STATE OF WISCONSIN
DEPARTMENT OF SAFETY AND PROFESSIONAL SERVICES
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IN THE MATTER OF RULEMAKING : ORDER OF THE
PROCEEDINGS BEFORE THE :DEPARTMENT
DEPARTMENT OF SAFETY AND :ADOPTING RULES
PROFESSIONAL SERVICES : (CLEARINGHOUSE RULE 18-104)
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ORDER
An order of the department to repeal SPS 85.120 (22), 85.230 (Note), 85.420 (2) (a) to (c), 85.520 (8) and (9), 85.530 (1) (b), 85.820 (2) (d) and (e), and 85.900 (7); to renumber SPS 87.02 (2) (a) to (c); to renumber and amend SPS 85.120 (23), 85.210 (intro.), (1), (2), (3), (5), and (7), 85.230 (1) (c) 3., 85.420 (2) (intro.), 85.700 (1) (b), 85.820 (2) (f), 85.900 (4), 85.910 (1), and 87.02 (1); to amend subch. I (title) of ch. SPS 85, 85.110, 85.120 (1), (2), (3), (Note), (6), (14), (15), (17), (18), (24), and (26), 85.200, 85.210 (Note), 85.220 (1) (intro.) and (2) (intro.), (b), (c), and (Note), 85.230 (1) (a) (Note) and (c) (intro.), 1., and 2., 85.240 (1) (a) and (b), subch. III (title) of ch. SPS 85, 85.310, 85.320 (title) and (1) (intro.), (a) (intro.) and 3., and (b), 85.330 (intro.), (1), and (3), subch. IV (title) of ch. SPS 85, 85.400, 85.410, 85.420 (title) and (1) (intro.), (a) (intro.) and 3., and (b), 85.430 (1), subch. V (title) of ch. SPS 85, 85.500, 85.510, 85.520 (intro.) and (3), 85.530 (1) (intro.), (a), and (c), 85.600 (1) and (Note), (2), and (3), 85.610 (1) and (2) (intro.), (a), and (b), 85.630 (1) (d) and (2), 85.700 (1) (intro.), (a), (c) to (f), (2), (3) (intro.), and (Note), 85.710 (5) (intro.) and (b) (intro.), 85.800 (1) (Note), (3) and (Note), (4) (intro.), (b), (d), and (e), (9), and (10) and (Note), 85.820 (1), (2) (intro.), (a), and (c), and (3) (a), (b), and (c), 85.830 (7), 85.840 (1) and (2), 85.900 (1) to (3), (5), and (6), 85.910 (1) (Note), (2) (intro.) and (c), (7) (a), (b) (intro.), and (Note), (8) (intro.), (d), (Note), and (e), (9) (intro.), (10), (11), and (12) (Note), 86.01 (1) to (7), (9), (11), and (13), 86.03 (3), and 87.02 (intro.) and (2) (intro.); and to create SPS 85.115, 85.210 (2m) and (3m), 85.220 (3) and (4), 85.230 (3) and (4), 85.425, 85.700 (1) (b) 1. to 4., 85.900 (4) (a) to (c), 85.910 (1) (a) 1. to 4. and (b), 87.01 (Note), and 87.02 (1) (a) to (c) and (2) (am), (bm), (cm), (d) (intro.), (e), and (Note), relating to real estate appraisers. Analysis prepared by the Department of Safety and Professional Services.
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ANALYSIS
Statutes interpreted:
Statutory authority:
Explanation of agency authority:
Section 458.03 (1) (b), Stats., requires the department to “…promulgate rules establishing criteria for the approval of educational and continuing educational programs and courses of study for appraisers and establishing criteria for the approval of the courses required under ss. 458.06 (2) (d) and 458.08 (2) (d).” Section 458.085, Stats., requires the department to promulgate rules establishing all of the following: - Educational requirements for general and residential appraiser certification and for appraiser licensure under ch. 458, Stats. - Experience requirements for general and residential appraiser certification and for appraiser licensure under ch. 458, Stats. - Continuing education requirements for renewal of certificates issued under ch. 458, Stats. Section 458.24, Stats., provides “[t]he department may promulgate rules establishing standards for appraisal practice. In promulgating rules under this section, the department shall consider including as part or all of the standards part or all of the ‘Uniform Standards of Professional Appraisal Practice’ established by the appraisal standards board of the appraisal foundation. The department shall periodically review the ‘Uniform Standards of Professional Appraisal Practice’ and, if appropriate, revise the rules promulgated under this section to reflect revisions to the ‘Uniform Standards of Professional Appraisal Practice’.” Related statutes or rules:
None.
