Michigan Office of Administrative Hearings and Rules  
Administrative Rules Division (ARD)  
MOAHR-Rules@michigan.gov  
REGULATORY IMPACT STATEMENT  
and COST-BENEFIT ANALYSIS (RIS)  
Agency Information:  
Department name:  
Licensing and Regulatory Affairs  
Bureau name:  
Bureau of Professional Licensing  
Name of person filling out RIS:  
Dena Marks  
Phone number of person filling out RIS:  
517-335-3679  
E-mail of person filling out RIS:  
MarksD1@michigan.gov  
Rule Set Information:  
ARD assigned rule set number:  
2023-32 LR  
Title of proposed rule set:  
Real Estate Appraisers – General Rules  
Comparison of Rule(s) to Federal/State/Association Standard  
1. Compare the proposed rules to parallel federal rules or standards set by a state or national licensing agency or  
accreditation association, if any exist.  
The proposed rules are consistent with the Appraisal Foundation’s Appraisal Standards Board (ASB) Uniform  
Standards of Professional Appraisal Practice (USPAP), authorized by the United States Congress. The USPAP  
contains the ethical and performance standards for the appraisal profession in the United States. The proposed rules  
are also consistent with the Real Property Appraiser Qualification Criteria (AQB Criteria), which is published by the  
Appraiser Qualifications Board of the Appraisal Foundation. The Real Property Appraiser Qualification Criteria and  
Interpretations of the Criteria, effective January 1, 2022, was amended in June 2023. The amendments become  
effective January 1, 2025. The department is not aware of any other laws, rules, or legal requirements that duplicate,  
overlap, or conflict with the proposed rules.  
A. Are these rules required by state law or federal mandate?  
MCL 24.245(3)  
RIS-Page 2  
Yes. These rules are required by state law. However, there is no federal mandate requiring these rules.  
MCL 339.205, states that the department shall promulgate rules which are necessary and appropriate to enable the  
department to fulfill its role under the Occupational Code (Code).  
MCL 339.308, states that the board shall promulgate rules as required in the article in which it is created as are  
necessary and appropriate to fulfill its role.  
MCL 339.2605, requires a licensee who performs an appraisal to utilize the USPAP in effect at the time of the  
appraisal, and requires the department to utilize the AQB Criteria regarding education, examination, and experience  
for licensure. Both the USPAP and AQB Criteria are subject to amendments adopted by the department.  
The following provisions require rule making: MCL 339.202, MCL 339.205, MCL, MCL 339.308, Executive  
Reorganization Order No. 1991-9, MCL 338.3501; Executive Reorganization Order No. 1996-2, MCL 445.2001;  
Executive Reorganization Order No. 2003-1, MCL 445.2011, and Executive Reorganization Order No. 2011-4, MCL  
445.2030.  
B. If these rules exceed a federal standard, please identify the federal standard or citation, describe why it is  
necessary that the proposed rules exceed the federal standard or law, and specify the costs and benefits arising out  
of the deviation.  
The proposed rules do not exceed a federal standard.  
2. Compare the proposed rules to standards in similarly situated states, based on geographic location, topography,  
natural resources, commonalities, or economic similarities.  
The proposed rules are consistent with the standards required by the Code and the AQB Criteria. All states require  
appraisers to be licensed or certified to provide appraisals to federally regulated lenders and use AQB minimum  
requirements. The proposed rules are similar to the requirements of other states in the Great Lakes region.  
All states in the country, which includes the Great Lakes Region (Indiana, Illinois, Ohio, Minnesota, Pennsylvania,  
and New York), require real estate appraisers to comply with Title XI of the Financial Institutions Reform, Recovery  
and Enforcement Act. 12 USC 3331 – 3351. Additionally, all real estate appraisers in the Great Lakes Region must  
follow the ASB’s USPAP when performing an appraisal. These are federal laws that supersede state law in the area of  
real estate appraisals. This means that states may not pass rules that are inconsistent with the federal law and all rules  
must comply with and be consistent with the AQB Criteria.  
A. If the rules exceed standards in those states, please explain why and specify the costs and benefits arising out of  
the deviation.  
The proposed rules do not exceed standards in other states. All states must follow USPAP for state-licensed and state-  
certified appraisers involved in federally related real estate transactions. All states must also follow the AQB Criteria,  
which establishes the minimum education, experience, and examination requirements for real property appraisers to  
obtain state certification.  
3. Identify any laws, rules, and other legal requirements that may duplicate, overlap, or conflict with the proposed  
rules.  
The proposed rules are consistent with the Code, the ASB USPAP, which is authorized by the United States Congress,  
the Appraisal Subcommittee’s (ASC) review results, and the AQB Criteria. The department is not aware of any other  
laws, rules, or legal requirements that duplicate, overlap, or conflict with the proposed rules.  
A. Explain how the rules have been coordinated, to the extent practicable, with other federal, state, and local laws  
applicable to the same activity or subject matter. This section should include a discussion of the efforts undertaken  
by the agency to avoid or minimize duplication.  
