Legislative Issues Brief (pdf) - Illinois Association of REALTORS

Legislative Issues37 th AnnualIllinois Association of REALTORS ®CAPITOL CONFERENCEApril 16, 2013 Michael D. Oldenettel, President Phil Chiles, President-ElectJim Kinney, Treasurer Loretta Alonzo, Immediate Past President• Mabél Guzmán, Chair• Matt Difanis, Vice ChairPublic Policy and Governmental AffairsMember Involvement Group• Gary Clayton, Chief Executive Officer• Greg St. Aubin, Director, Governmental Affairs• Julie Sullivan, Assistant DirectorLegislative and Political Affairs• Mike Scobey, Assistant DirectorAdvocacy and Local Issues♦ Sharon Gorrell - Housing Policy Advisor♦ Aimee Bick – RVOICE CoordinatorLocal GADs♦ Kyle Anderson♦ Brian Bernardoni♦ Conor Brown♦ Kristie Engerman♦ Howard Handler♦ Tom Joseph♦ Kristen Jungles♦ Neil Malone♦ Jeff Merrinettewww.illinoisrealtor.org

ILLINOIS ASSOCIATION OF REALTORS ®Licensing, Regulatory, and Transactional Issues SUPPORT Senate Bill 2266 (Haine), an IAR initiative to amendthe Real Estate License Act to clarify and update several provisions of the Act.We are working with the Department of Financial and Professional Regulation and others on this bill.There is no known opposition. Passed the Senate, pending in the House. OPPOSE House Bill 2832 (Lang) in its current form, but work with Rep. Langand Cook County Recorder Yarbrough on legislation and/or policies which assist CountyRecorders in helping to address fraudulent activity perpetrated through the recording process. The IAR,the State Bar Association, and the Land Title Association are all concerned that because this bill enablesrecorders to decide which documents are recorded in the normal process, and which are placed on a“review registry,” the bill would lead to uncertainty, confusion, and delays in real estate closings. Weare all for fighting fraud, but it is essential that the recording process not become a subjective processdetermined by each county recorder. SUPPORT Senate Bill 92 (Sullivan) and House Bill 1232 (Sacia), which is acompromise worked out last year with the Auctioneers Association to allow auctioneers to collaboratewith real estate licensees in real estate auctions, but maintains the provision that the auctioning of realestate is a licensed activity under the Real Estate License Act. The bill passed the Senate last year, butdid not advance in the House. SUPPORT House Bill 2764 (Scherer) to amend the Highway Advertising Control Act toclarify the regulation of signs advertising the sale or lease of real estate or on premise business signs.Affordable Housing/Foreclosure/Vacant Property Issues SUPPORT House Bill 2646 (McAsey), which amends the Condominium Property Act tobring much-needed clarity and certainty as to the amount of past-due condominium assessments that abuyer of a foreclosed condominium must pay. Under current law, agents and buyers are sometimes notaware of amounts owed until a few days before the closing. HB 2646 caps the maximum amount thatthe buyer would have to pay at the equivalent of 9 months of regular assessments, and this amountwould include any attorney’s fees (attorney’s fees could not be added on top of this). OPPOSE Senate Bill 1244 (Link), amends the Counties Code to authorize Lake County toenact a $3 surcharge on the recording of real estate related documents to fund an affordable housingtrust fund. We fundamentally OPPOSE turning once again to a real estate transfer fee - which makeshousing LESS affordable - to fund an “affordable housing” initiative. There are significant state andfederal resources that currently exist without doing ANOTHER local fee. SUPPORT Senate Bill 1740 (Trotter), an initiative of the Illinois Housing DevelopmentAuthority, that provides for a reduction of the assessed value of improvements made to foreclosedproperty if certain criteria are met.www.illinoisrealtor.orgFighting for Our Industry, Homeowners, and Property Rights!

