End of Session Report
The Second Regular Session of the 98th General Assembly completed floor action on May 13. On May 25 they sent to the Governor all bills passed that he had not previously received. Several bills, including the state budget, were delivered to the Governor in time for him to take action prior to the end of session, the purpose was to give the General assembly an opportunity to override the veto, which they did on two occasions.
In all, 147 pieces of legislation were “Truly Agreed and Finally Passed” this session. During the 2015 session there were 149 truly agreed bills and in the 2014 session 190. You may recall that during the 2015 session the Senate was involved in a controversy that made taking any action the last several days of the session very difficult. This session, the discussion over SJR 39 ate up almost two weeks prior to spring break.
That being said, it was a very productive session for Missouri REALTORS®. HB 1862 (landlord/tenant) which died last session because of controversy passed. HB 1708 also passed, though as an amendment and not in its original bill. In the final six weeks of the session an opportunity arose to move legislation to make digital transactions easier and we joined forces with the credit unions, banks and mortgage bankers to take advantage of that opportunity.
In this report I have included information about several of the more important bills as well as a list of all the bills that we were tracking. The bill numbers in the list, not the narrative, will send you to the state web site where you can read the final version. Look for the "Truly Agreed" copy under "Bill Text." If you click on the shaded block labeled “Actions,” just above the larger shaded block labeled "Bill Summaries," it will allow you to see the action taken on the bill and the vote numbers. You can go to the House or Senate Journal with the record of the vote by clicking on the page number in the column labeled "Jrn Pg," you need to remember the actual page because it just takes you to the beginning of the Journal for that day. The bill list will not show if a bill was passed as an amendment to another bill. As an example, under HB 1708 it shows the last action was the bill was reported from committee. It was, in fact, amended onto SB 867 and passed.
HB 1862
This Landlord/tenant bill was truly agreed and finally passed on Thursday, May 12. It was amended in the Senate to include language from SB 743 that requires landlords to place security deposits in a trust account. Missouri REALTORS® initially opposed the bill but it was amended in committee to allow real estate licensees to use the provisions of 339.105, so we agreed to the bill. There was some initial concern about an amendment offered by Sen. Jill Schupp but after a conference call with Mission Advocacy Committee on Friday, May 6, the Committee decided to attempt to clean up the language or, if that was not possible, go ahead and truly agree to the bill in the House. After consultation with the sponsor, Rep. Gary Cross, we decided to simply accept the amendment and move forward. It’s good that we did because the confusion of the last three days of the session saw a number of conference reports and Senate Bills with House Amendments die when the Senate adjourned at 4:12 PM on Friday.
HB 1708
HB 1708 allows Kansas City to require limited liability companies that own property in the city to file an affidavit listing the name and street address of the person who has control of the property. This was passed as an amendment to SB 867. Last year we initially opposed this bill because it was considerably broader and included all cities. The sponsor, Rep. Shelia Solon, agreed to amendments that limited it to only Kansas City and a further amendment that prohibited the city from charging a fee for the affidavit. After a meeting with city officials at the April Business Conference in Kansas City last year, the Association agreed to support the bill.
SB 572
This bill was a follow on to SB 5 passed in the 2015 session. The bill contains an important reform, especially for owners of rental property. In 67.398, dealing with nuisance abatement, the act requires that notice of the nuisance and subsequent order for abatement must be given both to the occupant of the property and the owner of the property at their last known address. This reduces the possibility that notice of the nuisance will not reach the owner.
SB 932
An important expansion of the law dealing with notaries was included in SB 932. The changes include a requirement that the secretary of state keep a database containing information found on each notary public’s seal and information on any notary seal that has been lost. It further requires that the manufacturer of a seal must register with the secretary of state and communicate with the secretary of state when it has issued a seal to any person in the state.
Because of the expansion of digital transactions, and in an effort to keep pace with that expansion, the act specifies that if “a signature or record is required to be notarized, acknowledged or verified or made under oath…the requirement is satisfied if the electronic signature of the person authorized to perform such acts, together with all other information required to be included, is attached to or logically associated with the signature or record.” It further requires the secretary of state to promulgate rules to implement those provisions.
