Source: http://regulations.delaware.gov/register/december2011/final/15%20DE%20Reg%20888%2012-01-11.htm
Timestamp: 2018-08-15 21:13:43
Document Index: 675138343

Matched Legal Cases: ['§4006', '§4019', '§4019', '§4019', '§4019', '§4019', '§4019', '§10118', '§10121', '§10111']

AND NOW, this 1st day of December, 2011 in accordance with 24 Del.C. §4006(a)(l), for the reasons stated below, this ORDER adopts new regulations governing the licensing and training of assessors as required by 24 Del.C. §4019(e).
On June 1, 2011, the Council on Real Estate Appraisers published proposed regulations governing the licensing and training of assessors, after seeking input from the Delaware Association of Counties and the Executive Director of the League of Local Governments.
The proposed rules are an attempt to develop standards in cooperation with the Delaware Association of Counties and the Executive Director of the League of Local Governments for licensing and training of assessors in order for municipal and county assessment departments to be in compliance within 3 years of the development and adoption of said standards pursuant to 24 Del.C. §4019(e).
Following two public hearings, on July 19, 2011 and October 18, 2011, the Council determined that a few non-substantive changes should be made to the regulations as originally published. These changes are addressed below, and reflected in Exhibit A.
The Council considered the following documents:
Board Exhibit 1	Affidavit of Publication from the News Journal, noticing the July 19, 2011 hearing.
Board Exhibit 2	Affidavit of Publication from the Delaware state news, noticing the July 19,2011 hearing.
Board Exhibit 3	Written comments from Louis Cox, Delaware Association of Assessing Officers to the Council.
Board Exhibit 4	Written comments from Lou Cox, Delaware Association of Assessing Officers to the Levy Court Leadership.
Board Exhibit 5	Written comments from Eddy J. Parker, Director of Assessments to David Baker, County Administrator.
Board Exhibit 6	2011 hearing.
Board Exhibit 7	Affidavit of Publication from the News Journal, noticing the October 18, Affidavit of Publication from the Delaware State News, noticing the October 18, 2011 hearing.
Board Exhibit 8	Written comments from Douglas Sensabaugh, New Castle County Property Assessment Division.
Board Exhibit 9	Written comments from Charles Brown, President of the Delaware Chapter of the Appraisal Institute.
Board Exhibit 10	Written comments from Douglas L. Nickel, President of the Delaware Association of Appraisers, Inc.
Board Exhibit 11	Written comments from George C. Wright, Jr. of the Delaware League of Local Governments dated October 13, 2011.
Board Exhibit 12	Written comments from Susan Miccio, of the Division of Professional Regulations.
Board Exhibit 13	Written comments from George C. Wright, Jr. of the Delaware League of Local Governments dated February II, 2011.
In addition to the documentary evidence, the Council received and considered the following public comment, received at its two public hearings on this matter:
Georgeanna Trietley testified that until July 1, 2011 she was an employee of DelDOT. She is now an employee of New Castle County Assessors. She is here to give the position of the Delaware Association of Assessing Officers. In July of 2010, a letter from her predecessor for the county was sent to this Council. That letter indicates that some county assessment employees are certified appraisers. They operate under the jurisdictional exception of USPAP. The Kent County office is conducting assessments based on 1987 market values; Sussex County is using 1974. Assessment is a software program, the software program takes in data regarding the amount of bathrooms, bedrooms, etc. and the program spits out a number. That's how assessments are done. Ms. Trietley wants the Board to know how assessments are done before deciding. The DAAO wants any regulation of assessors tabled until a reassessment of the state is complete. Ms. Trietley also provided a July 6, 2010 letter from Louis Cox, President of the DAAO. This letter indicates that current assessment practices in the three counties do not conform to USPAP.
Hal Godwin addressed the Council. Mr. Godwin is the Deputy County Administrator for Sussex County. On September 28, 2010, Sussex County Council unanimously supported a motion that the Council propose legislation for an amendment of the state statute regarding the regulating of assessors. HB 152 was introduced to amend 24 Del.C. §4019(e) so that the training and certification of assessors would happen only after there had been a total reassessment of properties in Sussex County. Sussex County feels that without a reassessment, the training and education of assessors would be providing them with skills they wouldn't use.
Eddy Parker was the next witness to address the Council. Mr. Parker has been employed by Sussex County for the past 20 years. His concern is that the standards cannot be met by the assessors in the counties. The assessors are required by law to have uniform assessments. They have tried to maintain uniform assessments since the law passed. If these regulations are enacted, there are going to be gross inequities in the assessment process. The main problem is that this Council doesn't understand the process used by assessors in the assessment process.