ILLINOIS ASSOCIATION OF REALTORS ® Continue to monitor and discuss Senate Bill 1602 (Collins),which would extend current federal protections for tenants following foreclosure,which are set to expire in 2014, by adding provisions to Illinois law. The provisionsrequire tenant leases to be honored after a foreclosure, and require a 90-day notice to evict tenantsfollowing foreclosure. The bill also seeks to regulate “cash-for-keys” agreements with tenants followingforeclosure. Continue to monitor and discuss House Bill 2572 (Jones), which enacts the LocalGovernment Stabilization Authority Act to enable townships within House Districts 28 (Rita ), 29(Jones), or 30 (Will Davis) to acquire, maintain, rehabilitate, and transfer property for the purpose ofreturning vacant, abandoned, and tax delinquent properties to productive use. This is a pilot programsimilar to the pilot program recently enacted by Cook County with the input of local REALTORS®.Commercial, Multi-Family, and Condominium Issues OPPOSE legislation to empower non-home-rule units to impose landlordlicensing and so-called “crime free housing” requirements on landlords (Senate Bill1155 and House Bill 2437 are not currently active). We have serious issues with some of theseordinances that home rule units currently enact. This approach puts landlords at risk of losing theirproperty due to the actions of their tenants, and is unfair to both landlords and tenants. Tenant groupsalso oppose these bills. We SUPPORT alternative approaches like House Bill 1532(DeLuca), which provide landlords with greater ability to handle recurrent disruptive and criminalactivity on their premises, and we also encourage broader discussions on a comprehensive approach thatbrings fairness and uniformity to both home rule and non-home-rule regulations in this area. OPPOSE House Bill 595 (Nekritz) in its current form, but work with the sponsor, theCondominium Managers Association, and the IDFPR to address our concerns. As written, the billamends the Community Association Manager Licensing Act to establish a new “supervisor” license, andimposes additional requirements on real estate licensees who are condominium manager licensees. SUPPORT Senate Bill 1961 (Haine) to consolidate the inspection and enforcement ofasbestos-related functions at the IEPA. The Department of Public Health will continue to licenseasbestos occupations. OPPOSE Senate Bill 2375 (Haine), which would extend the Criminal HousingManagement offense in the Criminal Code to commercial properties. The offense applies topersons who manage or control real estate (whether an owner or manager), if he or she recklesslypermits the physical condition or facilities of the real estate to become or remain in any conditionwhich endangers the health or safety of a person other than the defendant. We are working withthe sponsor and proponents to help address the situations they are concerned with in amanner that addresses our concerns.www.illinoisrealtor.orgFighting for Our Industry, Homeowners, and Property Rights!

ILLINOIS ASSOCIATION OF REALTORS ®Property Tax Issues SUPPORT legislative efforts to reduce and/or make theprovision of local government services more efficient (SB 1585-Biss; HB 439-Franks and SB 494-Cullerton, T.; HBs 2481 and 3251-Reboletti). OPPOSE Senate Bill 41 (Munoz), a repeat measure, to allow local tax assessors to file a TAXLIEN and impose significant penalties and interest when a homeowner has received a homesteadexemption for which they were not eligible, even if the violation was unintentional or the homeownerdid not realize they were no longer eligible. SUPPORT Senate Bill 2230 (Sullivan) which clarifies provisions in the Illinois Property TaxCode relating to the use of compulsory sales in the assessment of property. The bill ensures that all deedtypes are included in the definition of compulsory sales. This will ensure that these all deed types areincluded when the sales ratio reports are done by the Department of Revenue. Passed the Senate,pending in the House. SUPPORT Senate Bill 1924 (Luechtefeld), which modifies a subsection of the PropertyTax Code dealing with the preferential assessment for developers (commonly known as the “Vacant LotAct”). SB 1924 provides that through December 31, 2015 the preferential assessment can remain inplace for a subsequent developer who was transferred the property pursuant to a foreclosure. Continue to discuss House Bill 197 (Mayfield), a change to the TIF law to allocate toschools additional tax dollars attributable to inflation.Other Issues of Interest OPPOSE House Bill 2326 (Chapa LaVia) to amend the Freedom of Information Actto modify the definition of “commercial purpose” and to change requirements on persons whorequests to inspect or copy public records. OPPOSE House Bill 3262 (Verschoore) amending the Public Water District Act andthe Highway Code UNLESS AMENDED. The introduced bill removed the requirement of aPublic Water District to get the consent of a private landowner to place pipes or conduits in theeasement originally granted for highway purposes. SUPPORT House Bill 3014 (Unes/Cunningham) to enhance penalties on theoffense of theft of recyclable metal. Passed the House, pending in the Senate. OPPOSE Senate Bill 1097 (Noland) to enact the Consumer Contract Plain Language Act,which would apply to brokerage agreements and real estate contracts. The IAR believes that contractsbetween parties should contain whatever language the parties and their attorneys feel is necessary toaccurately reflect the nature of the agreement.• • • • • • •Fighting for Our Industry, Homeowners, and Property Rights!