SB 833
Because of legislation passed several years ago dealing the duties of surveyors, there was a question raised about the ability of attorneys and title companies to prepare certain documents that included legal descriptions or drawings. Included in SB 833 was a statement that nothing in the section dealing with surveyors shall be construed to preclude the practice of title insurance business as provided in chapter 381 or the practice of law as governed by the Missouri supreme court.
In the same bill, changes were included to clarify that a title company could issue a closing protection letter and charge a fee for that service in all transactions where its title insurance policies are issued and where its issuing agent or agency is performing settlement services in all residential real estate transactions.
Transient Guest Legislation
The final issue does not have a bill number simply because it did not pass but it will be back and time needs to be spent in determining the best way to address the issue.
Legislation was introduced to regulate the practice of renting a room, several rooms or an entire residence to an occasional “transient guest”. There are really two issues involved. The first is the ability of a local political subdivision to regulate the practice, the second is the impact on the assessment classification of the subject property.
Most of the bills or amendments made an effort to insure that the political subdivision could not ban the practice but could impose reasonable restrictions. The definition of "reasonable" is a slippery one but it is a fairly common word in statutes.
The other issue came to light after discussion with the state tax commission dealing with Shipman v. Dominion Hospitality, 148 S.W.3d 821 (Mo., 2004). The case arose when Dominion, which operated an extended stay hotel in St. Charles, appealed their assessment. The hotel typically rented space on a month to month basis but occasionally allowed rentals for less than a month. The St. Charles County Assessor classified the entire property as commercial, on appeal to the state tax commission, the commission found that the correct classification for the property should be 60% residential and 40% commercial. The assessor appealed and the case eventually ended up in the supreme court. The court found for the assessor. The decision relies on language in the statute 137.016.1(1) which defines residential property and, most importantly, this following statement in that statue: “but residential property shall not include other similar facilities used primarily for transient housing. For purposes of this section “transient housing” means all rooms available for rent or lease”. The assessor of Camden County has taken that decision to an extreme and has been classifying residential property that has been "occasionally rented" as commercial property. In discussion with the state tax commission, their opinion was that the case now controlled and therefor all residential property that was rented for a term of less than 30 days would be affected. Carrying that decision to its illogical conclusion this appears to mean that if you rent one bedroom for one night to a guest then your property is classified as commercial. Since residential property is assessed at 19% of its value and commercial property is assessed at 32% of its value the change in classification means a significantly larger tax bill.
In an effort to address the inequity imposed by the decision an attempt was made to amend one of the several amendments offered to regulate the occasional rental of rooms or residential structures. The amendment provided that property could be rented for up to 180 days before the commercial classification would apply. Every elementary and secondary education group had an opinion about the amendment and it was not favorable, the amendment was never offered. In an attempt to limit the distress of the education lobby another amendment was offered, this amendment provided that the commercial classification could be imposed only for the days that the property was used for transient guests. The was included in SB 897 through an amendment by Rep. Burlison, unfortunately a subsequent amendment by Rep. Alferman which dealt with lobbyists expenditures was also added to the bill and the Senate, given the limited time available, declined to take the bill up.
In short nothing happened on either the regulation of transient guest offerings or the attempt to limit the impact of the Shipman v. Dominion on people who occasionally rent a room or a house to another. The issue will be back next session.
MAJOR BILLS TRACKED 2016 SESSION
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HB 1466
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Burlison(R)
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Establishes certain requirements that must be met in order to regulate a previously unregulated occupation or profession.
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Last Action:
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5- 3-16 S Voted do pass as substitute from committee on Senate-Financial/Gov. Org. and Elections
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HB 1609
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Swan(R)
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Specifies that all new and existing tax credits shall be approved by the General Assembly as part of the budget process.
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Last Action:
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5-13-16 H Referred to House Committee on House-Economic Development/Bus. Attraction
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HB 1708
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Solon(R)
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Allows political subdivisions to require limited liability companies located within the political subdivision to file an affidavit listing the name and street address of a person who has control of property.
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Last Action:
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4-19-16 S Voted do pass from committee on Senate-Small Bus./Insurance/Industry
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HB 1741
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Brattin(R)
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Requires all employers and business entities to enroll and actively participate in a federal work authorization program and imposes stricter penalties for employing an unauthorized alien.
