2013 Legislative Report

Protecting the American Dream

P R O T E C T I N G T H E

AMERICAN DREAM

2 0 13 L E G I S L AT I V E R E P O R T

2 2013 Legislative Report Protecting the American Dream

Thank You!

As always, the success in the legislature is a direct result of our members’ mobilization and the collective

efforts you exerted daily, throughout the State of Oregon to protect homeowners. This effort was once again

displayed during our REALTOR® Rally at the Capitol, in which over 500 REALTORS® emerged on the State

Capitol to show support for the real estate industry.

The efforts of the Association were bolstered significantly by legislators from both major political parties, due

in no small part to the REALTOR® PAC’s commitment to support those candidates supportive of REALTOR®

values and core issues. The dedication of RPAC to supporting REALTOR® Party candidates made an important

impact on what became a difficult legislative session.

Political Affairs Key Committeen Kim Heddinger, Chair Eugene Association of REALTORS®

n Heather Benjamin, Vice-Chair Portland Metropolitan Association of REALTORS®

n Karen Blair Rogue Valley Association of REALTORS®

n Colin Call Eugene Association of REALTORS®

n Doris Cherachanko Portland Metropolitan Association of REALTORS®

n Jan Cullivan Portland Metropolitan Association of REALTORS®

n Jim Frick Grants Pass Association of REALTORS®

n Lester Friedman Central Oregon Association of REALTORS®

n Tony Giardina Portland Metropolitan Association of REALTORS®

n Marty Justus Malheur County Board of REALTORS®

n Joanne McKee Central Oregon Association of REALTORS®

n Debbie McMillan Salem Association of REALTORS®

n Don Meyer Salem Association of REALTORS®

n Rawlin Westover Springfield Board of REALTORS®

Government Affairs Key Committeen Amy Graham, Chair Lincoln County Board of REALTORS®

n Don Robertson, Vice-Chair Santiam Board of REALTORS®

n Jaynee Beck Central Oregon Association of REALTORS®

n Bill Bushlen Wallowa County Board of REALTORS®

n Beth Caster Yamhill County Association of REALTORS®

n Sue Curths Salem Association of REALTORS®

n George Grabenhorst Salem Association of REALTORS®

n Joann Hansen Coos County Board of REALTORS®

n Vikki Breese-Iverson Central Oregon Association of REALTORS®

n Mark Meek Portland Metropolitan Association of REALTORS®

n Rich Raynor Douglas County Association of REALTORS®

n Randy Shaw Klamath County Association of REALTORS®

n Lori Tydeman Portland Metropolitan Association of REALTORS®

n Jerry Warren Klamath County Association of REALTORS®

n Debbie Weaver Willamette Association of REALTORS®

Oregon REALTORS® Public Policy Team

Shaun JillionsChief Lobbyist

[email protected]

Paul RaineyDirector of Public Policy

[email protected]

Michael Van DykeLegislative Policy Director

[email protected]

Diana LenzAdministrative Assistant

[email protected]

2013 Legislative Report 3Protecting the American Dream

Dear REALTOR®,

The 2013 Legislative Session proved to be a challenging yet successful session for the real estate

industry and members of the Oregon Association of REALTORS®. While the make-up of the

77th Legislative Assembly was in stark contrast to that of the historic 30-30 split of the previous

legislature, the Oregon Association of REALTORS® realized numerous successes and defeated

multiple attacks against Oregon’s housing market due to the collective strength of the Association.

This session, nearly 3,000 bills were introduced for consideration and the Government Affairs Key

Committee identified 384 legislative concepts with a potential impact on business and real estate

taxation, distressed properties and foreclosures, economic development and housing affordability,

land use planning, private property rights and real estate license law.

The Oregon Association of REALTORS® Government Affairs Key Committee put forth a substantial

effort to thoroughly analyze the legislative proposals and to provide insight and expertise into

potential impacts on the real estate industry. Building up to the session, the grassroots strength of

our Association was on display during the past election cycle with the passage of Measure 79 and

certainly influenced efforts to protect Oregon’s housing market during the 2013 Legislative Session.

Amy Graham2012–13 ChairGovernment Affairs Key Committee


BUSINESS, TAX & ECONOMIC DEVELOPMENT

Protecting the Mortgage Interest Deduction & Property Tax Discounts

The Oregon Association of REALTORS® preserved and protected critical homeownership tools including the mortgage interest and property tax deductions and maintained stability in Oregon’s property tax system.

