural appraiser" means a person who has completed the necessary training and is certified to appraise agricultural and forest property in Montana.
(2) "Agricultural land classification/appraisal (ALCA) training" means specific training outlined by the department to meet the certification requirements necessary to appraise agricultural and forest property in Montana.
(3) "Agricultural timber classifier" means a person who has completed the necessary training and is certified to appraise agricultural and forest property in Montana. "Appraiser Qualifications Board" means the federal regulatory agency responsible for establishing qualifications nationwide for fee appraisers.
(4) "Commercial appraiser" means a person who has completed the necessary training and is certified to appraise commercial property in Montana.
(5) "Failure to perform the appraisal work satisfactorily" refers to the work that is completed produced by the appraiser and is determined to be unsatisfactory by the area manager and/or regional manager. At a minimum, that determination will include areas such as:
(a) continued inability by the employee to complete the planned amount of appraisal work;
(b) consistently making errors in following the appraisal process;
(c) failing to consider all approaches to value; and
(d) inability to defend appraisal work before taxpayers and appeal boards.
(6) "Industrial appraiser" means a person who has completed the necessary training and is certified to appraise industrial property in Montana.
(7) "International Association of Assessing Officers (IAAO)" means the professional organization for advancement of appraisers.
(8)(7) "Multiple certification" means holding more than one type of certification to appraise property.
(9)(8) "On-the-job appraisal work" means conducting the actual work required to complete the job for appraisers who are new to a specific appraisal classification.
(10)(9) "Residential appraiser" means a person who has completed the necessary training and is certified to appraise residential property in Montana.
(11)(10) "Successful completion of the required training session" means satisfactorily passing the written examination conducted at the conclusion of the training sessions.
AUTH: 15-1-201, MCA
IMP: 15-7-107, 15-7-111, MCA
REASONABLE NECESSITY: The department is proposing to amend ARM 42.18.205 to update the terms to reflect changes in the subsequent rules related to the Montana appraisal certification requirements. The proposed amendments remove language contained in (3) because it is redundant. The proposed amendments also renumber the remaining sections. Industrial appraiser certification requirements are now found in ARM 42.22.1316. Therefore (6) is being deleted to remove the reference to industrial appraisal. The department is also proposing to add clarifying language in (10) that is further addressed in ARM 42.18.206, 42.18.207, and 42.18.208.
42.18.206 RESIDENTIAL PROPERTY CERTIFICATION REQUIREMENTS
(1) All residential appraisers must receive specific training and testing to certify that they possess the required knowledge, skills, and abilities to perform residential property appraisals as outlined in this rule.
(2) Training and testing criteria shall be as follows:
(a) International aAssociation of aAssessing oOfficers (IAAO) certified training sessions will be offered annually if funding is available and if there are sufficient numbers of field staff who require the course.
(b) Employees shall attend the first residential training session offered by the department after commencement of employment. Satisfactory completion of the residential training session shall include successful completion of the written IAAO residential examination. If the employee fails to successfully complete the first written examination, attendance at the next residential IAAO training session shall be required. Failure to successfully complete the second written IAAO examination shall may result in the immediate termination of employment. The department may choose to demote the employee to a property valuation specialist, if the position is available and the individual is qualified to perform in that position. The employee will be notified of exam results directly by IAAO.
(3) After successful completion of the residential training session, the employee shall prepare a written residential demonstration appraisal narrative report (residential narrative report). Employees will be granted a maximum of 40 hours of administrative leave to complete the report. The report must be submitted to the department within six months after successful completion of the training session, or within 30 days after using the administrative leave granted, whichever occurs first.