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Last Action:
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5-13-16 H Set on the House Calendar
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HB 1798
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Zerr(R)
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Prohibits any tax imposed on internet access or the use of internet access.
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Last Action:
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1- 5-16 H Withdrawn
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HB 1861
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Cross(R)
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Specifies that an individual who has been evicted from a rental property must have written permission from the owner of the property to be on the premises in the future.
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Last Action:
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5-13-16 H Set on the House Calendar
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Last Action:
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5-25-16 G Sent to the Governor
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Remarks:
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Tentative Support, however there may be problems with the impact of the legislation on data collection by RPR and their vendors. This is a complex issue that deserves further study.
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Last Action:
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4-14-16 H Referred to House Committee on House-Select-General Laws
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HB 1970
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Anderson(R)
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Prohibits a municipality or utility company from holding an owner of a premises liable for the occupant's delinquent utility payments.
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Last Action:
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4- 4-16 H Public hearing completed
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HB 1991
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Norr(D)
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Requires landlords with 20 or more rental units to place security deposits in escrow bank accounts.
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Last Action:
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4-12-16 H Referred to House Committee on House-Civil and Criminal Proceedings
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HB 2034
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McGaugh(R)
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Specifies that attorneys and title insurers shall not be prohibited from preparing real estate drawings or legal descriptions.
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Last Action:
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3-15-16 H Reported do pass as substituted House-Select-General Laws
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HB 2072
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Hinson(R)
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Eliminates tax credits, converts all domestic and social tax credits into deductions, and reduces the top tax rate of the Missouri individual income tax.
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Last Action:
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5-13-16 H Referred to House Committee on House-Ways and Means
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HB 2318
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Cross(R)
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Provides that no person or entity that rents or leases real property shall be required to obtain a business license by any political subdivision of the state.
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Last Action:
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5-13-16 H Referred to House Committee on House-Civil and Criminal Proceedings
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HB 2361
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Wiemann(R)
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Creates the "Missouri Homeowners' Bill of Rights", which is a regulatory scheme for homeowners' associations.
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Last Action:
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2-16-16 H Not heard in committee House-Local Government
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HB 2436
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Zerr(R)
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Changes the laws regarding the energy efficiency investment act by removing certain restrictions on participants' eligibility.
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Last Action:
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3-30-16 H Referred to House Committee on House-Economic Development/Bus. Attraction
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HB 2520
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Lichtenegger(R)
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Requires landlords with 20 or more rental units to place security deposits in escrow bank accounts.
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Last Action:
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4-12-16 H Referred to House Committee on House-Civil and Criminal Proceedings
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HB 2530
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Curtman(R)
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Establishes the Corporate Welfare Elimination Act, which terminates corporate tax credits by placing a sunset on each.
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Last Action:
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5-13-16 H Referred to House Committee on House-Ways and Means
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HB 2579
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Kirkton(D)
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Changes the laws regarding real property to require the filing of a certificate of value before filing a document transferring interest in real property.
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Last Action:
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5-13-16 H Referred to House Committee on House-Banking
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HB 2668
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Korman(R)
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Provides that the state or a state department shall sell, transfer, or convey real property through a public auction except under certain circumstances.
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Last Action:
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5-13-16 H Referred to House Committee on House-Government Efficiency
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HB 2669
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Korman(R)
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Allows public administrators to sell property through public auctions.
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Last Action:
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5-13-16 H Referred to House Committee on House-Government Efficiency
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HB 2705
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Frederick(R)
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Changes the laws regarding property assessments so that the state low-income housing tax credit is considered in the assessment.
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Last Action:
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5-13-16 H Referred to House Committee on House-Ways and Means
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HB 2706
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Kratky(D)
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Authorizes an income tax credit for certain costs incurred in the renovation of a taxpayer's rented dwelling or residence.
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Last Action:
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5-13-16 H Referred to House Committee on House-Ways and Means
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HB 2727
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Hurst(R)
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Changes the laws regarding foreign ownership of agricultural land.
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Last Action:
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5-13-16 H Referred to House Committee on House-Agriculture Policy
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HB 2794
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Butler(D)
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Modifies laws relating to public nuisance penalties when police or emergency services respond to a residence to assist a victim of abuse or crime or in an emergency.
