HomeMy WebLinkAboutLEGISLATIVE POSITION STATEMENT (2)Legislative Position
Statement
2015
64TH REGULAR SESSION OF THE MONTANA STATE LEGISLATURE
MONTANA ASSOCIATION OF REALTORS® | 1 South Montana Avenue, Suite M-1, Helena, MT 59601
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LEGISLATIVE POSITION STATEMENT
(Approved by the MAR Board of Directors on September 18, 2014)
The Montana Association of REALTORS® (MAR) represents over 3,500 real estate brokers,
property managers, and salespersons who are members of the Association. The MAR Political
Affairs Committee and MAR staff examine a multitude of issues that concern the industry and
property owners and make policy recommendations to the MAR Board of Directors. This
position statement is the Association’s official guide for identification of legislative issues and
formalization of legislative positions.
One South Montana Avenue, Suite M-1, Helena, MT 59601
Phone: 406-443-4032: Fax: 406-443-4220
Email: mtmar@montanarealtors.org
Website: www.montanarealtors.org
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TABLE OF CONTENTS
Quality of Life Principals…………………………………1
Protecting Property Owners……………………………1
Ensuring Economic Vitality………………………………1
Providing Housing Opportunities and Choice….1
Preserving Our Environment…………………………..1
Building Better Communities………………………….2
Housing………………………………………………………..2
Home Ownership……………………………………………2
Fair Housing……………………………………………………2
Housing Affordability……………………………………..2
Supply And Demand of Housing……………………..3
Regulatory Reform……………………………………….3
Housing Finance Programs……………………………..3
Landlord/Tenant Relations……………………………..4
Rental Housing……………………………………………….4
Land Use and Environment…………………………..4
Notification…………………………………………………….4
Air Quality………………………………………………………4
Brownfields…………………………………………………….4
Conservation Easements………………………………..5
Local Control………………………………………………….5
Eminent Domain…………………………………………….5
Transcontinental Easements…………………………..5
Endangered Species Act………………………………….6
Environmental Restrictions on Land Use………..6
Noxious Weeds………………………………………………6
Public Lands……………………………………………………6
Timber……………………………………………………………6
Subdivision……………………………………………………7
Sanitation in Subdivision…………………………………7
Subdivisions for Lease or Rent………………………..7
Growth Principles…………………………………………..7
Wild Land Urban Interface……………………………..7
Planning and Zoning……………………………………….8
Water…………………………………………………………..8
Water Rights…………………………………………………..8
Water Banking and Marketing………………………..9
Exempt Wells………………………………………………….9
Water Quality…………………………………………………9
Nutrient Standards………………………………………….9
Wetland………………………………………………………….9
Outstanding Resource Waters (ORW)……………10
Taxation………………………………………………………10
Principals for Taxation…………………………………..10
Estate (Death) Tax…………………………………………11
Property Tax………………………………………………….11
Nonresident Real Estate Sales or Transfers……11
Sales Tax on Business & Professional Services.11
Capital Gains Tax…………………………………………..12
State Income Tax…………………………………………..12
Transportation and Infrastructure……………….12
Impact Fees…………………………………………………..13
Fiscal Policy…………………………………………………13
Unfunded Mandates……………………………………..13
Business………………………………………………………13
Bank Involvement in Real Estate Brokerage…..13
Conservation Construction Standards……………13
Foreign Land Ownership……………………………….14
Independent Contractor……………………………….14
Liability for Environmental Defects……………….14
License Law…………………………………………………..14
Point of Sale Service………………………………………14
Sales Price Disclosure…………………………………….14
Consumer Protection…………………………………..14
Home Inspections…………………………………………15
Lead Based Paint…………………………………………..15
Radon……………………………………………………………15
Meth Labs……………………………………………………15
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1. QUALITY OF LIFE PRINCIPLES
REALTORS® recognize the need to sustain
and enhance the quality of life enjoyed by
Montana’s citizens. We believe we can build
better communities by supporting quality
growth and seek economic, housing
opportunities that protect property owners.
PROTECTING PROPERTY OWNERS
REALTORS® believe that private property
rights are fundamental to our free-market
system and are a cornerstone upon which
this nation was founded. The United States
and Montana Constitutions recognize and
protect the right to own property. A strong
economy depends upon preserving the right
to freely own, use, and transfer real
property.
ENSURING ECONOMIC VITALITY
REALTORS® believe a strong economy with
full employment for our citizens throughout
the state remains the single biggest key to
our quality of life. A healthy economy
sustains vibrant communities for living and
working. Commercial, agriculture, business,
and residential growth, in turn, sustain a
healthy economy. Economic development
brings new opportunity and improved quality
of life for Montanans by increasing jobs, tax
base, purchasing power, availability of
goods services and offering community
revitalization improvement. An increased tax
base is crucial to government’s ability to
deliver necessary public services and
maintain infrastructure to serve the needs of
the community.
