CAR CAPITOL CONNECTION:
This Week in the Legislature: May 2, 2008
Landlord and Tenant Relations

HB 1356 passed out of the Senate Judiciary Committee after being reassigned from State Affairs. To the dismay of its sponsor, Rep. Michael Merrifield (D-Colorado Springs), a number of Senators are having to take a 17C (abstention for conflict of interest). As it turns out, there are quite a few landlords in the esteemed Senate Chambers; among them, Suzanne Williams (D-Aurora), Josh Penry (R-Grand Junction), Lois Tochtrop (D-Adams County), Jim Isgar (D- Hesperus) and maybe a few others… It could be tough to get the necessary 18 votes with so many not voting.

Initiative Update

As reported last week, the ballot initiative process is very hot. The deadline to file new initiatives was last Friday – good news meaning that REALTORS® can’t be threatened with more crazy ideas on this year’s ballot! The bad news?  Proposals advocating a cap on earned broker commissions, as well as those pushing for transfer tax and commercial property tax increases are still active in the process. These initiatives must undergo the “review and comment” hearing by May 9^th and their official titles must be set by May 21^st. Suffice to say, May is shaping up to be a busy month.

Transfer Taxes

Three initiatives are active to establish a statewide transfer tax on all real estate transactions.  All have been filed by the Housing Works for Colorado – a group supported by Housing Colorado, among others.  We know that these folks are raising money (first report denoting $60,000 in contributions) and they have made a significant expenditure to hire a petition circulator in order to garner the necessary signatures required to place the initiative on the ballot.  

To counter the transfer tax proposals, initiative #127 was filed to prohibit the collection of transfer taxes if assessed market values fail to increase by at least 18 percent in any two consecutive years.  Stay tuned...

Real Estate Broker Commissions

As previously reported, initiative #109 - relating to a cap on real estate broker commissions - was filed by the Colorado Trial Lawyers Association (CTLA) as a counter maneuver to a separate initiative attempting to place a cap on attorney fees.  Bob Golden, CAR Chief Executive Officer, has been in touch with the CTLA about their plans. Over the next week, it expected that both parties will be discussing how to go forward and if they will pull the measures from the ballot.

Commercial Real Estate Taxes

Initiative #95 proposes a five percent tax increase on commercial property. CAR is partnering with the National Association of Industrial and Office Parks to fight this measure.  The next step for #95 will be a title hearing.

Transportation Reform Introduced

A contentious measure to raise funds for Colorado’s highways and bridges passed the Senate State Affairs Committee yesterday.  Sponsored by Sen. Abel Tapia (D-Pueblo) and Representatives Joe Rice (D-Littleton) and Buffie McFadyen (D-Pueblo West), the bill proposes a $25 increase in car registrations, an increase in ownership fees for older cars, and a $6-a-day fee on rental cars.  While there is agreement across the state that Colorado’s roads are in desperate need of a consistent funding source and an increase in funds, there is disagreement as to how those changes should be financed.  Increased car registrations have been looked at by a variety of causes as a source of funding, and thus far such proposals have failed to gain traction. There continue to be dozens of meetings with leadership each day on how to get a funding bill through. It’s hard to tell if anything will pass.

Long Bill Signed

Gov. Bill Ritter signed the fiscal year 2008-09 budget into law this week, praising it for addressing today’s critical and immediate needs while also making strategic and forward-looking investments for a better tomorrow.  The $18.4 billion operating and capital budget, as detailed in House Bill 1375 (Buescher/Keller), will take effect July 1. Known as the Long Bill, the budget includes a $7.6 billion general fund appropriation.

Ritter used his power of line-item veto on several items.  Three footnotes were vetoed for going beyond legislative intent and violating the separation of powers for the executive branch to implement funds.  However, the governor directed the Departments to comply with the footnotes to the extent possible.  Additionally, footnote 57a, p 231 stated that that no state funds shall be allocated to local governments that have failed to enforce the provisions of HB 06S-1023, last year’s immigration bill that resulted from the special session.  The footnote was vetoed for containing substantive legislation, which is constitutionally prohibited in the budget, in addition to violating the separation of powers.  Unlike the other line-item vetoes, departments were directed to not comply with the footnote.