The proposed rules have been coordinated with the Code, the ASB USPAP, authorized by the United States Congress,  
the ASC’s review results, and the AQB Criteria as required by state law and the provisions of Title XI of the Financial  
Institutions Reform, Recovery and Enforcement Act of 1989. 12 USC 3331 et seq.  
Purpose and Objectives of the Rule(s)  
MCL 24.245(3)  
RIS-Page 3  
4. Identify the behavior and frequency of behavior that the proposed rules are designed to alter.  
Part 1 General Provisions: The rules in this section identify and define the terms used throughout the rule set.  
Additionally, the USPAP standards and exemptions from the USPAP standards are included in this section. The  
proposed changes update the rules to current drafting standards and add content advising that the USPAP and AQB  
standards must be followed. These changes notify licensees of the required standards and discloses where to access  
them.  
Part 2 Licensing: The rules in this section pertain to licensure requirements for appraisers, criteria for a supervisory  
certified appraiser, licensure exemptions, and market analysis. The proposed rules will rescind R 339.23207, which  
pertains to market analysis by real estate licensees. The reason for the rescission is that a market analysis performed  
by a real estate licensee does not meet USPAP requirements and violates MCL 339.2605 and the requirements of the  
ASB.  
Part 3 Appraiser Education: The rules in this section pertain to the prelicensure educational requirements for a real  
estate appraiser, prelicensure education course approval, and continuing education. The current set combines the  
prelicensure and continuing education requirements. To provide clarity, the proposed rules move all the continuing  
education information from this section to Part 3B, which will contain all the continuing education information.  
Additionally, non-substantive grammatical changes were made to comply with the most recent drafting standards.  
Part 3A Prelicensure Education Course Approval: This section contains the prelicensure education course approval  
information. The proposed rules rescind R 339.23316, which allows continuing education credit for prelicensure  
courses and moves the content of this rule under Part 3B Continuing Education. Additionally, updates were made to R  
339.23317 regarding the application for prelicensure course approval. The rule was modified to state that distance  
education courses must comply with the AQB Criteria and require the student to pass a written, closed book  
examination proctored by an approved official from the college, university, or sponsoring organization. Remote  
proctoring, including biometric proctoring, is acceptable. Lastly, the rule allows a written examination to be in paper  
or electronic form and disallows oral examinations. These changes were made to ensure a distance education  
program’s curriculum and presentation are consistent with AQB Criteria and that students are tested in a manner that  
exam results reliably show the student, in a remotely proctored exam, sufficiently demonstrates knowledge of the  
course curriculum using currently available technology.  
Part 3B Continuing Education: This section contains the continuing education requirements for the licensee and the  
protocol for approval of a continuing education course. This section was reorganized and includes the updated  
continuing education requirements included in the AQB Criteria that become effective on January 1, 2026.  
Specifically, the proposed changes to R 339.23321 clarify that the 7-hour national USPAP continuing education  
course must be completed one time every 2 calendar years and that licensees must attend a course pertaining to  
valuation bias and fair housing law and regulations every 2 calendar years. The initial participation in the valuation  
bias course must be 7 hours in length plus a 1-hour exam. Thereafter, the course length must be at least 4 hours.  
Additionally, proposed new rules were created to encompass the continuing education information that was originally  
located in Part 3 Appraiser Education or Part 3A Prelicensure Education Course Approval. These new rules identify  
activities that simultaneously count toward prelicensure education and continuing education requirements, outline  
sponsor and instructor duties, define unacceptable courses and activities, and prohibit misleading information in the  
programs.  
Lastly, some content was removed. R 339.23325, which pertains to instructors receiving continuing education for  
teaching courses, was rescinded, and moved to R 339.23322. And the permitted activity of receiving continuing  
education credit for attending a board meeting was removed because R 339.23321(d) states that continuing education  
hours must be completed with educational offerings that are consistent with the AQB Criteria. This activity is  
specifically allowed in the AQB Criteria. Additionally, the 2 hours of required continuing education pertaining to  
state laws and rules was removed as much of its content was duplicative of information conveyed in the 7-hour  
USPAP Continuing Education course.  
MCL 24.245(3)  
RIS-Page 4  
The updates and organizational changes to Part 3B were made to advise licensees of the current AQB Criteria  
continuing education requirements and to make the rules easier to understand.  
Part 4 Standards of Conduct: Edits were made to update and align the transaction limits for a state licensed real estate  
appraiser with current federal standards.  
A. Estimate the change in the frequency of the targeted behavior expected from the proposed rules.  
Part 1 General Provisions: The rules in this section identify and define the terms used throughout the rule set.  
Additionally, the USPAP standards and exemptions from the USPAP standards are included in this section. The  
proposed changes update the rules to current drafting standards and add content advising that the USPAP and AQB  
standards must be followed. These changes notify licensees of the required standards and discloses where to access  
them.  