PROVIDING HOUSING OPPORTUNITIES AND
CHOICE
REALTORS® believe homeownership is the
cornerstone of the American Dream and
deserves a preferred place in our system of
values. Homeownership contributes to
community responsibility; civic, economic,
business, employment stability, family
security well- being. Every citizen should
have the opportunity to own safe, decent,
and affordable workforce housing near
where they work, shop, and play. That
choice is critical to increasing
homeownership. Furthermore, these
objectives should be met through market-
driven approaches that foster a wide range
of urban and rural housing choices at all
price levels. Accommodating growth
relieves pressure on housing prices and
provides increased opportunities for home
ownership.
PRESERVING OUR ENVIRONMENT
REALTORS® recognize the incredible gift
that Montana’s natural environment offers to
our state’s citizens. Furthermore, we
recognize the importance of parks, open
space, and environment to our quality of life
and therefore, the marketability of
surrounding property. To maintain our
state’s quality of life, REALTORS® support
policies that encourage good stewardship
and responsible use of natural resources,
REALTORS® believe government must
accommodate quality commercial,
industrial, and residential growth using
innovative planning techniques and
incentives, while recognizing the importance
of local decision making, private property
rights, the value of a healthy economic
sector, and affordable workforce housing
ownership opportunities.
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BUILDING BETTER COMMUNITIES
REALTORS® believe communities flourish
best when they offer a high quality of life at
a reasonable cost. Livable communities
offer a variety of affordable workforce
housing choices, a viable business sector,
good schools, safe neighborhoods, quality
public services, ample recreation and park
areas, open space, efficient transportation
systems, and the infrastructure that
provides the framework for the quality of life
we enjoy in our communities. Governments
should encourage quality growth through
policies that sufficiently fund infrastructure
needs such as roads, water and sewage
that lay the essential groundwork for growth
in all sectors of our local economies.
2. HOUSING
HOMEOWNERSHIP
REALTORS® will continue efforts, within the
framework of a democratic free enterprise
system, to place homeownership within
reach of all who desire it. Homeownership
directly impacts neighborhoods,
communities, and state and local economic
stability.
Homeowners have a stake in their
communities. Homeowners pay property
taxes, providing a major source of revenue
for government. Homeowners are more
likely to participate in community, political,
and charitable causes. Housing at
affordable prices makes our communities
attractive to businesses that want to
relocate to our state. Housing is a major
driver of the economy, representing the
largest expenditure that consumers make.
All persons have a right to own real property
and to exercise the benefits of home
ownership without undue encroachment or
intrusion by government, groups, or
individuals.
FAIR HOUSING
REALTORS® subscribe to the policy of fair
housing. The primary objective of
REALTORS® is to provide the American
Dream of homeownership to all those who
aspire to achieve it. We believe equal
opportunity in housing can best be achieved
through observance of the law, education,
mutual cooperation of the real estate
industry and the public in a free and open
housing market. The Federal Fair Housing
Law assures all people the right to freely
choose where they will live.
REALTORS® accept the responsibility to
promote awareness among real property
consumers of the obligations and
advantages of strict compliance with the
spirit, as well as the letter, of the Federal
Fair Housing Law.
HOUSING AFFORDABILITY
Availability of housing for all income levels
is absolutely necessary for balanced and
healthy growth of the state and its individual
communities. Available and suitably located
housing is critical to workforce recruitment
and performance. A community’s workers
must be able to afford a place to live, while
their employers need to attract and maintain
a workforce with salaries that allow their
companies to stay competitive in the global
market. When fewer people can afford
housing, it becomes increasingly difficult for
companies to attract and retain a qualified
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workforce. Our ability to maintain a healthy
economy requires a sufficient supply of
housing that is affordable to workers.
SUPPLY AND DEMAND OF HOUSING
The price of housing, like that of any other
economic good, results from the interplay
between supply and demand. An increase
in demand for housing bids up the prices of
currently available homes. Land use and
growth controls have distorted this natural
economic process by imposing regulatory
requirements that delay new housing
construction and raise development and
construction expenses.
3. REGULATORY REFORM_______________
Government regulations and fees can add
to the cost of housing. Government should
recognize that fees, compliance costs, and
additional interest charges add significantly
to the final cost of a home. Implementing
the following recommendations can reduce
housing costs:
1. Local and state governments
should provide more
predictability and accountability
in the land use and development
approval process in order to
reduce the delays, uncertainties,
and risks of housing production.
2. Development standards should
not exceed reasonable
requirements to assure public
health, safety, and welfare.
