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Friday, August 8

STATE ISSUES

LONG-AWAITED WINEMAKER COMPROMISE ON BALLOT THIS NOVEMBER
A six-year effort to ferment legislation regarding Oklahoma winemakers will culminate this election year as voters decide whether to pass State Question 743. The ballot question came from SJR 29, by Morgan and Sen. Thomas Ivester, D-Sayre. The bill proposed a constitutional amendment to allow in- and out-of-state winemakers that produce no more than 10,000 gallons of wine to sell directly to package stores and restaurants as long as the wine was sold on the same price basis. The winemakers would be required to self-distribute the wine, using only vehicles owned or leased by the winemaker and without the use of common carriers. The resolution also contains an interdependency clause that would prohibit the direct selling by winemakers if any part of the question was found to be unconstitutional. The measure contains similar language on the ballot for State Question 743.

The accompanying bill, SB 995, by Morgan and Sen. Harry Coates, R-Seminole, allows winemakers inside and outside the state to sell and ship wine they produce directly to retail package stores and restaurants. It also allows winemakers inside or outside the state to receive orders in electronic or written form for wine to be delivered or shipped to consumers. It had been a major undertaking attempting to reconcile the various interests of wholesale distributors, out-of-state wineries and local wineries, Morgan said. For their part, local wineries had wanted the ability to market directly to package stores and restaurants without having to go through a wholesaler.

When the matter was discussed in committee, Reps. Trebor Worthen, R-Oklahoma City, and Rob Johnson, R-Kingfisher, expressed concerns. Wineries from outside the state had objected because they did not want in-state wineries to have an advantage afforded by skipping the middle man. And of course, wholesalers had resisted the measure because it represented a potential reduction in business. The end compromise, passed by the Legislature and signed by the governor, will be invalid if it is not approved by voters. If the voters see fit to pass the measure, it will become law. But it can, in its entirety, be overturned if any portion of the law is later found to be unconstitutional.

Attorney General Drew Edmondson's office issued a related opinion in July, finding that consumers cannot be allowed to purchase, then open and consume a bottle of wine while on the premises of a winery. It was also found that a bottle legally sold on the premises could not be treated a sample and then be served to customers. The request for an opinion was submitted by Sen. Kenneth Corn, D-Poteau

REPORT SHOWS OKLAHOMANS' TAX BURDEN DECLINED
Oklahoma's tax burden declined at a rate comparable to the national average in fiscal year 2008, according to a recent report. According to the Tax Foundation, a nonpartisan tax research group based in Washington D.C., Oklahomans paid $3,761 in state and local taxes from July 1, 2007, to June 30, 2008, or 9.8 percent of their per capita personal income. That was the 19th highest level in the United States and 0.1 percentage point above the national average, according to the report released Thursday. Tax Foundation Senior Economist Gerald Prante said the national average declined because income grew faster than tax collections between 2007 and 2008. That fact is reflected in the report's title, State-Local Tax Burdens Dip As Income Growth Outpaces Tax Growth.

According to Prante's calculations, New Jersey residents paid the largest percentage of their income in state and local taxes at 11.8 percent. New Yorkers were close behind, paying 11.7 percent. Connecticut was third at 11.1 percent. The top 10 were rounded out by Maryland, 10.8 percent; Hawaii 10.6 percent; California, 10.5 percent; Ohio, 10.4 percent; Vermont; 10.3 percent; Wisconsin, 10.2 percent and Rhode Island, 10.2 percent.

Alaskans pay the least, 6.4 percent in 2008, but Nevada is close at 6.6 percent, according to the report. Residents pay between 7 and 8 percent of their income in state and local taxes in four states: Wyoming, 7 percent; Florida, 7.4 percent; New Hampshire, 7.6 percent; and South Dakota, 7.9 percent. Four other states round out the bottom 10: Tennessee, 8.3 percent; Texas, 8.4 percent; Louisiana, 8.4; and Arizona 8.5 percent.

While Oklahoma's ranking declined one spot from 20th to 19th among the 50 states, the report notes that the state's tax burden ranks much higher than it did previously.

"Oklahoma's taxpayers have gone from 42nd to 19th in the tax burden rankings over the period of this study. During the 1970s Oklahoma residents ranked in the bottom 10 for state-local tax burden. During the 80s they hovered in the below average range, and since the mid 90s they mostly paid a slightly above-average tax burden," the report states.
According to data presented in the report, Oklahoma's lowest tax burden between 1977 and 2008 was 8.6 percent in 1980 and 1981. The state's highest tax burden was recorded in 1994 and 2007 at 10 percent. The state's lowest ranking was 43rd with a 9 percent tax burden in 1978, and the state has been ranked as high as 14th when it had a tax burden of 9.8 percent in 1999.

Prante's calculations also consider the taxes residents pay to other states, which he called "much larger than commonly supposed."

