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2017 Legislative Update #1
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| 2017 SESSION OF GENERAL ASSEMBLY BRINGS LOTS OF NEW FACES
There are 21 new legislators joining the forces of veteran House and Senate members at the Statehouse this year. Your IAR Government Affairs team will be busy ensuring REALTOR® issues are known and understood by the new “freshmen.” Our members’ grass-roots connections to their lawmakers are more important than ever. Newly elected Governor Eric Holcomb is no stranger to the REALTOR® family. As an aide to former Governor Mitch Daniels, he was instrumental in working with REALTORS® to enact property tax caps and the Major Moves highway funding initiative. Holcomb received support from IAR’s RPAC Trustees in his decisive victory over Democrat John Gregg. He was joined at a major economic development plan announcement this fall by then-IAR President, Nancy Smith. Although a first-time elected official, Holcomb is well-versed in REALTOR® issues and has pledged to work with the real estate industry on issues that will improve communities and quality of life across the state.
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| INDIANA PROFESSIONAL LICENSING AGENCY APPOINTMENT Governor Holcomb has announced the reappointment of IPLA Director Deb Frye to head the agency that oversees matters related to our members’ real estate licenses. Director Frye has served REALTORS® well as the head of this important agency and we are pleased to see her staying on board. She has served on staff at the IPLA as Deputy Director, Chief of Staff and Compliance Director. She also served as a Director of Fire Code Enforcement at the Indiana Department of Homeland Security. Continuity at IPLA is a positive outcome for licensees.
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| STATE BUDGET BILL CONTAINS REALTOR® PRIORITIES
House Bill 1001 (Authored by Rep. Tim Brown): This year the Indiana General Assembly undertakes its single Constitutional duty--the biennial task of crafting a $15 billion budget for the State of Indiana. Fiscal leaders from both the Senate and the House of Representatives will spend countless hours meeting with state agencies and various stakeholders about their future financial needs. Newly elected Governor Eric Holcomb (R) released a list of his legislative priorities earlier in the month. REALTORS® are pleased that many of his priorities focus on improving the quality of life for Hoosiers and making our state a more attractive destination to live and work. The expansion of the South Shore rail line, which runs from northern Indiana to Chicago, and increased funding to the Regional Cities initiatives are two important provisions for REALTORS® included in the governor’s budget. Transportation, infrastructure and economic development are quality of life issues that can improve communities and home values. The REALTOR® voice will be important as these priorities are debated and competition for limited state funds heats up.
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| SALES TAX ON SERVICES House Resolution 3 (Authored by Rep. Tim Brown) REALTORS® have long opposed the expansion of the sales tax base to include services. This is an issue that is not going away. Rep. Brown, who is Chairman of the Ways & Means Committee, drafted a bill last session that sought to expand the sales tax base to services, including commissions of REALTORS®. IAR opposed the bill and it was ultimately withdrawn. It remains a top priority of the Indiana Association of REALTORS®. This summer, Government Affairs staff met with various professionals who would also be affected by this tax expansion, as well as Chairman Brown. Chairman Brown has pledged not to introduce similar legislation during the 2017 session. However, he still feels strongly about studying this topic. This resolution asks the Legislative Council to assign this topic to an interim committee for further study. If this resolution is passed and assigned to a study committee, IAR staff will continue to educate legislators on the consequences for our industry. In the meantime, staff is seeking to commission an independent study by researchers on this topic.
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| LONG-TERM FUNDING FOR ROADS AND BRIDGES House Bill 1002 (Authored by Rep. Ed Soliday) For the second year in a row, the Indiana General Assembly is poised to take on the issue of improving Indiana’s roads and bridges. Last year, the House and Senate passed a measure that would address the Indiana Department of Transportation’s immediate fiscal shortfalls. This year, both bodies plan to take an indepth look at long-term infrastructure solutions and intend on modernizing the origins of transportation funding. House Bill 1002 contains the House Republican plan. It proposes to increase the gas tax by 10 cents, which has not been increased since 2003. Additionally, the bill will seek to annually index fuel taxes; transfer, over three fiscal years, the remaining 4.5 cents of the sales tax on gas to the State Highway Fund; and charge the Indiana Department of Transportation with studying tolling. REALTORS® know quality roads and bridges lead to quality communities and support a long-term solution to our state’s road funding needs.
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| “GENTRIFICATION” TAX RELIEF House Bill 1056 (Authored by Rep. Cherrish Pryor) This bill would give local municipalities the authority to create a neighborhood enhancement property tax relief program. Under this program, long-time homestead owners whose property tax bills had grown substantially due to the revitalization and rapid growth of home values could be eligible for a property tax deduction. The Government Affairs team has pledged to work with Rep. Pryor to help find a solution that provides relief to a limited class of taxpayers in a specified “hot area” without shifting the tax burden to other homeowners.