3. Local governments should adopt
procedures for equitably
allocating the cost of
infrastructure associated with
new development, without
unfairly burdening new
homeowners with costs more
appropriately shared by all
taxpayers.
4. Governments should recognize
the additional costs imposed
through transfer taxes, impact
fees, local land use regulations,
and the subdivision review
process impair the market’s
ability to ensure affordable
housing for all economic
segments of the community.
Economic segments are defined
as follows: entry level housing
(tied to local wages); affordable
housing (80 percent and below
of local median family income);
and workforce housing (80 to
120 percent of local median
family income). Where possible,
they should avoid imposing
additional costs on housing.
HOUSING FINANCE PROGRAMS
REALTORS® support efforts to stimulate
private development of affordable housing
through tax incentives and exemptions.
Down payment and closing costs are often
major barriers to homeownership.
Homeownership assistance is an effective
economic development and job creation
tool.
While REALTORS® support affordable
housing programs to provide financial and
in-kind assistance, we recognize that
government cannot build enough housing,
or provide enough assistance, to solve the
affordability gap that confronts our state’s
families.
The only way to close the gap is to increase
the supply of housing by reducing
government-imposed barriers that drive up
the cost of housing. Ultimately, that is the
single most important action to address
housing affordability challenges.
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LANDLORD/TENANT RELATIONS
REALTORS® support landlord/tenant laws
that provide equitable treatment for both
owner and tenant. This can best be
achieved by uniform application and
enforcement of the Landlord/Tenant Law to
ensure fairness and due process for both
landlord and tenant. The law should clearly
lay out the rights and responsibilities for
both the landlord and tenant of residential
property. It is important that tenants have
remedies for their grievances. It is equally
important that the property owner’s
investment is protected and that both
tenants and landlords honor the terms and
conditions under which property is rented.
RENTAL HOUSING
Similar to the price of homeownership, the
price of rent is influenced by the market.
Rental prices increase when vacancy rates
are low. The best tool local government has
for addressing increases in rental rates is to
encourage an adequate supply of rental
units by avoiding the imposition of
regulations that drive up the cost of
development and discourage new
construction. REALTORS® strongly oppose
any type of rent control or restrictions that
reduce property values and deter
investment in rental housing.
4. LAND USE AND ENVIRONMENT
Citizens of Montana value our state’s
unique natural environment. It plays an
important part in defining our quality of life
and provides both economic and
recreational opportunities for our citizens.
NOTIFICATION
A fundamental component of land use
regulations is due process protections for
landowners, including a predetermined
timeline as well as proper and adequate
notification of land use regulations.
Notification should be direct personal written
notification to all landowners of record
directly affected by the regulations.
AIR QUALITY
REALTORS® support the need to monitor
and maintain standards of air quality that
are based on sound scientific evidence.
Individual state and/or local governments
should have jurisdiction over air quality in
their area. This will enable communities to
make exceptions for particular projects and
time of year. We also believe significant
efforts should be focused on seeking out
alternative energy sources and providing
positive incentives to industries seeking to
reduce identifiable atmospheric pollutants.
BROWNFIELDS
Brownfields are formerly industrial and
commercial facilities where redevelopment
is complicated by real or perceived
environmental contamination. Revitalization
of brownfields benefits communities by
increasing the tax base, creating jobs, and
rejuvenating areas. Revitalization efforts are
hampered by the uncertainly of liability risks
under current law. REALTORS® support
reform of the liability system to reduce the
uncertainly of risk associated with
contaminated property. We support efforts
to clarify the innocent landowner’s defense
to liability for both current and future
property owners.
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CONSERVATION EASEMENTS
REALTORS® support the rights of private
property owners to use conservation
easements. However, due to the potential
for long-term impacts resulting from
restricting the land base available for
communities to grow, and for development
and other economic uses, we encourage
limited term easements, as opposed to
easements in perpetuity.
LOCAL CONTROL
REALTORS® believe that local
governments, in close cooperation with their
citizens, should be responsible for decisions
regarding land use and building better
communities.
Planning for the classification and use of
land must adequately consider the needs of
housing, agricultural, commercial, and
industrial growth, as well as quality of life
and a healthy local economy. Local land
use planning should not hinder the market’s
ability to provide for a variety of housing
types, mixes, densities, and pricing to meet
the needs of all segments of our population.
EMINENT DOMAIN
Governments should not arbitrarily infringe
on the basic right of the individual to
acquire, possess, and freely transfer real
property, and should protect private
property rights as stated in the United
States and Montana Constitutions. Every
person has the right to acquire real property
with confidence and certainty that the use or
value of such property will not be wholly or
substantially eliminated by governmental
action at any level without just
compensation or the owner’s express
consent.
The federal government should not
establish criteria for the use of eminent
domain by state and local governments.
Montana should establish its own rules and
laws governing eminent domain without
interference from the federal government.
