NEW JERSEY REGISTER
VOLUME 33, NUMBER 14
MONDAY, JULY 16, 2001
RULE PROPOSAL
LAW AND PUBLIC SAFETY
DIVISION OF CONSUMER AFFAIRS
STATE BOARD OF REAL ESTATE APPRAISERS
FEE SCHEDULE

Additions are indicated by <<+ Text +>>; deletions by <<- Text ->>.
Changes in tables are made but not highlighted.

Proposed Amendment: N.J.A.C. 13:40A-7.1

Authorized By: New Jersey State Board of Real Estate Appraisers, James Hsu, Executive Director.

Authority: N.J.S.A. 45:14F-8, 45:14F-12, 45:14F-13 and 45:14F-16.

Proposal Number: PRN 2001-280.

Submit comments by August 15, 2001 to:

James Hsu, Executive Director

New Jersey State Board of Real Estate Appraisers

124 Halsey Street

PO Box 45032

Newark, New Jersey 07101

The agency proposal follows:

Summary

The New Jersey State Board of Real Estate Appraisers (the Board) proposes to amend N.J.A.C. 13:40A-7.1, which is the Board's fee schedule. N.J.S.A. 45:1-3.2 requires that a professional board's fees must be established in an amount necessary to defray proper expenses incurred in performing its duties, but fees which raise revenues in excess of estimated expenses are prohibited. A Fiscal Officer of the Division of Consumer Affairs (the Division) recently completed a financial analysis which revealed that the proposed fee increases are necessary to satisfy the Board's current and anticipated expense levels and to comport with the requirements of N.J.S.A. 45:1-3.2.

The Board is proposing that all initial and renewal certification fees for general and residential real estate appraisers be increased. The Board is also proposing an increase for all initial and renewal license fees for real estate appraisers. In addition, the Board is proposing that the temporary visiting registration fee and the permit fee for apprentices be increased. These fees provide the Board with its primary source of revenue and are all allocated to the Board's operational costs, which include: the salaries of Board staff; costs incurred in reviewing applications submitted by applicants; responding to complaints and concerns of consumers and the public at large; adjudicating disciplinary matters; regulating compliance requirements of licensees; and the general regulation of real estate appraisers.

The Board is proposing these increases because the Board experienced a revenue shortfall of approximately $350,000. This shortfall primarily resulted from the last renewal period (1999) which only allowed for a fee increase from $240.00 to $300.00. See 31 N.J.R. 2870(a) and 32 N.J.R. 321(a). As a result, based on the current licensee base, this lower fee resulted in an approximate $250,000 loss of revenue.

Another reason for these fee increases is that there has been a reduction in the total licensee base of approximately six percent over the past two years. As the Board is primarily supported by licensing revenue, a reduction in the number of licensees results in a reduction of revenue. This reduction in this instance has resulted in a loss of $45,000. In order to offset this reduction, fees need to be increased. Additionally, since all licensees are now subject to criminal background checks before obtaining licensure or certification, during the last renewal cycle, the Board's administrative expenditures substantially increased to cover the cost of processing these background checks on all of its licensees. In fiscal year 2000 there was an expenditure of $46,000 for criminal history background checks. Thus, to cover such expenses, the Board is proposing that all initial and renewal certification and licensure fees for real estate appraisers, as well as the temporary visiting registration fee and the annual permit fee for apprentices, be increased.

The fees that are the subject of this proposed amendment are necessary for the Board to perform its statutory obligations to the regulated community and to the public at large in maintaining professional and ethical business practices in the field of real estate appraising. In order to meet its statutory obligations, the Board is proposing that all initial and renewal certification fees for general and residential real estate appraisers be increased. The Board is also proposing an increase for all initial and renewal license fees for licensed real estate appraisers. The temporary visiting registration fee is also to be increased. In addition, the Board is proposing that the permit fee for apprentices be increased.