"Every state's economic activity is different, as is every state's tax code," Prante wrote in the report. "As a result, they vary in their ability to 'export their tax burden,' that is, to collect revenue from non-residents." Of Oklahomans' $3,761 per capita tax burden, Prante calculated that $1,481 or 39.4 percent was paid to other states.

The complete report is available on the Tax Foundation Web site: TaxFoundation.org.

NEW BUILDING LAWS AIM TO INCREASE ENERGY EFFICIENCY
In the wake of rising energy costs, many states, including Oklahoma, have passed laws that require new public buildings to comply with energy-saving regulations. In June, Gov. Brad Henry approved a piece of legislation that aspires to improve energy efficiency in some of Oklahoma's public buildings. HB 3394, by Rep. Lance Cargill, R-Harrah, and Sen. Tom Adelson, D-Tulsa, requires the Department of Central Services to adopt a high performance certification program for public buildings, aimed at improving energy efficiency and decreasing resource consumption. The bill also establishes requirements and procedures for the program.

According to the bill, DCS is responsible for implementing the certification program to evaluate the efficiency of all new public buildings in the state. "The intent of this bill is to ensure that we have building structures that are as energy efficient as possible," said Gary Smedley, public information officer for DCS. "It's something we have been striving to do for years because it's the responsible thing to for both the environment and the economy."

Smedley said that initially the measure was written to get the department to use standards set forth by the U.S. Green Building Council's LEED. Smedley said that the LEED standards are very specific, and the final draft of the measure allowed for the use of other standards set forth by entities other than LEED. "LEED is the primary set of standards that we use, but there are other standards we utilize, as well," said Smedley. "The main objective is to make sure that we are creating buildings that are as efficient as possible."

According to the Green Building Council Web site, U.S. public buildings account for the following energy and resource consumption:
• 70 percent of all electricity;
• 39 percent of energy use;
• 39 percent of carbon dioxide emissions;
• 40 percent of raw materials use;
• 30 percent of waste output; and
• 12 percent of potable water consumption.

The Web site also states that the benefits of a green building include the enhancement and protection of ecosystems, improvement of air and water quality, reduction of solid waste and the conservation of natural resources. Buildings that are built to be energy efficient also have reduced operating costs, according to the Web site. According to the council's Web site, an upfront investment of 2 percent in green building design results, on average, in life cycle savings of 20 percent of the total construction costs. Tenants of green buildings can save about 50 cents per square foot each year through strategies that cut energy use by 30 percent, which can represent a savings of more than $50 thousand in a five-year lease on 20,000 square feet. LEED buildings also consume 30 to 50 percent less energy than conventional buildings, save 40 percent of potable water, reducie carbon emissions by 39 percent and have a 70 percent savings on waste output, according to the council's Web site.

Oklahoma's green building law will go into effect on Aug. 21.

FEDERAL ISSUES

FED LEAVES KEY INTEREST RATE ALONE
The Federal Reserve yesterday left the key interest rate unchanged at 2 percent, while stressing in their post-meeting statement that they’re concerned about both the struggling economy and high inflation. "Although downside risks to growth remain, the upside risks to inflation are also of significant concern," the Fed said.

Observers say that the Fed is unlikely to change the key rate this year. "They really went right down the middle," says U.S. Global Investors research director John Derrick. "They are basically in risk-assessment mode."

NAR ISSUES RESPA CALL FOR ACTION, MEETS WITH FED AND HILL STAFF
NAR launched a successful Call For Action among its Federal Political Coordinators to urge Members of the House of Representatives to sign on to a Congressional letter to HUD Secretary Steven Preston, urging withdrawal of the current proposed RESPA rule. The letter, organized by Representatives Hinojosa and Biggert, accumulated 220 co-signers up to the start of the Congressional recess on Friday August 1st with an addendum containing more members likely to be sent to Secretary Preston after the Congressional recess. NAR members sent 360 distinct, individual letters to the Hill asking members to sign on to the Hinojosa/Biggert letter, followed by phone calls to Members' offices further explaining why to sign on to Hinojosa/Biggert letter.

In addition, on August 5th, NAR staff along with a coalition of industry representatives, met with staff from the Board of Governors of the Federal Reserve System to urge better coordination between the Fed and HUD with regard to TILA and RESPA disclosures. Fed staff reiterated the position it took in its comment letter to HUD on the proposed RESPA rule, telling NAR and industry representatives that further testing and coordination of the two sets of disclosures is needed.

Finally, on August 6th, NAR staff met with Sanders Adu, the majority staff director of the House Financial Services Subcommittee on Oversight and Investigations and Lauren Todorovich, minority staff director, to brief them for a planned upcoming Congressional hearing on RESPA. NAR staff gave an overview of the major provisions if the proposed RESPA rule and voiced strong concerns regarding anti-competitive provisions, confusing disclosures and underestimated costs to small businesses. The Oversight and Investigations Subcommittee is planning a hearing for September.