Policy Statement Regarding Property TaxesThe Illinois Association of REALTORS® is a strong advocate for property taxpayers on a widerange of taxation and regulatory issues. We advocate for all types of property owners, in everymunicipality, every county, and every region of the state.As real estate professionals, we understand the complexities and variations of the property taxsystem in different regions of the state. For example, we understand that decreasing propertyvalues overall do not necessarily translate to a lower tax bill for all property owners. But ourclients and your constituents do not understand the complexities of the Illinois property taxsystem, and we are asking you as state leaders to think about property tax issues as part of yourpolicy considerations this spring.The REALTOR® organization has a rich history of dedicated involvement in real estate policyissues on behalf of our members and property owners at all levels of government. Weunderstand just how difficult and seemingly insurmountable it is to come up with passable“fixes” to the property tax system in Illinois. But our clients and your constituents do notunderstand these political realities, and are frustrated that we continue to live with what theysee as an unfair, unpredictable, incomprehensible, politically influenced process that stifleshome ownership as well as commercial and residential development.We also understand that issues like the state’s $96 billion unfunded pension liability, ourmassive budget deficit, and the contentious debate a court decision has sparked regarding the“concealed carry” of firearms, tend to crowd out other issues that are important but not animmediate crisis. Though the property tax issue may not seem the immediate crisis as some ofthese other issues, it is of no less significance to your constituents. Therefore, the IAR urgesyou to keep the property tax issue on your agenda, and to consider a pathway towardsestablishing greater fairness, predictability, and transparency in the Illinois property tax system.THE ILLINOIS ASSOCIATION OF REALTORS® PLEDGES TO SERVE AS A RESOURCE AND PARTNERWITH YOU AS YOU DEAL WITH THESE ISSUES, AND WE OFFER THE FOLLOWING THOUGHTS ASWE CONTINUE TO DISCUSS THIS CHALLENGING ISSUE:• First, do no further harm. There are proposals each year to make the tax system morecomplex, less transparent, and more prone to pushing property taxes upwards. Obviously,the discussion of pushing more pension costs off on property taxpayers concerns us. Butthere are also proposal to further expand exemptions from property tax caps and expandthe use of monies raised from particular levies. We urge you to not further exacerbate theproblem regarding property tax issues.

• Enable change. As you are aware, there are and have been proposals in the GeneralAssembly to enable local taxpayers and units of local government to voluntarily consolidateand reduce the number of local taxing districts to make the system more efficient andunderstandable. As you are aware, Illinois has more local taxing districts than any state inthe nation. Though we understand that each of these taxing bodies has a vocal localconstituency, we urge your leadership in enabling changes that encourage consolidationand elimination of taxing districts where it makes sense. This will increase efficiency,simplify taxpayer bills, and make the system more transparent.• Let’s educate and engage the taxpayers. REALTOR® members interact with propertyowners and investors of every kind, and we help to educate and inform our clients onproperty tax issues. We have committed substantial IAR resources to developing materialto help educate and engage our members as well as property taxpayers, and we pledge oursupport to help you educate your constituents on this issue, which is of primary importanceto nearly everyone. Among the material we have produced, at no charge to our membersto provide to their clients:o A “Community Activist” Toolkit, to educate our members and taxpayers how toengage in the local processes that impact their property tax bill;o Property Taxes in Illinois (one statewide version, one specifically geared towardsCook County.o Two different publications to educate our members and their clients about theunique issues regarding “Special Service Areas” in Illinois.• The Appeal Process. Most taxpayers find the assessment and appeal process daunting, andmany believe, especially in the commercial world, that relief is unlikely unless they engagean attorney who is an expert in the tax appeal process. There is no reason why taxpayersshould feel that the appeal system is ineffective or expensive to access. Through acombination of education and improvements in the process, we can make headway on thisissue. We should discuss the merits of allowing taxpayers to use non‐attorney experts toassist in their tax appeal efforts.• Reliance on the property tax. For decades, several “Blue Ribbon” state task forces studiedthe possibility of shifting the excessive reliance on the property tax to fund localgovernment services, especially schools, to another tax base – such as the income tax. Eventhe best and brightest minds of Illinois failed to develop a passable proposal though thesetask forces. Given the recent increase in the state income tax, this particular approachseems further out of reach than ever. However, we urge you to continue to consider thetoll that the Illinois property tax burden exacts on homeowners and businesses alike, as youconsider the “tax mix” in Illinois.Thank you for your leadership, support, and consideration, and we look forward to continuingthis critically important discussion in this and future General Assemblies.If you have any questions, please feel free to contact Greg St. Aubin (217‐652‐2300) or JulieSullivan (217‐652‐3180) if you have any questions.