Texas REALTORS put forth an ambitious legislative agenda for this session. For the most part, the association succeeded in passing its legislative programs while defeating bills that would negatively affect private-property owners and Texas REALTORS.
When the gavel fell on June 1, Texas REALTORS helped pass legislation that reforms the appraisal process, stops mandatory sales-price disclosure, prevents real estate transfer taxes, allows one-time filing of a tax exemption for your vehicle, defends against mortgage fraud, and prevents the erosion of consumers’ home equity protections. Below are the key issues that Texas REALTORS felt impacted your industry.
Appraisal reform
Texas REALTORS supported efforts to make the appraisal process more transparent and to make appraisal entities more accountable and efficient. All association-backed appraisal reforms passed. HB 8 ensures increased oversight of appraisal districts. HB 3613 allows for a residential homestead to be appraised as a residence, not on the basis of the “highest and best use” appraisal standard. SB 771, among other things, mandates updated appraisal methods, gives consumers alternatives to costly lawsuits when appealing a ruling by an appraisal review board, and adds CPAs to the list of people qualified to act as arbitrators. HJR 36 proposes a constitutional amendment to make appraisal practices more uniform.
Status - HB 8, HB 3613, and SB 771 were signed by the governor. HJR 36 will be placed on the November 3 ballot.
Business vehicle exemptions
Texas REALTORS supported legislation that allows an exemption form to be filed once and is valid until that vehicle changes ownership. HB 2814 passed that allows people who use their automobiles for professional and personal purposes to file only once a property-tax exemption form for their vehicles. Previously, this form had to be filed annually.
Status - HB 2814 was signed by the governor.
Eminent domain
Texas REALTORS supported enhancing protection of private-property rights in cases of eminent domain takings by government entities. The House and Senate passed HJR 14 that proposes a constitutional amendment limiting the public taking of private property. Unfortunately, the resolution did not include association-supported language allowing a property owner to repurchase the property for what the government paid for it if the property is not used for its public purpose within 10 years.
Status - HJR 14 will be placed on the November 3 ballot.
Homeowners-association reform
Texas REALTORS supported protection of homeowners’ rights while ensuring more efficient, more effective HOA management. The association supported unsuccessful legislation, HB 1976, designed to give homeowners more transparency and clarity with regard to HOA policies and procedures. Lawmakers in the House and Senate worked diligently throughout the session to achieve such reforms that would benefit consumers; however, some home developers, whose amendments were stripped from the bill, worked to kill the HOA-reform proposal.
Status - HB 1976 died in the Texas Senate.
Mortgage finance
Texas REALTORS opposed efforts to change home equity lending laws but supported efforts to curb mortgage fraud. Association-supported legislation passed that calls for stronger regulation of the banking industry. HB 10 strengthens the regulation of mortgage bankers and brokers by requiring them to adhere to stiffer federal guidelines of operation.
Status - HB 10 was signed by the governor.
Mandatory sales-price disclosure
Texas REALTORS opposed efforts to mandate disclosure of home sales prices. The Texas Association of REALTORS stopped all proposals (HB 133, SB 444, and HB 2257) calling for mandatory sales-price disclosure.
Status - HB 133, SB 444, and HB 2257 were defeated in House committee.
Margins tax
Texas REALTORS supported a low-rate, broad-based business franchise tax with minimal exemptions or exclusions. In addition, the association supports legislation that will clarify provisions of the new franchise tax to ensure more equitable treatment among business taxpayers. HB 4765 amends the Tax Code by increasing the amount of total revenue at which an entity would owe no franchise tax. Currently, that amount is $300,000. The new amount depends on the fate of another bill, HB 2154, which amends the taxation of certain tobacco products. If HB 2154 becomes law and tobacco-tax revenue increases, an entity with total revenue up to $1 million would owe no franchise tax for 2010 and 2011; that amount would drop to $600,000 in future years. If HB 2154 does not become law, the total revenue amount would be $600,000 in 2010 and remain at that level. The bill would take effect on Jan. 1, 2010, and apply to reports due on or after that date.
Status - HB 2154 and HB 4765 were signed by the governor.
Property-tax appraisal caps
Texas REALTORS opposed efforts to reduce the property-tax appraisal cap from its current level of 10%. Research shows that such efforts would harm the economy and would distort the housing market by penalizing new homebuyers who don’t benefit from the cap. The association helped stop numerous proposals designed to reduce property-tax appraisal caps from their current level of 10%.
Real estate transfer taxes
Texas REALTORS opposed all efforts to impose a tax on the transfer of real property. The association assisted in efforts to prevent legislation calling for taxes on real estate transactions.
Texas Real Estate Commission/Real Estate Center at Texas A&M University
Texas REALTORS supported efforts to eliminate inefficiencies within the Texas Real Estate Commission and implement a funding mechanism for the Real Estate Center at Texas A&M University. SB 862, which was supported by the association, updates and modernizes the Real Estate License Act as well as allows the Texas A&M Real Estate Center to continue to operate through a stable funding mechanism: $50 of the $200 annual professional fee will be redirected to the Real Estate Center beginning Sept. 1, 2011. The bill also increases the additional fee levied on all real estate salespeople to $20 per year, matching the fee paid by brokers.
Status - Signed into law by Gov. Perry.
County rulemaking authority
Texas REALTORS opposed wholesale expansion of rulemaking authority to Texas counties. The association successfully stopped all efforts to unilaterally expand county rulemaking authority.
Windstorm insurance
Texas REALTORS supported comprehensive legislative reform of the Texas Windstorm Insurance Association to ensure its long-term viability. HB 4409 reshaped Texas windstorm insurance to provide more stability and relief for homeowners and businesses in the Gulf Coast region. Although HB 4409 makes strides toward a solution, more work needs to be done.
Status - HB 4409 was signed by the governor.