FORECLOSURE RESCUE SCAMS ON THE RISE
Foreclosure rescue scams, in which con artists prey on struggling home owners, are becoming more of a problem, according to the Federal Trade Commission. The FTC has already filed three major foreclosure rescue cases this year, compared with zero a year ago; and one case involves thousands of victims and property worth millions of dollars, according to FTC regional director Brad Elbein, who heads the agency's foreclosure rescue campaign.

Some scammers promise to negotiate with a lender for a fee, then just take the money and run. In other cases, home owners pay rent to live in the house but sign title to a rescue company that is supposed to pay the mortgage. Instead, the company sells the house, taking whatever equity is left.

At least 14 states have passed new laws this year to protect home owners, including a new one in Idaho that requires a written contract with a rescue company and gives homeowners five days to change their minds.

"The scope is probably going to be potentially as large as the mortgage fraud problem itself," says Sharon Ormsby, the FBI's chief of financial crimes.

HOW THE NEW FIRST-TIME BUYER TAX CREDIT WORKS
Under the new housing bill, home buyers who have not owned a home in the last three years will be eligible for a tax credit equal to 10 percent of the property up to a maximum of $7,500.

Here’s how it works:
• The credit is $3,750 for married couples filing separately. Unmarried people who jointly purchase a home will be able to divide the $7,500 credit.
• This program is actually a loan, which home buyers must repay over 15 years at zero percent interest beginning in the second year after they purchase the home. A home buyer who qualified for the whole credit would pay $500 for 15 years or about $41.67 per month.
• The credit applies only to homes purchased on or after April 9, 2008, and before July 1, 2009.
• High-income home buyers don’t qualify: Eligibility begins phasing out for single filers with adjusted income of more than $75,000 and $150,000 for joint filers. It completely phases out at $95,000 for singles and $170,000 for married couples filing jointly.

To view a complete list of all the legislation OAR is tracking, click here. If you have any questions or need further information, please contact OAR’s Director of Government & Public Affairs Charla Slabotsky at 405.848.9944, 800.375.9944 or Charla@OklahomaRealtors.com.

Friday, July 11

STATE ISSUES

HOUSE SPEAKER TOUTS STATE'S ALTERNATIVE ENERGY POTENTIAL
Oklahoma has an opportunity to play a vital role in making Americans more independent from foreign oil with some policy tweaks that take advantage of the state's natural gas production, Speaker of the House Chris Benge said this week.

This summer, Republican leadership will be looking at options to incentivize growth in the compressed natural gas car market. These cars, while limited in availability now, are the cleanest internal-combustion vehicle on Earth and would give Oklahomans remarkable fuel-cost savings while also decreasing the world's dependence on oil.

With Oklahoma's large natural gas production, the state is in a position to be a national leader in this new technology, Benge said. Oklahoma's ever-growing wind-energy presence is an area where the state can be a standout as well.

"It is critical that we find ways to make our country less dependent on volatile, foreign oil, especially given the recent price spikes Oklahoma families have experienced at the pump," said Benge, R-Tulsa. "We need to take advantage of recent technology that utilizes a local, plentiful resource in natural gas. If done right, this could benefit the consumer as well as Oklahoma's natural gas industry."

According to the Energy Information Administration, total world oil production is 82.5 million barrels per day whereas global consumption is about 83.6 million barrels per day. With consumption outpacing production, demand increases are leading to higher consumer prices.

This week, Texas oilman Boone Pickens announced he plans to fund a multimedia advertising campaign to draw attention to what he calls the single biggest crisis facing the country today: its dependence on foreign oil. Natural gas and wind energy development are key pieces to a plan Pickens is promoting to broaden the energy spectrum in Oklahoma and across the country.

House leadership would like to build on the hard work Pickens has put into his personal energy plan. Benge and House leaders will also be working with local natural gas and oil companies and other interested parties to develop a comprehensive energy plan leadership anticipates presenting to lawmakers for consideration next legislative session.

"Oklahoma has a real chance to be on the cutting edge of alternative fuel energy policy in our country," said Benge. "We want an all-of-the-above solution when it comes to energy sources, which could include compressed and liquefied natural gas, coal, nuclear, geothermal, wind and solar energies. Now is the time to think creatively and work with both the public and private sectors to develop good solutions for Oklahoma's energy industry and consumers alike."

One critical piece of getting more CNG cars on the road is ensuring there are filling stations conveniently located for refueling and workers trained to maintenance the new technology in the cars. It is in these arenas that lawmakers can bolster the state's presence in this growing market, said Benge.

