Committee hears bill to let appraisers provide evaluations; stakeholders ask for language aligning with federal guidance

The Senate Industry and Business Committee opened a hearing on House Bill 1354 to allow licensed appraisers to provide property evaluations — a lower-scope, bank-facing valuation product distinct from full appraisals — and heard extended testimony from appraisers, bankers, realtors, builders and regulators.

Proponents, including Representative Dan Ruby (sponsor) and witnesses from the North Dakota Appraisers Association, said permitting appraisers to perform evaluations would expand the appraisal workforce, provide training opportunities for apprentices and speed transactions that do not require a full appraisal. Dean Rylander, chair of government affairs for the North Dakota Appraisers Association, described evaluations as a separate, lower-scope product that banks and federal regulators already accept for low-risk loans and said appraisers are trained to produce higher-quality evaluations than some current suppliers.

Appraisers and supporters emphasized the difference between appraisals (which must follow USPAP) and evaluations (which federal interagency guidance treats as a permissible, lower-scope alternative for certain loans). Representative Ruby and certified residential appraiser Steve Vetter told the committee that evaluations can help apprentices earn experience hours and keep small appraiser firms viable during slow markets.

Opponents and parties seeking clarification urged changes to the bill wording. The North Dakota Bankers Association told the committee the bill as written incorrectly defines “evaluation” as a “federally related real estate financial transaction,” a point the association said would conflict with federal program rules; the bankers asked the committee to remove the word “federally” from the definition so evaluations remain usable in state practice. The North Dakota Association of Realtors said it would move from a neutral to a supportive position only if two specific amendments were adopted to preserve existing brokerage and bank-evaluation roles and to reference the appropriate federal standards; the association said it wants to be sure broker price opinions and real-estate-licensee activity are not unintentionally precluded.

Department of Financial Institutions Commissioner Lisa Cruz testified neutrally, saying federal rules govern whether an appraisal is required and that “anyone can conduct an evaluation as long as they have expertise, is independent, and capable of rendering an unbiased opinion.” The Department and other stakeholders asked the committee to align any state statutory language with federal guidance to avoid creating conflicts that could affect regulatory reviews of the state appraiser program.

Corey Cost, chair of the North Dakota Appraiser Board, said appraisers can already perform evaluations under current law if they follow USPAP. Cost urged safeguards that preserve baseline ethics and competency oversight by the state appraisal board; he also noted that federal reviewers (the Appraisal Subcommittee) have flagged language in the bill’s definition of “evaluation” and the board asked legislative counsel to work with the committee to correct the definition so it does not harm the state appraiser program’s standing under federal review.

Multiple associations — the North Dakota Appraisers Association, appraisal-management companies, and trade groups including the North Dakota Association of Builders — said they would support the bill if amendments that reference the interagency evaluation guidelines and avoid inadvertent conflict with federal definitions are adopted. Witnesses discussed practical detail: an evaluation fee is commonly smaller than a full appraisal (testimony estimated roughly $200 for an evaluation vs. $600–$700 for an appraisal), the federal appraisal threshold for requiring a full appraisal has been raised in recent years (witnesses noted changes from roughly $250,000 to $400,000 in some contexts), and it can take three to five years for an apprentice to become a certified appraiser.

Committee staff and stakeholders agreed to continue work on amendment language. Matt Mengi, legal counsel to the appraiser board and the Department of Financial Institutions, offered to coordinate stakeholder drafting and said he would aim to return suggested language by the committee’s next meeting Wednesday.

Why it matters: Supporters say the bill creates a workforce pathway, reduces delays for low-risk loans and brings qualified, trained appraisers into the pool of professionals producing evaluations. Opponents want explicit statutory references to federal guidance and protections so that real-estate-licensees and banks may continue to perform evaluations under federal rules and so state oversight and the appraisal board’s authority remain intact.

What’s next: Stakeholders were directed to work with the appraiser board and the Department of Financial Institutions to craft amendment language that aligns the bill with federal interagency guidance and preserves regulatory safeguards. The committee closed the hearing and recessed; the sponsor and counsel plan to return with proposed edits.