Capitol Connection – May 11, 2018
Sine Die!
Wednesday, May 9th, the final gavel came down on the second session of the 71st General Assembly. In total, 784 bills were introduced. The Colorado Association of RELATORS® (CAR) tracked 80 bills this year and the Legislative Policy Committee (LPC) took a position on 46 of them. The split legislature this year with Republicans controlling the Senate and Democrats controlling the House meant every bill sent to the Governor for his signature had to have bipartisan support and in an election year, that is no easy feat.
However, despite all the tension under the dome, several big compromises ultimately were achieved in the waning hours of the legislation session including: rules for the sale of full strength beer in grocery and convenience stores, sorely-needed funding for both transportation and education, an agreement to shore up the Public Employees’ Retirement Association (PERA) that will help pay down the $32 Billion unfunded liability, and the reauthorization of the Civil Rights Commission.
Additionally, lawmakers addressed longstanding issues and some new issues earlier in the legislative session. A group of bills were sent to the Governor to fund rural broadband and both chambers addressed sexual harassment allegations against their colleagues. Those discussions resulted in the second expulsion of a lawmaker in Colorado history, some very heated debate about other accusations, and the General Assembly itself will work on rules for workplace behavior over the summer.
This year, CAR’s LPC tracked many bills that would affect our industry. CAR is very pleased to announce that we were successful in accomplishing many of our legislative priorities and defeating more than a few unfriendly bills this session.
CAR is always on the front lines, fighting for Colorado REALTORS®, and here are some of the top issues that CAR worked on in 2018, straight from the Capitol:
Squatter Prevention:
SB18-015, will prevent the unauthorized occupation of property statewide by creating an emergency civil court process that a property owner may pursue when a squatter illegally takes up residence in their home. This is a common sense public policy solution that: 1) Gives rightful property owners a remedy to remove squatters and lessen damages to private property; 2) Gives law enforcement officials the tools and necessary procedures to remove squatters, 3) Protects consumers from becoming a victim of housing scams; and 4) Deters fraudulent transfers of real estate and squatter events that threaten private property rights.
CAR worked on solving this problem with Colorado Springs legislators, the bar association, and several other stakeholders to find a way to forward and it was unanimously adopted on May 8th by both the House and Senate chambers and will be sent to the Governor for his signature.
Real Estate Commission Flexibility in License Periods:
HB18-1227, cleans-up a few lingering issues with the 2017 real estate sunset bill. The bill gives the Division of Real Estate the statutory authority to change the expiration date of real estate licenses from an anniversary date to a calendar renewal on December 31st of the third year after issuance. It also corrects the problem of inadequate education offerings for some rural areas or local boards during that transition period.
Previously only one type of education service provider was allowed to offer the transition course, which meant members would have to travel long distances to meet their requirements. Additionally, the transition course was only updated once in five years whereas the annual update course is new each year. Now the number of continuing education requirements will remain the same under the amendments, but in the transition license period two annual update courses will be required and the rest of the requirements can be met with elective courses. On April 23rd, Governor Hickenlooper signed this bill into law.
Legislative and Congressional Redistricting
With a 2020 census right around the corner that appears ready to give Colorado an eighth Congressional seat under reapportionment, there is a widespread belief among leaders in both parties and from advocates for unaffiliated voters that Colorado’s redistricting processes must be reformed to increase the competitiveness of legislative and congressional seats. Rather than give the line drawing responsibilities to the General Assembly, Senate Concurrent Resolutions (SCR) 004 and 005 refer these reform concepts to the 2018 ballot for Colorado voters.
SCR 18-004, amends the state constitution to create an independent congressional redistricting commission that is responsible for redrawing the U.S. congressional districts after the census rather than the General Assembly. And similarly, SCR 18-005, amends the state constitution to create an independent legislative redistricting commission that is responsible for redrawing the state senate and state representative districts after the census. The commissions are both made up of 12 members that will develop a congressional districts map or a state legislative districts map that uses a variety of factors, including competitiveness. The map must be approved by a super majority (8) with a minimum of 2 unaffiliated members.
