The Iowa Legislature adjourned on Friday, April 12. The following are the primary issues the IAR monitored during the legislative session.

Document Preparation

On Friday, March 29, Governor Vilsack signed the document preparation legislation into law. The legislation will become effective on July 1, 2002.

This legislation will ensure that REALTORS® can prepare the documents necessary to facilitate a real estate transaction for residential, commercial, and agricultural property (e.g. purchase agreements, listing contracts, etc.).

The legislation also makes changes to the real estate chapter of the Iowa Code and states that real estate licensees will no longer have to annually submit proof of errors and omissions insurance coverage. The bill replaces the annual proof of insurance requirement with a requirement that all licensees would have to provide the real estate commission with proof of coverage within 20 calendar days of the commission’s request to see proof of errors and omissions insurance. If a licensee fails to submit proof of insurance, the commission may deny a license renewal request, or suspend or revoke a license.

The bill also adds new language that would allow the real estate commission to issue civil penalties up to $2,500 for licensee discipline.

Tax Abatement

The IAR supported an amendment to the Department of Revenue and Finance policy bill. This legislation was adopted by both chambers in the last days of the session was signed into law by the Governor.

The amendment states that a homeowner who misses the filing deadline for their tax abatement schedule will still have two years to file for the tax abatement without losing the credit. The amendment would correct legislative language that was adopted in 2001 that changed the tax abatement filing laws to state that if an owner did not promptly file for tax abatement they would lose the abatement tax exemption up until the time they filed. This was signed by the Governor and is retroactive and effective immediately.

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Development Property Taxation

The IAR supported tax legislation dealing with property development. Currently, if a section of agricultural land is platted and available for commercial development the land will remain at the agricultural tax rate for three years. After the three years has expired the land will be taxed at the commercial rate regardless of whether the land has been developed yet.

This legislation would tax the property at the acreage or unimproved rate until there is permanent construction on the site. There was also an amendment to the legislation that would have increased the three year time frame to ten years for development.

This legislation was introduced late in the legislative session and was not considered by the Ways and Means Committee. The IAR will continue to support the passage of this legislation in 2003.

Real Estate Installment Contract Sales

The IAR has been working with other organizations to address problems with some real estate installment contract sales. This legislation will require certain types of disclosures for these contract sales.

The suggested disclosures primarily deal with the financial terms of the contract sales (i.e. annual interest, amortization schedule, unpaid taxes, liens, etc.). The legislation would apply to all persons who enter into four or more residential real estate installment sale contracts in one calendar year. The legislation also states that a contract seller who violates these disclosure requirements will be guilty of a simple misdemeanor. The bill includes legal recourse for contract purchasers if a contract seller violates the disclosure requirements.

The legislation passed the House early in the legislative session and the Senate approved the legislation in the last days of session. The bill has been signed by the Governor and will become effective on July 1, 2002.

Land Management and Planning

This legislation dealt with land use and local planning requirements. The bill would have established a statewide land management planning board, and required each county and city to establish a strategic development committee for the purpose of creating a development plan for their area. These local plans would have to be approved by the state land management planning board.

Certain types of public financial assistance would not be given to cities or counties that do not establish a development plan. The bill also prohibits annexation of territory in strategic preservation areas, and requires municipal services to be provided to an annexed area within three years.

The IAR opposed this legislation as it may be detrimental to housing and commercial development. The Legislature did not take action on this bill.