Part 2 Licensing: The rules in this section pertain to licensure requirements for appraisers, criteria for a supervisory  
certified appraiser, licensure exemptions, and market analysis. The proposed rules will rescind R 339.23207, which  
pertains to market analysis by real estate licensees. The reason for the rescission is that a market analysis performed  
by a real estate licensee does not meet USPAP requirements and violates MCL 339.2605 and the requirements of the  
ASB.  
Part 3 Appraiser Education: The rules in this section pertain to the prelicensure educational requirements for a real  
estate appraiser, prelicensure education course approval, and continuing education. The current set combines the  
prelicensure and continuing education requirements. To provide clarity, the proposed rules move all the continuing  
education information from this section to Part 3B which will contain all the continuing education information.  
Additionally, non-substantive grammatical changes were made to comply with the most recent drafting standards.  
Part 3A Prelicensure Education Course Approval: This section contains the prelicensure education course approval  
information. The proposed rules rescind R 339.23316, which allows continuing education credit for prelicensure  
courses and moves the content of this rule under Part 3B Continuing Education. Additionally, updates were made to R  
339.23317 regarding the application for prelicensure course approval. The rule was modified to state that distance  
education courses must comply with the AQB Criteria and require the student to pass a written, closed book  
examination proctored by an approved official from the college, university, or sponsoring organization. Remote  
proctoring, including biometric proctoring, is acceptable. Lastly, the rule allows a written examination to be in paper  
or electronic form and disallows oral examinations. These changes were made to ensure a distance education  
program’s curriculum and presentation are consistent with AQB Criteria and that students are tested in a manner that  
exam results reliably show the student, in a remotely proctored exam, sufficiently demonstrates knowledge of the  
course curriculum using currently available technology.  
Part 3B Continuing Education: This section contains the continuing education requirements for the licensee and the  
protocol for approval of a continuing education course. This section was reorganized and includes the updated  
continuing education requirements included in the AQB Criteria that become effective on January 1, 2026.  
Specifically, the proposed changes to R 339.23321 clarify that the 7-hour national USPAP continuing education  
course must be completed one time every 2 calendar years and that licensees must attend a course pertaining to  
valuation bias and fair housing law and regulations every 2 calendar years. The initial participation in the valuation  
bias course must be 7 hours in length plus a 1-hour exam. Thereafter, the course length must be at least 4 hours.  
Additionally, proposed new rules were created to encompass the continuing education information that was originally  
located in Part 3 Appraiser Education or Part 3A Prelicensure Education Course Approval. These new rules identify  
activities that simultaneously count toward prelicensure education and continuing education requirements, outline  
sponsor and instructor duties, define unacceptable courses and activities, and prohibit misleading information in the  
programs.  
Lastly, some content was removed. R 339.23325, which pertains to instructors receiving continuing education for  
MCL 24.245(3)  
RIS-Page 5  
teaching courses, was rescinded, and moved to R 339.23322. And the permitted activity of receiving continuing  
education credit for attending a board meeting was removed because R 339.23321(d) states that continuing education  
hours must be completed with educational offerings that are consistent with the AQB Criteria. This activity is  
specifically allowed in the AQB Criteria. Additionally, the 2 hours of required continuing education pertaining to  
state laws and rules was removed as much of its content was duplicative of information conveyed in the 7-hour  
USPAP Continuing Education course.  
The updates and organizational changes to Part 3B were made to advise licensees of the current AQB Criteria  
continuing education requirements and to make the rules easier to understand.  
Part 4 Standards of Conduct: Edits were made to update and align the transaction limits for a state licensed real estate  
appraiser with current federal standards.  
B. Describe the difference between current behavior/practice and desired behavior/practice.  
Part 1 General Provisions: The updates were made ensure that the set contains current requirements so that it is  
reliable to the licensees who utilize the content. The additions to the rules are designed to comply with current  
drafting standards, and provide clarity by referencing the statutes that explain why the licensees must follow the  
federal standards.  
Part 2 Licensing: Rescinding R 339.23207 will reduce the amount of market analyses drafted by individuals who are  
not licensed real estate appraisers. This promotes public protection by ensuring that USPAP standards are followed  
when appraisals are drafted and to promotes compliance with MCL 339.2605. Appraisals that are performed outside  
of compliance with the USPAP and MCL 339.2605 violate federal standards and the Occupational Code. Therefore,  
removing this rule will remove confusion that exists in the profession and provide clarity.  
Part 3 Appraiser Education: The changes to the Appraiser Education section separate the prelicensure education  
requirements, prelicensure course approval requirements, and continuing education requirements into separate  
sections to provide clarity and to allow for easier reading and understanding. The current rule set is difficult to  
decipher which rules apply to which subject and require the reader to consult more than one section and/or part when  
determining requirements that needed to be satisfied.  
The changes to the Prelicensure Education Course Approval section provide updates to ensure distance education  
programs are compliant with AQB Criteria enhancing the quality of the program and the reliability of test results for  
remotely proctored students. This will promote public protection by ensuring that remotely proctored students take  
the exam in a secure environment that is similar to in person testing.  
