oregon A SSOCIATION OF realtors ®
he 2009 legislative session presented many opportunities and challenges for the Oregon REALTORS® and the state of Oregon as a whole. Faced with the most disastrous economic climate of our lifetimes, lawmakers in Salem were forced to close budget gaps in previously enacted budgets and to make difficult decisions for the future of our state. The elections of 2008 had a profound impact on the state and provided a very different tone for Salem, as a single party enjoyed super majorities in both chambers of the Legislative Assembly as well as in the Governor’s office. When the dust settled, the Oregon Association of REALTORS® had what is widely viewed as one of the most successful sessions for a business group, as the entire Oregon REALTORS® legislative agenda was enacted into law. In addition, numerous harmful legislative proposals were stopped or significantly altered. These successes were the direct result of a collective effort, perhaps best demonstrated by the almost 600 REALTORS® from across the state who put the political grassroots strength of our association on display in Salem at REALTOR® Day at the Capitol. Likewise, when like-kind (1031) exchanges were threatened, over 6,000 emails were sent to the House of
Representatives by Oregon REALTORS® in a matter of hours. The efforts of the Association were bolstered significantly by legislators from both major political parties, due in no small part to RPAC’s commitment to support those candidates supportive of REALTOR® values and core issues. Approximately 2,900 individual bills were introduced for consideration by the legislature and the Oregon REALTORS® identified 455 bills with a potential impact on real estate license law, land use planning, business and real estate taxation, mortgage lending practices, economic development and housing affordability and attainability. The Oregon REALTORS® Government Affairs Key Committee, led by Chair Lori Tydeman, worked closely with the Public Policy staff, and put forth substantial effort to thoroughly analyze the legislative proposals and to provide invaluable insight and expertise into potential impacts on the real estate industry. It was only through the collective strength of our association that the Oregon REALTORS® weathered the very stormy waters of the 75th Legislative Assembly.
oregon A SSOC IATION OF rea ltors ®
he Oregon REALTORS® strengthened professionalism in the real estate industry by improving the education system for Oregon real estate licensees.
The Oregon REALTORS® provided enhanced protections and clarity for Oregon consumers in completing the final phase of all-broker licensing.
In enacting SB 640B, introduced on behalf of the Oregon REALTORS®, the legislature adopted the recommendations of joint task forces of the Oregon REALTORS® and Oregon Real Estate Agency to improve the education system for real estate licensees. The legislation creates a baseline and modest standard for professionals engaged in the transaction of most Oregonian’s largest personal investment by requiring new real estate licensees to obtain a high school diploma, GED or international equivalent. In addition, SB 640B maintains the existing requirement of 30 hours of continuing education for each two-year renewal period for active real estate licensees, but enhances the quality of the education received by expanding the list of mandatory topics and removing nonessential electives from continuing education credit eligibility.
In enacting HB 2910A, introduced on behalf of the Oregon REALTORS®, the legislature provided increased consumer protection by ensuring that all professional real estate activity is subject to proper oversight. The bill allows professional real estate activity to continue during the unforeseen or temporary absence of a principal broker, by allowing the temporary supervision of the professional real estate activity by a designated broker during the absence.
The bill outlines criteria for course providers and instructors to strengthen accountability and directs the Oregon Real Estate Agency to work with the Oregon REALTORS® and educators in order to develop a comprehensive list of course topics and objectives eligible for continuing education credit. The new, improved continuing education requirements passed through the legislature with near-unanimous support and will take effect on January 1, 2011.
In addition, the legislation completed the final phase of allbroker licensing with the elimination of the sole practitioner designation from Oregon’s licensing laws. Under the language of the bill those real estate licensees operating as sole practitioners on December 31, 2009 will be grandfathered in to principal broker status, without any additional testing requirements or cost. After January 1, 2010, those real estate brokers seeking to operate independently will need to obtain a principal broker’s license in order to do so. Under the bill, Oregon will truly become an “all-broker” state, as the only designations available will be that of broker and principal broker. HB 2910A passed through the legislature unanimously.
he Oregon REALTORS® put a stop to the imposition of new, costly private transfer taxes on the sale of real property.
With the passage of HB 2481B, introduced on behalf of the Oregon REALTORS®, the legislature acted to protect potential buyers from the pitfalls of the imposition of new private taxes or fees on the sale of real estate. This troubling development emanating from California and Texas allows, at its most basic elements, for the imposition of a private transfer tax or fee by a third party, to be collected upon every purchase of a particular property. Much like a government-imposed real estate transfer tax, private transfer fees are typically calculated as a percentage of the sales price, and present significant affordability issues for potential purchasers, especially first-time homebuyers. Private transfer fees also pose a significant hindrance to buyers seeking clear title to property and place a substantial barrier to potential buyers in seeking financing. With the unanimous passage of HB 2481B and signature by the Governor, the imposition of new private transfer fees is now prohibited in the State of Oregon.
he Oregon REALTORS® pushed for the creation of a dedicated funding source for affordable housing.