TRANSCONTINENTAL EASEMENTS
We believe that transcontinental easements
that do not benefit the state residents as a
whole, that do not meet the criteria of
eminent domain for the public’s good and
are for commerce only, should be held to a
standard different than eminent domain for
the public’s good. In the case of commerce,
which is simply business, the taking of
private property should be negotiated with
permission of the property owner at fair
market value. Companies, even though they
may be public utilities, should not have the
ability to seize or take private property to
fulfill a desired outcome for the sake of
commerce alone. There exists a distinct
separation between the use of eminent
domain for the public good when it cannot
be obtained otherwise, the use of eminent
domain for the public’s good when it cannot
be obtained otherwise, and the use of it for
commerce. Private property rights, in its
wide and varied forms, should remain
absolute and inviolate, unless a clear need
of the public body demands the taking.
ENDANGERED SPECIES ACT
REALTORS® support a balanced approach
to designating and recovering endangered
species. The impacts to our economy and
individual property rights must be part of the
recovery solution. Efforts to amend the
Endangered Species Act should include:
1. Greater consideration of economic
impacts and impacts on the rights of
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private property owners earlier in the
listing process;
2. More recognition for the important
role landowners play in the recovery
process (We encourage the use of
incentives for species protection,
rather than emphasizing restrictions
and penalties. We also believe
property owners should be
compensated when use of their land
is adversely affected by
implementation of the ESA.);
3. Increased local involvement in
habitat protection plans; and
4. Continual review and expedited
removal of species from endangered
status if supported by verifiable
scientific evidence.
ENVIRONMENTAL RESTRICTIONS ON LAND
USE
REALTORS® believe environmental
restrictions on the use of land and water
should be based on both verifiable scientific
evidence and economic considerations.
While science is an important tool in land
and water resource management, science
should not be the only criteria for action,
and should be balanced with landowners’
private property rights.
NOXIOUS WEEDS
REALTORS® believe the spread of noxious
weeds is one of the most significant
problems facing the state of Montana. It is a
serious threat to Montana’s wildlife,
agricultural production, recreation, and
property values. We support efforts at the
federal, state, and local levels to control and
eradicate noxious weeds.
PUBLIC LANDS
REALTORS® support a multiple use
approach to management of our public
lands. Montanans take part in a wide range
of activities on public lands including
camping, hunting, fishing, and other
pursuits. While good stewardship of our
public lands is imperative, we should be
careful not to impose policies that
unnecessarily restrict access for those who
enjoy outdoor recreation and value our
natural environment.
TIMBER
REALTORS® believe in protecting the rights
of property owners. For that reason, we
oppose legislation or regulation that would
not allow export of timber from private land,
as well as government regulation that would
prohibit the use of resources from privately
owned land without just compensation.
5. SUBDIVISION_____________________
REALTORS® believe subdivision law should
be used to set forth objective, predictable,
and equitable criteria for dividing land.
Subdivision law should:
1. Provide for a well-defined and timely
review process at the local level;
2. Preserve a right of appeal from the
decision of the governing body;
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3. Consider any applicable growth
policy as advisory only; and
4. Assure accountability from all parties
involved in the review process.
REALTORS® understand that local
governments are currently using the
subdivision review process not only to
regulate the actual division of land, but also
to control and regulate the development and
use of the land itself, as well as the use of
water resources. This is inefficient and
inappropriate. REALTORS® support local
governments using the subdivision review
process to regulate only the actual division
of land. This “division centered” subdivision
review process would prohibit the use of
land use regulations, building regulations, or
fire regulations in local government
subdivision regulations. Instead, subdivision
regulations should concentrate on survey,
documentation, easement, and access
issues.
SANITATION IN SUBDIVISION
REALTORS® believe sanitation in
subdivision issues are a matter of science.
Only those with applicable training and
expertise should make decisions about
wastewater treatment systems and other
requirements associated with sanitation
approval.
SUBDIVISION FOR LEASE OR RENT
REALTORS® believe creating additional
structures on a tract does not constitute a
subdivision and should not be subject to
regulatory requirements.
GROWTH PRINCIPLES
REALTORS® believe in planning for growth
and allowing the market to accommodate
growing housing needs; provide a wide
range of housing choices for all incomes
and to meet changing demographics;
protect the rights of private property owners;
1. Be a comprehensive land use
planning process that incorporates:
a) Encouragement of economic
growth and strength;
b) Long term provisions for land
availability;
c) Preservation of existing
housing stock;
d) Efficient use and provision of
public infrastructure;
e) Cooperation between state,
county and city governments,
and
f) Wide ranging public input;
2. Be incentive based rather than
regulatory;
3. Avoid local taxes and fees as “de
facto” planning or regulation;
4. Avoid using other political agendas,
for example:
a) social engineering,
b) restricting mobility,
c) global warming,
d) increasing revenue.