The changes to the Continuing Education section include the AQB Criteria updates to ensure licensees complete  
continuing education accordingly. Licensees will know the precise number of hours that must be completed and the  
topics that must be covered. These changes lessen any obstacles that may prevent timely license renewal and align the  
rules with federal standards.  
Part 4 Standards of Conduct: The changes to the Standards of Conduct section provide updates to the transaction  
limits for a state licensed real estate appraiser to align with current federal standards. These updates help ensure that  
licensees are aware of the current federal transaction limits for real estate appraisals, so that appraisers with the proper  
credentials are handling higher valued transactions or the appraisals involving more complex properties.  
C. What is the desired outcome?  
MCL 24.245(3)  
RIS-Page 6  
Part 1 General Provisions: The updates were made to the general provisions to ensure that the rule set contains current  
requirements, so that it is reliable resource to the licensees who utilize the content. The desired outcome is to have  
current and easy to understand rules to lessen confusion and promote compliance.  
Part 2 Licensing: Rescinding R 339.23207 will reduce the amount of market analyses drafted by individuals who are  
not licensed real estate appraisers. This promotes public protection by ensuring that USPAP standards are followed  
when these documents are drafted and to promote compliance with MCL 339.2605. It is imperative that the  
appropriately credentialed licensees are performing appraisals. The desired outcome is to ensure that appraisals are  
performed by licensees using USPAP standards so the public is assured that the appraisal value is accurate and based  
upon federal standards.  
Part 3 Appraiser Education: The changes to the Appraiser Education section separate the prelicensure education  
requirements, prelicensure course approval requirements, and continuing education requirements into separate sections  
to provide clarity. The desired outcome will promote easier reading, review, and understanding of the rule  
requirements for these topics.  
The changes to the Prelicensure Education Course Approval section provide updates to ensure distance education  
programs are compliant with AQB Criteria enhancing the quality of the program and the reliability of test results for  
remotely proctored students. The desired outcome is to ensure that programs are following the latest requirements,  
following current federal standards, and ensuring that remote testing produces reliable results. These changes protect  
the public by ensuring that the graduates are ready to enter into the profession and provide reliable appraisals.  
The changes to the Continuing Education section include the AQB Criteria updates to ensure licensees complete  
continuing education accordingly. Licensees will know the precise number of hours that must be completed and the  
topics that must be covered. These changes lessen any obstacles that may prevent the timely license renewal. The  
desired outcome will be that licensees will be taking continuing education programs that comply with the most up-to-  
date AQB Criteria.  
Part 4 Standards of Conduct: The changes to the Standards of Conduct section provide updates to the transaction limits  
for a state licensed real estate appraiser to align with current federal standards. The desired outcome is that  
appropriately credentialed appraisers are performing appraisals for higher transaction amounts or more complex  
properties.  
5. Identify the harm resulting from the behavior that the proposed rules are designed to alter and the likelihood  
that the harm will occur in the absence of the rule.  
MCL 24.245(3)  
RIS-Page 7  
The harm resulting from the behavior that the proposed rules are designed to alter and the likelihood that the harm will  
occur in the absence of the rule changes are as follows:  
For licensure, the proposed changes enhance protection of the public by ensuring that licensed real estate appraisers  
are performing a market analysis and that the analysis is done according to USPAP standards. If the rule remains the  
same, these documents will be drafted by unlicensed individuals and potentially not comply with the required USPAP  
standards or MCL 339.2605.  
For appraiser education, the proposed organizational changes will make the rule set easier for licensees to understand.  
This will decrease the potential for misunderstanding and misapplication of the rules. Additionally, the edits to the  
distance education requirements ensure that those enrolled in prelicensure education programs will be tested on the  
content of the class in accordance with AQB Criteria with an examination that tests the knowledge of the student in a  
method that allows validation and reliability of the remote exam results using the most current technologically  
available methods. Without the changes, the harm that would occur is that the testing results for a remote attendee may  
not be as reliable as a proctored in person examination.  
For continuing education, the proposed organizational changes will make the rule set easier to understand for  
licensees. Additionally, the changes include the most up-to-date AQB Criteria requirements. The harm that would  
occur if these updates were not made would be that licensees may complete their continuing education requirements  
incorrectly which will impede the renewal of the license.  
For standards of conduct, the proposed changes were made to align the transaction limits for state licensed real estate  
appraisers with federal law. Without these changes, inappropriately credentialed appraisers may be completing  
appraisals for higher transactional amounts or for very complex properties.  
All the above-mentioned changes were made to ensure that the rule set was clear, easy to understand, contained  
updates to the AQB Criteria, and promote public protection.  
A. What is the rationale for changing the rules instead of leaving them as currently written?  
For licensure, the rationale for changing the rules is to enhance public protection by ensuring that licensed real estate  
appraisers are performing market analysis and that the analysis is done according to USPAP standards. If the rule  
remains the same, these documents will be drafted by unlicensed individuals and potentially not comply with the  
required USPAP standards. Leaving the rule unchanged will allow the public to use an appraisal that is not performed  
by a licensed appraiser who complied with the federal standards.  