Assessors could care less what the fair market value is of a property. That has no affect on the assessment value. This is not a good use of tax payer money to train people on skills they will not be able to use when they get back to the office. A few years ago, the Board seemed to understand what assessors do, but it seems to have lost that understanding. There must be uniformity and that takes precedence over method. They must maintain uniformity. Assessors and appraisers serve different functions. Rule 10.5.1.4 "requires assessors to complete a comprehensive examination covering all phases of the appraisal process." This is too expansive and not needed by assessors in order for them to do their job.
Phillip McGinnis next addressed the Council. Mr. McGinnis reminded the Council that he served for eight years on this Council back in the 1990's. When the original appraiser legislation went through, the assessors were exempted from that legislation for a period of five to ten years. The point was that the assessors did not have the training that was required to come into compliance. At that time, the assessors were not addressed. Subsequently, all states began to realize that assessors were unregulated. During his time on the Council, he worked on regulations for assessors and worked on the "Massachusetts Rule," which relied heavily on the regulatory language used by the state of Massachusetts. However, the assessor exception was then extended until 2002. There was later a bill enacted that attempted to give assessors three years to comply with the regulations once they are enacted. Thereafter, in 2006 or 2007, Mr. McGinnis brought it to the Council's attention that there still were no regulations in place. At this point, there is no question that assessors don't do everything that appraisers do. The assessors have been exempted for close to 20 years and they have had plenty of time to get their education and start coming into compliance. USPAP recognizes assessors and mass appraising, so it is not unheard of that assessors are regulated. There have been attempts to get assessors licensed or certified for a long time and the time has come.
Doug Sensabaugh was the final witness to give live commentary to the Council. Mr. Sensabaugh stated that no assessor is opposed to regulation but the timing is poor right now. If the Council requires assessors to follow USPAP rules, they will go out of business. They will cease all assessments in Delaware and the counties will go out of business. Every other state has some certification or licensing program. Most, but not all, are different than the process for appraisers. Assessors in Delaware have no interest in the fair market value of property. Until there is a reassessment, the assessors cannot meet USPAP.
1.	24 Del.C. §4019(e) requires the Council on Real Estate Appraisers to "develop standards in cooperation with the Delaware Association of Counties and the Executive Director of the League of Local Governments or his or her designee for licensing and training of assessors in order for municipal and county assessment departments to be in compliance within 3 years of the development and adoption of said standards."
2.	In December of 2010, the Council sent a draft of its proposed regulations to the Delaware Association of Counties and the Executive Director of the League of Local Governments, seeking input and comments on the regulations as proposed.
3.	The Delaware Association of Counties responded, first on February 11, 2011 and then again on October 13, 2011. A follow-up letter was sent to the Executive Director of the League of Local Governments on March 31, 2011 but no response was ever received.
4.	The Delaware Association of Counties response dated February 11, 2011 included only comments from its legal representative. Counsel for the Delaware Association of Counties indicated that the proposed regulations "seem to me to be appropriate and beneficial in that they require formal training for real estate assessors." Further, the comments indicate "I think one would be hard put to argue against these type of requirements which will ensure that appraisals and assessments for municipal tax purposes are done properly." Counsel for the Delaware Association of Counties went on to state that he did not believe these regulations would impact how some towns-namely, those that adopt their county's assessments-do business in this area. Further, he does not believe these regulations will impact those towns that hire outside assessors to consult with their town Board of (lay) Assessors. Counsel closed his comments by asking if a citizen member of a Board of Assessors would be required to get all of the requisite training and education of a licensed assessor under the regulations. The Council does not believe any changes are necessary as a result of these comments. Lay persons on Boards of Assessors that either adopt county assessments or rely on professional assessments in reaching assessment value are not practicing assessing and will not need to be trained to the level of licensed assessors.
5.	On October 13, 2011, the Delaware League of Local Governments sent a second comment to the Council, indicating it "supports and agrees with the Council proposals. However, we feel that they should not be implemented until a general revaluation of real property is approved, mandated and funded by the State of Delaware. The League believes that the provisions providing for retraining and licensing of municipal assessors would be of value only after a new property reassessment is completed.” The Council on Real Estate Appraisers' enabling statute currently requires it to enact regulations “for licensing and training of assessors in order for municipal and county assessment departments to be in compliance within 3 years of the development and adoption of said standards.” 24 Del.C. §4019(e). The Council started this process over a year ago when it drafted up proposed regulations and shared them with the Delaware Association of Counties and the Executive Director of the League of Local Governments, as required by the statute. Id. Delaware is a mandatory state for real estate appraising. That is, no person may appraise a property's value in this state without first obtaining a license. The model used by assessors is a valuation model. Although the assessors characterize their work as merely plugging in numbers to a computer system, this is appraising using a mass appraising model. The information that spits out the assessment comes from a company that provides a system of assessment to the County or municipality. Although the assessors claim they are using construction costs from 1983, they are actually doing a retrospective valuation. That is, assessing is valuation of a property at a historical point in time. Although the assessors claim that they do not concern themselves with fair market value, assessors send out tax notices based on fair market value.
