in-20251210-IR-876250707FNA: INCORPORATION BY REFERENCE UPDATES

TITLE 876 INDIANA REAL ESTATE COMMISSION Notice of First Public Comment Period LSA Document #25-707 INCORPORATION BY REFERENCE UPDATES PURPOSE OF NOTICE The Indiana Real Estate Commission (IREC) is soliciting public comment on amending rules at 876 IAC 3 to: (1) update to the 2026 edition the Real Property Appraiser Qualifications Criteria (Criteria) incorporation by reference, published by the federal Appraiser Qualifications Board of the Appraisal Foundation; and (2) remove outdated references to a Uniform Standards of Professional Appraisal Practice course. IREC seeks comment on the affected citations listed and any other provisions of Title 876 that may be affected by this rulemaking. ADDITIONAL DOCUMENTS Regulatory Analysis:  20251210-IR-876250707RAA Notice of Public Hearing: 20251210-IR-876250707PHA CITATIONS AFFECTED: 876 IAC 3-3-2.7; 876 IAC 3-3-3.1; 876 IAC 3-3-4.1; 876 IAC 3-3-5.1; 876 IAC 3-3-10; 876 IAC 3-5-1; 876 IAC 3-6-9; 876 IAC 3-6-10 AUTHORITY: IC 25-34.1-3-8 OVERVIEW Basic Purpose and Background The Appraisal Foundation (Foundation) is a federal organization that sets congressionally authorized standards and qualifications for real estate appraisers nationwide. The Foundation ensures the appraiser profession adapts to changing circumstances and continues to move forward through the work of two (2) independent boards. One (1) of the independent boards is the Appraiser Qualifications Board (AQB). While the Foundation and AQB manage the standards and qualifications until they are adopted, it is ultimately the responsibility of both the Appraisal Subcommittee, a subcommittee of the Federal Financial Institutions Examination Council, and state regulators to ensure they are enforced under the provisions of Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (federal act). The real estate appraiser licensure and certification board, as the state appraiser regulatory agency, is required to implement real property appraiser licensing and certification requirements that are no less stringent than those issued by the AQB in the Criteria. Under IC 25-34.1-3-8(e), “The real estate appraiser licensure and certification program established by the commission under this section must meet the requirements of: (1) the federal act; (2) any federal regulations adopted under the federal act; and (3) any other requirements established by the commission as recommended by the board, including requirements for education, experience, examination, reciprocity, and temporary practice.". IREC, as it has with previous editions, must incorporate by reference the new 2026 Criteria, effective January 1, 2026, as adopted by the AQB June 22, 2023. States that do not meet the minimum AQB Criteria risk losing federal recognition of their real estate appraiser licenses with respect to federally related transactions, meaning those that involve loans from federally insured or regulated lenders. If this were to occur in Indiana, it would severely limit the mortgage-lending industry in Indiana and harm consumers. For purposes of IC 4-22-2-28.1, small businesses affected by this rulemaking may contact the Small Business Regulatory Coordinator: For purposes of IC 4-22-2-28.1, the Small Business Ombudsman designated by IC 5-28-17-6 is: Resources available to regulated entities through the small business ombudsman include the ombudsman's duties stated in IC 5-28-17-6, specifically IC 5-28-17-6(9), investigating and attempting to resolve any matter regarding compliance by a small business with a law, rule, or policy administered by a state agency, either as a party to a proceeding or as a mediator. REQUEST FOR PUBLIC COMMENT IREC is soliciting public comment on the proposed rule. Comments may be submitted in one of the following ways: COMMENT PERIOD DEADLINE All comments must be postmarked or time stamped not later than January 9, 2026. The rule, Regulatory Analysis, appendices referenced in the Regulatory Analysis, and materials incorporated by reference (if applicable) are on file at the Indiana Professional Licensing Agency, 402 West Washington Street, Room W072, Indianapolis, Indiana and are available for public inspection. Copies of the rule, Regulatory Analysis, and appendices referenced in the Regulatory Analysis are available at the Indiana Professional Licensing Agency office. If IREC does not receive substantive comments during the public comment period or public hearing, the rule may be adopted with text that is the same as or does not substantially differ from the text of the proposed rule published in this notice. PROPOSED RULE Sec. 2.7. (a) This section establishes criteria applicable to all licenses issued by the real estate appraiser licensure and certification board (board). (b) The board adopts and incorporates by reference the criteria applicable to all appraiser classifications established by the Real Property Appraiser Qualification Criteria, January 2022 2026 edition. Sec. 3.1. (a) This section establishes the educational requirements for the Indiana trainee appraiser license. (b) The minimum prerequisite to sit for the Indiana trainee appraiser examination is completion of the education criteria stated in subsection (c), and completion of the supervisor/trainee appraiser course as outlined in 876 IAC 3-6-9. (c) The minimum classroom hours shall be is the required core curriculum for trainee appraisers, established by the Real Property Appraiser Qualification Criteria, January 2022 2026 edition. Sec. 4.1. (a) This section establishes the educational requirements for an Indiana certified residential appraiser. (b) The minimum prerequisite to sit for the Indiana certified residential appraiser examination is completion of the education criteria, or alternative criteria, and the minimum qualifying education classroom hours of qualifying education for a certified residential real property appraiser established by the Real Property Appraiser Qualification Criteria, January 2022 2026 edition. (c) The fifteen (15) hours of Uniform Standards of Professional Appraisal Practice course will meet the requirements under subsection (b) if the course was taken prior to January 1, 2004. Sec. 5.1. (a) This section establishes the educational requirements for an Indiana certified general appraiser. (b) The prerequisite to sit for the Indiana certified general appraiser examination is completion of the education criteria, or alternative criteria, and the minimum qualifying education classroom hours of qualifying education for a certified general real property appraiser established by the Real Property Appraiser Qualification Criteria, January 2022 2026 edition. (c) The fifteen (15) hours of Uniform Standards of Professional Appraisal Practice course will meet the requirements under subsection (b) if the course was taken before January 1, 2004. Sec. 10. (a) The quantitative experience requirements shall must be consistent with the generic experience criteria, established by the Real Property Appraiser Qualification Criteria, January 2022 2026 edition. (b) An applicant may be given full credit for performance of at least seventy-five percent (75%) of the work associated with an appraisal, including preparation of the appraisal report. Full credit may be claimed for that appraisal, even if the work was reviewed by a supervising appraiser who signed the appraisal report, notwithstanding subsection (c). No credit may be given to an applicant performing less than seventy-five percent (75%) of the work on an appraisal. No credit may be given to an applicant for an appraisal unless the applicant either signed the report or was given credit for seventy-five percent (75%) of the work within the certification pages of the appraisal report. (c) An applicant may be given credit for twenty-five percent (25%) of the hours allotted for the type of property appraised if the applicant reviewed an appraisal prepared by a trainee under the applicant's supervision, and the applicant signed the report as the supervisor. (d) An applicant may be given credit for fifty percent (50%) of the hours allotted for the type of property appraised if the applicant prepared a Uniform Standards of Professional Appraisal Practice (USPAP) Standard 3 review report of an appraisal prepared by another person and prepared a separate written review appraisal report. (e) An applicant may be given credit for an additional fifty percent (50%) of the hours allotted for the type of property appraised if the applicant performed an appraisal for condemnation purposes, where there was a partial taking of the property, and documented before and after value of the property was completed. (f) An applicant may be given credit for fifty percent (50%) of the total experience requirement for practicum courses that are approved by the AQB Appraisal Qualifications Board Course Approval Program or the real estate appraiser licensure and certification board. A practicum course must include the generally applicable methods of appraisal practice for the credential category. Content includes, but is not limited to, the following: Assignments must require problem solving skills for a variety of property types for the credential category. Experience credit shall be is granted for the actual classroom hours of instruction and hours of documented research and analysis, as awarded from the practicum course approval process. (g) An appraisal for which experience is claimed under this rule must: (h) The total credit given for appraisal work consisting of restricted