South Dakota Gov. Kristi Noem on March 4 signed HB 1127
, legislation that allows appraisers to provide real property evaluations to federally regulated financial institutions. When the law takes effect July 1, the state will join at least 10 others that allow appraisers to provide evaluation services. Several other states are considering similar laws.
Evaluations provided by appraisers must conform to Interagency Appraisal and Evaluation Guidelines. South Dakota’s secretary of the Department of Labor and Regulation will be authorized to promulgate rules relating to “exemptions and standards allowing appraisers to perform an evaluation for a federally insured depository institution.”
Many valuation professionals continued to provide appraisal services while stay-at-home, shelter-in-place and non-essential business closure orders were in place due to the COVID-19 pandemic. Those orders are still in place in some states and cities.
Most states specifically recognized appraisal services as essential, while others referenced guidance from the Cybersecurity and Infrastructure Security Agency of the U.S. Department of Homeland Security regarding essential infrastructure services that were allowed to continue.
However, a few states had more stringent requirements for appraisal services during closure orders.
Pursuant to release of this guidance, all residential and commercial appraisal activities, including interior inspections, were permitted statewide for all intended uses (financing and non-financing) as long as health-related protocols were followed.
Vermont also originally adopted stringent criteria that prohibited appraisal activities from being performed more than 10 miles from an appraiser’s home. However, on April 17, the state clarified that low- or no-contact real estate-related services, including appraisals, were permitted.
Dallas County in Texas initially prohibited appraisal services, but pressure from appraisers forced officials to quickly change its order and allow those services.
An initiative to change how California assesses real property will be on the November ballot. If the so-called “split-roll” initiative passes, it would amend the state’s constitution to require commercial and industrial properties (except those zoned commercial agriculture) to be taxed on their market value, undoing part of Proposition 13, a landmark law that capped residential and commercial property tax increases.
Prop.13 was enacted in 1978 and requires properties to be reassessed only when sold or redeveloped, which means that some residential and commercial properties in California — including the massive Disneyland Park campus — have not been reassessed in 42 years. Prop. 13 also limits property tax to no more than 1% of the purchase price, with annual adjustments either equal to the rate of inflation or 2%, whichever is lower.
The new tax revenue would bypass the state’s General Fund, however, and instead be used to compensate for the state’s decreased revenue from personal income tax and corporation tax. Additionally, funds will be allocated to counties to help cover the costs of implementing the initiative. Remaining funds would be split between local governments and special districts (60%) and school districts and community colleges (40%).
The initiative is primarily supported by teachers’ unions and is strongly opposed by business interest groups.
Most state legislatures either adjourned early this year or suspended their operations due to the COVID-19 pandemic, and the types of bills being considered were generally limited to ones necessary for the continuation of government functions or related to the coronavirus pandemic. Most state appraiser regulatory agencies also curtailed their operations, and state appraiser boards met virtually with abbreviated agendas.
As such, there have been few appraisal-related legislative and regulatory measures this year, and the ones that passed focused on state compliance with the federal minimum requirements for the registration and oversight of appraisal management companies, including:
Michigan is considering AMC legislation with HB 5481
Preparations already are underway to advance a robust legislative agenda for 2021.