One option would be ramping up and properly funding a program that previously existed in the Career Tech system to create and build on existing car technician programs to include CNG technology. There are very few technicians trained nationwide to work on these cars, and expanding Oklahoma's programs would give technicians here a leading edge in the industry.

Another option legislators may consider would be tax credits to help businesses either expand existing fueling stations to include a compressed natural gas option, or build new stations to allow for easy CNG refueling. Home-refueling would also be an option, with an appliance that installs easily to a home gas line. Tax credits to defray some of the consumer costs could also be considered.

"We plan to look at as many ways as possible to help expand this new technology in Oklahoma, where we are already uniquely situated with a large natural gas industry to take advantage of CNG right away," said Benge. "But, this is only one solution in a larger alternative energy policy that must be developed at both the state and national level to move our country away from dependence on foreign oil while also benefiting our environment and consumers."

ATTORNEY GENERAL ISSUES OPINION ON LICENSING UNDER HB1804
Attorney General Drew Edmondson issued an opinion Thursday outlining the citizen and legal resident verification requirements placed on state entities when issuing commercial and professional licenses, including real estate licenses.

Sen. Patrick Anderson, R-Enid, and Rep. Mike Brown, D-Tahlequah, requested an official opinion on five questions related to provisions of the Oklahoma Taxpayer and Citizen Protection Act of 2007, commonly referred to as HB1804. Brown, who is a real estate licensee, said in an interview he simply wanted clarification of the law to better understand the burden on taxpayers. He declined further comment because he had not had a chance to review the decision at length.

The bill, by Rep. Randy Terrill, R-Moore and Sen. James A. Williamson, R-Tulsa was the state's 2007 immigration reform bill. The law requires every public employer to register and participate in a Status Verification System, meaning the Basic Pilot Program (BPP), any other equivalent federal program, any other independent system or Social Security number verification service to verify the work authorization of all new employees. Beginning July 1, 2008, the bill requires public employer contractors to participate in a status verification system. After July 1, 2008, the bill designates the discharge of a U.S. citizen or permanent resident alien by an employer who employs an unauthorized alien worker after July 1, 2008, a "discriminatory practice" if the employees had equal responsibilities and skills. If the employing entity was enrolled in and using a status verification system at the time of the discharge, the employer is exempt from liability, investigation or suit arising from any action under the preceding section of the bill.

The legislators asked the following questions:
• Does "public benefit" as used in HB1804, include commercial and professional licenses?
• If so, are public entities required to verify citizenship and legal residence of persons even if they already have the license in question?
• Must the recipient of a license fill out an affidavit at every renewal?
• Are state agencies required to verify citizenship under the Systematic Alien Verification of Entitlements (SAVE) Program upon receipt of an affidavit?
• Does the law require that in addition to an affidavit, the applicant provide proof of citizenship?

Edmondson's opinion stated that the phrase "public benefit" does include licenses under this and other statutes. Under HB1804, public entities shall not provide benefits to persons over 14 who are not lawfully present in the United States. Licenses therefore, cannot be issued by public entities to persons over the age of 14 without obtaining an affidavit from such person to verify citizenship, or legal status as a qualified alien.

Edmondson also found that additional verification is required for all non-citizens wishing to obtain a license.

As for renewals, legal citizens are not required to sign an affidavit at every renewal, but those who obtained licenses before enactment of the bill, will be required to provide one. Non-citizens of legal status will be required to provide all information at every renewal, as status may have changed, the opinion indicates.

The law will not require public entities to obtain additional proof of citizenship upon receipt of an affidavit from a United States citizen, though verification will be required of non-citizens under the SAVE program, or equivalent program, according to the opinion.

FEDERAL ISSUES

OBAMA, MCCAIN SEEK TO FIX HOUSING PROBLEMS
Which candidate would do a better job of handling housing prices? According to a recent AP-Yahoo News poll, 25 percent of those surveyed said Barack Obama and 17 percent thought John McCain. But nearly 30 percent said neither.

Both Obama and McCain envision the Federal Housing Administration providing new, cheaper mortgages to distressed home owners.

Obama wants to create a $10 billion fund to counsel distressed home owners before they slide into foreclosure, help people sell homes they bought but could not afford and team with state governments, community groups and lenders to ensure loans can be modified in a timely manner to avoid foreclosure or bankruptcy.

McCain sees a more limited government role. "In some cases, lenders and borrowers alike were caught up in the speculative frenzy that has harmed the housing market," the Arizona senator said. "It is not the responsibility of the American public to spare them from the consequences of their own bad judgment."

Although most voters think the next president will have a "great deal" or "some" influence over housing prices, there is unlikely to be a quick fix.

"The odds of that are slim to none," says Cal Jillson, political science professor at Southern Methodist University. If the next president can make people more optimistic about the future, "the slow rebuilding of confidence will help to increase home values," he contends.

