23.8140.01000
Sixty-eighth
Legislative Assembly HOUSE BILL NO. 1107
of North Dakota
Introduced by
Industry, Business and Labor Committee
(At the request of the North Dakota Real Estate Appraiser Qualifications and Ethics Board)
1 A BILL for an Act to amend and reenact sections 43-23.3-01 and 43-23.3-02, subsection 1 of
2 section 43-23.3-03, sections 43-23.3-04 and 43-23.3-05, subsection 1 of section 43-23.3-06,
3 and sections 43-23.3-07, 43-23.3-08, 43-23.3-09, 43-23.3-10, 43-23.3-11, 43-23.3-13,
4 43-23.3-17, 43-23.3-18, and 43-23.3-23 of the North Dakota Century Code, relating to the
5 regulation of real estate appraisers; and to provide a penalty.
6 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
7 SECTION 1. AMENDMENT. Section 43-23.3-01 of the North Dakota Century Code is
8 amended and reenacted as follows:
9 43-23.3-01. Definitions.
10 As used in this chapter, unless the context otherwise requires:
11 1. "Analysis" means a study of real estate other than estimating value.
12 2. "Appraisal" means an analysis, opinion, or conclusion relating to the nature, quality,
13 value, or utility of specified interests in, or aspects of, real estate. An appraisal may be
14 classified by subject matter into either a valuation or an analysis.
15 3. "Appraisal assignment" means an engagement for which a person is employed or
16 retained to act, or would be perceived by the public as acting, as a disinterested party
17 in rendering an unbiased supportable appraisal.
18 4. "Appraisal foundation" means the appraisal foundation incorporated as an Illinois
19 corporation on November 30, 1987.
20 5. "Appraisal report" means any communication of an appraisal.
21 6. "Appraisal subcommittee" means the appraisal subcommittee of the federal financial
22 institutions examination council.
23 7. "Appraiser" means a person who engages in appraisal activity for valuable
24 consideration.
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1 8. "Apprentice appraiser" means a person who holds a valid permit as an apprentice
2 appraiser.
3 9. "Board" means the North Dakota real estate appraiser qualifications and ethics board.
4 10. "Certified appraiser" means a person who holds a valid permit as a certified residential
5 or general appraiser.
6 11. "Certified general appraiser" means a person who holds a valid permit as a certified
7 general appraiser.
8 12. "Certified residential appraiser" means a person who holds a valid permit as a certified
9 residential appraiser.
10 13. "Licensed appraiser" means a person who holds a valid permit as a licensed
11 appraiser.
12 14. "Permit" means the document issued by the board, verifying that the person named on
13 the permit has fulfilled all prerequisites to practice either as an apprentice appraiser, a
14 licensed appraiser, or a certified appraiser.
15 15. "Real estate" means an identified parcel or tract of land including improvements, and
16 interests, benefits, and rights inherent in the ownership of real estate.
17 16. "Uniform standards of professional appraisal practices" means standards of appraisal
18 promulgated by the appraisal standards board of the appraisal foundation as adopted
19 and modified by the board. The standards adopted and modified by the board must
20 meet the minimum standards adopted by the appraisal foundation.
21 17. "Valuation" means an estimate of the value of real estate or real property.
22 SECTION 2. AMENDMENT. Section 43-23.3-02 of the North Dakota Century Code is
23 amended and reenacted as follows:
24 43-23.3-02. North Dakota real estate appraiser qualifications and ethics board.
25 1. The governor shall appoint the board. The board must consist of five members. One
26 member must represent the public; one member must be a representative of the
27 financial industry; and three members must be appraisers, at least one of which is
28 experienced in the appraisal of agricultural property.
29 a. Each appraiser member of the board must be either a licensed or certified
30 appraiser, but at least two of the appraiser members must be certified appraisers.
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1 b. The governor shall appoint the financial industry representative from a list of
2 qualified individuals submitted by the North Dakota bankers associations, the
3 credit union association of the Dakotas, and the North Dakota farm credit system
4 associations. Each of these entities may submit two names of candidates to the
5 governor. The public member of the board may not be engaged in the practice of
6 real estate appraising.
7 2. The term of each member is five years. A member may not serve more than two
8 consecutive five-year terms, after which at least two years must pass before the
9 governor may reappoint that former member to the board. The governor shall appoint
10 members so the terms of no more than two members expire each year. A member of
11 the board continues to hold office until the appointment and qualification of a
12 successor. The governor may remove a board member for cause.
