2012 Legislative Session Adjourns Oregon’s first ever, constitutionally approved annual session formally adjourned last week, after 34 days in Salem. While the pace was frantic, legislators rebalanced the budget and approved several significant pieces of legislation impacting the real estate industry. Looking back, it truly is amazing the number of issues addressed in such a short timeframe. The dedication of the members of the Oregon Association of REALTORS® was on display in full force throughout the session, and REALTOR® Party champions in the legislature pushed significant legislation across the finish line. Among the proposals in which the Oregon Association of REALTORS® played a key role were: LAND USE SB 5701EN – Senate Bill 5701EN was the budget reconciliation bill for the session, and contained several key provisions. Perhaps most importantly, money was appropriated to DLCD and Douglas, Jackson and Josephine Counties to conduct a pilot project to establish regional definitions of farm and forest lands. While the regional land use language was originally introduced in HB 4095, an anticipated Governor’s Executive Order and the appropriation in 5701EN will accomplish the same purpose. The pilot project in Southern Oregon will allow local counties to petition the state for definitions of farm and forest lands that take into account regional differences in farm and forest practices, in order to more accurately identify suitable land for housing, preservation and all economic industries. The benefits will include:

Strengthened local job creation and employment opportunities;

Decreased conflict with urban and rural needs, as true farm and forest lands will be more accurately identified; and

The ability of local elected officials to better determine the quality of life for their communities.

*Particular thanks goes to Co-Speaker Bruce Hanna for all of his hard work to make sure that for the first time in decades, Oregon’s unique land use system will finally account for the vast diversity in our state.

In addition, SB 5701EN contained a “budget note” that requires DLCD to prepare a report that identifies which counties and cities with a population over 10,000 people have or have not completed urban service agreements and approved facilities plans for land inside urban growth boundaries. Despite a mandate from the legislature to enact urban service agreements nearly 20 years ago, there are multiple areas within urban growth boundaries that are not served by water or sewer service. These properties are surrounded by high-density urban development, and services are available and desired by the property owner. In many cases, property that has been inside the urban growth boundary for over a decade cannot be developed due to the inability or refusal of the service providers to extend sewer or water to the property. Under the budget note, DLCD will report potential solutions back to the legislature prior to the 2013 Session to address this issue. The budget note came as a result of passage of HB 4090A through the House, although the bill received no action in the Senate Committee on Environment and Natural Resources.

SB 1582EN – Senate Bill 1582EN establishes a process for a person to request an independent review of a determination made by the Department of State Lands that wetlands are present on a land parcel owned by that person. The independent review will be conducted by a panel of three individuals experienced in wetland identification and delineation, and delineations must comport with the US Army Corps of Engineers Wetland Delineation Manual of 1987 and any subsequent federal supplements. The addition of this process is significant victory for landowners faced with wetlands determinations, and will provide an added degree of certainty for future development. REAL ESTATE HB 4111EN – House Bill 4111EN addressed an inequity in the statutes governing local government lien foreclosure procedures, which did not allow foreclosed property owners to recover the hard-earned equity in their properties upon foreclosure sale. Under the language of the bill, when an unpaid local improvement district lien is used to foreclose on a property, local governments are required to reach a certain level of the assessed value of the property before the foreclosure sale is approved. Under previous law, the maximum amount at sale was the value of the lien. Perhaps just as importantly, the Oregon Association of REALTORS® was successful in adding an amendment to address a simple recording issue with county clerks. The amendment removed unnecessary language requiring addresses on the first page of recorded documents that was inadvertently added during the 2011 Session. Failure to include the address on the cover page caused significant delays in the filing of mortgage documents, and the amendment restored the previous law and removed any confusion. SB 1552EN – The signature foreclosure bill of the session, Senate Bill 1552EN formally ends the “dual track” process in which a lender is negotiating with a homeowner while simultaneously preparing to foreclose on the home. In addition, the bill allows homeowners the opportunity to enter into mediation prior to foreclosure, after first meeting with a HUD-approved housing counselor. The requirement to first meet with a counselor addressed concerns that other state's programs have created unrealistic expectations for homeowners. Likewise, amendments adopted on the final day of session ensured that the program will not create a litany of unnecessary litigation and undue delays, simply for the sake of delay. The position of the Oregon Association of Realtors remained steadfast during the short session that something should be done to help those homeowners who legitimately have a chance at remaining in their homes with a little assistance (such as refinancing at today’s lower rates), and that there should be some form of accountability for lenders negotiating alternative proposals to foreclosures. The Association was never interested in political games or creating unrealistic expectations for consumers, and sought to facilitate the development of a balanced approach. While negotiations were at time tense and political rhetoric bordering on over the top on several occasions, particular credit goes to Senator Lee Beyer and Representatives Matt Wand and Gene Whisnant for their tireless efforts. The broad bi-partisan votes in favor of this legislation in both chambers are a testament to their hard work. ECONOMIC DEVELOPMENT

HB 4093EN – House Bill 4093EN allows the designation of up to eight additional enterprise zones, including five in rural or urban areas and three in rural areas only, while also allowing an increase in the size of enterprise zones from 12 square miles to 15 square miles. Enterprise zones are designed to encourage business investment in specific areas through targeted property tax relief, and help to create jobs and spur economic activity. Of course, several proposals that would have provided real job-creation opportunities did not make it through the process including proposals to help rural Oregon by withdrawing more water from the Columbia during high-flow winter months to irrigate crops and increased harvest levels to more closely mirror sustainable practices in our state forests. In addition, proposals to lower Oregon’s alarmingly high capital gains rate gained little traction. The successes of the session are a testament to the dedication of you the members of the Oregon Association of REALTORS®, thank you all for your responses to Calls to Action, your critical investments in RPAC and your dedication to protecting the real estate industry. Stay tuned for a more detailed Legislative Report in the coming month, which will be coming out just 8 short months before the legislature starts all over again!