Utah
Association of REALTORS®
2002 Legislative Wrap-up
Written by: Christopher Kyler, UAR Director of Government Affairs and General
Counsel
The 2002 Utah Legislative Session has concluded and yet again REALTORS® met with success against a host of threats. There were 625 original bills with another 500+ versions introduced during this session. The UAR sifted through each of the bills in order to find those related to private property rights, free enterprise, or the real estate profession. Our legislative committee met once a week during the session to read, analyze, and debate bills. Ultimately, our committee took an active role in advocating and monitoring a total of 55 bills.
Legislation Opposed & Killed: 11 of 11
Eleven of the bills we faced this year were extremely serious because they would have challenged our ability to conduct business and our ability to assert our private property rights. Here's a sampling . . .
RIGHT OF RESCISSION
& JOINT AND SEVERAL LIABILITY
Should buyers be able to "return"
the home they bought, and should REALTORS® be liable for the refund? The
Consumer Protection Division thought so.
HB 64, entitled "Consumer Protection Amendments,"
sought to supercede private contracts, like the REPC, by mandating that buyers
be given new rights of rescission and that salespeople be given new liability
for the refund. As applied to REALTORS®, this bill had the effect of stating
that any property first marketed by telephone to the ultimate buyer, regardless
of the relationship established during the sale transaction, would be subject
to a mandatory right of rescission. In fact, the buyer would have 3 days,
90 days, or even years in which to return the home, depending on the conversation
that took place during the initial phone call. Worse yet, this bill also stated
that the listing agent would be jointly and severally liable with the seller
for a refund of the purchase price. Fortunately, we were successful in striking
this outrageous language.
TRANSFER TAX
For the third year in a row, we fought against
a proposal to tax the transfer of all real property. SB 126 purported to have
the solution to all affordable housing needs: tax all transfers of property
and then give that money to affordable housing programs. Obviously, the logic
of this bill was twisted. As we've learned from situations throughout the
nation, transfer taxes hinder affordable housing by becoming the newest source
of revenue for the government to tap. Experience tells us that this tax could
rise as high as $10,000 per transaction, and would thereby slow down the entire
real estate market in Utah. Happily, we were once again successful in staving
off this attack.
"DO NOT CALL" LIST
After a one-year reprieve, we were again faced
with the challenge of fighting against a statewide "Do not call"
list. Simply put, this bill would have required every REALTOR® to pay
an annual fee to obtain a list containing names of people who do not want
to be called. This bill would have been detrimental as it required each of
us to carry an awkward and burdensome list with us everywhere to be checked
each and every time we were to make a phone call. This means anytime you would
call a FSBO, expired listing, or a lead you would have to check this list
first. Furthermore, if you accidentally called someone named on the list,
you would be subject to substantial fines. In states where this law has passed,
the list costs $500 annually and must be updated on a monthly basis. This
bill would have cost all REALTORS® time and money. Let's hope for another
reprieve.
DISTRACTED DRIVING
For the second year straight, we were involved
in the debate over distracted driving as HB 67 re-introduced the topic. We
had several interests in the matter: First, we wanted to ensure that cell
phone use was not the only action limited; second, to require that there be
one uniform law throughout the state of Utah, rather than piece-meal legislation
throughout various cities; third, to set forth clear language requiring that
officers prove causation; and fourth, to encourage hands-free cell phone use
by providing an exemption for it. Unfortunately, because the bill sponsor
was unwilling to accept and advocate each of our conditions, we determined
that the bill was more harmful than good for our industry. This bill died
without our support, however we suspect the debate will continue next year.
UTAH CONSTRUCTION CONTRACTS
SB 19 sought to mandate that all Utah construction
contracts contain state-determined terms regarding timing of payment, default,
cure time, and more. In sum, this bill interfered with our ability to write
our own contract terms, the net effect of which would be to place owners,
developers and general contractors at risk. Furthermore, this bill may have
hindered and even prevented future development projects because lenders would
not have been able to comply with the strict rules mandated by this bill.
We joined with many of our political allies to win this hard-fought battle
and defeat the bill. We suspect that the sponsor will bring the issue back
during the interim period.
PLENARY POWER
HB 165 attempted to expand the power of special
service districts by authorizing them to purchase conservation easements and
by stating that their powers should be "liberally construed." Additionally,
this bill would have given cities more power by granting them "great
latitude" in creating these districts. In sum, this bill would have placed
far too much power in the hands of a non-elected body, and therefore was defeated.
RESTRICTIONS ON TELEPHONE SOLICITATION
HB 260 sought to alter the current state law
regarding the hours during which a business can make phone calls to potential
clients. The current federal and state law allows REALTORS® to call potential
clients between the hours of 8 am and 9 pm. This bill sought to restrict that
calling period to the hours between 10 am and 6 pm. This shortened period
of time would have significantly hampered our ability to market our properties
and obtain new listings. Fortunately, we were successful in defeating this
bill.
OTHER BILLS
We were successful in opposing or modifying:
SB 171, Uniform Arbitration Act; HB 49, Municipal Plan for Moderate Income
Housing; HB 191, Mortgage Lending Disclosures; and HB 262, Mobile Home Park
Residency Act Amendments.
Legislation Supported & Passed: 18 of 22:
Our Legislative Committee determined that twenty-two different bills filed during this session were important to our industry and therefore merited our support. Some of these bills were long shots, but we felt it was important that we stand up to be counted amongst those who support change. Here's a sampling of the issues and our results . . .