HOUSING BILL ADVANCES IN SENATE
The Senate voted on the substantive parts of a long-discussed housing stimulus bill that also includes reforms to FHA and the oversight of Fannie Mae and Freddie Mac. The NAR-backed measure would permanently raise conforming and FHA loan limits and create a homeownership tax credit. Once the Senate acts, its measure must be reconciled with a similar House bill before a final bill can be sent to the president. Remaining votes on the bill, which involve procedural matters, are expected within the next few days.

To view a complete list of all the legislation OAR is tracking, click here. If you have any questions or need further information, please contact OAR’s Director of Government & Public Affairs Charla Slabotsky at 405.848.9944, 800.375.9944 or Charla@OklahomaRealtors.com.

June 27

STATE ISSUES

OFFICE OF STATE FINANCE TO LOSE DIRECTOR
The Office of State Finance is losing a director, but the State Regents for Higher Education is gaining an associate vice chancellor. Tony Hutchison will be joining the State Regents to begin work under the title associate vice chancellor of strategic planning and analysis. His work will include research on programs and resources necessary to move Oklahoma's system of higher education forward as well as study of a changing economy and workforce needs, he said. The State Regents unanimously approved his appointment Thursday. Hutchison officially took over the director's post in March 2007 when his appointment was approved by the Senate. Gov. Brad Henry named Hutchison to the position when the former director Claudia San Pedro left in November 2006 to join Sonic Corporation.

ETHICS COMMISSION TO REQUEST SUPPLEMENTAL FUNDING
After discussing a lawsuit and requesting a special session to address its funding needs, the Ethics Commission on Tuesday said it would consider a supplemental appropriation request at its July 11 meeting. The commission received a budget limit of $667,960 through HB2286, by Rep. Kenneth Miller, R-Edmond, and Sen. Mike Johnson, R-Kingfisher. The governor had line-item vetoed a section of the bill that would have required the commission to use $50,000 to purchase Federal Election Commission computer software. "The Ethics Commission cannot perform its constitutional mission with the inadequate appropriation provided thus far," said Chairman Don Bingham in a news release. "We will seek every remedy to see that Oklahomans are well represented in the year-round fight against ethics violations in state campaigns and public office."

STATE REGENTS APPROVE TUITION INCREASES
The Oklahoma State Regents for Higher Education on Thursday approved tuition and fee increases for Oklahoma's 25 public colleges and universities. On average, a full-time Oklahoma college student will pay $302 more next year for tuition, according to a State Regents' news release. "Even with the increases in tuition and fees, Oklahomans will still be paying less for a college education than their peers in other states," said Chancellor Glen Johnson Jr. "This increase will allow our institutions to continue providing a top quality education and outstanding service to our students."

FEDERAL ISSUES

SENATE TAKING ACTION ON HOUSING BILL
The U.S. Senate late last night approved parts of a housing bill that includes provisions to stabilize mortgage markets and reduce foreclosures. The House passed a similar bill in May. Some parts of the Senate housing package that weren't considered could be taken up imminently. NAR has issued a Call for Action on provisions of the bill that address FHA reform and GSE loan limits.

FHA WAIVES 90-DAY WAITING PERIOD
The Federal Housing Administration is lifting the mandatory 90-day waiting period it instituted in 2003 that delays the sale of REO properties. The waiting period, which never applied to properties sold by Fannie Mae, Freddie Mac, or state- and federally chartered financial institutions, was imposed to make flipping more difficult. But as the number of REO homes has grown, it has had the effect of flooding neighborhoods with properties. The change may help reduce the impact of foreclosures on some neighborhoods, but it won’t have as significant an impact as some might think, says Glen Daniels director of real estate-owned properties for Foreclosure.com. Many of the REO properties don’t meet FHA standards and will require rehabilitation before they can be sold to an FHA borrower, he points out.

HUD SECRETARY NAMES HORNE AS CHIEF OF STAFF
U.S. Department of Housing and Urban Development Secretary Steve Preston Wednesday announced David Horne will become chief of staff for the Department. Horne returns to the federal government after an extensive record in the public and private sector. Horne will oversee the day-to-day management of HUD's $40 billion budget and 9,300 employees throughout the nation.

Note: Due to the fourth of July holiday, the next update will appear on July 11. Happy 4th of July!

To view a complete list of all the legislation OAR is tracking, click here. If you have any questions or need further information, please contact OAR’s Director of Government & Public Affairs Charla Slabotsky at 405.848.9944, 800.375.9944 or Charla@OklahomaRealtors.com.

June 20

STATE ISSUES

OREC REQUESTS REALTOR® INVOLVEMENT IN TASK FORCES
At Wednesday’s OREC meeting, commissioners voted to form joint task forces with OAR on Errors and Omissions Insurance, Oklahoma’s Broker Relationships Law and the possibility of establishing an Oklahoma Real Estate Research Center.