13 3. Annually the members shall elect a chairman from among the members. At least two
14 of the members who are appraiser members must be present in order for a quorum to
15 exist. The members are entitled to receive compensation for each day actually
16 engaged in the service of the board and actual and necessary traveling expenses at
17 the rate allowed other state officials, paid from the fees collected by the board.
18 4. At least two of the members who are appraiser members must be present in order for
19 a quorum to exist.
20 5. The members are entitled to receive compensation for each day actually engaged in
21 the service of the board and actual and necessary traveling expenses at the rate
22 allowed other state officials, paid from the fees collected by the board.
23 SECTION 3. AMENDMENT. Subsection 1 of section 43-23.3-03 of the North Dakota
24 Century Code is amended and reenacted as follows:
25 1. The board, or the board's designated representative, shall:
26 a. Define apprentice appraiser, licensed appraiser, certified residential appraiser,
27 and certified general appraiser; determine the type of educational experience,
28 appraisal experience, and equivalent experience that meet the requirements of
29 this chapter; establish application procedures; and establish standards for
30 approval and disapproval of applications for permits.
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1 b. Establish examination specifications for each category of licensed and
2 certifiedthe apprentice and supervisory appraiser and administer examinations.
3 c. Approve or disapprove applications for permits, issue pocket cards and permits
4 to practice, and maintain a registry of the names and addresses of individuals
5 holding permits.
6 d. Discipline permittees.
7 e. Hold meetings, hearings, and examinations in places and at times as the board
8 designates and maintain records of board activities.
9 f. Adopt rules, pursuant to chapter 28-32, necessary to implement this chapter or
10 carry out the requirements imposed by federal law.
11 g. Adopt rules that clearly and concisely establish the standards for approval and
12 disapproval of applications for permits. The rules must include a requirement that
13 an application disapproval clearly specify the basis for the disapproval.
14 h. Keep permittees informed of board activities, including providing notification of
15 board member terms and any upcoming board vacancy; internet posting of
16 meeting notices and minutes; and internet posting of proposed and final rule
17 changes.
18 SECTION 4. AMENDMENT. Section 43-23.3-04 of the North Dakota Century Code is
19 amended and reenacted as follows:
20 43-23.3-04. Permit required - Exemptions.
21 1. Except as provided in this section, a person may not directly or indirectly engage in,
22 advertise, conduct the business of, or act in any capacity as an apprentice, licensed,
23 or certified appraiser without first obtaining a permit as provided in this chapter.
24 2. An appraiser, apprenticed, licensed, or certified in another state may not engage in,
25 advertise, conduct the business of, or act in any capacity as an appraiser in this state,
26 or perform an appraisal review for a property located in this state, without first
27 obtaining a temporary permit under section 43-23.3-11 or a permit under section
28 43-23.3-04.1.
29 3. This chapter does not apply to a licensed real estate broker or salesperson who, in the
30 ordinary course of business, gives an opinion to a potential seller or third party as to
31 the recommended listing price of real estate or an opinion to a potential purchaser or
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1 third party as to the recommended purchase price of real estate. However, the opinion
2 as to the listing price or the purchase price may not be referred to as value or as an
3 appraisal.
4 4. This chapter does not apply to a person who, in the ordinary course of business, gives
5 an opinion of the value of real estate to that person's employer.
6 SECTION 5. AMENDMENT. Section 43-23.3-05 of the North Dakota Century Code is
7 amended and reenacted as follows:
8 43-23.3-05. Permit process.
9 An individual who desires to engage in the practice of real estate appraisal shall apply for a
10 permit on forms prescribed bywith the board and submit the required fee.
11 SECTION 6. AMENDMENT. Subsection 1 of section 43-23.3-06 of the North Dakota
12 Century Code is amended and reenacted as follows:
13 1. An apprentice appraiser must meet the minimum requirements established by the
14 board for a permit. An apprentice appraiser may only assist a licensed or a certified
15 appraiser in the performance of an appraisal assignment.
16 SECTION 7. AMENDMENT. Section 43-23.3-07 of the North Dakota Century Code is
17 amended and reenacted as follows:
18 43-23.3-07. Examination requirement.
19 The board shall issue a permit to practice as a licensed, certified residential, or certified
20 general appraiser to an individual who has demonstrated the following qualifications through a
21 written examination process:
22 1. Knowledge of technical terms used in or related to real estate appraising, appraisal
23 report writing, and economic concepts relating to real estate.
24 2. Understanding of the principles of land economics, appraisal processes, and of
25 problems likely to be encountered in gathering, interpreting, and processing of data in
26 carrying out appraisal disciplines.
