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SPECIAL EDITION
2013 IAR Legislative Session Wrap-Up

The 2013 session of the Indiana General Assembly has come to a close and the final gavel resounded over what has proven to be a very successful session for the Indiana Association of REALTORS® and its members. Our efforts to move our proactive agenda forward produced much-needed changes to the license law transition and increased protection for brokers from liability. Our forcing the debate on the subject of property taxes in arrears has resulted in rooting out new ways to direct our members to navigate those complicated waters in the future without the need for new statutory authority. Your Government Affairs team weathered new political territory with super majorities in both houses and a newly inaugurated governor. Our REALTOR®-legislators proved, once again, to be champions for us in both chambers. We worked side-by-side with other trade groups, strengthening our already strong grass roots whenever possible. And thanks to so very many of you, The REALTOR® voice was heard loud and clear at the State House this session!

Below is a brief summary of several bills of interest to the real estate community.

Maggie McShane
Maggie McShane

Senior VP of Government Affairs

mmcshane@indianarealtors.com

Ph: (317) 913-3223
Eric Augustus headshot
Eric Augustus
Grassroots Manager

eaugustus@indianarealtors.com
Ph: (317) 372-0532
 
  

REAL ESTATE INDUSTRY BILLS

 

SEA 615- Real Estate Licensing, Senator Jim Merritt (R-Indianapolis)

SEA 615 was a priority bill for IAR and an important follow up bill to last year’s license law overhaul. The bill authorizes additional changes required to finalize the transition to the new license law requirements, which go into effect July 1, 2014. It allows for the approval by the commission and offering by schools of the new managing broker course, which will be required of all managing brokers and branch office managers on July 1, 2014. It also makes provisions for inactive licenses to transition to the new license status. Finally, it sets much-needed criteria for real estate schools and instructors. IAR Past President, Charlie Shook, testified in support of the bill.  Senator Jim Merritt has been a tremendous champion for the streamlining and modernization of our real estate license in a year in which a growing amount of “anti-licensing” sentiment has permeated the State House. A hat tip also goes to Rep. Bill Davis who ushered the bill through the house. SEA 615 passed unanimously in both the House and Senate, but was in jeopardy of getting bogged down at the tail end of the session due to general opposition form the administration to any changes in requirements for licensed professions.  IAR staff made a strong case to the Governor’s office that this bill was the final step in a long process to streamline and modernize the real estate license requirements.  Though Governor Pence vetoed two other licensing bills, he signed SEA 615 into law, making special note that it met his criteria of a licensing program that added efficiency and reduced outdated government regulation.

HEA 1372- Knowledge Imputed to Real Estate Broker, Representative Randy Truitt (R-W. Lafayette)

HEA 1372 is an IAR priority that arose from numerous calls from brokers to the IAR legal hotline.  The bill protects brokers against liability from imputed knowledge regarding a past transaction on a property by a broker at the same brokerage. It also removes the provision regarding the seller’s disclosure form that allows failure by the buyer to sign the form to be the sole reason to invalidate a contract. Buyer’s will still be directed to sign the form as proof of receipt, however, this change closes a loophole that allows a buyer to, by his own negligence, refuse or fail to sign the form and then point to it as cause to back out of a deal.  IAR Treasurer Bruce Bright testified in support of the bill in committee. HB 1372 passed unanimously on third reading in both the House and the Senate and again on its final concurrence vote in the House. House author, Rep. Randy Truitt, is a REALTOR® and helped fend off several attempts by opponents from the trial bar to gut the bill.  Senator Joe Zakas (R, Granger) and Senator Vaneta Becker (also a REALTOR®) were instrumental in ushering the bill through the senate.  Governor Mike Pence signed the bill into law on May 2nd.

SB 520- ERASER Committee, Senator Randy Head (R-Logansport)

SB 520 includes Real Estate Broker’s license in a review process that would eliminate the license requirement from Indiana law if the legislature fails to take affirmative action in 2018 to save it. REALTORS® opposed SB 520, which jeopardizes the future of our real estate license.  An IAR statewide Call for Action (CFA) to our members to communicate our opposition to the bill generated more than 1500 calls to House legislators. SB 520, known as the “ERASER” bill was heard in the Select Committee on Government Reduction on where Chairman Steve Stemler (D-Jeffersonville) did not take a committee vote on the bill. We want to thank all of those who responded to the CFA!  This bill is guaranteed to make a command appearance next session.  In the meantime, your Government Affairs team will continue to showcase the efforts our industry has already undertaken to streamline our own professional license—a model that other professions may want to follow.