(a) The residential narrative report must include:
(i) title page;
(ii) letter of transmittal;
(iii) table of contents;
(iv) assumptions and limiting conditions;
(v) photographs of subject property;
(vi) identification of property;
(vii) purpose of appraisal;
(viii) definition of market value;
(ix) date of appraisal;
(x) assessment and taxes;
(xi) city data;
(xii) neighborhood data;
(xiii) site data;
(xiv) plot plan;
(xv) zoning;
(xvi) description of improvements;
(xvii) construction features;
(xviii) property history;
(xix) highest and best use;
(xx) estimate of remaining economic life;
(xxi) cost approach with summary;
(xxii) market data approach with summary;
(xxiii) income approach with summary;
(xxiv) correlation and final estimate of value;
(xxv) certification;
(xxvi) qualification of appraiser; and
(xxvii) addenda and exhibits.
(b) Within two months after submission of the residential narrative report, the department shall advise the employee, in writing, whether the report is satisfactory. If the report is unsatisfactory, the employee shall have two months from the date of notification to correct and resubmit the report to the department. Additional administrative leave will not be granted for this purpose. Failure to successfully complete a written narrative report shall result in immediate termination of employment. Upon final acceptance, the residential narrative report shall become the property of the department.
(c) The required timeframes for submitting reports may be extended upon written request by the employee's direct supervisor. Written requests shall be directed to the appropriate regional manager for consideration. The regional manager will approve or deny the request. Copies of the regional manager's determination will be distributed to the employee, the employee's immediate supervisor, and the administrator.
(4) Upon commencement of employment with the department as a residential appraiser, the employee shall undertake a one-year period of on-the-job residential appraisal work during which time the employee will begin the process of meeting the requirements set forth in (1) and (2). For employees new to state government, this one-year period will run concurrently with and in addition to the automatic six-month probation period set forth in department policy 3.1.4. The commencement of the year experience requirement will coincide with the employee's notification of being assessed residential appraisal responsibilities. All work will be supervised by the department. During this period, in order to ensure that the employee has the aptitude for appraisal work, the employee shall be in a probationary status. Failure to perform the appraisal work satisfactorily at any time during the one-year probationary period shall may result in immediate termination of employment. The department may choose to demote the employee to a property valuation specialist position, if the position is available and the individual is qualified to perform in that position.
(5)(4) The department may waive the criteria set forth in (2), (3), or (4) if sufficient proof is provided within six months of hire that the employee has previously fulfilled those requirements. Evidence of fulfilling the requirements may include, but is not limited to providing proof of For example, the employee may have having successfully completed a course of instruction from the society of real estate appraisers whose complexity was a professional appraisal and real estate related organization, provided that the organization is a member of The Appraisal Foundation as defined in 37-54-102, MCA. The course must be equal to or greater in complexity than that of IAAO course I 101. An employee who is a Licensed Real Estate Appraiser through the Board of Real Estate Appraisers of the Business and Occupational Licensing Bureau of the Montana Department of Labor and Industry or another state in accordance to the Appraisal Qualifications Board (AQB) is also eligible for a waiver under this rule.
AUTH: 15-1-201, MCA
IMP: 15-7-107, 15-7-111, MCA
REASONABLE NECESSITY: The department proposes to amend the residential property appraiser certification requirements in ARM 42.18.206. The proposed amendments strike current language that requires employees seeking residential property appraiser certification to successfully submit a demonstration residential narrative appraisal. The examination requirement comports with similar testing requirements that are currently part of the overall requirements for achieving certification and/or licensing through the Board of Real Estate Appraisers of the Business and Occupational Licensing Bureau of the Montana Department of Labor and Industry for fee appraisers. These proposed amendments will better meet the needs of the Property Assessment Division and will also provide a more timely means of attaining certification by its residential property appraisers.
42.18.207 AGRICULTURAL PROPERTY CERTIFICATION REQUIREMENTS (1) The An employee seeking to obtain certification as an agricultural appraiser must be previously certified by the department as a residential appraiser by pursuant to the standards set forth in ARM 42.18.206.
(2) Training and testing criteria shall be as follows:
(a) Department training sessions will be offered annually if funding is available and if there are sufficient numbers of field staff who require the courses.