For appraiser education, the rationale for changing the rules is to make the set easier for licensees to understand. This  
will decrease the potential for misunderstanding and misapplication of the rules. Additionally, the rationale for  
making the edits to the distance education requirements is to ensure that those enrolled in prelicensure education  
programs will be tested on the content of the class in accordance with AQB Criteria with an examination that tests the  
knowledge of the student in a method that allows validation of the remotely proctored exam results using the most  
current technologically available methods. Without the changes, the testing results for a remotely proctored student  
may not be as reliable as a proctored in person examination. These changes provide clarity to promote compliance and  
allow public confidence in graduates from programs that allow remote testing.  
For continuing education, the rationale for making the proposed organizational changes is to make the rule set easier  
for licensees to understand. Additionally, the changes include the most up-to-date AQB Criteria requirements. Not  
updating the rules to include these updates would result in licensees completing continuing education requirements  
incorrectly which will impede timely license renewal.  
For standards of conduct, the proposed changes were made to align the transaction limits for state licensed real estate  
appraisers with federal law. This will ensure that properly credentialed appraisers are performing appraisals for higher  
valued properties or for properties that are more complex to appraise.  
MCL 24.245(3)  
RIS-Page 8  
6. Describe how the proposed rules protect the health, safety, and welfare of Michigan citizens while promoting a  
regulatory environment in Michigan that is the least burdensome alternative for those required to comply.  
The proposed rules will protect the health, safety, and welfare of Michigan citizens by:  
-Rescinding rules that could result in appraisal documents being completed by unlicensed individuals that are not in  
compliance with USPAP standards.  
-Organizing and clarifying the content of the rule set for easier understanding, which promotes compliance with  
regulations which are designed to protect the public.  
-Requiring distance education programs to conduct examinations that ensure reliable results demonstrating knowledge  
of the class curriculum using the most current technology.  
-Providing the most current AQB Criteria standards which include taking a course on valuation bias.  
-Clarifying which prelicensure program activities simultaneously count toward continuing education requirements.  
-Updating the transactional limits for a state licensed real estate appraiser to align with federal law.  
All the above-mentioned changes were made to ensure that the rule set was clear, easy to understand, and contains  
updates made by the AQB to ensure compliance with the regulations that promote public protection.  
7. Describe any rules in the affected rule set that are obsolete or unnecessary and can be rescinded.  
The proposed rules rescind R 339.23207, R 339.23316, R 339.23325, and R 339.23326.  
R 339.23207 Market analysis by real estate licensees; acceptable experience.  
The reason for the proposed rescission is that a market analysis performed by a real estate licensee does not meet  
USPAP requirements, which violates MCL 339.2605 and the requirements of the ASB.  
R 339.23316 Prelicensure education. This rule states that prelicensure education courses may be used to obtain credit  
for both prelicensure educating and continuing education. The proposed rules rescind R 339.23316 and move the  
content under Part 3B Continuing Education.  
R 339.23325 Continuing education course credit for instructors. For organizational purposes, the proposed rules  
rescind R 339.23325 and move the content to R 339.23322.  
R 339.23326 Continuing education requirements for the licensee. For organizational purposes, the proposed rules  
rescind R 339.23326 and move the content to R 339.23321.  
Fiscal Impact on the Agency  
Fiscal impact is an increase or decrease in expenditures from the current level of expenditures, i.e. hiring additional staff,  
higher contract costs, programming costs, changes in reimbursements rates, etc. over and above what is currently  
expended for that function. It does not include more intangible costs for benefits, such as opportunity costs, the value of  
time saved or lost, etc., unless those issues result in a measurable impact on expenditures.  
8. Please provide the fiscal impact on the agency (an estimate of the cost of rule imposition or potential savings for  
the agency promulgating the rule).  
The proposed rules are not expected to have a fiscal impact on the agency.  
9. Describe whether or not an agency appropriation has been made or a funding source provided for any  
expenditures associated with the proposed rules.  
No agency appropriation has been made nor has a funding source been provided for expenditures associated with the  
proposed rules.  
10. Describe how the proposed rules are necessary and suitable to accomplish their purpose, in relationship to the  
burden(s) the rules place on individuals. Burdens may include fiscal or administrative burdens, or duplicative  
acts.  
MCL 24.245(3)  
RIS-Page 9  
The proposed rules are necessary because the content is not found in statute. In fact, the statutes require these rules.  
The rules provide the requirements for licensure, prelicensure education, and continuing education for the licensee.  
The rules further provide the criteria for how to become an approved sponsor of a prelicensure program and  
continuing education program and the protocols that program coordinators and instructors must follow.  
For prelicensure courses, the addition of requirements distance education programs must satisfy may be considered  
more burdensome. However, the benefit of these requirements permits the usage of technology that increases the  
reliability of test results of a remotely proctored student.  
