Capitol Connection: January 24, 2014
Pre-Registration for REALTOR® Day closes February 7th
Don’t miss the 2014 REALTOR® Day at the Capitol on Wednesday, February 26th at the McNichols Building and the State Capitol. Based on feedback received from local leadership, we have revamped this event and are very excited for you to attend. We are offering Capitol tours and meetings with Legislators as part of the selections to help craft an educational and entertaining day. This is a great opportunity for you to learn about and discuss important policy issues affecting the real estate industry this upcoming year, as well as hear from legislative leaders and network with your legislators. Pre-registration is $55 and includes lunch and an afternoon program. For more details, or to register today, please click here.
HB 1001 Tax Credit For Property Destroyed By A Natural Cause
CAR has officially taken the position of SUPPORT on HB 14-1001, Concerning the Creation of an Income Tax Credit for a Taxpayer that owes Property Tax on Property that has been Destroyed by a Natural Cause. Beginning in the 2013 income tax year, the bill establishes an income tax credit for a taxpayer that owns real or business personal property that was destroyed by a natural cause as determined by the county assessor of the county in which the property is located.
The amount of the credit is an amount equal to the taxpayer’s property tax liability for the destroyed property in the property tax year in which the natural cause occurred. A taxpayer is allowed to claim the credit only for the income tax year during which the property was destroyed.The bill requires the executive director of the department of revenue (department) to create a certification form to be used by a county assessor to certify to the department, at the request of a taxpayer, that the taxpayer’s property was destroyed by a natural cause and that the taxpayer is entitled to an income tax credit. The bill specifies the information that shall be included on the certification form for real or business personal property that was destroyed by a natural cause.
The department is required to make the certification form available to taxpayers and county assessors on the department’s web site and by any other means deemed necessary by the department. Before claiming an income tax credit, the bill requires a taxpayer to request that the county assessor in the county in which the destroyed property is located complete and sign a certification form for the destroyed property that is the basis of the income tax credit. The county assessor is required to complete and sign the certification form upon such request and the taxpayer is required to submit the completed and signed certification form to the department with the taxpayer’s income tax return.The amount of the credit allowed that exceeds the taxpayer’s income taxes due is refunded to the taxpayer.
CAR sees this as a positive way to help mitigate the damage caused by the multiple natural disasters that happened in our state in 2013. HB-1001 only covers destroyed property, so it is giving reprieve to these taxpayers for the year of 2013 on affected properties.
SB 09 Disclose Separate Ownership Mineral Estate
CAR has successfully amended SB14-009, Concerning a Disclosure of Possible Separate Ownership of the Mineral Estate in the Sale of Real Property. Current law requires that sellers of real estate disclose specified information prior to the final sale. For example, sellers must inform buyers when the property is located within a special taxing district, or is subject to assessments as part of a common interest community. This bill adds a requirement for sellers to disclose that a separate mineral estate may subject the property to oil, gas, or mineral extraction. The disclosure does not create an additional duty on the part of the seller to investigate. As introduced, SB-009 required by no later than January 1, 2015, the Real Estate Commission in the Department of Regulatory Affairs (DORA) to promulgate rules to implement the requirement.
CAR does not believe that SB-009 will have the intended effect that the proponents believe it will. The Real Estate Commission’s Approved Contract to Buy and Sell already notifies Buyers that the surface estate may be owned separately from the underlying mineral estate, and further, advises Buyers that third parties may own interests in the mineral rights, giving those interests the right to enter and use the surface property.
Working with stakeholders through this process, CAR successfully amended SB-009 which alleviated some of our concerns. The amendment clarifies that it is the Buyer’s duty to do their own due diligence regarding the investigation of whether a mineral estate has been split from the surface estate, and/or whether there could possibly be future Oil & Gas activity when the Seller has no knowledge about a split estate or whether there is potential Oil & Gas activity – which will be the common transactional situation. Furthermore, we are pleased to see the reference to “or near” on Page 3, line 1, amended to read “or adjacent”. Without this change we feared the “or near” put Sellers and real estate licensees in jeopardy because where they may not believe some existing, or planned, activity is “near” the property a buyer and their attorney could have a different definition of “near” and now they get to litigate what “near” means. Lastly, we applaud the Division of Real Estate’s adopted amendment moving the effective date to January 1, 2016, which respects Real Estate Commission’s two-year moratorium on forms changes.