(b) The employee shall attend the first scheduled aAgricultural lLand cClassification/aAppraisal (ALCA) training session after being assigned ALCA responsibilities. Satisfactory completion of the ALCA training session shall include successful completion of the written examination conducted at the conclusion of the ALCA training session. If the employee fails to successfully complete the first written examination, attendance at the next ALCA training session shall be required. Failure to successfully complete the second written examination shall may result in immediate termination of employment. The department may choose to or demotion demote the employee to a residential appraisal position, if the position is available and the individual is certified to perform in that position. The employee will be notified of exam results within one month of completion of the exam.
(3) After successful completion of the ALCA training session, the employee shall prepare a written ALCA demonstration narrative report (agricultural narrative report) as specified by the department's requirements. The department will allow up to 40 hours of administrative leave to each employee in order to complete each required report. The report shall be submitted to the department within six months after successful completion of the training session, or within 30 days after using the administrative leave granted, whichever occurs first.
(a) The report must consist of at least one completed appraisal (classification) of an ownership large enough and diverse enough to adequately demonstrate the ability to differentiate between classes and productive grades of land. The report may be completed on an ownership containing many different agricultural land classifications. At a minimum, the report must consider an ownership with at least two different agricultural land classifications, one of which must be grazing. Materials submitted for this demonstration appraisal shall include:
(i) a copy of ownership plat in which property is situated;
(ii) a copy of property record card (AB-9) properly completed;
(iii) a copy(ies) of field notes properly completed;
(iv) copies of soil survey information utilized;
(v) a copy of mylar overlay or GIS map of area (ownership) and comparable adjoining properties. This will show the number of acres in each class and grade of land by 40-acre tract or fractional lot for both the subject property and comparables;
(vi) copies of other pertinent data utilized in classifying and grading the property, including precipitation information; and
(vii) a detailed narrative explaining and justifying the classifications and grading established.
(b) Within two months after submission of the report by the employee, the department shall advise the employee in writing whether the report is satisfactory. If the report is unsatisfactory, the employee shall have two months from the date of notification to correct and resubmit the report. No additional administrative leave shall be granted for this purpose. Failure to successfully complete a written narrative report shall result in immediate termination of employment or demotion to a residential appraisal position, if the position is available and the individual is certified to perform in that position. Upon final acceptance, the agricultural narrative report shall become the property of the department.
(c) Extensions of the timeframes for submitting the reports may be requested in writing by the employee's direct supervisor. The written request shall be directed to the appropriate regional manager for consideration. The regional manager will then be responsible for approving or denying the request, with copies of the action taken being distributed to the employee, the employee's immediate supervisor, and the administrator.
(4) Upon successful attainment of the criteria set forth in (1), (2), and (3), commencement of employment with the department as an agricultural appraiser, the employee shall undertake a one-year period of on-the-job agricultural appraiser ALCA work during which time the employee will begin the process of meeting the requirements set forth in (2). For employees new to state government, this one-year period will run concurrently with and in addition to the automatic six-month probation period set forth in department policy 3.1.4. The commencement of the year experience requirement will coincide with the employee's notification of being assigned ALCA responsibilities. All work will be supervised by the department. Failure to perform the classification/appraisal work satisfactorily at any time during the one-year period shall may result in immediate termination. The department may choose to demote the employee or demotion to a residential appraisal position, if the position is available and the individual is certified to perform in that position.
(5)(4) The department may waive the criteria set forth in (1), (2), (3), or (4) if sufficient proof is presented within six months of hire that the employee has previously fulfilled such criteria. Evidence of fulfilling the requirements may include but is not limited to providing proof of For example, the employee may have previously worked as an agricultural fee appraiser and prepared demonstration agricultural appraisal reports for clients. A copy of one of those reports would suffice for the criteria in (3). having successfully completed a course of instruction from a professional appraisal and real estate related organization, provided that the organization is a member of The Appraisal Foundation as defined in 37-54-102, MCA. The course must be equal to or greater in complexity than that of the department's ALCA course. An employee who is a Certified Residential Appraiser through the Board of Real Estate Appraisers of the Business and Occupational Licensing Bureau of the Montana Department of Labor and Industry or in another state in accordance to the Appraisal Qualifications Board (AQB), is also eligible for a waiver under this subsection.