WILD LAND URBAN INTERFACE
REALTORS® recognize that those living in
forested areas may face an increased risk
from wildfire. We encourage property
owners to create defensible space to help
reduce their risk. We further encourage
public land managers to prioritize efforts to
reduce the fuel load in fire-prone areas of
the state.
We oppose any efforts by local or state
governments to arbitrarily designate a wild
land urban interface for purposes of
restricting development. We also oppose
the use of property tax policy to regulate
growth and development in forested areas.
Instead, land management decisions should
be made through zoning or other
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appropriate processes that provide due
process protections for property owners.
PLANNING AND ZONING
Montana law requires communities to adopt
a growth policy in order to enact zoning
regulations. Moreover, Montana law
requires zoning to be in accordance with an
adopted growth policy. REALTORS®
support this statutory connection between
the adoption of growth policies and the
authority to zone.
REALTORS® believe that planning and
zoning should accommodate new growth.
Attempts to over regulate growth through
planning and zoning invariably, and
unnecessarily, complicates the process,
tends to invoke public apprehension and
landowner protests, and drives up the cost
of development.
REALTORS® believe it is critically important
that local governments refrain from using
subdivision regulations, building regulations,
and neighborhood plans to manage growth.
REALTORS® believe zoning, with close
cooperation of landowners, can be an
appropriate tool for making land use
decisions because it involves public
participation and provides optimum due
process protections for property owners,
including notice, public hearing, and protest.
6. WATER_______________________
WATER RIGHTS
REALTORS® believe it is important for the
State of Montana to complete the water
rights adjudication process in a timely
manner in order to protect existing water
rights and assure water availability for future
needs, including domestic use. Failure to
complete adjudication makes Montana
vulnerable to downstream states who take
water for their needs while impacting
recreational opportunities and other water-
related activities in Montana. When
adjudication is complicated by the water
compacting process, we strongly support
allowing the State Reserve Water Rights
Compact Commission to enter into an
Interim Agreement with the parties involved.
We support the present system of
appropriation of water rights through state
water law.
REALTORS® also believe that while the
proper review of new appropriations of
water and changes in existing
appropriations is necessary to protect
existing senior users, such review should
not be used in such a manner as to
maintain zero change in stream conditions
or as a method of regulating land use and
development. REALTORS® fully support the
constitutional right of all Montanans to
appropriate waters of the state for beneficial
uses as provided by law.
REALTORS® support the development and
implementation of clear and consistent rules
for the permitting of new appropriations of
water and changes in existing
appropriations, applied equally to applicants
and objectors. The laws of Montana have
established independent systems for the
regulation of water quality and water rights,
and REALTORS® believe that such a
system should be maintained.
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WATER BANKING AND MARKETING
With recent legislation increasing permit
requirements for subdividers attempting to
obtain water supplies, water banking and
marketing may become more prevalent in
Montana. REALTORS® may or may not
support water banking and/or marketing
provided that any such proposal will ease
the permitting process, is voluntary, and
includes safeguards against abandonment,
price monopolies, and special interest
control.
EXEMPT WELLS
REALTORS® believe that exempt wells
must be preserved. The use of exempt wells
to provide water for residential purposes is,
in part, a response to the difficulties and
costs associated with the process of
applying for new beneficial use permits and
transferring existing water rights.
REALTORS® support establishing more a
efficient water rights’ permitting process and
implementation of that process in a clear
and consistent matter.
WATER QUALITY
REALTORS® understand that clean water is
a key element of a healthy environment.
Montana’s water nondegradation law is one
of the toughest in the nation. We support
the Montana Water Quality Act and
continued state primacy in establishing
standards and criteria aimed at protecting
our health and safety as long as they are
based on scientific evidence.
NUTRIENT STANDARDS
REALTORS® believe that the adoption of
numeric nutrient standards should be
technologically and economically feasible
for point source and nonpoint source
dischargers.
WETLAND
REALTORS® believe any wetland legislation
should include:
1. The standardized definition for
wetlands identification from the
Corps of Engineers Wetland
Delineation Manual (Those areas
that are inundated or saturated by
surface or ground water at a
frequency and duration sufficient to
support, and that under normal
circumstances do support, a
prevalence of vegetation typically
adapted for life in saturated soil
conditions. Wetlands generally
include swamps, marshes, bogs,
and similar areas);
2. An efficient, coordinated permitting
process; and
3. Fair compensation, including the use
of wetland mitigation banking.
