LEGISLATIVE FISCAL ESTIMATE

[First Reprint]

SENATE, No. 3927

STATE OF NEW JERSEY

221st LEGISLATURE

 

DATED: JANUARY 15, 2025

 

 

SUMMARY

 

Synopsis:

Establishes penalties for appraisers who engage in discriminatory real estate appraisals and requires certain information to be provided to present and prospective owners or occupants of real estate.

Type of Impact:

Annual State expenditure increase; potential annual State revenue increase.

Agencies Affected:

Department of Law and Public Safety; Judiciary.

 

 

Office of Legislative Services Estimate

Fiscal Impact

 

 

Annual State Expenditure Increase

Indeterminate

 

Potential Annual State Revenue Increase

Indeterminate

 

 

 

 

·         The Office of Legislative Services (OLS) finds that the bill would result in an annual indeterminate expenditure increase to the Division of Consumer Affairs to monitor real estate appraisers for instances of discrimination and to enforce penalties when violations occur.

 

·         The Judiciary would also have increased administrative costs to the extent that a complainant alleging discrimination may initiate a suit in Superior Court.

 

·         The Division of Civil Rights in the Department of Law and Public Safety would incur ongoing indeterminate costs for its additional administrative costs under the bill.

 

·         An indeterminate amount of annual revenues would accrue to the State from civil penalties imposed on real estate appraisers found to have discriminated in their appraisals.

 

BILL DESCRIPTION

 

      This bill establishes penalties for appraisers who engage in discriminatory real estate appraisals and requires certain information to be provided to present and prospective owners or occupants of real estate.

      Holders of appraisal licenses or certificates, or appraisal management company registrations, may have their licenses, certificates, or registrations revoked or suspended, or be subject to fines, if the State Real Estate Appraiser Board determines that the holder of the credential has engaged in a discriminatory appraisal of real estate on any basis prohibited by federal, State, or local law.

      Additionally, the bill provides that within three days of receiving a mortgage loan application, a licensed mortgage broker must provide the mortgage applicant with a document that contains information informing the applicant of the opportunity to report, through the website or telephone number of the Division on Civil Rights, any suspicion of discriminatory appraisal by the holder of an appraising credential. This requirement will apply to all applications for mortgages for residential real estate.

      A holder of a credential who discriminates in the appraisal of real estate is subject to civil penalties of up to $10,000 for a first violation; up to $25,000 for a second violation occurring within five years of the first; and up to $50,000 for a third violation. A complainant is also granted the right to initiate a lawsuit in Superior Court.

      Finally, the bill requires that, when receiving a report of an alleged discriminatory appraisal, the Division on Civil Rights must ascertain the basis for the allegation and solicit from the complainant relevant demographic information, including the identity of the complainant.  The division must compile any demographic information provided by the complainants and report in the aggregate the demographic information collected to the Governor and to the Legislature on or before July 1, 2026.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS finds that the bill would result in an annual indeterminate expenditure increase to the Division of Consumer Affairs to monitor real estate appraisers for instances of discrimination and to enforce penalties when violations occur.  The Division of Civil Rights in the Department of Law and Public Safety would also incur ongoing indeterminate costs for its additional administrative costs under the bill.  Depending on their resource allocation policies, the added workload may or may not augment State administrative expenditures.  The OLS notes that in FY 2023, there were 2,713 real estate appraiser licenses issued by the New Jersey State Real Estate Appraiser Board in the Division of Consumer Affairs.

      The Judiciary would also have increased administrative costs to the extent that a complainant alleging discrimination may initiate a suit in Superior Court.  The OLS cannot know the number of additional suits that would be brought in a given year to determine the additional court costs.

      An indeterminate amount of annual revenues would accrue to the State from the civil penalties imposed on real estate appraisers found to have discriminated in their appraisals.  In the absence of information on the number of violations, the OLS cannot project the magnitude of the associated annual State revenue gain.

 

Section:

Law and Public Safety

Analyst:

Kristin Brunner Santos

Lead Fiscal Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

 

 

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).