After 18 months of negotiations with affordable housing advocates, the Oregon REALTORS®, Oregon Bankers Association and the Oregon Home Builders Association actively supported HB 2436, which increased the existing document recording fee by $15. While the bill does represent a nominal increase in housing costs, the benefits of creating a stable, dedicated revenue stream for affordable housing, including downpayment assistance programs, are significant and long overdue in Oregon. The Oregon REALTORS® stopped additional increases to the document recording fee, ensured that competition for mortgage products exists and stopped placing limits on the mortgage interest deduction. Under the agreement surrounding HB 2436, the Oregon REALTORS® received active assistance in opposing any further increase to the document recording fee from affordable housing advocates, which was particularly instrumental in stopping HB 2071, HB 2092, HB 2737, HB 2844 and proposed amendments to HB 2436, all of which would have further increased the fee.
The Oregon REALTORS® stopped the imposition of new real estate transfer taxes, the loss of tax deferral for likekind (1031) exchanges, and a luxury tax on second homes. In effectively stopping SB 396, HB 2473 and HB 3408, the Oregon REALTORS® ensured that the prohibition on local governments from imposing real estate transfer taxes remained solidly in place. There was significant opposition to lifting the preemption on local governments from affordable housing advocates as a condition of the Oregon REALTORS® support for the dedicated revenue source found in HB 2436. With the halting of HB 2696 the Oregon REALTORS® ensured that the invaluable tool of tax deferrals through like-kind (1031) exchanges remains a viable option for real estate investors in Oregon. Finally, the Oregon REALTORS® fought to make sure that a luxury tax, found in the language of HB 3146, was not imposed on the purchase of second homes. Fortunately for all Oregonians, all of these bills were stopped in their tracks.
The Oregon REALTORS® joined a broad coalition to ensure that all mortgage lenders are subject to the same balanced regulation and we were successful in removing detrimental requirements in HB 2188. In addition, the Oregon REALTORS® were successful in keeping HB 3115, which would have phased out the mortgage interest deduction for higher-income Oregonians, from receiving even a public hearing. The Oregon REALTORS® stopped costly mandatory energy audits at the point-of-sale and efforts to create unspecified exceptions to the state building code. In the original version of SB 79 the State Department of Energy sought to impose mandatory energy audits at the point-ofsale for all residential and commercial buildings. The Oregon REALTORS® led the effort to make significant amendments to the bill to ensure that any energy efficiency rating system was voluntary due to the costs associated with mandatory audits, the lack of qualified inspectors and the stigmatization of older properties that such a mandate would create. The Association also was successful in stopping HB 2961 which would have allowed large municipalities to fine developers for not building above the state building code energy standards which already are among the most stringent in the nation.
he Oregon REALTORS® protected economic development in rural Oregon by preserving the ability of local governments to determine the needs of their communities.
The Oregon REALTORS® were at the forefront in ensuring the Oregon’s land use laws recognize regional differences in the state.
In spearheading opposition to HB 2227B, the Oregon REALTORS® ensured that the appointed officials of LCDC were not granted legislative authority to determine whether or not a cap or moratorium should be placed on destination resorts in a particular region or county, rather than allowing the local elected officials to determine the needs of their community. The Association also was successful in stopping SB 430 which would have placed an outright moratorium on all destination resort development in the state.
As a result of intense negotiations, amendments put forth by the Oregon REALTORS®, Oregon Home Builders Association and Oregonians in Action were adopted into the final version of HB 2229 which contained the legislative recommendations of the Big Look Task Force. The bill contains significant improvement to Oregon’s land use system, as it requires LCDC to consider the variation in conditions and needs in different regions of the state in administering the land use system. Equally as important, it allows a single county the opportunity to correct mapping errors made in the acknowledgment of their comprehensive plan and to update the designation of farm and forest lands.
The Oregon REALTORS® also led the charge in opposition to SB 482 which would have required rural property owners to obtain a permit to drill a domestic well, and to HB 2859, which would have implemented permit requirements for domestic wells and effectively eliminated group wells in rural Oregon.
hile the 2009 Legislative Session was deemed primarily a success for Oregon REALTORS® and their clients, it was not without its setbacks. In the final days of the session, and with the state facing record unemployment, the legislature and governor made the unfortunate decision to enact substantial permanent tax increases on businesses and higher-income individuals in the midst of this devastating recession. The Oregon REALTORS® joined a unified business community in opposition to HB 2649 and HB 3405, as the imposition of the corporate minimum tax based on gross receipts, rather than actual profitability, will impose a significant new tax burden on companies that are losing money during this recession and will only exacerbate our economic troubles as a state. The imposition of the highest individual marginal tax rate in the nation primarily affects small businesses, which will further harm our economy.
or egon A S S OCI ATION OF rea ltors ®
Signature gathering efforts are in full swing and if successful, an election to determine the fate of the tax increases will take place on January 26, 2010. Oregon REALTORS® have once again demonstrated their political grassroots strength in collecting and turning in an impressive number of signatures in the referendum effort. The potential repeal of the tax measures poses its own set of challenges, however, as the Oregon Legislature has preordained another “special” session for February of 2010. Our collective strength will once again be put to the test to ensure that the interests and values of Oregon REALTORS® and their clients are protected throughout this interim and beyond. It is only through our continued diligence and collective efforts that the American Dream of homeownership will remain a reality in Oregon.
2009 Legislative Report