STATE OF WISCONSIN
DEPARTMENT OF SAFETY AND PROFESSIONAL SERVICES
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IN THE MATTER OF RULEMAKING : ORDER OF THE DEPARTMENT OF
PROCEEDINGS BEFORE THE : SAFETY AND PROFESSIONAL
DEPARTMENT OF SAFETY AND : SERVICES
PROFESSIONAL SERVICES : ADOPTING RULES
: (CLEARINGHOUSE RULE 20-086)
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ORDER
An order of the Department of Safety and Professional Services to amend SPS 85.230 (1) (intro.), (2), and (3), 85.240 (1) (intro.), and 85.500; and to create SPS 85.120 (15m), (21g), and (21r) and 85.230 (2m) and (4) (Note), relating to real estate appraisers.
Analysis prepared by the Department of Safety and Professional Services.
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ANALYSIS
Statutes interpreted: Section 440.09, Stats. Explanation of agency authority:
Section 440.09 (5), Stats., provides that “[t]he department or credentialing board, as appropriate, may promulgate rules necessary to implement this section.” Section 458.03 (1) (e), Stats., requires the department to “[p]romulgate rules specifying the types of real estate that may be appraised by licensed appraisers.” Related statute or rule:
Section 440.09, Stats., specifies the requirements for issuing reciprocal credentials to service members, former service members, and the spouses of service members and former service members. Plain language analysis:
The proposed rule creates s. SPS 85.230 (2m) to implement s. 440.09, Stats., as amended by 2019 Wisconsin Act 143. Section 440.09, Stats., specifies the requirements for issuing reciprocal credentials to service members, former service members, and the spouses of service members and former service members.
The proposed rule also revises the Licensed Appraiser classification under s. SPS 85.500 to reflect a May 15, 2020 change to the real property appraiser classifications within the Appraiser Qualifications Board’s Real Property Appraiser Qualification Criteria. Specifically, the Licensed Residential Real Property Appraiser classification in the Criteria was changed from applying to complex one-to-four residential units having a transaction value of less than $250,000 to those having a transaction value of less than $400,000. Summary of, and comparison with, existing or proposed federal regulation:
The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), 12 U.S.C. 3331 et seq., (Title XI) was enacted in 1989. Under FIRREA, insured financial institutions and insured credit unions are required to obtain the services of a state certified or licensed appraiser for appraisals conducted in connection with “federally related transactions.” Under FIRREA, all states that certify real estate appraisers for purposes of conducting appraisals in federally related transactions must assure compliance with the criteria established by the Appraiser Qualifications Board (AQB). The criteria established by the AQB are set forth in the Real Property Appraiser Qualification Criteria and Interpretations of the Criteria (Criteria). The AQB Criteria includes the minimum experience, examination, qualifying education, and continuing education requirements that must be satisfied by an individual in order to obtain and maintain a certified appraiser credential.
The regulations in the proposed rule will comply with the AQB Criteria. Specifically, the proposed rule will revise the Licensed Appraiser classification under s. SPS 85.500 to align with a recent change in the AQB Criteria related to real property appraiser classifications. In addition, the requirements for a reciprocal credential created by the proposed rule under s. SPS 85.230 (2m) are in compliance with the provision in the AQB Criteria related to background checks that specifies “[a]n applicant shall not be eligible for a real property appraiser credential if, during at least the five (5) year period immediately preceding the date of the application for licensing or certification, the applicant has been convicted of, or pled guilty or nolo contendere to a crime that would call into question the applicant’s fitness for licensure.” Summary of public comments received on statement of scope and a description of how and to what extent those comments and feedback were taken into account in drafting the proposed rule: N/A
Comparison with rules in adjacent states:
Illinois:
Rules of the Illinois Department of Financial and Professional Regulation address the practice of real estate appraisal in Illinois (68 Ill. Adm. Code 1455). The rules adopt the minimum qualifications for real property appraisers established May 1, 2018 by the Appraiser Qualifications Board of The Appraisal Foundation (68 Ill. Adm. Code 1455.10). Illinois has 3 classes of license for real estate appraisers, which do not include a Licensed Residential Real Property Appraiser or equivalent classification.
Iowa:
Rules of the Iowa Real Estate Appraiser Examining Board address the practice of real estate appraisal in Iowa (193F IAC 1 to 17). The rules adopt the minimum qualifications for real property appraisers established May 1, 2018 by the Appraiser Qualifications Board of The Appraisal Foundation (193F IAC 1.19). Iowa has 3 classes of license for real estate appraisers, which do not include a Licensed Residential Real Property Appraiser or equivalent classification.
Michigan:
Rules of the Michigan Department of Licensing and Regulatory Affairs address the practice of real estate appraisal in Michigan (Mich Admin Code, R 339.23101 to R 339.23405). The rules provide for 3 classes of license for real estate appraisers, including a State Licensed Real Estate Appraiser classification (Mich Admin Code, R 339.23403). This classification does not currently reflect the May 15, 2020, change by the AQB to the applicability of the Licensed Residential Real Property Appraiser classification.
Minnesota:
The Minnesota Statutes, Sections 82B.02 to 82B.24, address the practice of real estate appraisal in Minnesota. The statutes adopt the minimum education, examination, and experience requirements established by the Appraiser Qualifications Board (AQB) of the Appraisal Foundation and published in the most recent version of the Real Property Appraiser Qualification Criteria (2020 Minnesota Statutes, Section 82B.095, Subd. 3.). The statutes also provide for 5 classes of license for real estate appraisers, including a Licensed Residential Real Property Appraiser classification (2020 Minnesota Statutes, Section 82B.11, Subd. 3.). This classification does not currently reflect the May 15, 2020, change by the AQB to the applicability of the Licensed Residential Real Property Appraiser classification.
Summary of factual data and analytical methodologies:
The proposed rules were developed, in consultation with the Real Estate Appraisers Board, by reviewing the provisions of s. 440.09, Stats., as amended by 2019 Wisconsin Act 143, and the change made to the real property appraiser classifications within the Appraiser Qualifications Board’s Real Property Appraiser Qualification Criteria.
Analysis and supporting documents used to determine effect on small business or in preparation of economic impact report:
The proposed rules were posted for a period of 14 days to solicit public comment on economic impact, including how the proposed rules may affect businesses, local government units, and individuals. No comments were received.
Fiscal Estimate and Economic Impact Analysis:
The Fiscal Estimate and Economic Impact Analysis is attached.
Effect on small business:
These rules do not have an economic impact on small businesses, as defined in s. 227.114 (1), Stats. The Department’s Regulatory Review Coordinator may be contacted by email at Daniel.Hereth@wisconsin.gov, or by calling (608) 267-2435. Agency contact person:
Nilajah Hardin, Administrative Rules Coordinator
Department of Safety and Professional Services, Division of Policy Development
