Moving along
Legislators pass summer issues friendly to members

The state budgeting process slowed to a trickle this summer as legislators began the (in some cases) all-important primary season. Nonetheless, some REALTOR® related legislation was able to move through the legislature.

A “Red Tape” Package

Senate Bill 1231, sponsored by Sen. Laura Toy (R-Livonia), requires the Department of Labor and Economic Growth to grant and renew real estate licenses for brokers within 30 days of the receipt of the application. It was signed into law by the governor this summer as Public Act 264 of 2004. Sen. Jason Allen (R-Traverse City) spearheaded this package of bills as an overall streamlining of business regulations. In the end, a speedier application approval and renewal process will result for the benefit of both the department and the real estate community.

Because of the unique balance and political sensitivity of this “Red Tape” package, the legislation was unable to extend the requirement to salespersons. Nonetheless, they were able to insert boiler plate language into the Department of Labor and Economic Growth’s budget that requires the department to process real estate salespersons’ licenses within 30 days. Although budgets are renewed yearly, we are confident that this language will be included annually in the future.

Another set of bills, particularly beneficial to you commercial REALTORS®, is intended to “incentivize” business development in Michigan. Public Acts 244 and 245 of 2004, sponsored by Rep. Lorence Wenke (R-Richland), amend the General Property Tax Act to exempt the real and personal property of a “smart park” from the tax. By exempting real and personal property of a “smart park” from taxation, the bill will help foster the creation, development and growth of technology-based start-up businesses located in a “smart” zone.

Public Act 251 of 2004, sponsored by Rep. Scott Hummel (R-DeWitt), amends the Obsolete Property Rehabilitation Act to allow “start-up” small businesses to submit a yearly application for tax relief during the financially challenging early years. This new law not only provides small businesses a chance to succeed, but has a targeted focus of promoting economic growth for our local communities.

Public Act 252 of 2004, sponsored by Rep. Matt Milosch (R-Lambertville), is strikingly similar to Public Act 251 but would amend the General Property Tax Act to allow for exemptions for “start-up” small businesses. Both pieces of legislation require the exemptions to be approved by the local tax collecting unit on a year-by-year basis for up to five non-consecutive years. By exempting the real and personal property of a “start-up” business, the bill targets small businesses looking to crawl out from under the disadvantages of antigrowth taxation.

A Lead-Based Paint Package

After it passed in the Senate, we have continued working with the leadership of the House to produce a Lead-Based Paint package in the legislative process. We expect this legislation to be brought before the House for final passage in the near future. As you may recall, initial drafts of this legislation brought serious concerns about the possible negative effects it might have on property ownership. Our public policy committee began working with the Rental Property Owners Association and the Michigan Department of Community Health to determine if there might be a plausible solution to these negative effects. Happily, we were able to identify concessions that kept the legislators’ intent but made the law more refined and possible to obey. For example, better defining “hazards” and giving landlords 90 days to remediate them, rather than 30, where lead hazards are proved to exist to children. We believe that this would balance the interests of REALTORS® with the safety concerns of the community. Once the bill language evolved to meet our standards of being friendly to REALTORS®, we provided support for the passage of this package. The last two bills in the package, SB 756 and HB 5115, have passed through committee and await action on the House floor.

Senate Bill 756, sponsored by Sen. Bill Hardiman (R-Kentwood), would require any house that was built prior to 1978, that is rented or leased for residential purposes and has been abated for lead, to be registered on a Lead-Based Paint Housing Registry. House Bill 5115, sponsored by Artina Tinsley Hardman (D-Detroit), would provide penalties for any owner of residential or multifamily housing (that is rented or leased) who has knowingly rented a hazardous unit to a family with children under six years of age.

Note that this only affects landlords who have been previously notified that there is a lead hazard and has failed to abate the problem as required in present day law. In sum, these bills represent a reasonable approach to stopping willful or extremely negligent poisoning of Michigan children without accidentally snaring innocent or well-intended landlords.

Accepting Bonds

We had a much warmer reception for a related bill, sponsored by Sen. Patty Birkholz (R-Saugatuck) clarifying that road commissions shall accept surety bonds for unfinished improvements in new developments.

Because Michigan’s construction season is so weather sensitive, this bill will enable REALTORS® and developers to market properties more quickly, rather than potentially having to wait until the roads are completely finished before final approvals allow building and selling to begin.

The bill overwhelmingly passed both chambers of the state legislature and was signed into law as Public Act 122 on May 28.

Land Use Academy

Members and staff took the time to look far ahead into Michigan’s future as the Michigan Association of REALTORS® Land Use Academy had its initial run. The Barothy Lodge in Walhalla, Michigan, created a great backdrop for our informed and highly accredited group of speakers. The overwhelming interest to attend this Academy speaks volumes about our membership, and we look forward to the second Land Use Academy in the future, where you, the member, can learn more about good development design and about working with local government to implement sound land use policies.

In a related effort to enlighten local government to the detrimental effects of misguided policies (such as unnecessarily wide roads, exclusionary zoning and huge minimum lot sizes), some of you may have noticed MAR’s involvement with the “People and Land” ads that have been running in local newspapers.

Like the Land Use Academy, our intent is focused on a broader campaign of educating our members to work with local governments.

Additionally, this campaign is intended to promote a legislative agenda that better recognizes the need for more streamlined platting and less politicized stonewalling of rightful development at the local level.

Of course, and above all, we hope it leads to better recognition of property rights while improving our real estate market opportunities.

The Highest Compliment

Please pardon the internal focus, but I didn’t want to miss the most public of opportunities to thank our (newly) former Director of Public Policy, Nick Infante, for the great work he has done over the past four years.

Of course, it was never a matter of whether, but when, he would be moving into greener pastures.

He is a great lobbyist with a great work ethic, and is extraordinarily well- regarded by his peers and in the legislature. Thanks, Nick, for a great run. We wish you every success.

By the way, we are also very happy to announce the promotion of Brad Ward, director of legal affairs, to the public policy directorship. With his intimate knowledge of our issues and keen legal mind, Brad will undoubtedly meet the high standard that has been set for our department.

As so many of our land use and regulatory issues are works in progress, we are confident of a seamless transition.

Stay tuned.