The Task Force on E&O Insurance will be chaired by Commissioner Mike Cassidy of Oklahoma City and will be made up of two commissioners and five REALTORS®. The Task Force will study the possibility of mandatory E&O Insurance for all licensees. OAR’s current position is to monitor any proposals on mandatory E&O Insurance; any change to this official position will require Board of Directors action.

The new Broker Relationships Law Task Force will be made up of commissioners and REALTORS® and will carefully study and review the law to determine if any changes are needed. As you might recall, the original Agency Task Force which recommended the Broker Relationships Law met for more than eight years; the members of this new Task Force will clearly have a big job ahead of them!

The commissioners heard an interesting presentation from Gary Maler, director of the Texas Real Estate Center at Texas A&M University. The commissioners were very impressed with the presentation and discussed the possibility of establishing a similar program in Oklahoma. The joint Task Force between OAR and the OREC will explore this possibility.

MCMAHAN RESIGNS, HENRY PREPARES TO MAKE APPOINTMENT
Jeff McMahan resigned from his post as state auditor and inspector early Monday morning, setting the stage for Gov. Brad Henry to make his fourth appointment to a statewide elected office. "It is with sadness and regret that I resign my position as Oklahoma state auditor and inspector effective immediately," was all that McMahan wrote in a letter delivered to Henry Monday morning.

In a news release acknowledging McMahan's resignation, Henry's Communications Director Paul Sund said, "The governor will now begin the process of appointing a new state auditor and inspector. Gov. Henry believes it is critical to restore public trust in the auditor's position, and he will move carefully and as expeditiously as possible to select an individual who will do just that."

On Saturday, a federal jury found McMahan and his wife, Lori, guilty of three corruption-related counts. The couple was found not guilty of five mail fraud counts, and a sixth mail fraud allegation was dismissed. Prosecutors have indicated the convictions likely would result in prison sentences under federal guidelines. Shortly after the pair was convicted, the governor had issued a statement calling on the auditor to resign.

McMahan's decision eliminates the need for a House special committee to move forward with impeachment proceedings. "I am pleased Mr. McMahan did the honorable thing for the people of Oklahoma and decided to step down today," House Speaker Chris Benge, R-Tulsa, said in a prepared statement Monday. "The House will now not have to have an expensive and redundant impeachment process that would have cost the taxpayers money."

Under the Oklahoma Constitution, the governor is charged with appointing a replacement when a statewide elected official leaves office prior to the end of his or her term. Henry has previously made three similar appointments:
• Insurance Commissioner Kim Holland to replace Carroll Fisher in 2004
• State Treasurer Scott Meacham, replacing former Treasurer Robert Butkin who resigned to take a job in the private sector in 2005
• Corporation Commissioner Jim Roth, who replaced Denise Bode in 2007 when she resigned to return to the private sector

Holland and Meacham won election to their offices in 2006. Roth is seeking election to his post in this year's election.

McMahan turned over the day-to-day operations of the office to Michelle Day, his chief deputy and chief of staff, shortly after pleading not guilty to the charges against him in late January. Following the announcement by Henry's office that it had received McMahan's resignation letter, Terri Watkins, legislative liaison and spokeswoman for the State Auditor and Inspector's Office, distributed a statement that read, "The State Auditor and Inspector's Office continues to operate in the professional manner it has in the months after the state auditor stepped aside. The auditor's office has very talented and hard working employees that will continue to serve the people of Oklahoma. We will be in contact with the governor's office as he moves forward with a decision on an appointment."

DANA MURPHY REMAINS ON TICKET FOR CORPORATION COMMISSION
Republican Dana Murphy will appear on the primary ballot for the two-year post on the Oklahoma Corporation Commission after the Oklahoma State Election Board ruled in her favor Monday. Republican Rob Johnson had challenged her candidacy on the grounds that her notarized signature was altered after she submitted the form to the Election Board. Her notarized signature showed "Dana L. Murphy," but in responding to a question from Election Board Secretary Michael Clingman, Murphy said she wanted her name to appear on the ballot as "Dana Murphy."

ETHICS COMMISSION REQUESTS SPECIAL SESSION
The Oklahoma Ethics Commission on Tuesday sent a letter to the governor requesting a special session to address the agency's funding issues. "The Legislature has not provided, and does not provide for the coming fiscal year, sufficient funding for the Ethics Commission," according to the letter issued by commission Chairman Don Bingham. Bingham also cited constitutional language that requires the commission be allocated funds "sufficient to enable it to perform its duties as set forth in his constitutional amendment."

The governor said a call for a special session would be premature without first having a specific funding agreement in place. However, a news release noted that the governor would be willing to sit down with legislative leaders to discuss the commission's funding request.