Lastly, the AQB Criteria now requires that licensees take a course in valuation bias and fair housing law and  
regulations as part of the continuing education requirements. While the addition of this course is considered another  
requirement that must be satisfied, there is no increased burden on the licensee because the total amount of required  
continuing education hours for the licensure period did not increase. Therefore, it is the department’s position that  
proposed rules are necessary and suitable to accomplish their purpose, in relationship to the burden(s) the rules place  
on individuals. The proposed rules, to the extent that a burden is created, promote public protection.  
A. Despite the identified burden(s), identify how the requirements in the rules are still needed and reasonable  
compared to the burdens.  
There are no additional burdens placed on licensees as a result of the proposed rules. The addition mandating that  
some of the continuing education hours pertain to learning about valuation bias and fair housing law and regulations  
does not add extra hours to the required continuing education and will help licensees identify implicit valuation bias  
that occurs when drafting an appraisal and promote equality in the housing market.  
Impact on Other State or Local Governmental Units  
11. Estimate any increase or decrease in revenues to other state or local governmental units (i.e. cities, counties,  
school districts) as a result of the rule. Estimate the cost increases or reductions for other state or local  
governmental units (i.e. cities, counties, school districts) as a result of the rule. Include the cost of equipment,  
supplies, labor, and increased administrative costs in both the initial imposition of the rule and any ongoing  
monitoring.  
There are no anticipated increases in revenues, or cost increases or reductions, to other state or local government  
units as a result of the proposed rules.  
12. Discuss any program, service, duty, or responsibility imposed upon any city, county, town, village, or school  
district by the rules.  
There are no anticipated or intended programs, services, duties, or responsibilities imposed on any city, county, town,  
village, or school district as a result of these proposed rules.  
A. Describe any actions that governmental units must take to be in compliance with the rules. This section should  
include items such as record keeping and reporting requirements or changing operational practices.  
There are no actions that governmental units must take to comply with these proposed rules.  
13. Describe whether or not an appropriation to state or local governmental units has been made or a funding  
source provided for any additional expenditures associated with the proposed rules.  
No appropriations have been made to any governmental units as a result of these rules. No additional expenditures  
are anticipated or intended with the proposed rules.  
Rural Impact  
14. In general, what impact will the rules have on rural areas?  
The proposed rules are not expected to impact rural areas. The proposed rules apply to applicants for licensure and  
licensees, regardless of their location.  
A. Describe the types of public or private interests in rural areas that will be affected by the rules.  
The proposed rules are not expected to impact rural areas. The proposed rules apply to applicants for licensure and  
licensees, regardless of their location.  
MCL 24.245(3)  
RIS-Page 10  
Environmental Impact  
15. Do the proposed rules have any impact on the environment? If yes, please explain.  
No. The proposed rules do not have any impact on the environment.  
Small Business Impact Statement  
16. Describe whether and how the agency considered exempting small businesses from the proposed rules.  
The proposed rules impose requirements on individual appraisers rather than small businesses. Even if an appraiser’s  
workplace qualifies as a small business, the department could not exempt his or her business because it would create  
a disparity in the regulation of the profession.  
17. If small businesses are not exempt, describe (a) the manner in which the agency reduced the economic impact  
of the proposed rules on small businesses, including a detailed recitation of the efforts of the agency to comply  
with the mandate to reduce the disproportionate impact of the rules upon small businesses as described below (in  
accordance with MCL 24.240(1)(a-d)), or (b) the reasons such a reduction was not lawful or feasible.  
The proposed rules cannot exempt small businesses because the rules do not directly regulate small businesses, but  
individual appraisers.  
While an appraiser may work independently or as part of a small business, the law does not allow the rules to exempt  
these individuals from the requirements of the rules. However, the impact on an appraiser who works as part of a  
small business is minimized in the proposed rules, as the rules are written broadly. As a result, an appraiser, whether  
he or she works in small business or not, should not be impacted any more or any less by the changes.  
A. Identify and estimate the number of small businesses affected by the proposed rules and the probable effect on  
small businesses.  
As of September 19, 2023, there are approximately 450 state licensed real estate appraisers, 955 certified general real  
estate appraisers, 1,039 certified residential real estate appraisers, 384 limited licensed real estate appraisers, and 59  
temporary practice permits in Michigan.  
An appraiser may work in a small business, but no matter what type of business environment he or she works in, he  
or she will have to comply with the proposed rules. The rules do not impact small businesses differently because the  
impact is to the individual appraiser only.  
B. Describe how the agency established differing compliance or reporting requirements or timetables for small  
businesses under the rules after projecting the required reporting, record-keeping, and other administrative costs.  
The agency did not establish separate compliance or reporting requirements for small businesses. The proposed rules  
will apply to all appraisers. The rules were drafted to be the least burdensome on all affected appraisers.  
C. Describe how the agency consolidated or simplified the compliance and reporting requirements for small  
businesses and identify the skills necessary to comply with the reporting requirements.  
The agency did not consolidate or simplify the compliance and reporting requirements for small businesses nor  
identify the skills necessary to comply with the reporting requirements as the proposed rules impose requirements on  
individual appraisers rather than small businesses.  
D. Describe how the agency established performance standards to replace design or operation standards required  
by the proposed rules.  