Plain language analysis:
In consultation with the Real Estate Appraisers Board, the Department of Safety and Professional Services conducted a comprehensive review and update of chs. SPS 85 to 87 to ensure the rules are consistent with current professional and licensing practices and applicable Wisconsin statutes and federal regulations. As a result, the following updates have been made: - Section SPS 85.115 is created to incorporate by reference into chs. SPS 85 to 87 the 2020-2021 Uniform Standards of Professional Appraisal Practice issued by the Appraisal Standards Board of The Appraisal Foundation. - The minimum requirements for certification as a general appraiser under subch. III of ch. SPS 85, certification as a residential appraiser under subch. IV of ch. SPS 85, and licensure as an appraiser under subch. V of ch. SPS 85 have been revised to adopt the minimum qualifications for real property appraisers established May 1, 2018 by the Appraiser Qualifications Board of The Appraisal Foundation. - Sections SPS 85.400, 85.500, and 86.01 have been revised to reflect that the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency have issued a final rule that increases the threshold for commercial real estate transactions requiring an appraisal from $250,000 to $500,000 (Federal Register Vol. 83, No. 68). - Section SPS 85.900 (5) is revised to clarify that continuing education credit may be claimed for teaching a continuing education course that is approved by the Department of Safety and Professional Services. - The provisions for renewal under s. SPS 87.02 are revised to specify the requirements for late renewal or reinstatement of a certification or license include completion of the most current edition of the 7-Hour National USPAP Update Course. - Other provisions throughout chs. SPS 85 to 87 have been revised to update notes, provide clarity, and conform to current drafting standards. Summary of, and comparison with, existing or proposed federal statutes and regulations:
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 rules will comply with the AQB Criteria.
Title XI also directs each federal financial institutions regulatory agency (the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of the Comptroller of Currency, and National Credit Union Association) to publish appraisal regulations for federally related transactions within its jurisdiction.
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency have recently issued final regulations that increase the threshold for commercial real estate transactions requiring an appraisal from $250,000 to $500,000 (Federal Register Vol. 83, No. 68). The regulations in the rules have been revised to reflect the increased threshold.
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 incorporate by reference the 2018-2019 Uniform Standards of Professional Appraisal Practice issued by the Appraisal Standards Board of The Appraisal Foundation (68 Ill. Adm. Code 1455.240). The rules do not currently adopt the minimum qualifications for real property appraisers established May 1, 2018 by the Appraiser Qualifications Board of The Appraisal Foundation.
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 provide that the Board has adopted the Uniform Standards of Professional Appraisal Practice issued by The Appraisal Foundation [193F IAC 1.1(1)]. The rules do not currently adopt the minimum qualifications for real property appraisers established May 1, 2018 by the Appraiser Qualifications Board of The Appraisal Foundation.
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 reference the Uniform Standards of Professional Appraisal Practice, and specifically provide (Mich Admin Code, R 339.23104) that the following individuals are exempt from the requirements of Standard 3 (Appraisal Review, Development):
- A member of the Board of Real Estate Appraisers who is performing an investigation or testifying at an adjudicatory hearing on behalf of the Department.
- A member of the Board of Real Estate Appraisers who is serving in the capacity of a reviewer while reviewing the work experience of an applicant for licensure.
- An investigator employed by or retained by the Department who is performing an investigation or testifying at an adjudicatory hearing.
The Michigan Statutes, Section 339.2610, adopts the minimum education, examination, and experience requirements contained in the qualifications for real property appraisers established by the Appraiser Qualifications Board of The Appraisal Foundation. Minnesota: The Minnesota Statutes, Sections 82B.02 to 82B.24, address the practice of real estate appraisal in Minnesota. The statutes define “standards of professional practice to mean the Uniform Standards of Professional Appraisal Practice of the Appraisers Standards Board of The Appraisal Foundation in effect as of January 1, 1991, or other version of the standards designated by the Commissioner of the Department of Commerce (Minnesota Statutes, Section 82B.021, Subdivision 26). The statutes do not currently adopt the minimum qualifications for real property appraisers established May 1, 2018 by the Appraiser Qualifications Board of The Appraisal Foundation.
Summary of factual data and analytical methodologies:
The rules were developed by, in consultation with the Real Estate Appraisers Board, reviewing the provisions of chs. SPS 85 to 87 to ensure the rules are consistent with current professional and licensing practices and applicable Wisconsin statutes and federal regulations. Analysis and supporting documents used to determine effect on small business or in preparation of economic impact analysis:
The 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 document 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, Dan Hereth, may be contacted by calling (608) 267-2435. Agency contact person:
