Ohio Association of Realtors 2015 Legislative Conference Issues Briefing
Substitute-House Bill 64 – Representative Ryan Smith
FY 16-17 Operating Budget
- Provides for a 6.3% across the board state income tax cut
- Makes permanent the 75% small business tax deduction
- Removes all major tax proposals from Executive Budget including sales tax expansion and rate increase, rate increase of the CAT, severance and cigarette taxes.
The Ohio Association of Realtors supports the direction of the House’s plan to reduce the state personal income tax burden without imposing harmful new taxes or tax increases on businesses and many of the services they provide and consume. Ohio’s economy is moving in a positive direction, and the substitute package is a better approach to maintain that progress.
Encourage the Senate to avoid increasing taxes on business to provide additional personal income tax cuts. Further the Ohio Association of Realtors opposes any effort to create a bifurcated CAT, such that a different higher rate is assessed on those professions, including Realtors, who do not currently collect sales tax.
Ohio Division of Real Estate Credentialing Task Force
The Ohio Association of Realtors had a number of members participate over the course of 2014 in a Task Force to review Ohio’s real estate license law. The Ohio Association of Realtors is on record supporting a number of their recommendations including.
- Creating three sub-categories of broker licenses, Principal, Management and Associate and two for sales persons, Management and Sales Person.
- Permit Brokers to act as Principal Brokers for more than one company
- Procedures for handling contemporaneous offers
- Allowing pre-licensure education to be completed online.
State Senator Kevin Bacon is currently working with us to draft legislation making these changes. Please encourage your Senators to consider becoming co-sponsors and supporting the bill.
Issues for Discussion
Senate Bill 58 – Senator Bob Peterson - Provides a connection exemption for property owners with working septic systems when a new sewer becomes available. The issue of allowing a property owner to delay connecting to a new sewer line was one that was not resolved during the rule making process. Senate Bill 58 would allow a homeowner who is not creating a nuisance to delay the cost of immediate connection and the additional expense associated.Encourage support of Senate Bill 58
Senate Bill 113 – Senator LaRose and HB 144 - Marlene Anielski – Require the remediation of real property on which a methamphetamine lab has been discovered.
Ohio is in the minority of states that do not provide for some disclosure or remediation of former meth labs. These two bills accomplish our primary goal of not stigmatizing a property by utilizing the condemnation process and not making permanent a notice on the deed. Additionally, the legislation creates process-based remediation standards which will help contain costs for innocent property owners.
Encourage your Legislators to continue working on these bills to further address the issues of time frame for the process, the disclosure for properties prior to enactment and acknowledgement by consumers of un-remediated properties.
Senate Bill 134 – Senator Bill Seitz - Makes permissive actual damages and attorney's fees, to limit certain civil penalties, allow respondents to recover attorney's fees in certain instances, and exempt certain landlords from the housing provisions of the Ohio Civil Rights Law.
OAR has a long history of supporting Fair Housing and the Ohio Civil Rights Commission. Increasingly in certain circumstances groups may use these statutes to benefit themselves through the awarding of attorney fees or settlements. OAR supports efforts to curb these abuses, but must not risk Ohio’s Substantial Equivalency Status with HUD.
Ohio Housing Market
- The Ohio housing market is continuing to reestablish a solid foundation, with increased sales activity and steady gains in average price.
- Statewide, sales activity in the first quarter 2015 increased 5.5 percent from the same period a year ago. Additionally, total dollar volume during the first three months of 2015 reached nearly $3.6 billion, a 17 percent gain from the first quarter 2014.
- The number of homes sold across Ohio in Market rose 13.2 percent from the level posted during the month a year ago. This marks the seventh consecutive monthly year-over-year gain in sales activity.
- Around the state, 18 of the 20 markets tracked by OAR have reported increases in sales activity during the first quarter 2015 (compared to the same period a year ago). The average price has increased in 16 markets.
- Ohio Pending Home Sales Index, which tracks homes purchase agreements reached – but yet to close, has posted 10 consecutive monthly year-over-year gains.
Proposed Foreclosure Registry
In April 2012, Toledo City Councilwoman Paula Hicks-Hudson introduced a Revised Draft Ordinance that creates a new Chapter 1767 in the City’s Municipal Code, pertaining to the registration and maintenance of vacant residential buildings. The Revised Draft Ordinance provides that "an owner of a vacant residential building must, within 15 days of the building becoming vacant, enclose and secure the building if it is open. The building must be maintained in a secure and closed condition until the building is again occupied or until repair or completion of the building has been undertaken." The Revised Draft Ordinance provides that "an Owner of a residential building that has been vacant and not occupied for more than 90 consecutive days or has an outstanding house, building, health or zoning order must file a vacant building registration statement with the City and pay a registration fee. A separate vacant residential building statement must be filed for each building." The Revised Draft Ordinance sets forth a schedule of registration fees, ranging from $100 to $3,000 or more, depending on how long the building has been vacant and the number of units in the building.
TBR agrees with Councilwoman Hicks-Hudson that there are an overwhelming number of properties not being maintained in the Toledo area and would like to work with the City to create a solution that will address the true problem.