The agency did not establish performance standards to replace design or operation standards required by these rules.  
18. Identify any disproportionate impact the proposed rules may have on small businesses because of their size or  
geographic location.  
The proposed rules do not impact small business; rather, they impact an individual appraiser. Therefore, there is no  
disproportionate impact on a small business because of its size or geographic location.  
19. Identify the nature of any report and the estimated cost of its preparation by small businesses required to  
comply with the proposed rules.  
There is no report preparation cost to small businesses.  
MCL 24.245(3)  
RIS-Page 11  
20. Analyze the costs of compliance for all small businesses affected by the proposed rules, including costs of  
equipment, supplies, labor, and increased administrative costs.  
There are no expected increased costs for small businesses concerning the costs of equipment, supplies, labor, or  
administrative costs.  
21. Identify the nature and estimated cost of any legal, consulting, or accounting services that small businesses  
would incur in complying with the proposed rules.  
There are no expected increased costs for small businesses concerning legal, consulting, or accounting services.  
22. Estimate the ability of small businesses to absorb the costs without suffering economic harm and without  
adversely affecting competition in the marketplace.  
There are no expected costs to small businesses that will cause economic harm to a small business or the marketplace  
as a result of the proposed rules.  
23. Estimate the cost, if any, to the agency of administering or enforcing a rule that exempts or sets lesser  
standards for compliance by small businesses.  
The proposed rules impose requirements on appraisers rather than a small business. Even if an appraiser qualifies as  
a small business, the department could not exempt his or her business because it would create disparity in the  
regulation of the profession. Therefore, there is no cost to the agency for administering or enforcing the rules because  
exempting or setting lesser standards of compliance for a small business is not in the best interest of the public.  
24. Identify the impact on the public interest of exempting or setting lesser standards of compliance for small  
businesses.  
The proposed rules impose requirements on appraisers rather than a small business. Even if an appraiser qualifies as  
a small business, the department could not exempt his or her business because it would create a disparity in the  
regulation of the profession. Therefore, exempting or setting lesser standards of compliance for a small business is  
not in the best interest of the public.  
25. Describe whether and how the agency has involved small businesses in the development of the proposed rules.  
The department worked with the Michigan Board of Real Estate Appraisers as well as stakeholders who attended  
public meetings and submitted written comments in the development of the proposed rules. The board is composed  
of members of the profession and public members who work in small and large businesses in Michigan.  
A. If small businesses were involved in the development of the rules, please identify the business(es).  
The department worked with the Michigan Board of Real Estate Appraisers as well as stakeholders who attended  
public meetings and submitted written comments in the development of the proposed rules. No other small  
businesses were involved in the development of the rules.  
Cost-Benefit Analysis of Rules (independent of statutory impact)  
26. Estimate the actual statewide compliance costs of the rule amendments on businesses or groups.  
The department does not expect any statewide compliance costs of the proposed rules on businesses or groups.  
A. Identify the businesses or groups who will be directly affected by, bear the cost of, or directly benefit from the  
proposed rules.  
The department does not expect any businesses or groups to be directly affected by, bear the cost of, or directly  
benefit from the proposed rules.  
B. What additional costs will be imposed on businesses and other groups as a result of these proposed rules (i.e.  
new equipment, supplies, labor, accounting, or recordkeeping)? Please identify the types and number of businesses  
and groups. Be sure to quantify how each entity will be affected.  
The department does not expect the proposed rules to result in any additional costs such as new equipment, supplies,  
labor, accounting, or recordkeeping on businesses or other groups.  
27. Estimate the actual statewide compliance costs of the proposed rules on individuals (regulated individuals or  
the public). Include the costs of education, training, application fees, examination fees, license fees, new  
equipment, supplies, labor, accounting, or recordkeeping.  
There are no additional compliance costs placed on individuals as a result of the proposed rules.  
A. How many and what category of individuals will be affected by the rules?  
There are approximately 2,951 licensed real estate appraisers. All licensees and applicants for licensure as a real  
estate appraiser are affected by the proposed rules.  
MCL 24.245(3)  
RIS-Page 12  
B. What qualitative and quantitative impact do the proposed changes in rules have on these individuals?  
There is no quantitative impact on individuals because of the proposed rules. However, the qualitative impact will be  
that a real estate appraiser licensee will learn about valuation bias, which promotes an awareness of the concept. This  
will teach the licensee how to avoid including implicit bias in appraisals.  
28. Quantify any cost reductions to businesses, individuals, groups of individuals, or governmental units as a result  
of the proposed rules.  
There are no cost reductions to businesses, individuals, groups of individuals, or governmental units because of the  
proposed rules.  
29. Estimate the primary and direct benefits and any secondary or indirect benefits of the proposed rules. Please  
provide both quantitative and qualitative information, as well as your assumptions.  
The primary and direct benefits of the proposed rules are to applicants and licensees as the proposed rules will update  
out-of-date information, reorganize, and clarify requirements in the rule set. Further, the requirement of the valuation  
bias continuing education course will benefit the public by teaching licensees about valuation bias and how to  
prevent it from occurring in appraisals.  