Specifically, the Board proposes to amend N.J.A.C. 13:40A-7.1(a)3i and ii to provide that the initial certification fee for general real estate appraisers be increased from $300.00 to $550.00, if certification is granted during the first year of the biennial renewal period, and from $150.00 to $275.00, if certification is granted during the second year of the biennial renewal period. The proposed amendment to N.J.A.C. 13:40A-7.1(a)4i and ii provides that the initial certification fee for residential real estate appraisers be increased from $300.00 to $550.00, if certification is granted during the first year of the biennial renewal period, and from $150.00 to $275.00, if certification is granted during the second year of the biennial renewal period. Under the proposed amendment to N.J.A.C. 13:40A-7.1(a)5i and ii, the initial license fee for real estate appraisers will be increased from $300.00 to $550.00 and from $150.00 to $275.00, depending on which year of the biennial period the license is initially granted. The proposed amendments to N.J.A.C. 13:40A-7.1(a)6 and 7 further provide that the fee charged for biennial certification renewal for general and residential real estate appraisers be increased from $300.00 to $550.00. Under proposed amendment N.J.A.C. 13:40A-7.1(a)8, the Board proposes that the license renewal fee for a biennial period be increased from $300.00 to $550.00. The Board also proposes that under N.J.A.C. 13:40A-7.1(a)10, the temporary visiting registration fee be increased from $100.00 to $150.00. The Board further proposes that under N.J.A.C. 13:40A-7.1(a)19, the annual apprentice permit fee, be increased from $75.00 to $100.00.

Social Impact

The proposed amendment to N.J.A.C. 13:40A-7.1 will impact general and residential real estate appraisers, apprentices, all persons seeking licensure as real estate appraisers, and those individuals seeking temporary registration certificates. There is a strong State interest in regulating the practice of real estate appraising, predicated in large part on ensuring that those consumers who utilize the services of a real estate appraiser are receiving a genuine unbiased analysis, opinion or conclusion relating to the nature, quality, value or utility of specified interests in, or aspects of, real estate. The Board believes that the proposed amendment will have a positive social impact to the extent that the Board will have adequate financial resources to devote to regulating the practice of real estate appraising so as to safeguard the welfare of consumers who utilize the services of real estate appraisers.

Economic Impact

The Board believes that the proposed amendment to N.J.A.C. 13:40A-7.1 will have an economic impact upon general and residential real estate appraisers, apprentices, individuals applying for a temporary visiting registration and those persons seeking licensure as real estate appraisers. The proposed amendment will have an economic impact upon persons granted initial certification as either a general or residential real estate appraiser to the extent that the initial certification fee for such persons will increase from $300.00 to $550.00 or from $150.00 to $275.00, depending on which year of the biennial period they are granted certification. The proposed amendment will also have an economic impact upon persons granted initial licensure as a real estate appraiser to the extent that the fee will be increased from $300.00 to $550.00 or from $150.00 to $275.00, depending on which year of the biennial period they are granted licensure. In addition, the proposed amendment will have an economic impact upon those individuals already certified as either a general or residential real estate appraiser to the extent that the renewal fee will increase from $300.00 to $550.00. The proposed amendment will also have an economic impact upon those individuals already licensed as a real estate appraiser to the extent that the biennial renewal fee will increase from $300.00 to $550.00. The proposed amendment will also have an economic impact upon individuals applying for a temporary visiting registration because this fee will increase from $100.00 to $150.00. In addition, the proposed amendment will have an economic impact upon those individuals holding apprentice permits because the annual apprentice permit fee will increase from $75.00 to $100.00.

The Board believes that the proposed amendment to the fee schedule will have a positive economic impact on the Board by ensuring that the Board will be fully funded so as to defray the expenses it incurs in the performance of its statutory duties.

The proposed fee increases may have an indirect economic impact upon those consumers who utilize a real estate appraiser's professional services in that appraisers may pass the increase, or a portion of the increase, on to their clients. The Board, however, does not anticipate that the proposed amendment will have an economic impact upon the general public.

Federal Standards Statement

A Federal standards analysis is not required because the proposed amendment is governed by N.J.S.A. 45:14F-1 et seq. and, therefore, is not subject to any Federal standards or requirements.