Further, to the extent that assessments are relying on a universe of properties that were appraised in 1974, that data is the result of a mass appraisal. When assessing a home's value today within that mass appraisal, assessors are conducting a retrospective mass appraisal. Further, if there exists today a unique property that doesn't fall into the mass appraisal model, a separate valuation report must be completed. Although the assessors argue that requiring them to come into compliance with USPAP will be a hardship, assessments need only be conducted in accordance with Standard 6 of USPAP, “Mass Appraisal, Development and Reporting.” Assessors will only comport their behavior to Standards 1 & 2 when they are assessing a unique property that does not fall within the mass appraisal model.
Finally, the Council's enabling statute mandates the Council to promulgate these regulations. The process began with the input of the assessors and continued with public comment and more input from the assessors. The Council has made every effort to address the assessors' concerns; however, delaying the promulgation of these regulations until such time as there is a state wide reassessment would run afoul of the legislative mandate found at 24 Del.C. §4019(e).
6.	All written and verbal public comment raised the same concerns. Namely, that assessors are not concerned with market value and that any regulation of assessors should be postponed until such time as there is a state wide assessment. The only other topic raised by the public comment was that the education requirements are onerous on assessors, despite the fact that they will have three years to come into compliance pursuant to the statutory mandate. The requirement for general real estate appraisers is 300 hours of classroom time, as well as 3000 hours of experience credit. The appraiser trainee is only required to have 90 hours of education prior to licensure pursuant to the AQB. That is far more than what the assessors are being asked to do. Further, the assessors have three years to come into compliance with the regulation and get the requisite amount of pre-licensure education. The Council does not believe this is an unconscionable burden. The regulations proposed by the Council require a much lower threshold of education and training that that currently imposed on appraisers in this state and are an attempt to obtain only a minimum level of competency in the practice of assessing. The ongoing education requirement for assessors was proposed as only 28 hours every two years, half of which can be taken on-line. However, the Council is sensitive to the assessors' concerns and in its final form, will cut the proposed amount of education in half, and will permit all hours to be taken on-line. This is a significant concession as appraisers are only permitted to take half of their education credit hours on-line.
7.	Finally, the Council considered technical suggestions made by the Division of Professional Regulation.Only non-substantive changes were made as a result.
NOW THEREFORE, under the statutory authority and for the reasons set forth above, the Council on Real Estate Appraisers does hereby ORDER that the regulations be, and that they hereby are, adopted and promulgated as set forth below. The effective date of this Order is ten days from the date of its publication in the Delaware Register of Regulations, in accordance with 29 Del.C. §10118(g).
2.2.4	A licensee or certificate holder may apply for inactive status for a period not to exceed 6 years if he or she is not performing appraisals in Delaware.
8.1	Complaints
8.2	Hearing Procedures
8.2.1	All hearings shall be in accordance with the Administrative Procedures Act, 29 Del.C. §§10121-10129.
10.0	Change and Modification to Rules and Regulations
10.1	The Council may, change or modify these Rules and Regulations as provided in 29 Del.C. §§10111-10119.
10.3.3	Approved applications. An approved application will be valid for 1 year from the date of approval. If an applicant does not pass the certification examination within this 1-year period, the applicant’s application will be considered to have been [withdrawn abandoned]. If the applicant wishes to take the examination after 1 year from the date of approval, a new application, along with the required fee, shall be reviewed on the basis of statutes and regulations in effect at the time the new application is received by the Board.
10.7.1	Except as provided in 10.7.2, a licensed assessor shall complete [28 14] classroom hours of continuing education—including at least 7 hours on USPAP and at least 3 hours on the law, rules, and regulations of the Council—during each biennial renewal period as a condition of renewal of certification for the next biennial renewal period. Fourteen hours may be completed via on-line, video or remote instruction; and fourteen hours must be completed in class during every biennial renewal period.
10.9.5	All licensees shall notify the [Council Division] in writing of each change of [contact information, including but not limited to] business address, residence address, e-mail address, business telephone number or trade name within ten (10) days of said change. The information provided shall be sufficiently descriptive to enable the Council to correspond with and locate the licensee. All licensees shall notify the Council in writing of each change of supervisor or employer, and shall provide the Council with the new supervisor’s or employer’s name, business address, and business telephone number.
15 DE Reg. 888 (12/01/11) (Final)