30. Explain how the proposed rules will impact business growth and job creation (or elimination) in Michigan.  
The rules are not expected to have an impact on business growth, job creation, or job elimination.  
31. Identify any individuals or businesses who will be disproportionately affected by the rules as a result of their  
industrial sector, segment of the public, business size, or geographic location.  
There is not expected to be a disproportionate effect due to industrial sector, segment of the public, business size, or  
geographic location.  
32. Identify the sources the agency relied upon in compiling the regulatory impact statement, including the  
methodology utilized in determining the existence and extent of the impact of the proposed rules and a cost-  
benefit analysis of the proposed rules.  
MCL 24.245(3)  
RIS-Page 13  
The Appraisal Foundation:  
https://www.appraisalfoundation.org/imis/TAF/Standards/Qualification_Criteria/Qualification_Criteria__RP_/TAF/A  
QB_RPAQC.aspx?hkey=5ec61b8d-751b-4a97-90b1-9b3dae51beea  
The Real Property Appraiser Qualification Criteria (AQB Criteria):  
https://appraisalfoundation.sharefile.com/share/view/s63f99dc2b9f241e0b3fd1645f7b63680  
Code of Federal Regulations:  
https://www.ecfr.gov/current/title-12/chapter-III/subchapter-B/part-323  
Illinois:  
https://www.ilga.gov/legislation/ilcs/ilcs5.asp?ActID=1368&ChapterID=0  
https://www.ilga.gov/commission/jcar/admincode/068/06801455sections.html  
Indiana:  
https://iga.in.gov/laws/2023/ic/titles/25#25-34.1-8-10  
https://iga.in.gov/laws/2022/ic/titles/25#25-34.1-3  
https://www.in.gov/pla/professions/real-estate-appraisers-home/real-estate-appraiser-resources/#Statutes___Rules  
Minnesota:  
https://www.revisor.mn.gov/statutes/cite/82B  
* Note: Real estate appraiser rules were repealed.  
New York:  
https://dos.ny.gov/system/files/documents/2021/09/real-estate-appraiser-law-booklet-march-2021.pdf  
Ohio:  
https://codes.ohio.gov/ohio-revised-code/chapter-4763  
https://codes.ohio.gov/ohio-administrative-code/chapter-1301:11-3  
Pennsylvania:  
https://www.legis.state.pa.us/WU01/LI/LI/US/HTM/1990/0/0098..HTM  
https://www.pacodeandbulletin.gov/Display/pacode?  
file=/secure/pacode/data/049/chapter36/chap36toc.html&d=reduce#:~:text=An%20applicant%20for%  
20certification%20as,a%20residential%20real%20estate%20appraiser.  
Wisconsin:  
https://docs.legis.wisconsin.gov/statutes/statutes/458.pdf  
https://docs.legis.wisconsin.gov/code/admin_code/sps/professional_services/080/85.pdf  
A. How were estimates made, and what were your assumptions? Include internal and external sources, published  
reports, information provided by associations or organizations, etc., that demonstrate a need for the proposed  
rules.  
No estimates or assumptions were made.  
Alternative to Regulation  
33. Identify any reasonable alternatives to the proposed rules that would achieve the same or similar goals.  
MCL 24.245(3)  
RIS-Page 14  
Since the rules are required by statute, there is no other reasonable alternative to the proposed rules that would  
achieve the same or similar goal.  
A. Please include any statutory amendments that may be necessary to achieve such alternatives.  
There is no other reasonable alternative to the proposed rules that would achieve the same or similar goal.  
34. Discuss the feasibility of establishing a regulatory program similar to that proposed in the rules that would  
operate through private market-based mechanisms. Please include a discussion of private market-based systems  
utilized by other states.  
Since the rules are authorized by statute, private market-based systems cannot serve as an alternative. Each state is  
responsible for implementing its own laws and rules pertaining to appraisers. Private market-based systems are not  
used for regulating licensees. The licensing and regulation of appraisers are state functions, so a regulatory program  
independent of state intervention cannot be established.  
The profession has numerous professional associations that could be considered regulatory mechanisms that are  
independent of state intervention; however, these professional organizations would provide the public with  
significantly less protection because membership in many of these organizations is voluntary. This means an  
individual who meets the membership requirements, but does not join one of the professional organizations, would  
be able to practice and there would be no way to ensure their competency or hold them accountable.  
35. Discuss all significant alternatives the agency considered during rule development and why they were not  
incorporated into the rules. This section should include ideas considered both during internal discussions and  
discussions with stakeholders, affected parties, or advisory groups.  
Since the rules are required by statute, there are no alternatives to the proposed rules that the agency could consider.  
They are necessary for the administration and enforcement of the licensing process.  
Additional Information  
36. As required by MCL 24.245b(1)(c), please describe any instructions regarding the method of complying with  
the rules, if applicable.  
The instructions for compliance are included in the rules.  
MCL 24.245(3)  
;