BEFORE THE DEPARTMENT OF REVENUE
OF THE STATE OF MONTANA
In the matter of the adoption of Rule I (ARM 42.22.1317) and amendment of ARM 42.22.101 and 42.22.1316 relating to centrally assessed appraiser certification requirements
NOTICE OF ADOPTION AND AMENDMENT
TO: All Concerned Persons
1. On July 29, 2010, the department published MAR Notice No. 42-2-834 regarding the proposed adoption and amendment of the above-stated rules at page 1695 of the 2010 Montana Administrative Register, issue no. 14.
2. A public hearing was held on August 24, 2010, to consider the proposed adoption and amendment. Ms. Mary Whittinghill, President of the Montana Taxpayers Association, appeared at the hearing. Oral testimony received at the hearing and written comments subsequently received, are summarized as follows along with the response of the department:
COMMENT NO. 1: Ms. Whittinghill seeks clarification on the definition of industrial appraiser if it is not already defined in this chapter. She further suggested ARM 42.22.1316(3) be amended to insert industrial appraiser instead of centrally assessed appraiser.
RESPONSE NO. 1: The department has defined "industrial appraiser" in ARM 42.22.101(1). The department agrees with Ms. Whittinghill's comment regarding the error in ARM 42.22.1316(3) and has made that correction as shown below.
COMMENT NO. 2: Ms. Whittinghill commented at the hearing that, related to the availability of funding, it should be a priority of the department to make sure that funding is available for employee training. She further added that in the past, when funding was scarce, employees of the department were trained and IAAO certified in order to train other employees. She stated that it is important to taxpayers that the department ensures that employees conducting appraisals have the training necessary to come to reasonable conclusions of value for all properties in Montana, for every tax.
RESPONSE NO. 2: The department understands that employee training which allows the department to provide good service to the citizens of the state is important, not only in the appraisal field, but all services that the department provides. Ms. Whittinghill suggests some good alternatives for training that the department will consider. The department will continue to also provide training to its employees as a high priority, but must be prepared to respond if there are serious funding restrictions.
COMMENT NO. 3: In addition to testifying at the hearing, Ms. Whittinghill provided written comments. Ms. Whittinghill stated opposition to the requirement that state appraisers attend the WSATA Committee on Centrally Assessed Properties (WSATA-CCAP) School for the purpose of taking training courses 101, 102, and 103, or their equivalents because they utilize information contained in the 2009 rewrite of the WSATA Appraisal Handbook, which she indicated was controversial from the beginning to the end of the process used by the department. She further commented the rule requires new appraisers to attend the WSATA School, which utilizes the WSATA Appraisal Handbook as its primary resource, state funding of such training will likely ensure that tax litigation continues unabated. The funding of such training is incompatible with effective tax administration. Ms. Whittinghill suggested at the hearing that the department consider having state appraisers attend the Wichita unit valuation training courses instead. In replay, the department indicated the training courses do not reflect the views of the states. Ms. Whittinghill commented that "the planning committee contains representatives from the states, while the WSATA training courses do not consider industry input."
RESPONSE NO. 3: The department respectfully disagrees with Ms. Whittinghill's position. The WSATA Appraisal Handbook, as defined in its forward, is for educational purposes and was approved for use by the 14 western states that comprise WSATA. The appraisal school, taught and administered by WSATA CCAP, teaches a course dealing with the valuation of centrally assessed or unit valued property. CCAP, through its by-laws, makes the appraisal school available to state and other jurisdictional appraisers on the campus of Utah State University. This sort of tax-type specific training cannot be found at any other organizations in the United States.
The Wichita School is not specific to appraisers working for or employed by state, federal, or local governments. The Wichita School may be an additional tool for training centrally assessed appraisers. The department's use of the WSATA Appraisal Handbook and school reflects its established practice. It would be incorrect for the department to fail to describe this practice in this rule.