The mortgage interest deduction was continually under attack during the 2013 Legislative Session and efforts to eliminate or limit this deduction were strongly opposed by the Oregon Association of REALTORS®. This valuable tool, which has been helping homeowners since 1913, helps Oregonians realize the dream of homeownership by preserving housing affordability in our communities and neighborhoods. Any changes to the mortgage interest deduction would increase the tax burden on homeowners and take our housing market backwards.

The Oregon Association of REALTORS® successfully stopped the following legislation targeting the mortgage interest deduction: House Bill 2001, House Bill 2456, House Bill 2491, House Bill 2503, House Bill 2959, House Bill 3365, House Bill 3366, House Bill 3367, House Bill 3370, House Bill 3373, House Bill 3374, and Senate Bill 305.

The Association was also successful in defeating efforts to give local counties the ability to eliminate property tax discounts for individuals paying early, which was an attempt to raise revenue and avoid voter approval. A staple in the property tax system is allowing for a discount if a homeowner pays their full property taxes by November 15th of that year, which also benefits local communities relying on revenue coming in early.

This homeownership incentive came under attack through House Bill 3368 and a proposed amendment to House Bill 2480. The Association was able to counter yet another attack and maintain this important homeownership tool.

The Oregon Association of REALTORS® also preserved the predictability of Oregon’s voter-approved property tax system and defeated efforts to reset assessed values at the point of sale. These attacks came in the form of: House Joint Resolution 7, House Joint Resolution 8, House Joint Resolution 13, House Joint Resolution 19, House Joint Resolution 20, House Joint Resolution 22, House Joint Resolution 23, House Joint Resolution 24, and Senate Joint Resolution 11.

Point of Sale Energy Audits Defeated

The Oregon Association of REALTORS® stopped mandatory energy audits and septic inspections at the point of sale, saving homeowners money.

Once again there was a legislative proposal to require mandatory energy audits at the point of sale. House Bill 2793 would have required costly energy audits at the point of sale, adding yet another obstacle for Oregonians buying or selling real estate and adding $300 to $500 to closing costs on residential transactions. While the Oregon Association of REALTORS® opposes point of sale mandates, the Association supports voluntary efforts to strengthen energy efficiency within the housing market and real estate industry.

The Association also stopped legislative efforts to mandate septic inspections (House Bill 3172), which was an attempt to place a significant burden on property owners with yet another expense at the point of sale. The Association worked with members of the legislature to amend this bill and instead provide prospective purchasers with a mechanism for obtaining notice through the seller disclosure forms. This solution protects buyers and sellers from incurring what can be a significant cost at the point of sale, while allowing consumers to make a voluntary determination on whether a septic inspection is necessary.

During the session, the Department of Environment Quality (DEQ) announced they were no longer pursuing administrative rules that would charge a reporting fee at the point of sale for septic inspections. This is a direct result of the successful passage of Measure 79. Thanks to your efforts, sellers in Oregon will not be required to pay a fee to the State of Oregon just to have their septic system inspected when they sell their property.

Preserving Like-Kind Exchanges

The Oregon Association of REALTORS® preserved the tax benefits of Like-Kind (1031) Exchanges and supported the continued regulation of 1031 Facilitators.

Like-Kind (1031) Exchanges play an important role in the real estate market for homeowners and investors. House Bill 3433 would have eliminated the tax benefits of this useful tool and taken the real estate market backwards. The Association, along with over 1,000 replies from REALTORS®, was able to convey that this legislation


would be a disincentive to invest in real estate and would result in an enormous blow to the continued economic recovery. Again, it was the voice of the REALTORS® that helped bolster the effort to protect the tax benefits of Like-Kind (1031) Exchanges.

In conjunction with maintaining the tax benefits of Like-Kind (1031) Exchanges, the Association supported the passage of House Bill 3495-Enrolled, which extended the regulations of facilitators for these much needed investment tools. 1031 exchanges are a critical investment tool, but there must be regulations for facilitators to ensure consumer protection.

Flexibility in Financing

The Oregon Association of REALTORS® introduced and passed legislation to help individuals achieve the American Dream when credit is tight.