OUTSTANDING RESOURCE WATERS (ORW)
REALTORS® believe Montana’s water
quality laws and regulations provide a high
standard of protection for our streams and
water bodies. We support a well-defined
process, as well as the use of clear and
consistent criteria, for designation of
Outstanding Resource Waters (ORW) in the
state. Designation must take into account
the rights of property owners and the
potential social and economic impacts of
ORW designation on our local communities.
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7. TAXATION
Tax revenues allow people to work together
to accomplish objectives too big for a few to
do by themselves. Working through
government, our tax dollars build and
maintain public schools, parks, roads,
highways, utilities, and provide many other
services that benefit everyone. Economic
growth brings additional income and tax
revenues to our communities, making it
possible to support a variety of needs, such
as public safety, education, recreational,
and social services. To enjoy the benefits
our communities offer, we must pay the
taxes necessary to support the needed
facilities and services.
The public expects government to provide
and deliver these services. At the same
time, the public expects (and deserves) that
government will spend tax revenues wisely
and efficiently. Government programs and
services should be prioritized, and
government should strive to deliver the best
product or service at the lowest cost.
PRINCIPLES FOR TAXATION
Our tax structure can inhibit or promote
growth and economic development in our
state. When taxes imposed on businesses
are disproportionately higher than those in
surrounding states, we discourage new
business from locating in Montana and
discourage expansion of existing
businesses. When taxes on properties are
too high, we discourage investment in home
ownership. In order to achieve an equitable
and balanced tax structure for Montana,
REALTORS® believe efforts to enact tax
reform should result in a revenue system
that:
1. Produces revenue in a reliable
manner. Reliability involves
adequacy, stability, and certainty.
2. Treats individuals equitably.
Minimum requirements of an
equitable system are that it imposes
similar tax burdens on people in
similar circumstances and minimizes
regressivity;
3. Maintains economic
competitiveness. It should not
unintentionally or unnecessarily
interfere with private economic
decisions in the market place. It
should; however, be competitive with
tax systems used in other states to
promote economic growth and
stability. The taxes generated from a
high quality revenue system should
help provide a level playing field with
similar treatment for all industries
and all firms within a given industry
within the state;
4. Facilitates taxpayer compliance and
is easy to administer. It is easy to
understand and minimizes
compliance costs;
5. Is composed of elements that are
complementary. All economic
activity and wealth should contribute
proportionally to supporting
government services. Taxes should
not be just a number of different
methods to generate more revenue
from the same source;
6. Relies on a balanced variety of
revenue sources. A broad tax base
spreads the tax burden and lowers
overall rates. Lower rates can
improve the state’s economic
position and minimize the effects of
external changes in the market
place. One means to balance our tax
system is to consider adopting a
“three-legged” stool of income,
sales, and property taxes. We
should avoid excessive reliance on
any single source of revenue; and
7. Is accountable to taxpayers. Tax
laws should be explicit, not hidden,
and the public should be adequately
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informed about the effect of any
proposed changes. Taxes, as well
as tax expenditures, should be
evaluated regularly to assess their
impact and effectiveness.
ESTATE (DEATH) TAX
REALTORS® believe it should be the
inherent right of any person to pass the
fruits of his or her labor to the person or
persons of his or her choice. In order to
preserve family farms and businesses, we
support estate tax repeal.
PROPERTY TAX
REALTORS® recognize the continuing
burden placed on homeowners by rising
property taxes and support efforts to provide
property tax relief. We support existing
programs to provide assistance to those
most at risk of being taxed out of their
homes. We oppose, however, any reform
efforts that create a shift in the tax burden
from one group of taxpayers to another.
REALTORS® believe that our property tax
system should preserve the market value
concept as a means of providing uniformity
and equity in the valuation of all property.
Property reappraisal should not result in a
windfall increase of property taxes paid by
Montanans.
NONRESIDENT REAL ESTATE SALES OR
TRANSFERS
REALTORS® support Montana’s auditing
authority to pursue nonresidents that fail to
pay taxes they may owe on capital gains
realized from the sale of Montana real
property. We strongly oppose requiring a
withholding at the time of sale.
REALTORS® believe that like-kind transfers
of real estate bring capital investment to
Montana and improve our economy. Often
times, nonresidents that exchange into the
state will again exchange out of the state.
Although nonresident exchanges leaving
the state may result in a capital gain, a vast
majority of these exchanges rarely result in
an event taxable by the State of Montana
because of the federal deferability of the
gain. Therefore, it makes little practical
sense to create an expensive tax
compliance policy that requires a
withholding or tax lien on outbound like-kind
exchanges. The costs will invariably
outweigh the benefits while discouraging
capital flow into the state.
REALTORS® may support local option taxes
if local government specifies which projects
or services would be provided by specific
tax revenues to accomplish targeted
purposes for a specified period of time and
are subject to a vote of the people. Once
the specified time has expired, the tax and
projects should sunset.