FEDERAL GOVERNMENT ACQUISITION
OF REAL PROPERTY
HB 208 strengthens the legislation that we passed
last year to prevent the federal government from taking real property in Utah
without the consent of the Utah Legislature. The effect of this bill is to
slow down the erosion of Utah's sovereignty, which occurs as our lands are
taken without our consent. Additionally, this bill protects each of us as
taxpayers that remain in the state by slowing the increase in our tax burden.
RECONVEYANCES
HB 202, Reconveyance of Trust Deed or Release
of Mortgage, protects buyers of real property from fraudulent dual conveyances
by eliminating the requirement that a title company wait thirty days after
receiving payment before publishing notice of intent to release or reconvey.
JOINT TENANCY
SB 103 eliminates the archaic practice of using
a "strawman" when trying to terminate a joint tenancy in real property.
In sum, this bill makes the process of termination more simple and logical.
AGRICULTURAL PROTECTION
SB 94 closes the loopholes currently used to
circumvent Utah's nuisance law and harm farmers and ranchers. In reality,
this bill asserts the principle that individuals ought to be able to determine
the highest and best use of their land. Additionally, this bill clarifies
the legislature's intent that nuisance law not be used against a private property
owner in a capricious manner.
COUNTY BOUNDARIES
SJR 4 allows counties more flexibility in approving
private development plans by allowing counties to make minor adjustments to
the county boundary line. This was needed to ensure that lots and/or houses
are not bisected or divided by county boundary lines. This issue is timely
because there are various developments throughout the state that are struggling
with the problems of fire protection, police protection, voting districts,
school districts, and more due to bisected lots.
WATER COMPANY CHANGE APPLICATIONS
SB37 solidifies private property rights by clarifying
the process and procedures by which individuals that own water shares and
hold water rights obtain changes. This bill was meant to strike a more fair
balance between water companies that represent all shareholders and individual
shareholders who want to change their use. Water rights are a critical private
property right and are many times determinative of whether raw land has any
value or liquidity. As such, the UAR will continue to advocate in favor of
sound water policy.
IRRIGATION DISTRICTS
SB20, entitled bonding authority for irrigation
districts, protects taxpayers by ensuring that irrigation district fees will
be based on use rather than value.
CAPITAL GAINS TAX REDUCTION
For the second consecutive year, the UAR fought
to keep the public policy debate regarding a capital gains tax reduction alive.
Through repeated House committee hearings, and an intense House debate, we
were again successful in convincing the House of Representatives to pass this
bill out favorably. Unfortunately, due to this year's budget shortfall combined
with the grim budget outlook for the next few years to come, this bill was
not able to obtain funding and therefore was not enrolled.
EDUCATION REFORM
For the first time in our history, our Legislative
Committee decided to show our interest in the school reform debate. For too
long we have quietly watched from the sidelines while the school crisis intensified.
However, with the Legislatures heightened appetite for property taxes, income
taxes, a new sales tax on services, and a first ever school impact fee, we
became acutely aware of the collision that is due between taxpayers and education
funding needs. We believe that the real estate industry will become the easiest
target for new revenues. Therefore, we decided to play offense.
REALTORS® are uniquely qualified to testify
as to what families want. We meet with families looking to locate into neighborhoods
with good schools, and this gives us an unequaled opportunity to gauge the
public's pulse. With these considerations, the UAR decided to thrust itself
into the education reform debate. One such bill was SB69 that dealt with tuition
tax credits, also referred to as opportunity scholarships. The idea behind
the opportunity scholarships is to provide the citizenry with incentives to
reduce the burden on the public school system by encouraging private alternatives.
Unfortunately, the philosophy behind this approach was deemed too uncertain
and unproven, and therefore did not receive support beyond the Utah Senate.
OTHER BILLS
We also participated in the following bills
which passed: HB 44, Trustees of Trust Deeds Amendments; HB 24, Revisions
to Redevelopment Agency Laws; HB 58, Water Forfeiture Amendments; HB 119,
Assessment of Property Subject to a Minimum Parcel Size; HB 155, Property
Taxes-Farmland Assessment Act; HB 201, Property Tax-Judgment Levy; HB 23,
Mortgage Practices Act Revisions; and HB 233, Mitigation of Damages in Condemnation
Proceedings.
WHY ARE WE WINNING SO OFTEN?
The Utah Association of REALTORS® is the
Voice for Real Estate® in Utah. In fact, we are one of the loudest voices
on the hill. With a membership base of 8,000+ members, we are one of the largest
grassroots organizations in the state. With 300+ members attending REALTOR®
Day at the Legislature, ours is one of the largest visits during the session.
With the Political Survival Fund (PSF) receiving $150,000 last year and even
more this year, we are one of the largest political donors to campaigns in
the state. With our Legislative Committee, consisting of 40 volunteer REALTORS®
meeting once a week, we are one of best-informed groups in the state. With
our Elections Committee, consisting of 40 volunteer REALTORS® working
campaigns, we are one of the most organized campaign teams in the state. With
our URPAC Trustees Committee, charged with deciding where the PSF money is
spent, we are one of the most strategic groups in the state. With REALTORS®
including, Senator Al Mansell, Representative Gerry Adair, Representative
Gordon Snow, Representative Carl Saunders, Representative Paul Ray, Representative
Brent Parker, Representative Steve Mascaro and Senator Waddoups serving the
state, real estate is one of the most represented professions on the hill.
With our clear Statement of Policy, outlining our belief in the Constitution,
private property rights, and free enterprise principles, we stand for the
right things. . . . and that is why we win.