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| DISCLOSURE OF ENGINEERED LUMBER House Bill 1124 (Authored by Rep. Tim Wesco) Fire prevention and safety is the No. 1 concern for many homeowners. Although a common and reliable construction material, we have learned from our firefighter friends that engineered lumber also burns more quickly and can be a safety problem for firefighters who must assess burn times at the scenes of structural fires. IAR opposed last year’s bill, which would have required all homeowners to place a sticker in their home stating the presence of engineered lumber in the structure. Our organization believed that this solution placed a steep burden on homeowners to maintain these stickers, which could easily be removed without their knowledge or intent. However, in this version of the bill, the individual applying for a building permit must signify on that document if engineered lumber will be used in their project. That information is then compiled and transmitted to the local fire authorities. We are grateful that various stakeholders in this legislation heard our concerns on behalf of homeowners, and created a solution that works for both firefighters and homeowners alike.
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| REGULATION OF SHORT-TERM RENTALS House Bill 1133 (Authored by Rep. Matthew Lehman): The growing industry of short-term rentals, facilitated through the Internet by corporations like Airbnb, is a trending topic for the National Association of REALTORS®, as well as many state associations. Many states and municipalities are seeking to ban or limit a property owner’s ability to rent their property for short terms. The hospitality industry has also sought restrictions against short-term rentals, which are viewed as competition by traditional hotels and motels. Consumers are responding well to markets with good short-term options and REALTORS® often have a hand in renting, owning and/or managing these properties. This bill would prohibit local units from enacting ordinances that would ban short-term rentals. IAR supports the protection of the private property right that this bill would help maintain.
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| HANDS FREE WHILE DRIVING House Bill 1255 (Authored by Rep. Milo Smith): For the past two sessions, legislators have introduced bills to prohibit the use of telecommunication devices while operating a vehicle. The bills, affectionately referred to as the “texting while driving” bills, both died during previous sessions. This year, Rep. Smith seeks to require Indiana drivers to use a hands-free device or voice-operated technology to place or receive a phone call. Indiana REALTORS® spend numerous hours on the road and often conduct business while en route to different residential and commercial properties, so a reasonable “hands-free” solution could provide additional REALTOR® safety on the roads.
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INDIANA REAL ESTATE COMMISSION APPOINTMENTS House Bill 1308 (Authored by Rep. Denny Zent): This bill contains the legislative requests for the Indiana Professional Licensing Agency. It also removes the Congressional district designation from the Indiana Real Estate Commission’s membership requirements. If passed, this bill would no longer require members to represent specific Congressional districts, but simply reside anywhere in the state. IAR does not support removing this requirement at this time. We will be working with this agency to ensure all corners of the state are properly represented on this very important board.
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REVIEW OF PROFESSIONAL LICENSES Senate Bill 114 (Authored by Sen. Dennis Kruse) In recent years, there has been growing support from policymakers to eliminate entry barriers into various Indiana professions. As part of this movement, the Professional Licensing Agency created the Jobs Creation Committee to audit all the licensed professions to determine if each warranted licensing in this state. The Indiana Association of REALTORS® represented the real estate profession during numerous meetings, advocating for licensing and detailing to committee members how licensing had improved the quality of our industry. IAR staff and leadership used this opportunity to tout the successful effort to streamline and modernize real estate license law. After years of auditing and no results from this committee, Sen. Kruse is asking the Senate and House to eliminate this unnecessary committee.
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LAND BANKS Senate Bill 310 (Authored by Sen. Brandt Hershman): This bill would allow third class cities to create land banks to manage and improve the marketability of dilapidated properties. Currently, only counties, consolidated cities and second class cities have the ability to establish land banks in their municipalities. This would provide local officials in third class cities another tool to deal with “problem” properties, and hopefully return these properties to the tax rolls. There are 94 third class cities who could take advantage of this new tool.
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ELIMINATION OF STATE MORTGAGE DEDUCTION Senate Bill 415 (Authored by Sen. Travis Holdman): The filing of the Indiana mortgage deduction is burdensome to local officials, and this bill seeks to repeal the state mortgage deduction after Jan. 1, 2018 and raise the homestead deduction to the lesser of: 1) 65% of assessed value of the homestead, or 2) $48,000, in the case of a homestead for which the mortgage deduction was not claimed for the same assessment date. IAR staff members have been told that this bureaucratic change will help local officials, although the fiscal report on this bill indicates there will be revenue loss for local units. We have concern that this will result in property tax increases for many homeowners.
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EVICTIONS Senate Bill 395 (Authored by Sen. Mike Delph): This bill seeks to make the intentional omission of a previous eviction on a rental application a Class C misdemeanor. The maximum fine for a Class C misdemeanor is $500, and punishable by up to 60 days in jail. Although IAR generally supports full disclosure bills, the penalties in this bill are very steep. In addition, there is concern that the bill could prevent landlords from entering into leases with deceptive tenants by dissuading those people from acting in a way in which they could be held criminally liable.
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