This legislation gives Colorado voters a chance to determine if a more fair and neutral process for redistricting should be instilled in Colorado. The changes to the existing line drawing systems could increase the likelihood of making legislative and congressional seats more competitive as potential legislators would have to appeal to a broader array of voters who maintain diverse opinions on issues that come before the U.S. Congress and the State Legislature. Both concurrent resolutions were sent to the Governor.
Rural Broadband:
SB18-002, is a bi-partisan bill that will expand the broadband network in rural areas to underserved citizens. This legislation changes a state telecom fee, the High Cost Support Mechanism, to reallocate funding to provide additional resources for broadband infrastructure. Broadband funding for rural areas of Colorado has been a continued topic of discussion at the State Legislature in recent years. And this legislation will allow rural areas and businesses of our state the opportunity they deserve to share the same capacity for economic development, business recruitment, and job creation as the Front Range and urban areas.
According to the Denver Post, “1 in 4 rural households still lack access to broadband internet, leaving wide swaths of Colorado unable to compete for residents and businesses.” That problem is being addressed by SB18-002 and similar bills, such as HB18-1099, which requires the Broadband Deployment Board to consider new criteria related to speed and cost when telecommunication companies invoke a first right of refusal for a competitor’s broadband grant application. Both SB18-002 and HB 1099 were signed into law by the Governor on April 2nd.
Protecting Data Privacy – HB 1128 and SB 109:
House Bill 18-1128: Protections for Consumer Data Privacy
After the prominent Equifax data breach last year, HB18-1128, requires public and private entities in Colorado that maintain paper or electronic documents that contain personal identifying information to develop and maintain a written policy for the destruction and proper disposal of those documents. The bill also requires individual or commercial entities to report data breaches to the attorney general’s office after the discovery of a security breach.
CAR worked to include a definition of third party service providers based on contracts to maintain, store and process personal information so REALTORS® involved in transactions have clear operating procedures on the responsibility for personal data management and communication of any securities breaches. The bill was sent to the Governor this week.
Senate Bill 18-109: Authorize Audio-Video Communication Notarial Acts
SB18-109, would have allowed notaries public to perform notarial acts using audio-visual communication. The process is called remote notarization and is similar to a skype or face-time type of interaction where there is audio and video communication between the notary and the person having a document notarized. Under current regulations, an individual must physically appear before a notary public to have a document notarized. This legislation would have established several requirements a notary must comply with, such as rules and standards about the necessary evidence to identify the individual seeking remote notarization and how that process of identification should take place.
However the legislation had one glaring issue with the drafted language. The bill would have allowed a notary to keep all the information from the transaction and sell the data to other parties outside of the transaction, such as marketing companies. This would have been a huge problem for protecting the safety of consumer data, especially the kind of financial information that is part of a real estate transaction. CAR raised this concern and attempted to remove the sale of data provisions that we believe are harmful for consumer REALTOR® clients, but negotiations with the proponents broke down late in the session and the bill died on the calendar. Thank you to all of our members who have responded to the call for action to let the legislature know that protecting consumer data is important to your businesses and your clients.
Arbitration Bills:
House Bill 1261: Colorado Arbitration Fairness Act
House Bill 1262: Arbitration Services Provider Transparency Act
HB18-1261, would have established ethical standards for arbitrators, prohibiting an arbitrator from performing their responsibilities with bias. The bill also specified that any party could challenge in court the neutrality of an arbitrator or an arbitration service provider, and it required several specific disclosures by arbitrators, and authorized injunctive relief against an arbitrator who has potential partiality.
HB18-1262, would have amended the Uniform Arbitration Act to require arbitration service providers to collect, publish, and make specific information available on arbitrations performed in the previous 5 years.
CAR was disappointed to see legislation that would put the widely supported bi-partisan reform of construction defects litigation of 2017 at risk by making arbitration more burdensome to an industry that needs specialized expertise for these types of construction related cases.
Additionally, CAR offers arbitration services for our REALTOR® members and this overly broad approach to bring transparency to alternative dispute resolution would have prevented CAR from offering these services as one of our most important member benefits to the thousands of small businesses that comprise our membership.