appraisal reports shall must not exceed five hundred (500) hours. Sec. 1. (a) As a prerequisite to renewal of a real estate appraiser license or certification, the licensee or certificate holder shall satisfy the criteria specific to continuing education, established by the Real Property Appraiser Qualification Criteria, January 2022 2026 edition. (b) A licensee is not entitled to continuing education credit for classroom hours that were used for required prelicensure education under 876 IAC 3-3. (c) The real estate appraiser licensure and certification board (board) may verify information concerning continuing education that is submitted by the licensee or certificate holder as evidence supporting the course information. The board may require licensees or certificate holders to provide information regarding the continuing education hours claimed on the individual's renewal. Failure to do so may lead to action under IC 25-1-4-5 or IC 25-1-4-6. (d) It is the responsibility of each licensee or certificate holder to retain evidence to support the courses taken for a period of three (3) years after the end of the renewal period for which the renewal application is submitted to the board. These records shall must include at least one (1) or more of the following: Sec. 9. (a) This section establishes requirements for the use and supervision of licensed trainee appraisers. (b) Indiana licensed trainee appraisers shall be subject to direct supervision, including inspection of all properties by a supervising appraiser who satisfies all the general criteria of the supervisory appraiser requirements, established by the Real Property Appraiser Qualification Criteria, January 2022 2026 edition. (c) The An Indiana licensed trainee appraiser is permitted to have more than one (1) supervising appraiser in the office of the supervising appraiser with whom the Indiana licensed trainee appraiser has associated under 876 IAC 3-3-22. An additional supervisor shall be acting in substitution for the supervising appraiser identified under 876 IAC 3-3-22 and is only responsible for the Indiana licensed trainee appraiser on appraisals where responsibility is assumed by the additional supervisor, at the consent of the supervisor of record identified under 876 IAC 3-3-22. Overall responsibility for the trainee appraiser remains with the supervisor of record as long as the association with the trainee appraiser is in effect under 876 IAC 3-3-22. (d) An appraiser may not be the supervising appraiser for more than three (3) trainees. (e) An appraisal log shall be maintained by the Indiana licensed trainee appraiser and supervising appraiser. The appraisal log shall follow the requirements established by the supervisory appraiser requirements, established by the Real Property Appraiser Qualification Criteria, January 2022 2026 edition. It is the responsibility of the trainee to retain the log for submission to the real estate appraiser licensure and certification board with any future application for license certification. The trainee appraiser shall be is entitled to copies of appraisals, including appraisal reports and any work files that the trainee appraiser completes. However, the original records shall be maintained at the office of the supervising appraiser. (f) The supervising appraiser shall accompany the Indiana licensed trainee appraiser and inspect the subject and comparable properties on the following appraisal assignments: (g) The supervising appraiser and the licensed trainee appraiser shall meet with each other on a reasonable schedule to interact about the appraisal work of the trainee. (h) Subsections (d) and (f) do not apply when an Indiana licensed trainee appraiser is an employee of a governmental entity acting in the course of the governmental entity's activities. Sec. 10. (a) A supervising appraiser under section 9 of this rule shall successfully complete a supervisor/trainee appraiser course in order to be a supervising appraiser. The course must be completed prior to commencement of before an association with a trainee appraiser begins. (b) The supervisor/trainee appraiser course shall qualify qualifies for continuing education credit for the supervising appraiser under 876 IAC 3-5. (c) A supervisor/trainee appraiser course shall be approved by the real estate appraiser licensure and certification board or the Appraisal Qualifications Board and shall provide adequate information to ensure the supervisory appraiser and trainee appraiser understand the qualifications and responsibilities of that role. Specifically, the course objectives shall must be consistent with the supervisory appraiser and trainee appraiser course objectives, established by the Real Property Appraiser Qualification Criteria, January 2022 2026 edition.