Leadership through the Storm: Protecting Homeowners & the Economy

ThE 2013 LEgISLATIvE SESSION IS OvER, ANd IT wAS A “dOOzy.” ThE NORTh CAROLINA gENERAL ASSEMBLy TACkLEd MORE ThAN 1,750 fILEd BILLS ThIS yEAR, INCLudINg COMpLEx ANd CONTROvERSIAL LEgISLATION, ANd AS A RESuLT wAS ROCkEd

By pOLITICAL STORMS ANd TuMuLT--fROM “MORAL

MONdAy” pROTESTS, wITh 924 ARRESTS MAdE, TO fREquENT RAdICAL ShIfTS IN pROpOSEd LEgISLATION

Through it all, the NC REALTORS® Government Affairs staff and Legislative Committee stood steadfast alongside its members and homeowners – aiming to provide stalwart leadership as the General Assembly considered many pieces of housingrelated legislation, and strongly advocating to protect the safety and vitality of homeowners, homeownership, property rights, the housing industry and the overall economy.

In a highly contentious debate over state tax reform, legislators first proposed calling for a tax on real estate services; sales taxes on the myriad other services that accompany a real estate transaction; a statewide transfer tax; a new franchise tax on LLCs, LLPs and other corporate entities; and a significant business licensing fee. Then, complete elimination of mortgage interest and property tax deductions was added to the list.

“At times it felt like one of those video games that hurls new attacks as soon as you beat the previous ones,” said Mark Zimmerman, chair of the 2013 NC REALTORS® Legislative Committee.

Despite the serious challenges, NC REALTORS® successfully steered through the worst of the tax reform storms and made a series of accomplishments on important issues concerning regulatory reform, property management and environmental law. The combined forces of NC REALTORS® staff, its legislative committee, our members, General Assembly allies and other advocates are preparing to take the helm once more and go full steam ahead when the next legislative session begins May 16.

The bills highlighted below represent a “snapshot” of the many housing policy issues that arose during the 2013 session. Please don’t hesitate to visit NCLeg.net or to contact the NCAR Government Affairs Office at cthomas@ncrealtors.org for additional information on these bills or others considered in 2013.

State Tax Reform

During the session’s tax reform debate, NC REALTORS® aimed to ensure no unintended consequences of the reforms would impede housing’s fragile recovery and affect current and future homeowners, REALTORS® and the economy. Legislators introduced six tax reform bills that were of concern to NC REALTORS® and ultimately failed to be passed by either chamber, thanks to the feedback they heard from REALTORS®.

The tax reform bill that was finally approved, House Bill 998 (The Tax Simplification and Reduction Act), was introduced by Representatives David Lewis (R-Harnett), Mitchell Setzer (R-Catawba), Tim Moffitt (R-Buncombe) and John Szoka (R-Cumberland) and signed into law by Governor of North Carolina Pat McCrory on July 23, 2013. The law now allows filers to take a standard deduction ($15,000 for married taxpayers filing jointly, $12,000 for head-of-household filers and $7,500 for single and married taxpayers filing separately) or to itemize with a combined cap on mortgage interest and property tax deductions of $20,000 for all filers.

NC REALTORS® prevailed in influencing legislators to remove from the bill all original provisions that would have been harmful, and with help from NC REALTORS® champions in the House, the housing deductions remain as two of only three deductions allowed in the new tax code. The allowable amount for the housing deductions took many shapes in legislators’ plans along the way. By the end of session, while it did not remain unlimited, it progressed from complete elimination to $20,000 for all filers. Due in large part to the determined efforts of NC REALTORS® advocates and champions, many North Carolina homeowners were protected.

NC REALTORS® sincerely thanks its supporters for standing up for homeowners and a healthy economy and for all their help in the fight. NC REALTORS® currently are planning for the 2014 legislative session, where they will continue working to protect housing deductions, press for removal of the cap and address transfer and service tax issues, for the betterment of North Carolina.