The commission was provided a budget of $667,960 through HB2286, by Rep. Kenneth Miller, R-Edmond, and Sen. Mike Johnson, R-Kingfisher. The bill initially directed the use of up to $50,000 to purchase Federal Election Commission computer software, but Henry used his line-item veto to strike that particular section from the bill.

HEARING ON FOUR-DAY WORK WEEK SET
Oklahoma state agencies and employees have been encouraged to discuss the possibility of a four-day work week at a public hearing set for 10:00 a.m. July 9. One less day would ease the burden of high gas prices on state employees, and state agencies could save money by turning the lights off one day a week, said Rep. Mike Shelton, D-Oklahoma City, in a news release calling for the public hearing.

State agencies already have the authority to implement flex schedules, something that is a beneficial tool, said Oscar Jackson, administrator of the Office of Personnel Management and secretary for human resources and administration. Under the right circumstances, flex time can benefit employees and agencies, but each agency has to take into consideration its own mission to the general public to ensure services to the public are not interrupted, he said.

INTERIM STUDY REQUESTS FILED
Legislators are busy requesting Interim Studies to look at specific issues before the legislature adjourns again in February 2009. Of particular interest to REALTORS®:

IS2008H-002, requested by Rep. Dan Sullivan, R-Tulsa, to study the usage of eminent domain powers by the State of Oklahoma.

IS2008H-003, requested by Rep. Lucky Lamons, D-Tulsa, and Rep. Don Armes, R-Faxon, to study tax credit/land legacy.

IS2008H-038, requested by Rep. Mike Thompson, R-Oklahoma, to study hotel furnishing taxes.

IS2008H-055, requested by Rep. Randy Terrill, R-Moore, to study ad valorem taxation.

IS2008H-060, requested by Rep. Don Armes, R-Faxon, to study real estate broker relationships law/agency law.

IS2008H-078, requested by Rep. Joe Dorman, D- Rush Springs, to study ad valorem taxation.

These Interim Studies are currently awaiting approval from the Speaker of the House.

FEDERAL ISSUES

MORE THAN 400 DEFENDANTS CHARGED FOR ROLES IN MORTGAGE FRAUD SCHEMES
The Department of Justice and Federal Bureau of Investigation (FBI) announced today a national takedown of mortgage fraud schemes, the culmination of substantial coordinated efforts during the last three and a half months to identify, arrest and prosecute mortgage fraud violators through the United States. Operation Malicious Mortgage highlights the strong enforcement response undertaken by the Department of Justice and its law enforcement partners to combat the threat mortgage fraud poses to the U.S. housing industry and worldwide credit markets.

From March 1 to June 18, 2008, Operation Malicious Mortgage resulted in 144 mortgage fraud cases in which 406 defendants were charged. On Wednesday, 60 arrests were made in mortgage fraud-related cases in 15 districts. Charges in Operation Malicious Mortgage cases were brought in every region of the United States and in more than 50 judicial districts by U.S. Attorneys' Offices based upon the law enforcement and investigative efforts of participating law enforcement agencies. The FBI estimates that approximately $1 billion in losses were inflicted by the mortgage fraud schemes employed in these cases.

In addition to fraud directly related to individual mortgages, the Department is committed to investigating and prosecuting cases of mortgage-related securities fraud. Today, the U.S. Attorney's Office for the Eastern District of New York announced an indictment against two senior managers of failed Bear Stearns hedge funds, charging Ralph Cioffi and Mathew Tannin with conspiracy, securities fraud and wire fraud. Cioffi was also charged with insider trading. The indictment alleges that the managers marketed the two funds as a low risk strategy, backed by a pool of debt securities such as mortgages. The indictment alleges that by March 2007, the managers believed the funds were in grave condition and at risk of collapse, but made misrepresentations to stave off investor withdrawal. The funds subsequently collapsed in the summer of 2007 resulting in approximately $1.4 billion in losses to investors.

"Mortgage fraud and related securities fraud pose a significant threat to our economy, to the stability of our nation's housing market and to the peace of mind of millions of American homeowners," said Deputy Attorney General Mark R. Filip. "Operation Malicious Mortgage and our other mortgage-related enforcement actions demonstrate the Justice Department's commitment and determination to combat these criminal schemes, hold their perpetrators accountable and help restore stability and confidence in our housing and credit markets."

"Operation Malicious Mortgage is a concerted, joint law enforcement and prosecutorial effort aimed at disrupting individuals and groups engaged in mortgage fraud," said FBI Director Robert S. Mueller, III. "This operation is an example of our unified commitment to address this significant crime problem. The FBI will continue to direct investigative and analytic resources towards mortgage fraud and corporate securities fraud that threaten our nation's economy."