The Oregon Association of REALTORS® introduced a key piece of legislation in the form of House Bill 2856-Enrolled relating to seller financing. This legislation, which passed unanimously through the legislature, allows an individual to originate up to 3 mortgage loans in a 12-month period on residential properties. The bill provides much needed relief for individuals trying to purchase their homes when credit is tight or on unique properties where conventional financing is difficult to obtain. This is especially true in more rural areas of the state.

The Oregon Association of REALTORS® put a stop to new and impractical disclosure requirements at the point of sale and stopped an attempt to tax residential real estate loans.

House Bill 2527 proposed altering the definition of “consideration” for purposes of a real property transaction. Under the proposed legislation, buyers and sellers would have been required to record any and all concessions made during the sale in the deed (i.e. leaving the fridge, entertainment equipment, appliances, etc.). This hard to enforce burden would have also resulted in inaccurate home values and had a negative effect on the real estate market while compromising the ability of individuals to negotiate in private.

The Oregon Association of REALTORS® also defeated House Bill 3319, which proposed to tax residential real estate loans when the loan amount exceeded the real market value of the real property.

Supporting the Needs of Oregon Businesses

The Oregon Association of REALTORS® helped maintain business incentives and supported economic development by stopping prevailing wage requirements and also worked to clarify and protect employers relating to workers compensation laws.

The REALTORS® were successful in helping to stop House Bills 2675 and 2677. These two legislative concepts would have offset important tax incentives provided to businesses looking to build and expand in enterprise zones by requiring they pay prevailing wages. These tax incentives are critical to economic development and encouraging companies to not only come to Oregon, but also stay in Oregon and expand. Additionally, Senate Bill 243 was defeated by a coalition of advocates, which would have required real property owned or controlled by ports to be subject to prevailing wage law.

Furthermore, in response to a recent Supreme Court case, the Association worked alongside a broad coalition to clarify and protect employers working in limited liability companies and partnerships from not having the exclusive remedy protection in workers’ compensation suits. Senate Bill 678-Enrolled extends the exclusive remedy protection in workers’ compensation suits, garnering widespread support throughout the legislature, and passed unanimously out of both chambers.

Protecting Taxpayers

The Oregon Association of REALTORS® helped stop attempts to modify vote requirements for revenue raising legislation and ensured the continued need for bi-partisan support on such legislation.

The requirement of a 3/5th vote on all revenue raising legislation is an important aspect of the legislative process and helps to ensure bi-partisan support of such bills. House Joint Resolution 10 proposed that all revenue-raising bills pass with a simple majority, while House Joint Resolution 14 proposed a simple majority when bills sought to repeal or suspend the operation of tax expenditures, such as the mortgage interest deduction. Both failed pieces of legislation would have removed the bi-partisan safeguard that often plays a pivotal role in legislation passing or failing.


LAND USE & NATURAL RESOURCES

Strengthening Job Creation & Economic Growth

The Oregon Association of REALTORS® supported the push for more industrial ready sites and teamed with industry allies to ensure Oregon has prime land available for companies looking to relocate, expand, or startup in Oregon.

Senate Bills 246 and 253 introduced the Oregon Industrial Site Readiness Program Fund and the Oregon Industrial Site Readiness Assessment Program Fund. These bills establish two competitive grant programs which help to fund due diligence assessments for industrial lands and provide funds to public entities to help develop and create an inventory of industrial land sites. In order to attract and keep more businesses in Oregon, it’s critical that there be shovel-ready industrial sites.

In the final days of the legislative session, the Oregon Association of REALTORS® was successful in securing an

additional $116,000 through House Bill 5008 to support

the efforts in the three counties involved in the Southern

Oregon Regional Planning Pilot Program enacted through

executive order by Governor Kitzhaber to strengthen and

promote regional flexibility in Oregon’s land use system.

Protecting Private Property Rights

The Oregon Association of REALTORS® protected private

property rights by stopping the unnecessary designation

of scenic waterways in Oregon.

Senate Bill 401 would have designated various streams,

creeks, and waterways throughout Oregon as scenic

waterways. This legislation would have infringed on

homeowners’ property rights who have bordering property

to these newly designated scenic waterways. Through

defeating this legislation, the Association was able to

preserve property rights along these designated areas.