SB 9- Residential Real Estate Sales Disclosure Form, Senator Brent Steele (R-Bedford)

 SB 9, authored by Senator Brent Steele (R-Bedford) would remove the provision in Indiana law that says the seller’s disclosure form is NOT a warranty.  It also made the “agent” liable for information contained on the disclosure form.  IAR strongly opposed this bill, and generated REALTOR® calls to key committee members stating our opposition. IAR Treasurer Bruce Bright opposed the bill in committee and Chairman Joe Zakas (R-South Bend) did not take a committee vote on the bill.  Scores of REALTORS®, with the help of local board AE’s helped ensure this bill did not move out of committee, effectively killing it in committee.   This is an issue that is likely to rear its head in future sessions.  Thanks to our members and local board staff on for a great team effort to kill this bad bill! 

HEA 1313- Regulation of Residential Landlords, Builders, and Remodelers, Representative Mike Speedy (R-Indianapolis)

HEA 1313 puts in places a moratorium until July 1, 2014 on political subdivisions on the adoption of new regulations of landlord and tenant relations, rental agreements, or real property that requires an imposition of a fee for inspection or registration. Current regulations regarding fees for inspections or registrations are not impacted by HEA 1313. This bill only impacts political subdivisions that are seeking to create new regulations that would generate revenue through an inspection or registration program. The bill is intended to slow the growing practice of local units looking to generate income of targeting certain business sectors to raise income.  HEA 1313 passed on a final concurrence vote on Thursday in the House by a slim 51-32 margin.  IAR and other trade associations worked closely together to garner the votes for this important bill and to ensure that it did not disrupt long-standing and effective programs already in place.  We will continue to fight local efforts to saddle our industry with more than its fair share of the burden of balancing local budgets.


STATE BUDGET AND TAX ISSUES


HEA 1001- Biennial Budget, Representative Tim Brown (R- Crawfordsville)

HEA 1001, a two year $30 billion state budget that garners broad Republican support from both chambers passed the General Assembly on primarily a party line vote. The budget includes increased funding for roads, education and child services. Included in the budget is a 5% income tax cut spread out until 2017. Governor Mike Pence campaigned on a 10% income tax cut, but calls the 5% that the General Assembly gave him, “the right tax relief at the right time and will give a much needed boost to working families, small businesses and family farms.” The budget also includes phasing down the corporate and financial institutions tax rates, repeals the inheritance tax and maintains a $2 billion reserve which House and Senate leaders sought from the beginning of session. “When all the tax cuts are fully implemented, this will be the largest tax cut in the state’s history”, said Senator Long (R-Fort Wayne). 

HEA 1116- Property Taxes, Representative Dan Leonard (R- Huntington)

HEA 1116 requires DLGF to grant permission to a township to increase the township levy. It also eliminates a requirement that a county auditor notify each political subdivision of the property tax reductions resulting from the circuit breaker credit. It provides that the DLGF is required to conduct a public hearing on a political subdivisions budget, tax rate, and tax levy if requested in writing by a taxpayer. What started out as a local budgeting bill for public libraries, became a streamlining bill for local levy and fire emergency loan procedures. It currently awaits the Governor’s signature.

HEA 1544- Various Tax Matters, Representative Eric Turner (R- Cicero)

HEA 1544 further defines the term “common areas” for purposes of the circuit breaker law. Provides that land is considered “residential property” if it is land shared by dwelling units of a building that includes two or more dwelling units. It allows an individual to claim a standard homestead deduction for a particular assessment date even if on that assessment date the property on which the homestead is located was vacant land or construction of the dwelling that constitutes the homestead was not completed. 

SEA 152- Property Tax Assessments, Senator Doug Eckerty (R- Yorktown)

SEA 152 provides that in the case of real property that is subject to a property tax appeal in which the gross assessed value is reduced by the property tax assessment board of appeals (PTABOA), if the assessed value is increased above the amount determined by the PTABOA in a previous appeal, the assessor has the burden of proving that the assessment is correct. It specifies that when a taxpayer is entitled to interest, the interest shall be computed using the rate in effect for each particular year covered by the refund or credit. SEA 152 passed both the House and Senate and passed on it final concurrence on Thursday. It will now go to the Governor for his signature before it becomes law.
 

