Oregon Realtors ® Advocacy What It Means To You

Dated: 07/08/2017

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Realtors during this session alone advocated for many bills that affect home ownership. Most notably HB 2006 Mortgage Interest Deduction Died in committee and HB  2004-B Rent Control died on the senate Presidents desk without enough votes to pass.  We will continue to fight for Home Ownership rights. 

First Time Home Buyer Savings Accounts, died in committee 
OAR Position: Support

Oregon is facing an affordable housing crisis. The housing market is suffering because homes are becoming increasingly expensive and it takes too long for many young people and renters to save enough money for a down payment on a home. High rents, student loan payments and wages that don’t keep up with the cost of living are tough obstacles to overcome.

That’s why OAR pursued the Oregon First-Time Homebuyers Savings Program (HB2996 and SB849) – a new idea to help prospective home buyers start saving for their first home.

Unfortunately, despite being well received by a bipartisan group of legislators, neither bill made it to the Governor’s desk for signature. The politics of housing policies caused considerable collateral damage. We will re-introduce the concept in the 2018 short session.

SB 849 – Passed Senate Business and Transportation, died in Senate Revenue 
HB 2996 – Passed House Human Services and Housing, died in House Revenue.
 
HB 3357 – Doc Recording Fee, died in Ways and Means 
OAR Position: Reservations as Introduced

FAs introduced, the bill would have doubled the fee charged and collected by county clerks for real estate document recordings. With housing affordability issues on the forefront of everyone’s mind, this session wasn’t the right time to advance this policy and the bill died in committee. Existing statute directs this fee to be credited to the County Assessment and Taxation Fund which is then distributed as follows: 76% to the General Housing Account, 10% to the Emergency Housing Account, and 14% to the Home Ownership Assistance.

Sent to Ways and Means on April 20, died in committee.
 
HB 2004-B – Rent Control, died on Senate President’s Desk 
OAR Position: Oppose

In the midst of a housing crisis in many parts of the state, HB 2004-B, was intended to address increasing rents and limited supply of rental units. Although well intentioned, the bill presented numerous unintended consequences that would have made the situation worse. Rather than focusing on increasing supply of housing, the bill would have made it more difficult for existing landlords and would have significantly stifled the development of new multifamily units.

While the bill’s allowance for San Francisco style rent control provisions were removed in the Senate, the bill lacked the votes for passage from the Senate.
 
HB 5037 – Oregon Real Estate Agency Budget & SB 68 – Broker Licensing Fee Increase, both bills passed and were signed by the Governor; HB 5037 on May 15, 2017, Effective July 1, 2017; SB 68 on 5-21, effective Jan. 1, 2018. 
OAR Position: Support

The Oregon Real Estate Agency is funded entirely with fees paid for professional licenses by brokers, principal brokers and property managers and from publication fees. The Real Estate Agency last instituted a comprehensive fee increase in 1997. The user- specific fees were increased to cover inflationary costs and staff time associated with the provision of services. The Real Estate Agency collaborated with stakeholders over the course of the 2015-17 biennium to gather input, develop the new fee schedule and to inform licensees about the timing and reasons behind the fee proposal.

Senate Bill 68 (2017) increases fees imposed by the Oregon Real Estate Agency and established new fees. The approved fee increases in Senate Bill 68 (2017) are for:  

  • License Applications from $230 to $300 

  • Active License Renewal from $230 to $300 

  • Inactive License Renewal from $110 to $150 

  • Late Renewal Fee from $30 to $150 

  • Reactivation Fee from $75 to $150 

  • Business Name Registration Fee from $230 to $300 

  • Branch Office Registration Fee from $10 to $50 

  • Escrow Renewal Fee from $300 to $450 

  • Escrow Branch Office Renewal from $150 to $225 

  • Temporary License Fee from $40 to $150 

  • Temporary License Extension Fee from $40 to $150 

  • Registered Business Name Renewal Fee established at $50 

  • Registered Business Name Change Fee established at $300 

  • Continuing Education Provider Application established at $300  

  • Escrow Application Fee from $300 to $450  

  • Continuing Education Provider Renewal established at $50  

  • Escrow Branch Office Application from $150 to $225

 
SB 67 – Agency ORS Chapter 696 Rewrite, passed, signed by Governor on June 6, 2017, effective Jan. 1, 2018 
OAR Position: Support

SB 67 made technical fixes to Chapter 696, including updates to language and references and reorganization of some material for readability.

