As you can imagine, it was a very hectic conclusion to this year’s legislative session. Let’s dive right in…updates that further explanation on the license law issues since the original post have been inserted in red.
License Law Issues:
The General Assembly approved both of Missouri REALTORS® license law priorities. The first, language allowing a licensee to own an unlicensed LLC that can receive commission payments. The second, advertising guidance. Both priorities were included in HB 476 and in HB 273. These were omnibus professional registration bills and REALTOR® legislators initially sponsored both bills; Rep. Derek Grier’s HB 476 and Rep. Tom Hannegan’s HB 273. We’ve referred to it as “The LLC legislation” but it is not limited to LLCs. The phrase used in the act is “business entity.” It was more simplistic to refer to LLCs because we anticipate that most of the entities will be LLCs. The term “business entity” means any corporation, partnership, limited partnership, limited liability company, professional corporation, or association.
In the case of the legislation dealing with “business entities,” it’s pretty simple – after August 28, any real estate licensee may own a business entity that has been formed for the purpose of receiving compensation earned by that licensee from the licensee’s associated broker without having to separately license the business entity with the Missouri Real Estate Commission. The licensee may then proceed to recognize that compensation as recommended by his/her tax advisor.
Who can own the entity?
- The licensee.
- The licensee, together with their spouse. If the spouse is licensed, they must both be associated with the same broker, though the spouse does not need to be also licensed to own the LLC.
- The licensee and one or more other licensees may own the LLC, but they must all be associated with the same broker.
In the House, Rep. Dan Houx introduced HB 695; this bill was focused on LLC changes. Rep. Hannah Kelly introduced HB 1124 on advertising guidance. Senate bills and sponsors were SB 435 (LLC changes), introduced by Sen. Denny Hoskins, and SB 473 (advertising guidance), introduced by Sen. Justin Brown. Specific to advertising guidance, the legislation amends 339.100 (24) and prohibits the use of any advertisement or solicitation which: “(b) Includes a name or team name that uses the term “realty,” “brokerage,” “company,” or any other term that could be construed as a real estate company separate from the associated broker’s company. The context of an advertisement may be considered by the commission when determining whether the licensee committed a violation under the provisions of this paragraph:”. Point being, if you are advertising yourself or as a team, don’t use the words in quotation marks. And be careful not to describe yourself or your team in a manner that would make it appear to be a brokerage or an entity separate and apart from your associated broker’s company.
HB 695 and HB 1124 language did not change from originally introduced bills.
The Governor will need to sign the bills that include the two license law issues, so there is no action required at this time. Once legislation is approved by the Governor, these provisions would become effective on August 28, 2021.
Low-Income Housing Tax Credits and Historic Tax Credits:
While there were several attempts from House members to make significant changes in LIHTC, we were successful in maintaining the status quo. Status quo, in this instance, is a very positive development.
The Missouri Nondiscrimination Act (MONA) did not pass this session. The Act protects individuals based on sexual orientation or gender identity and has been introduced in the Missouri General Assembly for 23 years. We are the first business group to support this important legislation. Passing this will remain a top priority for Missouri REALTORS®.
Property Assessed Clean Energy (PACE):
Rep. Bruce DeGroot has been working on reforms to the PACE program for at least four years. This year it all came together with the passage of HB 697. We believe the basic concept of PACE is valid, provide loans at a reasonable interest rate so homeowners can replace old inefficient HVAC units with modern high-efficiency units. This allows property owners the ability to save money in the long run and lowers the power demand. The problem has been a need for some reasonable consumer protections and oversight beyond local PACE boards; this bill has both.
PACE can be used for items other than HVAC but the most significant percentage in Missouri is for HVAC.
One of the big surprises of the session was the passage of Senate Substitute NO. 2 for Senate Committee Substitute for Senate Bills NOS. 51 & 42. Discussion was that the House had issues with the original Senate version, and they were going to make changes and attempt to work it out in conference. That plan fell apart when the Senate adjourned early, somewhere around 2:20 PM on the final day of session. Rep. Dean Plocher, who as Majority Leader controlled the House floor, took the courageous step of calling to take up the Senate bill. It passed, though the Emergency Clause did not.
Sen. Tony Luetkemeyer introduced SB 51 and Sen. Bill White sponsored SB 42. Truly Agreed version
It finally happened! SB 153 included a provision that modified the definition of “engaging in business activities within this state.” The definition now includes those who had gross receipts of at least $100,000 from the sale of tangible personal property used in Missouri. Those vendors will be required to collect and remit use tax. This is a big win for commercial real estate.
After a bruising and prolonged debate, the Missouri House finally approved SB 262 to increase the motor fuel tax over a stepped-in period. Rep. Becky Ruth, the House handler, did a magnificent job of deflecting opposition and pointing out the positive effects of the increase. The Act allows a person driving a motor vehicle weighing less than 26,000 pounds to request a tax refund. At the end of five years, the bill will add 12.5 cents to the existing motor fuel tax of 17 cents. I had many House members comment on our Call for Action and letter they received from Missouri REALTORS® President Janet Judd asking for their support of the issue. It is safe to say that REALTORS® made a difference in this crucial issue.
I want to thank all Missouri REALTORS® who acted on our Call for Action.
Every time copper and other metals undergo a price increase, property owners face increased acts of vandalism aimed at stealing wire and pipes to be sold as scrap. HB 69, offered by Rep. Hardy Billington, aims to make it more difficult for those who steal these materials to sell them to recyclers and metal dealers. This is an ongoing battle, but these changes will help keep properties safe.
Truly Agreed version of HB 69
HB 271, an omnibus act centered on local government, contains language that allows Boone County to enact an ordinance “to ensure the habitability of rented residences.” It will enable the county to designate an officer “to respond to written complaints of the condition of the residence that threatens the health or safety of tenants.” The tenant submitting the complaint must be a lawful tenant who is current on all rent due. This language is similar to prior attempts, and neither Columbia Board of REALTORS® nor Missouri REALTORS® opposed these changes.
The bill, as introduced by Rep. Chuck Basye, is HB 607.
A word about “Omnibus bills”:
Several times the phrase “omnibus bill” has been used in this report. What does that mean? In the General Assembly, an “omnibus bill” is an aggregation of bills that share a common connection. While Missouri has some reasonably strict constitutional and case law dealing with the passage of a bill, those are not self-enforcing. So long as you don’t get too far afield, you can generally put together several similar bills and get them all passed in one package. That’s what happened with both of our licensing priorities, and this time it worked, so far. The bills that contain our priorities do not appear to have any controversial provisions, so it’s likely that the Governor will approve one or both.
As always, thank you for your unwavering support this session. To celebrate the success of this year’s legislative session, REALTOR® Party staff will be traveling to Local Boards/Associations for the REALTOR® Party Roadshow. This summer, we hope to spread the REALTOR® Party message of success through visits with brokers and agents!
To schedule a visit or learn more, please contact Erin Hervey, Vice President of REALTOR® Party and Local Board Relations, at (573) 445-8400 ext. 1110 or email@example.com.
Chief Lobbyist, Missouri REALTORS®