SEA 370- Title Insurance, Senator Travis Holdman (R-Markle)

SEA 370 creates a rating bureau for title insurance companies. It requires title insurance companies writing policies in the state to file their rates with the Department of Insurance. The Commissioner of the Department of Insurance can then approve or disapprove of their rate for title insurance. SB 370 also creates a closing protection letter that specifies, in the event that a title insurance company is closing a real estate deal, they are responsible for intentional or unintentional misconduct or errors in connection with the closing. SB 370 passed both the House and Senate and has been signed by the Governor.
 

SEA 517- Local Government Finance, Senator Pete Miller (R- Avon)

SEA 517 authorizes the Department of Local Government Finance (DLGF) to establish a three year pilot program for three counties concerning nonbinding reviews of budgets, property tax rates and property tax levies. The pilot program will help DLGF greater understand the estimated consequences of the circuit breaker property tax credits. It also allows local governments to have greater flexibility with their general fund to help offset any effects of circuit breaker shortfalls.  It currently awaits the Governor’s signature.  

 


QUALITY OF LIFE ISSUES/PROPERTY ISSUES

 

HEA 1011- Mass Transit, Representative Jerry Torr (R- Carmel)

HEA 1011 was a top priority for REALTORS® in Central Indiana.  It establishes a summer study committee to further study the possibility of mass transit in the central Indiana region. What started out as a plan for a regional transit authority that would create both light rail and bus rapid transit systems for central Indiana, became an opportunity to study the issue further after it was met by strong opposition from Marion County legislators concerned about voting to allow local tax increases. The original proposal would seek to increase income tax rates on citizens of counties that opted into the regional transit authority. Citizens would have gotten the chance to vote on a referendum to have their local income taxes increased in order to fund mass transit. Although the bill was not enacted as introduced, the crucial issue of improved public transportation for the Indianapolis metro area lives to see another day.  HB 1011 will give the legislature another summer to study other financing options for Indygo and beyond and ensuring the issue will be revisited this summer and next session.

SEA 433- Abandoned property; property safety, Senator Allen Paul (R-Richmond)

SEA 433 is an attempt to assist local governments with the problem of abandoned housing in their communities. It gives county executives additional options for transferring properties that did not sell at a tax sale to a person who is able to repair and maintain the property. It allows individuals who have a substantial interest in the abandoned property or own an adjacent parcel he first opportunity to redeem the property before it goes to tax sale.  It also allows individuals to clean up graffiti on abandoned properties with protection by the “Good Samaritan” law. SEA 433 passed both the House and the Senate and is now awaiting the Governor’s signature.

SEA 4- Historic Preservation, Senator Jim Arnold (D-LaPorte)

SEA 4, sponsored by fellow REALTOR®, Rep. Ed Clere (R-New Albany), provides an exclusive method for removing the designation of a historic district. As the bill passed the house, the amount of Historic Rehabilitation tax credits that were available to restoring and rehabbing historic buildings was increased. However, after the bill was returned to the Senate, that language was stripped out because of its fiscal impact. Representative Clere is devoted to historic preservation issues and is hopeful that he may be able to revisit an increase of these credits at a later date.  

HEA 1084- Various Property Issues, Representative Woody Burton (R-Greenwood)

HEA 1084, authored by fellow REALTOR® Woody Burton, gives the Attorney General’s office enforcement of the statute concerning homeowners associations. It also requires homeowners associations to make available financial records and communications of the association should a member of the association request them. The records can be made available for a fee of $35 per hour for any search lasting over an hour. It also allows the suspension of a real estate license for 90 days of an individual that has engaged in material and intentional misrepresentations or omissions in at least three transactions. HB 1084 passed both the House and Senate before it passed on its final concurrence vote of 49-0. It awaits the Governor’s signature.

SB 373- Trespass and Application Fraud, Senator Travis Holdman (R-Markle)

SB 373 goes further to define criminal trespass on a property.  The bill sought to protect certain businesses and industries against activists gaining unauthorized access to private property, however, it had a myriad of serious unintended consequences and quickly became very controversial. As introduced, the bill restricted the photographing or video recording of agricultural operations or industrial facilities and criminalized the dissemination of related photos or videos.  IAR staff was concerned that the bill would have prevented appraisers and brokers from photographing farms and industrial facilities and sought exemptions for appraisers and brokers. The bill was amended unfavorably in conference committee to remove ALL exemptions and broaden its application to ALL real property.  Thanks to Speaker Brian Bosma for pulling the plug on this very bad bill on the last day of session by withdrawing it from the calendar.  Appraisers and brokers need no longer fear pulling out that camera to photograph a property!


 
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