Jobs Impact

The Board believes that the proposed amendment may have an impact on jobs in the State to the extent that otherwise qualified applicants for certification as a general or residential real estate appraiser, licensure as a real estate appraiser, a real estate appraiser apprentice or individuals seeking a temporary registration may not be able to afford the increase in fees. Although the Board cannot estimate with certainty the number of individuals who will be unable to afford the increased fees, it is believed that the effect upon jobs will be minimal. Moreover, the Board believes that any impact on jobs which may result from the proposed amendment will be outweighed by the positive benefits derived from having a fully funded Board that will be equipped to carry out its statutory obligations to the licensed community and to the public at large.

Agriculture Industry Impact

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

Regulatory Flexibility Analysis

The Regulatory Flexibility Act (the Act), N.J.S.A. 52:14B-16 et seq., requires the Board to give a description of the types and an estimate of the number of small businesses to which the proposed amendment will apply. Currently, the Board has approximately 2,500 licensees and approximately 300 apprentices. If, for purposes of the Act, Board licensees are considered "small businesses" within the meaning of the statute, the following analysis applies:

The Act requires the Board to set forth the reporting, recordkeeping and other compliance requirements of the proposed amendment, including the kinds of professional services likely to be needed to comply with the requirements. The Act further requires the Board to estimate the initial and annual compliance costs of the rule, to outline the manner in which it has designed the rule to minimize any adverse economic impact upon small businesses and to set forth whether the rule establishes differing compliance requirements for small businesses.

The proposed amendment does not impose reporting or recordkeeping requirements upon licensees. The proposed amendment, however, does impose compliance requirements upon real estate appraisers. Persons who are granted initial certification as general or residential real estate appraisers will be required to pay an initial certification fee of $550.00 or $275.00, depending on which year of the biennial renewal period they are granted certification. Persons who receive initial licensure as a real estate appraiser will be required to pay an initial licensure fee of $550.00, if they are granted licensure in the first year of the biennial renewal period, or $275.00, if they are granted licensure during the second year of the biennial renewal period. The proposed amendment also imposes compliance requirements upon those individuals applying for a temporary visiting registration because such individuals will be required to pay a fee of $150.00, instead of $100.00. In addition, the proposed amendment also imposes compliance requirements upon apprentices because apprentices will now be required to pay $100.00 for their annual permit fee.

The proposed amendment to N.J.A.C. 13:40A-7.1 also imposes compliance requirements upon all general or residential real estate appraisers applying for biennial certification renewals. Certified general and residential real estate appraisers will be required to pay $550.00 for the renewal. The proposed amendment to N.J.A.C. 13:40A-7.1 also imposes compliance requirements upon all licensed real estate appraisers applying for biennial licensure renewal. Real estate appraisers with licenses will be required to pay $550.00 for license renewal.

No additional professional services will be needed to comply with the proposed amendment. Under the proposed amendment, the Board proposes only the level of fees necessary to fund operating expenses consistent with the requirements of N.J.S.A. 45:1-3.2. Because the proposed amendment must be uniformly applied in order to assess costs over all licensees, the Board has not imposed differing compliance requirements based on size.

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

<< NJ ADC 13:40A-7.1 >>

13:40A-7.1 Fee schedule

(a) Charges for credentialing, certification, licensure and other services are as follows:

1.-2. (No change.) 
3. Initial certification fee, general real estate appraiser:
i. During the first year of a biennial renewal period
ii. During the second year of a biennial renewal period
 
$550.00
$275.00
4. Initial certification fee, residential real estate appraiser:
i. During the first year of a biennial renewal period
ii. During the second year of a biennial renewal period
 
$550.00
$275.00
5. Initial license fee:
i. During the first year of a biennial renewal period
ii. During the second year of a biennial renewal period
 
$550.00
$275.00
6. Certification renewal fee for general real estate appraiser, biennial $550.00
7. Certification renewal fee for residential real estate appraiser, biennial$550.00
8. License renewal fee, biennial$550.00
9. (No change.)  
10. Temporary visiting registration fee $150.00
11.-18. (No change.)  
19. Apprentice permit fee; annual $100.00

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Posted July 16, 2001