SALES TAX ON BUSINESS AND PROFESSIONAL
SERVICES
REALTORS® may support a sales tax on
consumer goods and business and
professional services as part of overall tax
reform if it can be demonstrated that there is
an overall benefit to the taxpayer, that all
services are taxed equitably, and it is
accompanied by a substantial and
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permanent reduction or elimination of
another tax.
We will oppose any effort to impose a sales
tax on business inputs, construction
materials, or the sale of homes as it would
discourage business activity, investment,
and economic development. Services that
are associated with the purchase of real
estate should be treated as part of the
investment costs of the transaction and not
be taxed.
CAPITAL GAINS TAX
A capital gain is an increase in the value of
an asset, as in stock or real estate, between
the time it’s bought and the time it is sold.
REALTORS® believe reducing the capital
gains rate would encourage real estate
investment and stimulate the economy. We
support continued efforts to lower the tax on
capital gains.
STATE INCOME TAX
Economic development may be hampered
when a state’s tax rates are significantly out
of line with those in competing and/or
neighboring states. When entrepreneurs
consider where to locate, they are
influenced by the total amount of individual
income taxes they will pay. That is
especially true of high income individuals
whose decisions are influenced by the
combined federal/state marginal tax rate
determined by federal tax policy and the tax
policy of each individual state. Because of
its importance to furthering economic
growth and investment, REALTORS®
support efforts to ensure our marginal
income tax rate remains competitive.
8. TRANSPORTATION &
INFRASTRUCTURE__________________
Infrastructure, including repair and
maintenance of existing infrastructure as
well as building new infrastructure, is an
important investment in the growth of
society, the economy, and quality of life.
Infrastructure – roads, bridges, water and
sewer systems, along with schools and
parks – provides the essential foundation to
a healthy economy. Investing in well-
planned, properly financed public
infrastructures helps accommodate and
direct growth to benefit the whole
community.
Sufficient funding of infrastructure is a
critical investment in our communities.
Infrastructure provides the backbone for our
community’s quality of life, the framework
for economic development, and lays the
essential groundwork for accommodating
residential, commercial, and industrial
growth.
REALTORS® recognize the need for new
infrastructure. REALTORS® support the
concept of proportional reimbursement and
strongly urge all municipalities to utilize this
tool.
IMPACT FEES
REALTORS® understand that additional
infrastructure may be needed to support
new development. We also believe that
proper development makes a positive
impact on the local tax base and on the
range of housing choices available in our
communities. Any fees assessed by local
government such as impact fees and/or
development fees (including dedications in
lieu of fees and linkage) should not hamper
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or deter development in Montana
communities.
Because impact fees ultimately drive up the
cost of a home, they should not be used for
any other purpose than to defray the cost of
providing public capital improvements which
are directly attributed to new development.
In no case should fees be used to correct
existing deficiencies or to fund a
disproportionate share of the cost of off-site
improvements. Furthermore, public
education facilities are the responsibility of
the community at large and should not be
disproportionately assessed against new
homeowners and businesses.
REALTORS® oppose any legislative
proposals that seek to change the Montana
Impact Fee Enabling Act of 2005 in order to
shift an unfair portion of the cost of public
facilities onto new development. The
methodology established by the enabling
this Act ensures that impact fees do not
exceed the cost of financing new or
expanded infrastructure required by the
development from which impact fees are
collected. The methodology also is
designed to ensure that impact fees cannot
be utilized to finance new or expanded
infrastructure that is not directly related to
the development from which impact fees are
collected. These requirements are referred
to as “rough proportionality” and “rational
nexus” by the U.S. Supreme Court. Without
nexus and proportionality, impact fees
cannot pass constitutional muster.
9. FISCAL POLICY
Government needs to recognize the people
who pay the government’s bills are the
same people who are struggling to make
house payments, buy a car, or save money
for their children’s education. Every dollar
taken away from working families and
businesses to pay for government means
less money in the economy to create jobs,
opportunities, and tax revenues.
REALTORS® believe a balanced state
budget should be maintained by reducing
unnecessary administrative expenditures,
prioritizing programs services, and
eliminating those that no longer achieve
their purpose. Fiscal accountability and
responsibility should be encouraged at all
levels of government.
UNFUNDED MANDATES
REALTORS® support measures to assure
that all state mandates are fully funded and
that a sunset review process is
implemented to update the fiscal impact and
determine the effectiveness of all mandated
programs. Mandates that are found to be
obsolete or ineffective should be eliminated.
10. BUSINESS
BANK INVOLVEMENT IN REAL ESTATE
BROKERAGE
REALTORS® oppose expanding the
authority of banks and bank holding
companies to enable them to engage in real
estate brokerage activities. We oppose any
changes in Montana law that would grant
state-chartered financial institutions powers
which are not granted to federally-chartered
institutions, or permit them to engage in real
estate activities without standards and
safeguards which will ensure a level playing
field.