AUTH: 15-1-201, MCA
IMP: 15-7-107, 15-7-111, MCA
REASONABLE NECESSITY: The department proposes to amend the agricultural/forest land property appraiser certification to ARM 42.18.207. The proposed amendments strike current language that requires employees seeking agricultural/forest land property appraisal certification to successfully submit a demonstration agricultural narrative appraisal. The examination requirement comports with similar testing requirements that are currently part of the overall requirements for achieving certification and/or licensing through the Board of Real Estate Appraisers of the Business and Occupational Licensing Bureau of the Montana Department of Labor and Industry for fee appraisers. These proposed amendments will better meet the needs of the Property Assessment Division and will also provide a more timely means of attaining certification by its agricultural property appraisers.
42.18.208 COMMERCIAL PROPERTY CERTIFICATION REQUIREMENTS (1) The An employee seeking to obtain certification as a commercial appraiser must be previously certified by the department in the appraisal of as a residential property and agricultural land appraiser.
(2) Training and testing criteria shall be as follows:
(a) International aAssociation of aAssessing oOfficers (IAAO) certified training sessions will be offered annually if funding is available and if there are sufficient numbers of field staff who require the course.
(b) The employee shall attend the first scheduled commercial training session after being assigned commercial appraisal responsibilities. Satisfactory completion of the commercial training session shall include successful completion of the written IAAO commercial examination conducted at the conclusion of the commercial training session. If the employee fails to successfully complete the first written IAAO examination, attendance at the next IAAO commercial training session shall be required. Failure to successfully complete the second written IAAO examination shall may result in immediate termination of employment. The department may choose to or demotion demote the employee to a residential appraisal position or a residential/agricultural appraisal position, if such a position is available and the individual is certified to perform the duties necessary for that position. The employee will be notified directly of the exam results by IAAO.
(3) After successful completion of the commercial training session, the employee shall prepare a written commercial demonstration appraisal narrative report (commercial narrative report). The department will allow up to 40 hours of administrative leave to each employee in order to complete the report. The report must be submitted to the department within six months after successful completion of the training session, or within 30 days after using the administrative leave granted, whichever occurs first.
(a) The commercial narrative report must include:
(i) title page;
(ii) letter of transmittal;
(iii) table of contents;
(iv) assumptions and limiting conditions;
(v) photographs of subject property;
(vi) identification of property;
(vii) purpose of appraisal;
(viii) definition of market value;
(ix) date of appraisal;
(x) assessment and taxes;
(xi) city data;
(xii) neighborhood data;
(xiii) site data;
(xiv) plot plan;
(xv) zoning;
(xvi) description of improvements;
(xvii) construction features;
(xviii) property history;
(xix) highest and best use;
(xx) estimate of remaining economic life;
(xxi) cost approach with summary;
(xxii) market data approach with summary;
(xxiii) income approach with summary;
(xxiv) correlation and final estimate of value;
(xxv) certification;
(xxvi) qualification of appraiser; and
(xxvii) addenda and exhibits.
(b) The commercial narrative report can be completed on any commercial property, including apartment buildings, but if done on an apartment building, the structure must be a four-plex or larger.
(c) Extensions of the timeframes for submitting the reports may be requested in writing by the employee's direct supervisor. The written request shall be directed to the appropriate regional manager for consideration. The regional manager will then be responsible for approving or denying the request, with copies of the action taken being distributed to the employee, the employee's immediate supervisor, and the administrator.