COMMENT NO. 4: Ms. Whittinghill indicated that the department's comments related to the WSATA Handbook during the hearing overstate the extent to which content related issues raised by other parties were given fair consideration prior to the Handbook's fall 2009 publication. She further stated that although a draft copy of the Handbook may have been provided to the International Association of Assessing Officers (IAAO) and to the American Society of Appraisers (ASA), this does not mean that the text was subjected to scrutiny by nationally recognized appraisal organizations, that a legitimate peer review process would have involved far more, and that the department's admission that no comments were received from either IAAO or ASA confirms that a formal review process did not occur.
Ms. Whittinghill requests the department to consider the comments stated in a September 8, 2009 letter to the Western States Association of Tax Administrators (WSATA) from the Western States Association of Tax Representatives (WSATR). In reference to the letter, she states that the department and others involved in the drafting of the updated WSATA Handbook received nearly 70 pages of comments solely from WSATR, that other parties raised additional issues in separate correspondence, and that all of these parties expressed concerns about the Handbook containing incomplete, unbalanced and factually inaccurate content. She further states that the Handbook was published without addressing the vast majority of the issues raised.
Ms. Whittinghill further requests that, because the WSATA Appraisal Handbook did not receive unanimous approval of the member states; and that WSATR representatives requested but were not provided the information, that the actual vote, by state, should be included in the department's response to the comments on this rule action. She further stated that since the department oversaw and took the lead in the rewrite, that this information should be readily available.
RESPONSE NO. 4: The department agrees that the IAAO and ASA provided WSATA with no comments on the WSATA Appraisal Handbook. WSATA did receive comments from other organizations such as WSATR. The WSATA membership, including the state of Montana, thoroughly and properly considered all of the comments received. Along with WSATA members reviewing the comments received, WSATA retained Michael Goodwin and Peter Crossett, two nationally recognized experts in the centrally assessed appraisal field, to review and provide a written report on the comments received. Mr. Goodwin and Mr. Crossett's prepared report included recommended changes to the WSATA Appraisal Handbook as well as providing a detailed response to each comment received when possible. The WSATA Executive Committee concurred with Mr. Goodwin and Mr. Crossett's report and adopted the WSATA Appraisal Handbook. The WSATA Appraisal Handbook is a copyrighted document; therefore, the department does not control its distribution. Therefore, the department is limited to only reference the WSATA Appraisal Handbook in the rule.
Ms. Whittinghill also stated that the WSATA membership did not have a unanimous vote to adopt the WSATA Appraisal Handbook. This is true. The WSATA Executive Committee vote was nine states voted to approve the handbook (Arizona, Idaho, Montana, New Mexico, Nevada, Oregon, Texas, Washington, and Wyoming); no states voted against the adoption of the handbook; and three states abstained on the vote (Alaska, Colorado, and Utah). California and Hawaii did not cast a vote.
3. Based on the comments received, the department further amends ARM 42.22.1316 as shown below:
42.22.1316 INDUSTRIAL PROPERTY CERTIFICATION REQUIREMENTS
(1) through (2)(b) remain the same.
(3) Upon commencement of employment with the department as an
unit valuation or centrally assessed industrial property appraiser, the employee shall undertake a one-year period of on-the-job 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 assigned unit or centrally assessed industrial property appraisal responsibilities. All work will be supervised by the department. Failure to perform the appraisal work satisfactorily may result in immediate termination of employment.
(4) remains the same.
AUTH: 15-1-201, MCA
IMP: 15-7-107, 15-7-111, MCA
4. The department adopts New Rule I (ARM 42.22.1317) and amends ARM 42.22.101 as proposed.
5. An electronic copy of this adoption notice 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 adoption notice 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.
/s/ Cleo Anderson /s/ Dan R. Bucks
CLEO ANDERSON DAN R. BUCKS
Rule Reviewer Director of Revenue
Certified to Secretary of State September 13, 2010