CONSERVATION CONSTRUCTION STANDARDS
REALTORS® support energy conservation
and the practice of conservation standards
in new construction. We support these
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standards on a voluntary basis and support
the concept of positive incentives for
conservation activities. We oppose a
mandatory conservation standard for new
construction; such as mandated fire
sprinklers, as it could become a barrier to
affordable workforce housing for some
Montanans.
FOREIGN LAND OWNERSHIP
REALTORS® support the right of foreign
investors to freely acquire property in
Montana. We oppose laws and regulations
which in any way curtail these rights. We
believe foreign investors in Montana real
estate should be subject to the same rates
of taxation as U.S. investors. Systems for
taxing foreign investors and reporting
requirements on the foreign investor and/or
his salesperson should be designed to
minimize the reporting burden.
INDEPENDENT CONTRACTOR
Real estate licensees are specifically
exempt from Montana’s Workman’s
Compensation Act and are exempt as
independent contractors from the
Unemployment Compensation
requirements. REALTORS® believe that as
current law requires, the Internal Revenue
Service qualifications should provide the
maximum criteria that can be imposed to
qualify for independent contractor status.
LIABILITY FOR ENVIRONMENTAL DEFECTS
REALTORS® support the elimination of
liability of the lender, salesperson, and
innocent seller of environmentally defective
properties. It has become increasingly
difficult to secure financing for properties
that may hold concealed environmental
defects.
LICENSE LAW
The laws and regulations of the State of
Montana should be consistent with the
demands of our open and free consumer-
oriented market. Fees paid for licensing
should be used for serving the licensees
and the interest of the general public.
POINT OF SALE SERVICE
Where a real estate broker/salesperson
provides a service in addition to or different
from those he/she is obligated to provide,
that broker/salesperson is entitled to
remuneration for these services, provided
that full and written disclosure is made to
and accepted by all clients and customers
to the transaction in advance of undertaking
to perform such services. REALTORS® are
opposed to legislative and regulatory efforts
to limit the payment of remuneration for
these additional services. We oppose the
acceptance of fees by real estate
brokers/salespersons for the simple referral
of customers or clients to mortgage lenders
and providers of other settlement related
services.
SALES PRICE DISCLOSURE
REALTORS® support maintaining the
confidentiality of the information filed on the
Realty Transfer Certificate.
11. CONSUMER PROTECTION________
REALTORS® believe that sellers of real
property should disclose known conditions
(including defects) of said property at the
time it is offered for sale or lease.
Disclosure must be within the limits of the
seller’s knowledge and belief. Disclosure
must be a mandatory requirement.
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REALTORS® further believe real estate
licensees should not be held liable for false
or misleading information provided by
owners unless the licensee knew the
information was false or misleading.
HOME INSPECTIONS
REALTORS® believe home inspections are
an important facet of the home-buying
experience, and the inspection protects
consumers by helping potential homebuyers
detect flaws in the home they wish to
purchase. REALTORS® play an important
role in educating the consumer and
providing information about the necessity of
a home inspection. However, REALTORS®
should not be responsible or liable for the
actions of the home inspector, or the
process by which the consumer wishes to
choose the individual or company doing the
inspection.
LEAD BASED PAINT
Lead is a public health issue. REALTORS®
support increased education of all
homeowners about lead so they will
become aware of potential health hazards.
Legislative and administrative efforts should
be directed at the general public, rather than
focused on the real estate transaction.
RADON
REALTORS® believe that verifiable scientific
evidence is necessary to support all
government and private claims of health
risks associated with indoor air quality
problems. Because additional regulatory
requirements impose costs on sellers of real
property, we will oppose mandatory testing
and/or regulations concerning radon testing
and mitigation until such time as scientific
evidence is available to indicate there is a
significant risk to public health from elevated
levels of radon.
METH LABS
REALTORS® recognize Montana faces a
growing problem with the illegal
manufacture of methamphetamines.
Because properties may be impacted by the
presence of contaminants associated with
production of methamphetamines, we
believe law enforcement authorities should
be immediately notified when a meth lab is
discovered in order to ensure prompt
decontamination by properly trained
individuals. Because the health risks
associated with secondary effects of meth
labs have not been quantified, adoption of
any additional mitigation requirements
should not impose significant costs on
innocent property owners, nor should they
unnecessarily delay the sale or transfer of
decontaminated property.
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NOTES:
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Legislative Position
Statement
One South Montana Avenue, Suite M-1, Helena, MT 59601
Phone: 406-443-4032 : Fax: 406-443-4220
Email: mtmar@montanarealtors.org
Website: www.montanarealtors.org