Board flags AI risks for appraisers and watches Attorney General rules on foreign buyers

The Texas Appraiser Licensing and Certification Board on Friday spent substantial time weighing how artificial intelligence is changing appraisal practice and how proposed Attorney General rules implementing Senate Bill 17 might affect appraisers' reporting obligations.

Board members and staff said AI is increasingly used in appraisal practice and at recent regulator conferences, raising questions about disclosure and governance. “AI is a tool. It is not a license holder,” the executive director said, adding that licensees may use tools but remain responsible for verification and disclosure.

Staff summarized Senate Bill 17, which took effect Sept. 1, 2025, and noted the Attorney General's office released proposed implementing rules in March with a public comment period that closed April 27. The proposed rules would treat certain participants in real-estate transactions — including appraisers defined as "facilitating entities" — as entities that must report suspected violations to the Attorney General. If the OAG determines a facilitating entity failed to report, it could refer that license holder to TALCB for discipline.

TALCB staff and board members emphasized that any referral from the Attorney General would still be analyzed by TALCB under USPAP (the Uniform Standards of Professional Appraisal Practice) and the board's statutes. “If we are referred something, we would have to process and potentially investigate that referral to ensure we have enough evidence to find a violation under USPAP or our statutes,” staff said.

Board members raised practical and legal questions: who would define or verify foreign-buyer status in routine appraisal work, whether making such inquiries could raise fair-housing or civil-rights concerns, and how appraisers would make a determination without overstepping legal boundaries. Staff said the OAG defines terms in its rulemaking and TALCB is in a "hurry up and wait" posture to see if the OAG adopts the rules as proposed or makes changes in response to comments.

Board members asked staff to prepare outreach and training if the rules move forward so appraisers receive clear guidance on how to comply and avoid unintended discipline. Staff also said trade associations and industry groups had been active in the comment period and that TALCB would publish guidance and communications for licensees if adoption seemed likely.

The board did not take formal action beyond discussion; members asked staff to continue monitoring OAG rulemaking and prepare communications and training if needed. The board plans to watch for any further OAG action and will analyze referrals under existing state law and USPAP standards.