27 3. Understanding of the uniform standards of professional appraisal practices.
28 4. Knowledge of theories of depreciation, cost estimating, methods of capitalization, the
29 mathematics of real estate appraisal, and other principles and procedures determined
30 by the board to be appropriate for the appreciable classification of permit.
31 5. Basic understanding of real estate law.
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1 6. Understanding of the types of misconduct for which disciplinary proceedings may be
2 initiated against an appraisersuccessfully completed the appropriate national
3 examination as required by the appraisal foundation appraisal qualification board
4 criteria.
5 SECTION 8. AMENDMENT. Section 43-23.3-08 of the North Dakota Century Code is
6 amended and reenacted as follows:
7 43-23.3-08. Application prerequisitesAppraisal education requirements.
8 An applicant for a permit as an apprentice, licensed, certified residential, or certified general
9 appraiser mustshall successfully complete the education requirements established by the
10 board.
11 SECTION 9. AMENDMENT. Section 43-23.3-09 of the North Dakota Century Code is
12 amended and reenacted as follows:
13 43-23.3-09. Appraisal experience requirements.
14 The board may issue a permit to practice as a licensed, certified residential, or certified
15 general appraiser to an individual who possesses the minimum experience requirements
16 established by the board. The board shall require an applicant to furnish, under oath, a detailed
17 listing of the appraisal reports or file memoranda for which appraisal experience is claimed by
18 the applicant. Upon request, the applicant shall provide to the board copies of appraisal reports
19 or other documents that the applicant has assisted in preparing.
20 SECTION 10. AMENDMENT. Section 43-23.3-10 of the North Dakota Century Code is
21 amended and reenacted as follows:
22 43-23.3-10. Expiration of permit.
23 Permits expire biennially on December thirty-first of each year. The expiration date of the
24 permit must appear on the permit and no other notice of its expiration need be given to the
25 permittee.
26 SECTION 11. AMENDMENT. Section 43-23.3-11 of the North Dakota Century Code is
27 amended and reenacted as follows:
28 43-23.3-11. Temporary permit.
29 1. The board may issue a temporary permit to an applicant who is apprenticed, licensed,
30 or certified in good standing by another state. The board may deny a temporary permit
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1 to an applicant whose permit, apprenticeship, license, or certification was revoked,
2 suspended, or otherwise subjected to discipline by any state or jurisdiction.
3 2. An applicant for a temporary permit shall file with the board a designation in writing
4 which appoints the chairman of the board to act as the applicant's licensed agent upon
5 whom all judicial and other process or legal notices directed to the applicant may be
6 served. Copies of the appointment, certified by the chairman of the board, may be
7 received in evidence in any proceeding and must be given the same effect as the
8 original. In the written designation, the applicant shall agree that any lawful process
9 against that individual which is served upon the agent is of the same legal force as if
10 served upon the applicant, and that the authority of the agent continues in force as
11 long as any liability of the applicant remains outstanding in this state. Upon the receipt
12 of any process or notice, the chairman shall mail a copy of the process or notice by
13 certified mail, return receipt requested, to the last-known business address of the
14 applicant.
15 3. The board may issue a temporary permit to an applicant if the applicant agrees in
16 writing to abide by this chapter and to submit to the jurisdiction of the board.
17 4.3. The board shall issue a temporary permit to an applicant who has complied with this
18 section. The board may require the applicant to pay a fee. The board shall determine
19 the amount of the fee and the duration of the temporary permit.
20 SECTION 12. AMENDMENT. Section 43-23.3-13 of the North Dakota Century Code is
21 amended and reenacted as follows:
22 43-23.3-13. Principal place of business.
23 A permittee shall notify the board of the address of the permittee's place of business. Within
24 twenty days of a change in the address of the place of business, the permittee shall give written
25 notification of the change to the board and pay the change of address fee.
26 SECTION 13. AMENDMENT. Section 43-23.3-17 of the North Dakota Century Code is
27 amended and reenacted as follows:
28 43-23.3-17. Retention of records.
29 An apprentice, licensed, or certified appraiser shall retain, for at least five years, originals or
30 copies of all written contracts engaging the permittee's services for appraisal work and all
31 reports and supporting data assembled and formulated by the permittee in preparing the
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1 reports. The period for retention of records applies to each engagement of the services of the
2 permittee and commences upon the date of the submission of the appraisal to the client unless,
3 within that period, the permittee is notified that the appraisal report is involved in litigation, in
4 which event the period for the retention of records commences on the date of the final
5 dispositio