Regulatory Reform: Zoning/Design & Aesthetic Controls

During the 2013 session, NCAR made great headway on House Bill 150 – introduced by Representatives Nelson Dollar (R-Wake), Bill Brawley (R-Mecklenburg), Tim Moffitt (R-Buncombe) and Jonathan Jordan (R-Ashe) – and the bill’s passage was stymied only as a casualty of the tax reform debate. With wide support in both chambers and from both parties, the bill received the support of Speaker of the House Thom Tillis (R-Mecklenburg) and was co-sponsored by Representative Moffitt, the chair of the House Regulatory Reform Committee. A companion bill, Senate Bill 139, was introduced in the North Carolina Senate by Senators Dan Clodfelter (D-Mecklenburg), Rick Gunn (R-Alamance) and Jeff Tarte (R-Mecklenburg).

The proposed legislation clarifies that municipalities do not have the authority to regulate the appearance of single-family residential structures except under limited circumstances, and once passed, it will relieve property owners of overly burdensome local ordinances. The House passed the bill overwhelmingly in 2013, but Senate President Pro Tempore Phil Berger (R-Rockingham) removed it from the legislative calendar at the last minute. NCAR staff currently are working with allies to have the bill heard in the Senate during the 2014 session.

Property Management: Expedited Eviction

NCAR also took great strides during the 2013 session with the passage of House Bill 802. The bill – introduced by Representatives Beverly Earle (D-Mecklenburg), Tim Moore (R-Cleveland), Bill Brawley (R-Mecklenburg) and Carla Cunningham (D-Mecklenburg) – will shorten eviction times for non-paying tenants. The bill will become law on September 1, 2014.

NCAR worked with the bill’s sponsors and the North Carolina Apartment Association to assist in the legislation’s passage. Moving ahead, NCAR will continue to gather evidence of money delays in the eviction process, which are costing landlords and ultimately tenants, and to research the delays’ source and how other states regulate the use of private process servers.

Environmental Law: Jordan Lake Rules

NCAR also contributed to the passage of Senate Bill 515 (the Jordan Lake Water Quality Act) – sponsored by Senators Rick Gunn (R-Alamance) and Trudy Wade (R-Guilford) –in the 2013 session. The new law calls for a three-year delay of the Jordan Lake Rules, which originally were intended to clean up the lake, a drinking water source for the Triad, but have proven to be overreaching, costly to local governments and property owners, and of no benefit to water quality. Moving ahead, there will be a review of the Rules, and NC REALTORS® will work with a commission appointed to oversee a pilot project, to find a better solution.

Looking Ahead

The 2014 legislative session could prove contentious as well. At press time, a fraction between the legislature and the Governor’s administration, which began in the 2013 session, appeared to remain. In a short special legislative session held in early September, the General Assembly voted to override vetoes by Governor McCrory, in order to pass two bills (unrelated to housing) into law.

NC REALTORS® leadership emphasizes that, particularly in such an environment, NCAR will need its supporters more than ever:

“The housing industry is always a target. NCAR has remained vigilant and smart to fend off continual attacks on the industry, homeownership and private property rights. To continue doing so, however, NCAR will need our strong commitment and support as members, through contacting our Representatives and Senators about important issues and providing the resources needed to compete in an ever more expensive arena,” said Mr. Zimmerman. “Our political engagement will be crucial to ensure positive outcomes for homeowners and our businesses.”

“Every infringement on pro-housing policies contributes to a cumulative hit on homeowners and the real estate-based economy. Every decision that negatively impacts housing damages an industry that’s critical to creating jobs and turning our economy around,” said Patrice Willetts, 2013 president of NC REALTORS®. “With such threats becoming all the more frequent and coming from many different directions, now more than ever, there is power in numbers. Every single NC REALTOR® voice will be needed to keep property ownership safe. Please find your voice to protect and promote private rights and ownership in North Carolina.” v

By KRISTIN MILLER RPAC MANAGER