Legislative Issues

Quarterly Legislative Activities Report

March 2011

The $55.7 billion two-year state budget plan has been passed by the Senate and, after the Senate changes were rejected by the House, will now enter conference committee where members of both chambers will convene to resolve the differences. The points of contention must be resolved by the end of the month as the Ohio Constitution requires state lawmakers to have a budget bill signed into law by July 1^st.

Offering some relief to the budget woes are reports by the Office of Budget and Management showing overall tax revenues exceeding original estimates by nearly $1 billion. OBM Director Tim Keen has indicated that the additional revenues should be used to pay off certain Medicaid expenses and other costs that had previously been set to lapse into FY 2012. Governor John Kasich has stated that if revenues continue to come in ahead of projections, he plans to give the surplus funds back to the taxpayers in the form of a tax cut of some type.  However, members of the General Assembly are skeptical of this plan and may want to direct any excess dollars into the Budget Stabilization Fund “rainy day fund”.

Items included in House Bill 153, the budget bill, are a provision that would eliminate the Estate Tax in Ohio on January 1, 2013.   Additionally, the Department of Commerce, Division of Real Estate is seeking to make changes to the real estate license law.  The changes include:

• Clarify activities for which a license is required.
• Clarify licensure exemptions.
• Revise advertising regulations to accurately reflect Division policy.
• Clarify payment of commissions.

• O.R.E.I.A.  P.O. Box 4044, Youngstown, Ohio 44515  Email:OREIALegislative@embarqmail.com (330) 824-0023

  Limit terms of Ohio Real Estate Commissioners to two consecutive terms.

• • Exemptions such as the trustee exemption and exemption for persons who own any interest in the real estate, even an option.  Limiting exemption to the legal interest to eliminate the abuse of this exemption.

• • Advertising real estate is a primary component to listing real state.  The current advertising regulations are poorly written and do not comport with current industry practices and the historical and current interpretation of the statute.

• • Current statute technically prohibits the payment of commissions to salespersons who retire or voluntarily place their license in inactive status after that licensee earns the commission but before the transaction closes.
  • Codify the Division’s position (upheld by case law) that interests in a commission may not be assigned by a salesperson to a third party.
• Provide authority to the Superintendent to issue advisory letters in lieu of initiating disciplinary proceedings for infractions that require attention and corrective action but don’t rise to level of formal discipline. No harm to consumer, business or another licensee are examples of advisory letter use.

• • There is currently no limit. This revision mirrors the term limits in ORC 4763, the real estate appraiser regulation.

• Provide the Ohio Real Estate Commission the authority to promulgate rules setting forth the curriculum of the 10 hour post licensure course.
• Modify the disposition of fees received by the Division to increase funds in the operating account without raising fees.
• Clarifies what constitutes the “date of licensure”.
• Clarifies that a broker licensed in Ohio must maintain a definite place of business in the state.
• Requires electronic notification to the licensee upon successful license renewal.
• Establish that a licensee is not liable for “imputed knowledge” of another current or former licensee.
• Prohibits a licensee from participating in a dual agency situation where that licensee is also a party to the transaction.
• Clarifies the medical extension under continuing education requirements.
• Revise the statute regarding investigations for unlicensed activity to remove the exemption for previously licensed individuals and to provide due process via 119 hearing process.
• Adds disclosure of purchase contract information to a credentialed appraiser solely for purposes of performing a real estate appraisal to the list of exceptions to the confidentiality requirement.
• General grammatical clean up.

Finally, there are also changes to the process for delinquent tax certificates.  The bill authorizes county treasurers to establish the time, between three years and six years after the date of sale or transfer of a tax certificate, within which a tax certificate holder must initiate a foreclosure action to collect the taxes. It further authorizes the negotiated sale of tax certificates in accordance with the requirements for current sales at public auction and authorizes tax certificates being sold at public auction to be advertised electronically.

In separate news, the U.S. Department of Housing and Urban Development awarded the Ohio Department of Health a grant of $2.1 million to identify and remediate hazards from lead paint in low-income houses in 36 counties. The Ohio Department of Health will administer the funds in 30 Appalachian counties as well as six northwestern Ohio counties. Although the manufacture of paint with lead has been banned since 1978, 457 cases of lead poisoning were diagnosed in children age 6 or younger in Ohio in 2009.

Below are the bills that we are tracking as they might be of interest to our members of the Ohio Real Estate Investors Association.