The measure also removed the requirement that a principal real estate broker or real estate broker create a client trust account when they act as a courier by taking a check made out to the seller or lessor from a purchaser or lessee for the purpose of conveying same to the seller or lessor.

This measure also provided that a licensed real estate property manager may not solicit a potential tenant unless they have a written property management agreement with the lessor.

The technical fixes in this concept are the result of a comprehensive review of ORS chapter 696 made to ensure alignment of the language, references and processes described in the chapter.

Put simply, the bill synchronizes terminology and references within Chapter 696, improves readability, and makes technical fixes to issues discovered in the course of applying existing law and through communication with the regulated community.

 
HB 3099 – Principal Broker Continuing Education, died in committee 
OAR Position: Support

Introduced late in session, HB 3099 was the product of the “Raise-the-bar” Presidential Workgroup at OAR. Designed to provide principal brokers with specific continuing education to increase professionalism by providing greater guidance to brokers they supervise, the bill was introduced too late in the process to advance.

The concept will be re-introduced in the 2018 short session.

 
HB 2006 – Mortgage Interest Deduction (HB 3298, HB 2060), died in committee 
OAR Position: Oppose

Since its inception over a century ago, the U.S. income tax system has recognized the positive effects of homeownership for families, communities, and society by rewarding home buyers with tax benefits. The result has been a home-owning society that is, in many respects, the envy of the world.

Since the State of Oregon has such a reliance on income tax1 the mortgage interest deduction is tied to the federal code. The code allows an individual to deduct the interest payments on no more than $500,000 of total mortgage debt or $1,000,000 of indebtedness for joint filers.

House Bill 2006 would have eliminated the MID for individuals making $100,000 or more ($200,000 for joint filers). HB 2006 would have also capped the amount of interest that could be deducted for those individuals making under $100,000 ($200,000 for joint filers) at $15,000 on their primary residence. In addition, the bill would have eliminated the MID for second homes.

A deduction of interest helps middle class families when they need it most – at the beginning of their home ownership experience when payments of interest on a loan is greatest. The proposed tax credit was an arbitrary value with no relation to a home’s cost and interest rates on a home loan.

While married couples make up the majority of first-time homebuyers, singe females make the second largest percentage of first-time buyers. They would have been hit particularly hard by the arbitrary income limitations imposed by the bill.

The bill would have also exacerbated the current affordable housing challenges facing our state by making it even more difficult for many families to qualify to purchase homes in places like Portland and close-in suburbs.

While HB 2006 died in committee, the context of the bill was threatened in additional legislation. HB 3298 and HB 2060 were scheduled for work sessions in House Revenue at later dates, after HB 2006 had died in committee. Both bills would have impacted homeownership in negative ways. And, most disturbingly, all of the bills would have been able to advance with simple majority votes, rather than the 3/5 majority needed for bills that increase taxes.

186.9% of the state general fund budget is sourced from personal income taxes (2016-17 Oregon Bluebook).

 
HB 2771 – Eliminating the Deductibility of Property Taxes, died in committee 
OAR Position: Oppose

House Bill 2771 would have phased out the itemized deduction for real property taxes for incomes between $50,000 and $125,000 for single taxpayers and between $100,000 and $250,000 for joint taxpayers. In addition, the bill would have eliminated the ability to deduct property taxes for single tax payers making $125,000 or joint tax payers making $250,000 or more in a year.

When itemized deductions exceed the standard deduction, Oregon taxpayers have the option to itemize deductions. Despite the inequities in Oregon’s property tax system, it provides predictability for Oregon homeowners. We understand that property tax reform is a difficult task, but we need property tax reform that still provides predictability. A bill like HB 2771 distracts from the larger issues that need attention.

There is little connection between property taxes paid, a home’s real market value and a taxpayer’s ability to pay. HB 2771 would have exacerbated the inequities in the system.

 
HJM 3 – Appraisers: Passed, signed by presiding officers May 18, 2017 & May 22, 2017 and was filed with the Secretary of State on May 22, 2017. 
OAR Position: Support

Under this House Joint Memorial, the Oregon Legislature highlighted the issue surrounding appraisals in the State of Oregon. The memorial urges Congress to instruct the Appraiser Qualifications Board to develop a temporary standard or accreditation to provide immediate relief from the shortage of real estate appraisal professionals by highlighting the following

HJM 3 supports changes to the minimum appraiser qualifications criteria proposed by the Appraiser Qualifications Board of the Appraisal Foundation, including development of an alternative track for progressing from one State Licensed Appraiser to another.