The proposed legislation is still under review by City Council. TBR staff continues to monitor the proposed legislation.
This information is provided by the Ohio Association of REALTORS®.
Ohio Municipal Income Tax Reform
Are you frustrated with Ohio’s current municipal tax system? The Ohio Society of CPA’s top legislative priority this year is achieving meaningful, common sense reforms to Ohio’s municipal income tax system.
OSCPA organized the Municipal Income Tax Uniformity Coalition, a partnership of 17 organizations in Ohio, including OAR, driving reform of Ohio’s municipal income tax code. Together, they represent a large share of the business and individual taxpayers who are the lifeblood of Ohio’s economy and are impacted most by the current structure.
OSCPA has testified that the Ohio municipal tax system remains overly burdensome for taxpayers, and that change is sorely needed. You can take action now! How you can help!
- Talk to your clients and employer.
- Explain the cost and burden of filing multiple returns.
- Point out the benefits of uniform filing definitions.
- Contact your legislators.
- Contact Scott Williams, Paul Glass, or the OSCPA’s Governmental Affairs team at firstname.lastname@example.org or 800.686.2727 to learn how you can get involved and drive needed reform.
Pre-licensure Online Education
This proposal will change the license law to permit offering the option of providing all aspiring real estate salespersons pre-licensure courses on-line.
House Bill 390: Scrap Metal Dealers
House Bill 390 prohibits a scrap metal dealer from purchasing or receiving copper pipe from any person other than a licensed plumber. It also prohibits a scrap metal dealer from purchasing or receiving an air conditioning unit from any person other than a licensed HVAC contractor. The Bill provides an exemption for the owner of the parcel where the material was removed.
House Bill 32: Definition of Surveying
House Bill 32 clarifies Ohio law so that persons other than engineers and surveyors could continue to prepare plans, drawings and make various measurements for purposes of sitting or designing an onsite waste water treatment system. The legislation would continue to allow competent sewage system designers, installers and registered sanitarians to perform those functions as has previously been the case thus minimizing design costs for homeowners.
House Bill 105: Termination of Lease for Victims of Domestic Violence
House Bill 105 will allow a tenant who is a victim of domestic violence to terminate a rental agreement or have the tenant’s name removed from the rental agreement under certain circumstances. It will require a landlord of a tenant who is a victim of domestic violence or menacing to change the lock of the dwelling unit.
House Bill 106: Termination of Lease for Military Service
House Bill 106 will enable members of the armed services and Ohio National Guard to terminate a rental agreement when the member receives military orders to deploy or for a permanent change of station.
House Bill 10: Voluntary Action Program
House Bill 10 provides tax credits to owners of real property that enters into the voluntary action program.
Senate Bill 50: Energy Tax Credits
Provides limited tax credits for landlords improving energy efficiency of residential rental property.
Senate Bill 43: Trust Account Interest (Formerly SB 286)
Senate Bill 43 will require broker’s trust account to earn interest and for the interest to be paid quarterly to the State to fund foreclosure prevention programs.
Internet Recorder’s Fee
This bill will permit the office of the County Recorder to place public documents housed within the County Recorder’s office on their website so anyone can access the information 24 hours a day, seven days a week.
Would require the County Recorders to charge a single user fee of $1 per printed page and also establish a “commercial user” fee for those entities (i.e., Title Companies) that print out a large amount of documents from the website.
Bolstering Consumer Real Estate Lending
Continued economic weakness and uncertainty are contributing to a lackluster demand for commercial space, which has resulted in reduced operating incomes, property values and equity – all of which complicate efforts to refinance maturing loans. Approximately $1.6 trillion in commercial real estate mortgages will mature between 2012 and 2016. Currently there is insufficient credit capacity for small business and other commercial property owners to refinance this wave of loan maturities, which could result in higher loan defaults and delinquencies – further endangering economic recovery.
Preserve the Mission and Purpose of the Federal Housing Administration (FHA) Program
FHA, like every other holder of mortgage risk, has incurred financial losses as a result of increasing foreclosures. However, FHA has increased premiums in order to compensate for these losses. Congress should NOT impose any additional burdens on consumers. Further mandated increases to premiums or increases to down payments will disenfranchise FHA borrowers and hurt our housing recovery.
Protect Homeownership Tax Benefits
Prior to 2007, the tax laws required that any time a lender forgave any part of a mortgage debt, the person responsible for that debt was required to pay income tax at ordinary rates on the forgiven amount. Over the past 60 years, there had never been a time when housing values all over the U.S. collapsed. A collapse occurred in 2007.
Legislation to relieve homeowners of any requirement to pay income tax on forgiven debt was enacted in 2007. Among the limitations to the relief was a provision to assure that tax relief was not extended to cash out refinancing or to very large amounts of debt (more than $2 million). That provision was originally scheduled to expire at the end of 2009, but was extended during the financial crisis so that it would expire at the end of 2012.
Secure the Future of Homeownership
To secure the future of homeownership four actions must be taken:
- Comprehensive restructuring of GSEs
- Expedited decisions by lenders/services on short sales
- Maintenance of appraisal independence and integrity
- Establishment of QRM/QM rules that maximize consumer access to credit