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Dear IAR Member,
The first half of the 2020 session of the Indiana General Assembly has come to a close and though we can’t promise as much excitement as J. Lo and Shakira delivered during the half-time show at the Super Bowl, your IAR lobbyists are ready to take the field for the very quick-paced second half.
Remember, this year is referred to as a “short session” since the biennial budget is prepared in odd-numbered years. In fact, the legislature does not technically have ANY constitutional duties during the short session. Despite that, more than 1,200 bills were filed this year. Bills that haven’t passed at least one chamber – House or Senate – by now are considered “dead.” You’ll find below the status of several bills of interest to REALTORS®.
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REALTORS® SWARM STATEHOUSE AT IAR ANNUAL LEGISLATIVE CONFERENCE
With nearly 300 registrants at our annual IAR Legislative Conference this year, it’s safe to say you can’t shake a stick at the Statehouse without hitting a REALTOR® when we trek over from the Hilton to the beautiful limestone neighbor of our beloved REALTOR® Building. Thanks to all who joined us to help our REALTOR® voices be heard as we advocated for sound policy on behalf of homeowners and our REALTOR® members!
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PROFESSIONAL LICENSE PORTABILITY AND PROVISIONAL LICENSES
Two bills still moving through the process that pertain to professional licenses have been substantially improved and amended to meet some of the concerns IAR expressed. House Bill 1008, a priority of the House Republican caucus, seeks to make it easier for professionals licensed in other states to obtain an Indiana license. The bill was amended at our request to give authority to the Indiana Real Estate Commission, and other boards and commissions like it, to decide whether the license requirement of other states are “substantially equivalent” to Indiana’s. Since Indiana requires a test that is specific to Indiana law, we will fight hard to make sure that requirement isn’t eliminated. IAR believes asking out-of-state licensees to have a basic competency in Indiana real estate law is crucial to the integrity of the real estate license!
A second bill, Senate Bill 427, would create a dual licensing pathway for a provisional one-year license for a military spouse. The bill was narrowed from its original form after IAR testimony in committee. It went from applying to any potential license applicant to the narrow group of military spouses. We support an additional amendment that would further narrow applicability of this bill to license categories that already allow for a provisional license which would have the effect of nullifying its impact on REALTORS®, since no such license currently exists for real estate licensees.
Proponents of this legislation believe state license requirements create barriers to entry to those seeking jobs and want to send a message that Indiana is “open for business.” This is a frustrating argument, since the number of real estate licenses is currently up to the same levels we had pre-2008. We will continue to advocate for good ideas to grow our Indiana economy, while fighting to protect the professionalism our industry has worked hard to establish!
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SENATOR MERRITT BILL HELPS ADDRESS COMPLIANCE ISSUE FOR REAL ESTATE BUSINESS ENTITIES
Senate Bill 358 corrects a license law compliance issue that was brought to IAR’s attention this past summer. In an unrelated complaint against an Indiana broker, the Attorney General’s office notified the licensee, who had formed an LLC as a business decision, that Indiana license law allows ONLY the broker company to be an LLC. We understand it is commonplace for brokers, either by their own choice or at the advice of their accountant or attorney, to form an LLC for tax purposes. This bill would allow brokers to form business entities of their choice for the purpose of compensation. It fixes a compliance problem that could be both pesky and costly for agents. It passed the Senate with unanimous approval, a sure sign of bi-partisan support which should greatly improve its chances in the House.
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BILL PROTECTS REALTORS® EXEMPTION FROM DO NOT CALL LIST
A bill enacted last year that was intended to tighten up the state’s “Do Not Call List” inadvertently forced a requirement to register as a “salesperson” for the purposes of that list on several business categories that are currently exempt from the Do Not Call Law, including real estate professionals. REALTORS® fought hard years ago for an exemption to that law and we have fought off several attempts in the past to eliminate that hard-fought exemption. Although the bill last year did not eliminate it, it did add a nonsensical and burdensome registration requirement that we do not believe should apply to real estate licensees. House Bill 1109 corrects last year’s drafting error and restores the code to its original form – a big win for REALTORS®.
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POINT-OF-SALE MANDATES DEAD
House Bill 1154, a bill that would require mandatory testing of wells and septic systems prior to closing, was not given a vote by the House Environmental Affairs Committee due to IAR’s objections. Clean water and failing septic systems are a great concern to homeowners, but the bill, as drafted, would have put the sole burden of compliance on property owners seeking to transfer property. It had the potential to delay closings and scuttle transactions, and there was no plan of action for dealing with failed inspections. IAR prefers a statewide approach that would capture water quality problems and public health issues across the board and not single out the limited number of property transfers, thus unfairly enforcing standards on a limited few. As a rule, IAR opposes all point-of-sale mandates, which have the effect of acting like real estate transfer taxes.
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LAKE MICHIGAN SHORELINE DEBATE OVER FOR NOW
Two bills that sought to address a recent Indiana Supreme Court decision pertaining to the property ownership of land along the Lake Michigan shoreline both failed to advance out of their respective houses of origin. House Bill 1031, which would have grandfathered properties with deeds that showed their ownership to the “water’s edge, and a related bill, Senate Bill 321, which would have expanded recreational uses in front of private property along the Lake Michigan shoreline. Also, under discussion was giving the Department of Natural Resources greater authority to regulate shoreline mitigation and sea wall construction along the shoreline, rather than having a hodgepodge of local regulations. For the second consecutive year, the General Assembly has had difficulty finding common ground in the wake of this landmark court decision. IAR accepts the State Supreme Court definition of the ordinary high-water mark in the Gunderson case. We recognize certain transitory activities should be stipulated along the lakeshore but have concerns about expanding those activities to include things like overnight camping, and we support DNR’s role in creating uniform rules for shoreline projects.
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