(d) Within two months after submission of the report by the employee, the department shall advise the employee in writing whether the report is satisfactory. If the report is unsatisfactory, the employee shall have two months from the date of notification to correct and to resubmit the report. No additional administrative leave shall be granted for this purpose. Failure to successfully complete a written commercial narrative report shall result in immediate termination of employment or demotion to a residential appraisal position or a residential/agricultural appraisal position, if the position is available and the individual is certified to perform the duties of that position. Upon final acceptance, the commercial narrative report shall become the property of the department.
(4) Upon successful attainment of the criteria set forth in (1), (2), and (3), commencement of employment with the department as a commercial appraiser, the employee shall undertake a one-year period of on-the-job commercial appraisal work during which time the employee will begin the process of meeting the requirements set forth in (2). For employees new to state government, this one-year period will run concurrently with and in addition to the automatic six-month probation period set forth in department policy 3.1.4. The commencement of the year experience requirement will coincide with the employee's notification of being assigned commercial appraisal responsibilities. All work will be supervised by the department. Failure to perform the appraisal work satisfactorily shall result in immediate termination or demotion to a residential appraisal position or residential/agricultural appraisal position, if such a position is available and the individual is certified to perform the duties necessary for that position.
(5)(4) The department may waive the criteria set forth in (1), (2), (3), or (4) if sufficient proof is presented within six months of hire that the employee has previously fulfilled such criteria. Evidence of fulfilling the requirements may include, but is not limited to providing proof of having successfully For example, the employee may have cCompleted a course of instruction from the appraisal institute a professional appraisal and real estate related organization, provided that the organization is a member of The Appraisal Foundation as defined in 37-54-102, MCA. The course must be whose complexity was equal to or greater in complexity than that of IAAO course II 102. An employee who is a Certified General Appraiser through the Board of Real Estate Appraisers of the Business and Occupational Licensing Bureau of the Montana Department of Labor and Industry or another state in accordance to the Appraisal Qualifications Board (AQB), is also eligible for a waiver under this subsection.
AUTH: 15-1-201, MCA
IMP: 15-7-107, 15-7-111, MCA
REASONABLE NECESSITY: The department proposes to amend the commercial property appraiser certification requirements to ARM 42.18.208. The proposed amendments strike current language that requires employees seeking commercial property appraiser certification to successfully submit a demonstration commercial narrative appraisal. The examination requirement comports with similar testing requirements that are currently part of the overall requirements for achieving certification and/or licensing through the Board of Real Estate Appraisers of the Business and Occupational Licensing Bureau of the Montana Department of Labor and Industry for fee appraisers. These proposed amendments will better meet the needs of the Property Assessment Division and will also provide a more timely means of attaining certification by its commercial property appraisers.
4. Concerned persons may submit their data, views, or arguments, either orally or in writing, at the hearing. Written data, views, or arguments may also be submitted to: Cleo Anderson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-5828; fax (406) 444-4375; or e-mail canderson@mt.gov and must be received no later than September 3, 2010.
5. Cleo Anderson, Department of Revenue, Director's Office, has been designated to preside over and conduct the hearing.
6. An electronic copy of this Notice of Public Hearing is available through the department's site on the World Wide Web at www.mt.gov/revenue, under "for your reference"; "DOR administrative rules"; and "upcoming events and proposed rule changes." The department strives to make the electronic copy of this Notice of Public Hearing conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered. In addition, although the department strives to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.
7. The Department of Revenue maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request, which includes the name and e-mail or mailing address of the person to receive notices and specifies that the person wishes to receive notices regarding particular subject matter or matters. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the person in 4 above or faxed to the office at (406) 444-4375, or may be made by completing a request form at any rules hearing held by the Department of Revenue.
8. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.
/s/ Cleo Anderson /s/ Dan R. Bucks
CLEO ANDERSON DAN R. BUCKS
Rule Reviewer Director of Revenue
Certified to Secretary of State July 19, 2010
