State and Local Issues
Agenda Summary2006 State And Local Issues Committee
National Association of REALTORS®
2006 Midyear Legislative Meetings & Trade Expo
Marriott Wardman Park
Marriott Balcony C & D
Wednesday, May 17, 2006 & Saturday, April 1, 2006
10:00 AM - 12:01 PMChair: Michael Flynn
Vice Chair: Ken Jackson
Committee Liaison: Bill Brown
Committee Executive: Bob McNamara
I. Call to Order
A. Introductions
B. Conflict of Interest and DisclosureOwnership Disclosure Policy
1. When NAR has an ownership interest in an entity and a member has an ownership interest* in that same entity, such member must disclose the existence of his or her ownership interest prior to speaking to a decision making body on any matter involving that entity.
2. If a member has personal knowledge that NAR is considering doing business with an entity in which a member has any financial interest**, or with an entity in which the member serves in a decision-making capacity*, or wit, then such member must disclose the existence of his or her financial interest or decision making role prior to speaking to a decision making body about the entity.
3. If a member has a financial interest in, or serves in a decision-making capacity for, any entity that the member knows is offering competing products and services as those offered by NAR, then such member must disclose the existence of his or her financial interest or decision-making role prior to speaking to a decision making body about an issue involving those competing products and services.
After making the necessary disclosure, a member may participate in the discussion and vote on the matter unless that member hasa conflict of interest as defined below.
Conflict of Interest Policy
A member of any of NAR’s decision making bodies will be considered to have a conflict of interest whenever that member:
1. Is a principal, partneror corporate officer of a business providing products or services to NAR or in a business being considered as a provider of products or services (“Business:); or
2. Holds a seat on the board of directors of the Business unless the person’s only relationship to the Business is service on such board of directors as NAR’s representative; or
3. Holds an ownership interest of more than 1 percent of the Business.
Members with a conflict of interest must immediately disclose their interest at the outset of any discussions by a decision making body pertaining to the Business or any of its products or services. Such members may not participate in the discussion relating to that Business other than to respond to questions asked of them by other members of the body. Furthermore, no member with a conflict of interest may vote on any matter in which the member has a conflict of interest, including votes to block or alter the actions of the body in order to benefit the Business in which they have an interest.
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*Ownership interest is defined as the cumulative holdings of the member, the member’s spouse, children, siblings and to any trust, corporation or partnership in which any of the foregoing individuals is an officer or director, or owns, in the aggregate, at least 50% of the (a) beneficial interest (if a trust), (b) stock (if a corporation) or (c) partnership interests (if a partnership).
**Financial interest means any interest involving money, investments, credit or contractual rights.
II. Approval of Previous Meeting's Minutes
III. Unfinished Business
A. Approval of 2006 goals
B. BRAC report
C. Education Award program - Phil McGinnis
D. Eminent domain activity update - McNamara, Blaesser
The U.S. Supreme Court's decision in the Kelo case endorsed the use of eminent domain for privately-sponsored economic development. Kelo allowed non-blighted property to be taken from one private owner and given to another private owner in furtherance of a "public purpose." Public reaction to thedecision has been negative, prompting state legislatures and the U.S. Congress to draft legislation restricting the use of eminent domain for certain purposes.
At the 2005 Annual meeting NAR policy was amended to delete the phrase "public purpose" where it appears in NAR policy on property rights and substitute the phrase "public use". The latter phrase indicates that eminent domain powers should only be used to acquire property for ownership by a public entity or publicly-regulated common carrier, such as a railroad. New policy language was also added directing that states, not the federal government, should establish their own rules and laws governing the use of eminent domain. NAR policy also calls for a broad interpretation of "just" compensation to include not only the value of the property condemned but also all other reasonable and necessary costs generated by the condemnation action.At the January 2006 C.A.R. meetings in Anaheim, the eminent domain task force proposed the following recommendations, which were approved at the Board of Directors session:
(1) That C.A.R. “SUPPORT” legislation concerning eminent domain that would:
-Prohibit the taking of single family property by eminent domain forany use other than for public use.
-Amend the eminent domain law to make it easier for property owners to transfer their existing property tax base
-Require courts to award the prevailing plaintiff attorney fees and costs should the plaintiff prevail in an eminent domain proceeding when challenging: a) the validity of the taking of property; or b) the valuation of the property.
-Require: a) independent licensed appraisers to be used in eminent domain proceedings; and b) redevelopment agencies to reimburse property owners the cost of an additional appraisal in eminent domain proceedings.
(2) That C.A.R. “SUPPORT” legislation concerning redevelopment law that would:
-Substantially tighten the definition of “blight” used by redevelopment agencies proposing to create or expand redevelopment project areas.
-Reduce the time period during which the initial finding of “blight” may exist in a newly created redevelopment project area.
-Reduce the time period during which redevelopment agencies may take property by eminent domain.
-Require a re-evaluation of the necessity of a redevelopment area on a periodic basis.
-Require redevelopment agencies to disclose to all property owners thatthey may transfer their property tax base if the qualified replacement property is within the same county.Some believe that the Kelo case was decided correctly and that government needs broad eminent domain power in order to improve economic conditions.
Secure property ownership is a core value of REALTORS®. Strong property rights protection supports and encourages property ownership from which REALTORS® benefit. Still, REALTORS® can benefit by participatingin redevelopment projects that rely on eminent domain.
NAR opposes all federal legislation on eminent domain, preferring that each state determine its own approach. Nonetheless, nine bills on eminent domain have been introduced since the Kelo decision. Two different House committees and one Senate committee have held hearings. NAR has submitted a statement for the record to the House Judiciary Constitution Subcommittee. H.R. 3405, a bill restricting federal funds to states that use eminent domain for economic development purposes, passed the House Agriculture Committee and is being considered by the House Resources Committee. The Senate included a similar provision as an amendment to the Transportation, Treasury, and HUD appropriations bill. Another bill, H.R. 4128 (similar to H.R. 3405), was approved by the House Judiciary Committee on 10/26/05 and passed by the full House on 11/3/05. NAR has sent letters to members of the Judiciary and Resources Committees. The Senate's eminent domain bill (S.1313) is not moving quickly as Senators await the results of a GAO study not due until November 2006.IV. New Business
A. Smart Growth program overview - Molinaro or Wluka
B. Speaker - Federal Tax Reform Impact onState Fiscal Issues - David Brunori - GW University
C. Speaker - Compensation for Regulation: The limits of eminent domain and police power - Brian Blaesser
D. State and Local Issues Tracker - Gerry Allen
E. Discussion - roundup of state and local REALTOR issues from around the country
V. Adjournment