  • In 2016, more than 62 percent of appraisers were 51 years of age or older, 24 percent were between 36 and 50 years of age and only 13 percent were 35 years of age or younger 

  • The present criteria result in an infeasible financial burden, as wages earned by appraisers are not high enough to induce an individual to enter the profession after incurring the costs of a four-year college degree, especially when the degree must be accompanied by a multiple year, and often unpaid, internship. 

  • The shortage of appraisers affects rural Oregonians in greater numbers than those in urban areas.

 
HB 2189-A – Appraisers Record Retention (Statute of Repose), signed by Governor on May 25, 2017
OAR Position: Support

Real estate appraisers are subject to a recordkeeping rule through our federal regulatory document, the Uniform Standards of Professional Appraisal Practice. By that rule, appraisers must retain work files for five years after the completion of an appraisal project in most circumstances.

HB 2189 implemented a common-sense solution in marrying liability on that activity to the federal Record Keeping Rule. The bill was changed in the Senate by a friendly amendment to match real estate agents’ limit of liability at six years so the limit is seamless for the public.

The limitation in liability for appraisers would not apply to cases of fraud and misrepresentation, for which the 2-year discovery rule in ORS 12.110 would continue to apply. Most appraisers are small businesses and a lawsuit, or the threat of a lawsuit, can be devastating. We believe that the provisions of HB 2189 will bring certainty to appraisers regarding how long after performing an appraisal they may be sued, and will allow appraisers to adequately manage the risks associated with providing those services.

 
HB 2501 – Appraiser Shortage, died in committee 
OAR Position: Support

House Bill 2501 directed the Appraiser Certification and Licensure Board to establish rates of pay for independent contractor appraisers. As a benefit to appraisers, it would have required appraisal management companies to compensate independent contractor appraisers at rates set by the Board. In addition, it would have required appraiser management company to pay appraiser within 31 days, as opposed to 45 days, or according to an agreed upon schedule.

The bill was introduced after several legislators were contacted by constituents telling stories of highly inflated costs for standard appraisals, particularly in the more rural parts of the state.

 
HB 2748 – Wood Smoke Policy & Funding, signed by Governor on May 23, 2017, effective date July 1, 2017 (DEQ budget not yet signed by Governor) 
OAR Position: Support

Following a lengthy interim work group on the topic of wood burning smoke, House Bill 2748 was introduced during the 2017 session and contained many recommendations as a result of that work. After considerable public discussion, the bill was eventually amended to allow for funding from both private and public sources, expands the allowable use of funding to replace or remove uncertified stoves, and requires the Oregon Department of Environmental Quality (DEQ) to prioritize grants to areas that are currently in nonattainment or areas that are in substantial risk of being designated as a nonattainment area due to particulate matter. The bill passed with broad bi-partisan support through the legislative process before being signed by Governor Brown on June 21st and became effective July 1, 2017.

In an effort to provide funding for the program, the state has invested $250,000 through the DEQ budget to kick-start the grant program. In a budget year such as this, an initial investment of that magnitude is a success for the program. In the end, the DEQ budget passed through both chambers on a close margin before heading to the Governor’s desk for signature.

 
SB 812 – Septic Repair/Replacement Policy & Funding, signed by Governor June 6, 2017, effective June 6, 2017 (DEQ budget not yet signed by Governor) 
OAR Position: Support

Septic system repair and replacement has been a priority of the association for multiple years now. Having previously worked directly with DEQ to provide education for our membership, supporting this low interest loan septic program policy has been a priority over the past few sessions. Following the successful passage of the original septic system repair and replacement program and funding during the 2016 session, it was discovered that technical fixes were necessary in 2017. SB 812 provided those technical fixes, which include: clarifying that an applicant for a low interest loan need not borrow the full amount of the project, clarifies the requirement that the homeowner or business connect to a sewer system if available, and allows for funds to be used for a regional evaluation of a community septic system. The bill passed through the legislature unanimously with the members present and was signed by the Governor on June 16, 2017.

In addition to the policy fixes to the program, there was an additional funding request to help sustain and expand this incredibly successful program. The request was $1.5 million of state investment in the program after receiving $250,000 during the previous session. While we faced a $1.8 billion budget hole to begin the session, we felt this was a critical program and advocated for the full request. In the end, the full $1.5 million ($200,000 of which is for DEQ administration) was allocated through the DEQ budget for the septic program and marks a substantial investment in a successful and important program. In the end, the DEQ budget passed through both chambers on a close margin before heading to the Governor’s desk for signature.

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