This Week in the Legislature: April 25, 2008

Ballot Initiative Update

There are now three active initiatives that have been filed which address real estate transfer taxes – all brought forward by the same groups.  To address flaws existing in the current initiative, the proponents submitted the two additional proposals this week. CAR remains actively engaged in this process and will continue to intervene on behalf of REALTOR® interests.

In addition to the transfer tax proposals, initiative #109 was filed this week concerning the restriction of earned real estate broker fees. In a nutshell, a six percent cap would be placed on transactions up to $250,000; three percent for $250,000 – $500,000; and one percent for transactions above $500,000 (but no more than $500 per hour).

In reaction to initiative #109, CAR has released the following press statement:

First the Colorado Association of REALTORS® believes the ballot initiative process is an unproductive way to deal with consumer and business issues.  Second we believe this proposed ballot initiative specifically is bad for consumers.  It changes the relationship between the consumer and the real estate agent/REALTOR® by mandating a fixed price whereas, current commission rates are negotiable regardless of the selling price of a property.

The sliding scale is patently unfair, particularly to the majority of buyers who are purchasing homes on the lower dollar value of this scale.  For example, using the proposed ballot initiative scale, a family purchasing a $200,000 home would be required to pay a $12,000 commission.  A family purchasing a $500,000 home would only pay a $5,000 commission based on the 1 percent mandated rate.

Our current system encourages innovative business models that clearly benefit the consumer.  As an association, our desire is to encourage and support our varied professionals in being creative for the consumer and providing diverse solutions to their real estate needs.
 

Recognizing the fight we have on our hands – transfer tax and broker fees – we need your help!  CAR has done an outstanding job influencing the legislative process. We do this by working with, and endorsing, candidates that appreciate our point of view and aren’t afraid to fight for property rights, consumers protections and the integrity of the transaction process. Unfortunately, the ballot process  is outside of our control. Therefore, we must work the mainstream media and public as a whole to educate them on the dire effects of these ballot measures. Your contribution to the Political Survival Fund will go straight toward this endeavor. It will help us elect REALTOR® friendly candidates and defeat the unproductive ballot measures.

This Week in the Legislature - February 15, 2008
Real Estate Sunset Legislation Moves Forward
HB 1212 - Concerning the Continuation of the Real Estate Commission – was quickly ushered through the House Business Affairs Committee on Thursday evening. The bill passed unanimously with eight yes votes, two excused and one abstention. Rep. Victor Mitchell (R-Douglas) abstained due to a potential conflict of interest as he recently invested in a real estate brokerage firm. HB 1212 will now move along to the House Finance Committee. The Colorado Association of REALTORS® is in support of this legislation.

Vacancy Filled
Karen Middleton was selected to fill the HD 42 vacancy left by Michael Garcia’s resignation and was sworn in on Wednesday, February 13.  Her resignation to the State Board of Education was effective that day as well.  Middleton is an Aurora Democrat whose focus in the legislature will likely involve education issues. 

Federal Economic Stimulus Package
On Thursday afternoon, President Bush signed the Economic Stimulus package into law. Last week, Congress gave overwhelming final approval to the Economic Stimulus Package supported by NAR and REALTORS® across the country. As a result, the government will be sending payments to most American households and grant tax incentives for business investment.

The legislation includes the requested GSE and FHA limit increases strongly backed and lobbied by NAR. The increased GSE loan limits means borrowers will see immediate relief with new liquidity in the mortgage market and the nation will see an additional 300,000 home sales. The increased FHA loan limits means an additional 138,000 Americans will purchase homes, and with the needed FHA reforms means 200,000 families can refinance their homes safely and affordably.

