By Brad Ward
As promised in the January edition, here is part two of two of this Capitol Report, wrapping up all of the policy issues from 2018. By the time 2018 ended along with session and Governor Snyder’s final term, we scored some significant victories, fended off some harmful legislation, and laid the groundwork for some significant legislation to move in early 2019.
First, let us deal with the biggest let down of the 2018 lame duck session, the veto of the Michigan First Time homebuyer Savings Account (FHSA) legislation. A top priority of ours last year, Senate Bills 511-512 passed the legislature with overwhelming support from both sides of the aisle. The bills were vetoed by Governor Snyder despite amendments made along the way to try and address his concerns. In his veto message, Governor Snyder explained that despite seeing some benefit to helping retain Michigan talent, he came into office not wanting to incentivize behavior through the tax code. His philosophy was one of providing a low rate for all tax payers and not picking winners through incentives and credits. Sadly, because the FHSA is a tax-incentivized vehicle, it did not meet this philosophy.
I’m happy to report that work has already begun on this same legislation in 2019. Senators Peter MacGregor (R- Rockford) and Ken Horn (R- Frankenmuth) will be reintroducing the bills early this session. The FHSA legislation was a main focus of candidate interviews throughout the campaign season so education of the new legislators began earlier. Similarly, Governor Gretchen Whitmer expressed her support for the concept when she met with the RPAC Trustees back in June. Anticipate reading about movement of these bills in the near future.
Turning to some of the other issues on the 2018 lame duck docket:
Reasonable Regulation and Good Science: SB’s 652-654, from lead sponsor Senator Tom Casperson (R-Escanaba), bolstered the interests of businesses and Michigan citizens in their dealings with the Department of Environmental Quality (DEQ). This law change will promote transparency in the rule-making and permitting process, providing greater certainty for businesses and property owners, while highlighting science-based applications within the process. (Enacted as PA 267-269 of 2018).
Unfortunately, this has become the first political issue between our new Democrat governor and the Republican Legislature. As one of her first handful of official acts, Governor Whitmer issued an executive order eliminating these private sector oversight boards. The legislature is taking exception to her eliminating a legislatively created board through executive power.
Wetland Regulation Reform: SB 1211, also sponsored by Senator Tom Casperson (R-Escanaba), provides greater transparency for property owners in wetland areas. The new law requires DEQ to provide a property owner, in writing, a list of each specific provision of statute, rule, or permit that the person was alleged to have violated and a statement of the facts constituting the violation. Also, if the person agreed to meet with the department, it could not initiate a civil enforcement action until after the meeting was held, unless the meeting was not held within a reasonable time of not less than 60 days. As a response to growing claims of subjective field rulings by DEQ staff, this new law provides greater certainty for property owners. It will also require the DEQ to consider costs, existing technology and logistics when evaluating alternative options for permitted processes. (Enacted as PA 564 of 2018)
Assessor Reform: HB 6049, sponsored by Representative James Lower (R-Cedar Lake), represents important reform in the assessment of property in Michigan. The new law will provide baseline compliance standards for how assessment should be done, while implementing a rolling audit to ensure that assessment districts are meeting the needs of their respective constituency. While the impact of the law may be a few years down the road, the bar for assessment practices in Michigan has been raised. (Enacted as PA 660 of 2018).
A Good Defense
Michigan Realtors® was also instrumental in thwarting problematic legislation this past year. The following bills were either defeated or improved from their original form
Cyber Breach Liability: SB’s 632-633, sponsored by Senator Darwin Booher (R-Evart), were laudable in intent but they would have the unintended consequence of moving in a direction of potential liability and increased costs for many Michigan businesses. The bills would have required new notification requirements and infrastructure expenses, while shifting the financial liability associated with data breaches from banks and credit unions to other businesses that routinely handle credit card payments or sensitive information. The Michigan Realtors® were members of a business coalition in opposition to the bills. Our position was for a more comprehensive and thoughtful approach to addressing this growing problem, one that attacks the root of the problem, not just who pays for it afterwards.
Good Moral Character: HB 6110, sponsored by Representative Brandt Iden (R-Kalamazoo), would have impacted the way in which “good moral character” is currently assessed for real estate licensees, specifically, weighing whether a felony conviction should be considered disqualifying for an applicant seeking a real estate license. While it is important to provide second chances in society, the way the bill was drafted would have removed the Department of Licensing and Regulatory Affairs’ ability to look at an applicant’s criminal record subjectively. While the bill was well-intentioned, the Public Policy Committee felt that a more appropriate approach would be to expressly identify felony convictions that should be disqualifying and allow LARA and BREBS to look at the totality of the circumstances.
Commercial Transfer Fee: SB 943, sponsored by Senator Mike Nofs (R-Battle Creek), became a potential vehicle bill for additional funding of the statewide insurance fund for Orphaned Contaminated Sites. These sites have always existed and there are approximately 3,000 orphaned sites in Michigan. However, with the current situation that Michigan faces with PFAS, the profile on this issue has increased in recent months. While the discussion continued, the idea was brought forward to implement a transfer tax on the sale of all commercial property. Michigan Realtors® was quick and successful in arguing that such a fee would be a negative for commercial real estate.
Premises Liability Codification: SB 1017, sponsored by Senator Peter MacGregor (R-Rockford), would have codified decades of caselaw concerning liability of possessors of real property for injuries sustained by individuals who have the possessor’s permission to be on the property. Michigan Realtors® raised concerns relative to the danger that a real estate agent might be considered a possessor of property under the language of the bill. This led to an amendment exempting Article 25 licensees from the scope of liability. While the bill did not get signed into law, it’s a good example of working to protect membership from unintended consequences.
The new legislative session is now underway and in addition to FHSA’s and Michigan Realtors® is back at work on protecting vacation rentals (HB 4046), statewide septic code, and clarifying that commission agreements must be in writing. Please follow along with breaking news through our social media and E-news publications. Additionally, be the first to receive Call for Action alerts on your mobile phone by texting the word “REALTOR” to 30644.
