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2006 Legislative Report

The 104th General Assembly adjourned on May 27 with a flurry of activity that included several pieces of legislation that were supported and shaped by TAR.  We are very fortunate to have strong bipartisan support of our legislation and members of the General Assembly continue to say how important it was to hear from their REALTORS® in the district.  Our Calls to Action for legislation generated 6,600 emails to members of the General Assembly supporting our issues.

The Governmental Affairs Committee and Legislative Affairs Subcommittee met on several occasions to discuss various aspects and nuances of legislation being presented to the General Assembly.  Chairman Jason Farmer and Vice-Chair Fontaine Taylor with other committee members played an important role in crafting legislation that the entire real estate community can be proud of.

New Statute of Limitations for Real Estate Licensees

Legislation written and supported by TAR was passed this year that will create a statue of limitations against filing a complaint with the Tennessee Real Estate Commission.  The legislation was sponsored by Senator Curtis Person (R, Memphis) and Representative Kent Coleman (D, Murfreesboro).  Over 15 members of the Senate signed on as co-sponsors!

The new law creates a two-year statute of limitations for filing a complaint at TREC against a licensee.  As passed, the statute starts when the consumer or person filing the complaint "knew of the violation."  If the violation is a criminal act, the statute of limitations is the same as the criminal statute of limitations.

The legislation will also allow the commission to dismiss frivolous claims against licensees.  It is good for the consumer and the licensees, as it will make individuals who have real complaints step forward.

Minimal Level of Services

As discussed on the previous page, the legislature did enact a Minimal Level of Services bill that was brought by TAR and was overwhelmingly approved by the General Assembly.  Sponsors Senator Jamie Woodson (R, Knoxville) and Representative Charlie Curtis (D, Sparta) presented the legislation and helped TAR work with both the Department of Commerce and Insurance and the Department of Justice who initially had concerns about the legislation.  It was passed unanimously by both the House and Senate.

Predatory Lending

TAR supported the "Tennessee High-Cost Home Loan Protection Act." legislation that was brought by the Anti-Predatory Lending Coalition and the Memphis Area Association of Realtors.  Senator Roy Herron (D, Dresden) and Representatives Craig Fitzhugh (D, Ripley) and Larry Turner (D, Memphis) all worked closely with the interest groups to find some middle ground on this important issue and achieved a unanimous vote from both chambers.

The new law establishes point and fee triggers for Tennessee consistent with federal law defining high-cost loans and contains greater supervisory and enforcement provisions for the Tennessee Commissioner of Financial Institutions.  After January 1, 2007, lenders offering high-cost loans will be prohibited from "bait-and-switch" tactics at closing, flipping a property without benefit or charging pre-payment penalties after the first 24 months of he loan.

County Powers Act

At the end of the legislative session 2005 there were 23 local option transfer tax and adequate facility tax bills that had been referred to the Tennessee Advisory Council on Intergovernmental Relations (TACIR) for review.  Once TACIR returned their suggestion, which included allowing taxing provisions that TAR could not support, it became necessary to work with interested parties.

At the beginning of the 2006 session the Tennessee County Services Association, County Commissioners Association, County Mayors Association and TAR worked together to find middle ground on the issue.  While TAR remains vigilant in its position to oppose all new taxes on real estate, the legislation is a new mechanism that will allow high-growth counties to make the decision to implement an adequate facilities tax at the local level.  This new tax must be used to pay for schools and is paid at closing (not when the builder pulls the building permit.)

The new mechanism is limited to just high-growth counties, can only be raised every four years and is capped at $1 per square foot.  The legislation also prohibits counties from implementing a local option transfer tax.  The mechanism will require that it be passed by two-thirds vote of the county commission, twice, insuring that local organizations and interested groups (including REALTORS®) will get an opportunity to voice their opinion on the issue.