This Week in the Legislature - February 8, 2008
Landlord/Tenant Legislation Expected Soon
More than 40 hours of discussion and negation has gone into this year’s much improved version of landlord/tenant legislation which will be sponsored by Rep. Mike Merrifield’s (D-Manitou Springs).  Among the number of issues discussed, definitions surrounding Warrant of Habitability proved to be much of the focus. CAR owes a special thank you to Ted Bryant of the Jefferson County Association of REALTORS® and the CAR Legislative Policy Committee (especially those members in the Regulatory Subcommittee) for laboring over the countless drafts of language.  Stay tuned for final details and the formal introduction of this bill...

New Short Sale Form
The Real Estate Commission approved the proposed Short Sale Form. This form will be required starting March 31, 2008 for all short sale transactions. It is expected to be a way for buyers and sellers to better understand the intricacies of these transactions.
Real Estate Commission-Approved Contracts and Forms.

Joe Rice and Steve Ward Come Home
Colorado’s two legislators who served in Iraq are back in the statehouse.  Following three months deployed in Baghdad, Army Reserve Lieutenant Colonel Joe Rice, better known as State Rep. Rice, has returned to Colorado and the General Assembly.  He joined his colleagues on the House floor last Monday.  Sen. Steve Ward, a U.S. Marine reservist, arrived home for his first day of session today.  Ward spent the last six months in Fallujah as a military inspector general. 

Assistant Majority Leader Terrance Carroll
After Rep. Michael Garcia’s resignation, the House Democrats held an election to fill his leadership vacancy of Assistant Majority Leader.  Rep. Terrance Carroll (Denver) was awarded the vacancy over Rep. Paul Weissmann (Boulder).  

Registration Hike Proposed
Governor Bill Ritter has announced a proposal to increase car registration fees by $100 in order to address Colorado’s growing transportation needs and lack of consistent funding in that area.  The proposal comes from Ritter’s Blue Ribbon Commission on Transportation’s final report, which determined that the state would require an additional $500 million per year to adequately maintain the state’s road system.  The panel also noted that $1.5 billion per year in new funs are necessary to fix roads and bridges.  Currently, annual vehicle registration fees are approximately $142, with information on the particular automobile determining the fee.  Other funding proposals from the commission include a 13-cent-a-gallon increase in the state fuel tax, which has not been raised in 17 years and has been depreciating in value.  While a tax increase would require voter approval, the registration fee increase would not.  Republicans have voiced opposition to the proposal, stating that such an increase belongs on the ballot.

Health Care Reform
The 208 Blue Ribbon Health Care Commission presented their findings to the legislature on Thursday.  The 27-member panel had narrowed proposals submitted to four for modeling, and then created an additional fifth proposal out of many elements for modeling as well.  The plans ranged from universal healthcare, coming in at an estimated cost of $15 billion to the state, to an individual mandate to purchase insurance, with a price tag of $1.23 billion.  However, the Governor has acknowledged that the money simply is not available for action to be taken on any of the costly proposals this year, and a tax increase will not be going to the voters for funding. 

However, Sen. Bob Hagedorn and Rep. Anne McGihon will be introducing legislation this year to address health care costs at a lesser price.  One proposal, to expand the Children’s Health Plan (CHP+) to cover 65,000 of the state’s uninsured children, would cost approximately $43 million per year.  Another bill would designate $23 million for preventative care and preparation for state medical emergencies, such as a pandemic.  

Update on Ballot Initiatives
Proponents of the “Right to Work” ballot initiative, which would prohibit union membership or payment of union dues as a requirement for employment, have begun to gather signatures on their petition.  At least 76, 047 valid signatures must be turned into the Secretary of State’s office by August 4, 2008 in order to appear on the 2008 ballot.  Two other initiatives have had their petition forms approved: “Definition of a Person” and “Prohibition on Discrimination and Preferential Treatment by Colorado Governments.”

Several new proposed initiatives have been filed with Legislative Council.  “Fair Share Health Care” would require every business entity in Colorado with 20 or more employees to provide major medical health care coverage for employees and their dependents.  “Farm Animal Confinement” would prohibit the confinement of farm animals in a manner that does not allow them to turn around freely, lie down, stand up, and fully extend their limbs.