Oregon REALTORS® with State Representative Deborah Boone

REALTORS® Protecting the Dream of Homeownership at the State Capitol

P R O T E C T I N G T H E

AMERICAN DREAM


HOUSING & CONSUMER PROTECTION

Preventing Barriers to Housing Affordability

The Oregon Association of REALTORS® preserved the property manager exemption for routine maintenance.

House Bill 2524-Enrolled originally would have removed the current exemption from contracting licensure that real estate licensees who manage property (or their employees) use to perform maintenance on properties that they manage. The Association was able to successfully work with the chief sponsor of the bill to clarify the intent of the existing statute while preserving this important exception. It is absolutely necessary for real estate licensees who manage property or their employees to be able to perform routine maintenance on those properties.

The Oregon Association of REALTORS® stopped unnecessary burdens on sellers of real property and stopped efforts to implement inclusionary zoning in Oregon.

House Bill 3299 would have amended the seller’s property disclosure form to include the requirement that the seller of real property disclose whether the property was located within one mile of land included in the inventory of significant mineral or aggregate resources. This amendment to the seller’s property disclosure would have created an impractical burden on homeowners as they try to sell their homes and impeded the buying and selling of real estate.

Additionally, the Association defeated House Bill 2890 and Senate Bill 475. These concepts, referred to as inclusionary zoning, would have created the ability for local governments to require builders or developers to sell residential housing at a set price or establish unnecessary requirements or conditions on a development. Allowing either of these legislative concepts to pass would have resulted in increased home prices and yet another obstacle to homeownership. The Association, along with its coalition partners, was able to stop these bills and avoid a burden to the real estate industry.

Foreclosure Mediation

The Oregon Association of REALTORS® supported the expansion of the foreclosure mediation program

and efforts to enhance the state’s Loan Refinancing Assistance Pilot Project.

Senate Bill 558-Enrolled expanded the foreclosure mediation program to now allow mediation in judicial foreclosures. A program that was brought into law in the previous session was initially available only in non-judicial foreclosures. The uncertainty surrounding the Mortgage Electronic Registry (MERS) Supreme Court Case resulted in an overload of foreclosure cases going through judicial foreclosure and thus a little used mediation program. Extending the mediation program to judicial foreclosures will give thousands of homeowners the opportunity to stay in their homes while also bringing consistency to the judicial and non-judicial foreclosure processes. House Bill 2662-Enrolled strengthens local government’s ability to remedy neglect of vacant properties and maintain housing values in local communities.

The Association supported successful efforts with the passage of House Bill 3389-Enrolled that will prohibit a beneficiary from requiring a non-profit purchaser in a short sale to sign an arm’s length affidavit, promising not to sell or rent back to the original owner of the home. This allows financial institutions to voluntarily participate in the state’s successful pilot project designed to help Oregonians facing foreclosure stay in their homes in Crook, Deschutes, Jackson, Jefferson, and Josephine Counties.

Document & Recording Fees

The Oregon Association of REALTORS® stopped unpredictable increases in document recording fees.

The Association was successful in stopping an increase in recording fees for counties, which does not have a connection to housing, proposed by House Bill 2869. This legislation would have allowed counties to increase recording fees without a cap, creating a lack of predictability and the potential for signif icant cost increases for Oregonians recording real property. The Association also ensured a $5 increase through House Bill 2417-Enrolled was dedicated to housing for veterans and that current funding within the program was being spent eff iciently.


What is RPAC?Being involved in RPAC is an investment. An investment in your industry, your business, and your bottom line. RPAC—the REALTORS® Political Action Committee—is the only organization in the country solely devoted to protecting REALTOR® interests at the local, state, and federal level. RPAC actively educates our elected officials about legislative issues that impact your business most, and supports the election efforts of pro-REALTOR® candidates. RPAC is built upon the financial investment of REALTORS® dedicated to preserving the future of the real estate industry.

RPAC Benefits Your Clients and You

RPAC advocates on issues critical to homeowners and

REALTORS®: mortgage interest deduction, real estate tax

treatment, land use, and flood insurance.

RPAC Protects Your Business and Your Clients

As a result of past RPAC investments, REALTORS® have

defended against these attacks on your clients and your

business. Your RPAC investment ensures our continued

success of protecting Oregon’s housing market.

