While the legislative session is not officially closed, the assembly has adjourned for the year. The Senate is still in session, but many of the bills we supported are ready for the Governor’s desk. Below please find high-level updates on some of the critical ones we have been working on either in our public affairs committee meetings or through our calls to action. We’ll update further in the coming weeks as we understand how many of these are implemented (especially related to Chapter 452). The links to each bill’s language is in BLUE. They include: Chapter 452, TIF, Liquor License, Landlord/Tennant, Property Rights and Wetland Reform.
Chapter 452: (AB 456): Protecting the real estate licensee independent contractor relationship – this bill clarifies what must be accomplished in order to classify real estate agents as independent contractors, as opposed to employees. This bill assists in clarifying the independent contractor status of real estate agents and removing any inconsistencies of the treatment of real estate independent contractors under state law by:
a) removing the employee and employer statutory references in Chapter 452;
b) creating a safe harbor for real estate independent contractors consistent with federal IRS regulations;
c) identifying in the statute supervision responsibilities by real estate firms as to agents;
d) eliminating the current inconsistent application of Wisconsin’s worker’s compensation law requiring real estate companies to carry worker’s compensation insurance for agents as though they are employees, even though the same agents are independent contractors for federal and state tax purposes.
However, this bill does permit a real estate firm to voluntarily offer worker’s compensation insurance without forfeiting the independent contractor status.
In addition, this legislation will: Codify the unauthorized practice of law — statutorily confirming the Wisconsin Supreme Court’s 1961 decision of a real estate licensee’s ability to complete state-approved forms. A 1961 decision by the Wisconsin Supreme Court, in Reynolds v. Dinger, 14 Wis. 2d 193 (1961), the Court held that the completion of state-approved forms by Wisconsin real estate licensees was not an unauthorized practice of law. Reduce licensee statute of limitation — provide a 2-year statute of limitations similar to the language and structure of home inspectors under Wis. Stat. §440.997. Wisconsin real estate licensees are currently subject to a 6-year statute of limitations on litigation related to written contracts. The fact that a company and its agents are susceptible to litigation 6 years after a transaction closes, terminates or expires creates significant uncertainty for practitioners and their companies.
1. TIF Bills: While we were pushing for a package of eight TIF bills that would modernize and improve the process, the assembly has approved four of the eight that will now go the Governor’s desk. Four others (see below) will not move on this session. However, we will be lobbying for their passage during government day and into the new session which will begin later this year. The most important of those defeated bills is SB 55 which increases the total limit on the total amount of taxable property permitted within a community’s TID from 12 to 15 percent. We are thankful for those bills that have been passed and will make that known during our capital visits in March.
- SB 56 (AB 137) – Extends the sunset date for declaring a TID distressed or severely distressed from 1/1/2015 to 1/1/2020.
- SB 57 (AB 138)- Provides the Joint Review Board with greater flexibility Allows for greater flexibility related to re-determining the base value of a TID when the base value has fallen at least 10% for two consecutive years.
- SB 55 (AB 136) – Increases the limit on the total amount of taxable property permitted within a community’s TIDs from 12% to 15%.
- SB 52 (AB 133) – Allows for greater flexibility related to revenue sharing between districts within a jurisdiction and between overlapping taxing jurisdictions.
- SB 50 (AB 131) – Makes several technical changes to the law regarding public notice requirements, time limits for joint review board actions, and maintaining the industrial zoning classification for only industrial TIDs.
- SB 51 (AB132) – Makes modifications to the functions of Joint Review Boards.
- SB 53 (AB134) – Allows local governments to mitigate the negative impacts to TID cash flows caused by legislative and administrative actions.
- SB 54 (AB 135) – Provides local communities with greater flexibility as to the composition of a TID by eliminating the 25% vacant land test.
2. Liquor license – while originally created to help the Titletown development, we are already hearing that other Southeastern Wisconsin projects will be benefiting from the new legislation. In a nutshell, the legislation creates two licenses for special economic development districts and allows municipalities with extra licenses to rent them to neighboring communities.
3. Landlord / Tennant Bill – This is an extremely complicated and controversial bill. Thanks to cooperation and communication in Madison, voices of opposition were quelled and the heart of the bill moves on. To summarize as it relates to our industry, the bill which would set new policies on when landlords could evict their tenants and how local governments could regulate rental properties and establish local historic districts. It also has language about time of sale requirements that is more favorable to the landlords.
4. Property Rights and Navigable Water Bills (per the League of Municipalities)- AB 582, the property rights bill, and SB 459, the navigable waters, wetlands, and stormwater bills that the Senate had passed earlier this week. These bills will now be sent to the Governor for his signature. The amended version of AB 582 does not include the developers’ discount provision in the original bill, which provided a 50% discount on the assessed value of vacant platted lots formerly classified as agricultural land.
Related to Navigable Water Bills, new key items have been added:
- Provides that DNR may not prohibit the construction of storm water management ponds in navigable or nonnavigable artificial waterways as a method for achieving compliance with DNR’s prescribed performance standards for sources of nonpoint water pollution.
- Provides that DNR must give credit for any pollutant reduction achieved by ponds in artificial waterways in determining compliance with performance standards specified in a storm water discharge permits:
- Exempts from wetland permitting requirements any discharge that is the result of maintaining a sedimentation or stormwater detention basin and associated conveyance features.
Looking ahead, we will continue to listen to members and the legislature about upcoming issues. At this time, we have identified three issues, that we will begin to discuss at our Government Day session:
a. Transportation / Infrastructure Funding: This will be front and center during the next session, and one that CARW members and business association surveys suggest is one of the top issues. If you recall, the legislature passed a taxing proposal that would have created sustained funding for infrastructure through a new tax proposal, but it was rejected by the Governor who did not want to increase taxes of any kind. This must be addressed next session.
b. Property Tax Reform – this is and has been our number one priority. In the most recent state budget, Governor Walker signed into law, a measure that reduced property tax bills in Wisconsin while continuing to honor the state’s commitment to allocate more than $200 million annually in state general purpose revenue to help fund Wisconsin’s tech colleges. In addition, the budget included a renewal of the cap placed on local levies for the next two years (through 7/17) but allows increases based on net new construction and gives local governments the power to carry forward up to .5% of unused levy authority to the next year. Additionally, local governments may exceed the levy limits if approved through local referendum. Our goal is to continue to work on creative solutions for lowering the property tax, and keeping it front and center during our lobby day.
c. TIF Bills – (see not passed bills above)
Please let us know if you have questions! [email protected]
More information on supporting CARW legislative initiatives through conduit or LDC: https://carw.com/public-policy/direct-givers-conduitrpac/