This legislation would have increased the costs, extended the length of time of our process, and burdened the court system with new cases because CAR would not be able to continue offering these member benefits with these overly burdensome requirements. CAR testified in opposition along with others and fortunately, these bills died in the Senate State, Veterans and Military Affairs committee on April 18th.
Affordable Housing – SB 007, HB 1195, and HB 1315:
Senate Bill 18-007: Affordable Housing Tax Credit
SB18-007, renames the Low Income Housing Tax Credit (LIHTC) to the Colorado Affordable Housing Tax Credit and extends the program through 2024, which was originally set to expire in 2019. The bill was sent to the Governor for his signature on April 27th.
CAR as affordable housing advocates, has historically supported LIHTC. Since 2015, this program has supported the development of over 4,000 affordable rental housing units and generated over $463 million in private sector equity to support Colorado’s affordable housing needs.
House Bill 18-1195: Tax Credit Contributions Organizations Affordable Housing
HB18-1195, would have provided a state income tax credit for contributions to nonprofit organizations and Housing Authorities engaged in the new construction of affordable housing for homeownership of at least 120% Average Median Income. The donation by an individual or organization had to be tied to an actual project.
This legislation would have incentivized new construction of affordable housing that all geographic areas of Colorado need given the lack of affordable inventory statewide. These projects would have been developed with an attainable price for homeowners in the low-income and workforce housing level. CAR was happy to support good public policy solutions that could be an effective tool to address the continuing problem of affordable housing. Unfortunately after the budget process the bill hit some hurdles with the fiscal note and it died in the Senate this week, so CAR will have to continue working on this legislation in the future. Again, thank you to all our members who called on their legislators in our call for action that impressed upon the legislature the importance of this legislation.
House Bill 18-1315: Manufactured Home Sales Tax Exemption
HB 18-1315, expands the sales and use tax exemption for manufactured homes. Under current law, 48 percent of a manufactured home price is exempt from state sales and use tax, this bill would completely exempt the purchase of a new manufactured home from state sales tax.
According to the U.S. Census Bureau, the average sales price of a new manufactured home in Colorado in 2016 was $66,100, and households that live in manufactured homes make on average $30,000. Due to a quirk in the way that these housing options are taxed as personal property it meant that the tax on the purchase of this type of home would cost approximately $1,000, which is a significant closing price burden for the working families that traditionally purchase manufactured homes. This legislation will ease that burden and increase the availability of affordable housing for hard working Coloradans. The bill was sent to the Governor this week.
Thank you to the 2018 LPC Members!
Finally, we would like to extend a sincere thank you to all of the members of the LPC for your hard work and dedication throughout this session. Thank you to our subcommittee chairs: Janene Johnson – Business/Taxation, Jon Roberts – Housing, Jack Beuse – Land Use, David Barber – Regulatory, and Barb Asbury – Water. Additionally, thank you to Sean Dougherty 2018 LPC Chair, and John Mitchell, 2018 LPC Vice Chair, for all of your time and effort this year!
Upcoming Events: NAR Midyear Legislative Meetings (May 14-19, 2018)
The REALTORS® Legislative Meetings & Trade Expo is where NAR members take an active role to advance the real estate industry, public policy, and the association. REALTORS® come to Washington, DC, for special issues forums, committee meetings, legislative activities, and the industry trade show. Registration is now open. Click here for more information.
This year, NAR has held the REALTOR® Legislative Meetings schedule from 2:00PM to 4:30PM on Wednesday, May 16th to allow time for Capitol Hill Visits. For Colorado, we have 9 Members of Congress visits to complete on Capitol Hill. While we will try to schedule as many meetings as possible during this NAR designated time frame, we will not be able to fit all of these meetings into this window. As we approach May, CAR Staff will be in contact with attendees regarding our hill visits meeting schedule for your constituent meetings with your Members of Congress.
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Invest in RPAC
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Colorado Project Wildfire
Developed by the Colorado Association of REALTORS®, Project Wildfire is designed to help reduce the destruction of land, property, and lives. Working in partnership with other like-minded fire prevention organizations across the state, local REALTOR® associations are bringing education and awareness, as well as access to resources, directly to residents in their local communities. To learn more about Colorado Project Wildfire, click here.