Hall of Fame$25,000 Cumulative Lifetime Investments

n John Baker Central Oregon Assoc. of REALTORS®

n Carol Dozois Eugene Assoc. of REALTORS®

n Rick Harris Rogue Valley Assoc. of REALTORS®

n David Hemenway Cottage Grove Board of REALTORS®

n Pat Kaplan Portland Metropolitan Assoc. of

REALTORS®

Major Investor, Sterling R —$1,000 RPAC Investment

n Vicki Arnold East Metropolitan Assoc. of

REALTORS®

n John Baker Central Oregon Assoc. of REALTORS®

n Stacey Boals Rogue Valley Assoc. of REALTORS®

n Bill Bushlen Wallowa County Board of REALTORS®

n Beth Caster Yamhill County Assoc. of REALTORS®

n Amy Graham Lincoln County Board of REALTORS®

n Myra Girod Central Oregon Assoc. of REALTORS®

n Joann Hansen Coos County Board of REALTORS®

n Kerri Hartnett Portland Metropolitan Assoc. of

REALTORS®

n John Hoops Eugene Assoc. of REALTORS®

n Shaun Jillions Oregon Assoc. of REALTORS®

n Lynn Johns Central Oregon Assoc. of REALTORS®

n Art Kegler Columbia Basin Board of REALTORS®

n Michael Kozak Central Oregon Assoc. of REALTORS®

n Debi Laue Portland Metropolitan Assoc. of

REALTORS®

n Krista Laulainen Rogue Valley Assoc. of REALTORS®

n Scott Lewis Rogue Valley Assoc. of REALTORS®

n Donald Livingood Rogue Valley Assoc. of REALTORS®

n Robert McClung Central Oregon Assoc. of REALTORS®

n Joanne McKee Central Oregon Assoc. of REALTORS®

n Colin Mullane Rogue Valley Assoc. of REALTORS®

n Barbara Myers Central Oregon Assoc. of REALTORS®

n George Perkins East Metropolitan Assoc. of

REALTORS®

n Nancy Perkins East Metropolitan Assoc. of

REALTORS®

n Debbie Price East Metropolitan Assoc. of

REALTORS®

n Kathy Querin Portland Metropolitan Assoc. of

REALTORS®

n Paul Rainey Oregon Assoc. of REALTORS®

n Kevin Simrin Eugene Assoc. of REALTORS®

n Steve Smiley Klamath County Assoc. of REALTORS®

n Jeremy Starr Eugene Assoc. of REALTORS®

n Steve Strode Portland Metropolitan Assoc. of

REALTORS®

n Nanette Wimmers Mid-Columbia Assoc. of REALTORS®

n Bernard Young Rogue Valley Assoc. of REALTORS®

n Lantes Zoeller Willamette Assoc. of REALTORS®

n John Zupan Rogue Valley Assoc. of REALTORS®

Oregon Association of REALTORS® 2013 RPAC Major Investors

Major Investor, Golden R$5,000 Initial RPAC Investment & $2,000 Sustaining

n David Hemenway Cottage Grove Board of REALTORS®

Presidents Circle, Sterling R$1,000 RPAC Investment & $2,000 President’s Circle Investment

n Alan Mehrwein Portland Metropolitan Assoc. of

REALTORS®

n Jenny Pakula Oregon Assoc. of REALTORS®

Presidents Circle, Golden R$4,000 Initial RPAC Investment, $2,000 President’s Circle Investment, & $1,000 Sustaining

n Carol Dozois Eugene Assoc. of REALTORS®

n Rick Harris Rogue Valley Assoc. of REALTORS®

n Pat Kaplan Portland Metropolitan Assoc. of

REALTORS®

n John Wallace Oregon Assoc. of REALTORS®

Presidents Circle, Crystal R$2,000 Initial RPAC Investment, $2,000 President’s Circle Investment, & $1,000 Sustaining

n Debra Gisriel Klamath County Assoc. of

REALTORS®

n Byron Hendricks Salem Assoc. of REALTORS®

n Eva Sanders Portland Metropolitan Assoc. of

REALTORS®

Please invest in RPAC today. Go to: www.OregonRPAC.comIf you don’t wish to give online please make checks payable to: Oregon REALTOR® PAC • PO Box 351 • Salem, OR 97308

Support RPAC—REALTORS® Political Action Committee

Documents

2013 Legislative Report