Is it common to have peer teaching evaluation for tenured/tenure-track faculty every year? Is it common for US public universities to enforce peer teaching evaluations (have professors sit in each others' classes) for tenured faculty member every year? What about requiring evaluation twice a year for tenure-track faculty members?
I can't say exactly how common it is, but it happens. But it is most likely in the first couple of years of a probationary (tenure track assistant professor) contract and less likely for tenured professors. It might even be required each once in each year of the contract. And if problems with teaching have arisen, then it is more likely that it will be needed. 

It can be nerve wracking, of course, but if well done it can be a valuable assist to an inexperienced teacher. Ideally the person visiting is willing to become a teaching mentor to the newcomer. Ideally the person visiting has a superior record of teaching and knows many of the tricks that help the professor avoid pitfalls and respond appropriately to student needs. 

But like any other skill, teaching effectively needs to be learned. In a situation in which people come to the task with little background it is good to provide some help in becoming both comfortable and effective in the classroom. 

Sometimes the visitor needs to make a written report for the junior faculty member's file. Other times a meeting afterwards is enough. 

It is possible that it should happen more than it does, but it shouldn't be haphazard. Thought needs to be given to who does the visiting and the consequences of the visit.