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Last Action:
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4-26-16 H Referred to House Committee on House-Local Government
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SB 572
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Schmitt(R)
Cornejo(R)
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Modifies various provisions regarding municipalities located in St. Louis County, nuisance abatement ordinances, disincorporation procedures for various cities, and municipal courts.
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Last Action:
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5-25-16 G Sent to the Governor
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SB 615
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Silvey(R)
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Creates a limit for the total amount of tax credits that may be authorized in a fiscal year.
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Last Action:
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1- 7-16 S Referred to Senate Committee on Senate-Jobs, Eco. Devo. and Local Government
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SB 693
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Holsman(D)
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Modifies provisions requiring LLC's owning rental or unoccupied property in Kansas City to list a property manager with the city clerk.
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Remarks:
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Support, see HB 1708
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Last Action:
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4- 5-16 S Hearing conducted
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SB 715
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Curls(D)
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Changes the notice requirement to a tenant in a foreclosure action from ten days to ninety days.
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Remarks:
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Oppose, creates problems for lenders and could cause problems with obtaining loans for certain properties.
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Last Action:
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1-11-16 S Referred to Senate Committee on Senate-Judiciary Civil/Criminal Jurisprudence
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SB 716
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Curls(D)
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Repeals provisions regarding nonjudicial foreclosure proceedings and requires all foreclosure proceedings to be handled judicially.
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Remarks:
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Oppose, in states with judicial foreclosure the time it takes to get a property back on the market tends to be significantly greater than in states without judicial foreclosure. Other issues include higher rates of interest to borrowers and empty properties creating problems for neighbors.
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Last Action:
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1-11-16 S Referred to Senate Committee on Senate-Judiciary Civil/Criminal Jurisprudence
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SB 717
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Curls(D)
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Changes the amount of damages that a tenant can recover when the security deposit is wrongfully withheld by a landlord.
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Last Action:
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1-11-16 S Referred to Senate Committee on Senate-Judiciary Civil/Criminal Jurisprudence
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SB 743
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Curls(D)
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Provides that a landlord must keep security deposits in a depository institution and changes the amount a tenant can recover when the security deposit is wrongfully withheld.
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Remarks:
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Bill amended, now Support
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Last Action:
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4-14-16 S Voted do pass as substitute from committee on Senate-Judiciary Civil/Criminal Jurisprudence
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SB 744
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Curls(D)
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Specifies that Kansas City may require the registration of certain properties.
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Last Action:
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1-11-16 S Referred to Senate Committee on Senate-Jobs, Eco. Devo. and Local Government
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SB 774
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Schmitt(R)
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Modifies the gubernatorial appointment process for acting directors and members of boards and commissions.
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Last Action:
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5-13-16 S Set on the Senate Calendar
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SB 828
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Sifton(D)
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Provides that attorneys and title insurance companies are not precluded by land surveyor statutes from preparing property descriptions.
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Remarks:
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Support, see HB 2034
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Last Action:
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1-12-16 S Referred to Senate Committee on Senate-Small Bus./Insurance/Industry
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SB 829
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Wasson(R)
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Establishes legislative procedures for regulating previously unregulated professions.
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Remarks:
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Support, see HB 1466
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Last Action:
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1-12-16 S Referred to Senate Committee on Senate-Financial/Gov. Org. and Elections
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SB 831
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Wasson(R)
Burlison(R)
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Provides acceptable ways a professional licensee may submit payment, application, requests for educational time extensions or notify his or her licensing board.
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Last Action:
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5-13-16 S Set on the Senate Calendar
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Last Action:
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1-21-16 S Referred to Senate Committee on Senate-Commerce, Energy and the Environment
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SJR 25
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Emery(R)
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Eliminates income taxes and replaces them with an expanded sales and use tax and creates a property tax relief credit.
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Remarks:
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Oppose, sales tax on services. To be fair to Sen. Emery the Resolution does exempt Professional Services from the sales tax and those are defined to include real estate brokerage services. Also exempted are real estate sales and rental. However, if this were to be put in place there would be significant pressure in the future to impose those taxes on the exempt classes.
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Last Action:
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1- 7-16 S Referred to Senate Committee on Senate-Ways and Means
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