Mortgage frauds employ a variety of tactics including misrepresentations, deceit and other criminal abuses to fund, purchase or insure mortgage loans. Operation Malicious Mortgage addresses primarily three types of mortgage fraud schemes: lending fraud, foreclosure rescue scams and mortgage-related bankruptcy schemes. Lending fraud frequently involves multiple loan transactions in which industry professionals construct mortgage transactions based on gross fraudulent misrepresentations about the borrower's financial status, such as overstating the borrower's income or assets, using false or fictitious employment records or inflating property values. Foreclosure rescue scams involve criminals who target legitimate homeowners in dire financial circumstances and fraudulently collect fees for foreclosure prevention services or obtain ownership interests in residential properties. Both of these fraudulent mortgage schemes may be furthered by filing bankruptcy petitions that automatically stay foreclosure.

To view a complete list of all the legislation OAR is tracking, click here. If you have any questions or need further information, please contact OAR’s Director of Government & Public Affairs Charla Slabotsky at 405.848.9944, 800.375.9944 or Charla@OklahomaRealtors.com.

June 13

STATE ISSUES

EIGHT CANDIDACY HEARINGS SCHEDULED
The Oklahoma State Election Board will hear arguments regarding eight contested candidacies today at the Capitol. The deadline for filing contests of candidacy was June 4. At that time, 10 contests had been filed, but the object of two of those contests withdrew: Republican Matt Collins in House District 41 and Democrat Annie Goolsby in House District 3.

The board will have hearings for the following:

Republican Rob Johnson v. Republican Dana Murphy for the two-year seat on the Corporation Commission
Republican Mike Christian v. Democrat David Castillo, state House District 93
Incumbent Democrat Al McAffrey v. Independent Dominique DaMon Block, state House District 88
Incumbent Republican John Enns v. Democrat Noah Ynclan, state House District 41
Republican Dan Kirby v. Democrat Ephraim Alajaji, state House District 75
Kirby v. Republican Nathan Dahm, state House District 75
Incumbent Republican Charles Key v. Democrat Linda James, state House District 90
Democrat George Bullock v. Incumbent Republican Daniel Sullivan, state House District 71

FEDERAL ISSUES

NAR REPORT: RESPA PROPOSAL TOO COSTLY
The U.S. Department of Housing and Urban Development (HUD) has significantly underestimated the financial impact that its proposed RESPA reforms would have on consumers and real estate businesses, says a report released this week by the NATIONAL ASSOCIATION OF REALTORS® (NAR).

NAR says it appreciates HUD’s attempts to reform the settlement process. After all, the association has been advocating for RESPA reform that will make the closing process less confusing and less expensive for borrowers. However, NAR is concerned that the cost analysis HUD is using to justify its proposal is misleading. “HUD is ignoring several key factors in its analysis that … could likely add an average of more than $400 to a borrower’s closing costs if implemented,” said housing economist Ann Schnare, who conducted the report for NAR.

RESPA is the principle federal law governing the real estate settlement process. Virtually all mortgage-related matters at closing follow rules laid out by RESPA. NAR has been advocating for RESPA reform that will make the closing process less confusing and less expensive for borrowers. “We want to see reform to the Good Faith Estimate that simplifies the closing process, allows borrowers the opportunity to shop around for the best mortgage for their situation, and ensures that [borrowers] fully understand the terms of their chosen mortgage,” said NAR President Dick Gaylord.

NAR: Key factors weren't considered.
HUD’s analysis uses a set of simple calculations that attempt to quantify the relative costs of the revised Good Faith Estimate and the addition of a lengthy “closing script” to the settlement process. But Schnare’s report brings attention to several key considerations that HUD does not address in its calculations that could produce compliance costs four times higher than those derived by HUD. “My report demonstrates that HUD is ignoring several key factors in its analysis that could have a major financial impact on consumers and could likely add an average of more than $400 to a borrower’s closing costs if implemented,” said Schnare.

Good Faith Estimates add up.
HUD estimates that the compliance costs associated with the revised Good Faith Estimates would be about $45 per originated loan, but Schnare concludes that HUD greatly underestimates the number of Good Faith Estimates that would be issued. For example, if the average consumer obtained just two Good Faith Estimates before applying for a loan, HUD’s estimated Good Faith Estimate cost would rise by 60 to 100 percent, depending on the fallout that occurs after a loan application has been made. “After accounting for additional hedging and underwriting costs, and applying more realistic assumptions regarding the expected number of Good Faith Estimates, projected costs could well exceed $300 per loan,” Schnare said.

Closing scripts would be twice as costly.
NAR’s report estimates that the cost of the closing script would probably be about twice the amount estimated by HUD, and those costs would most likely be passed on to the home buyer. “In the end, a proposal that is supposed to save consumers could wind up costing more per transaction, and reform that is supposed to make the transaction safer and easier to understand for consumers could end up more confusing and more complicated,” Gaylord said.

To learn more about this issue, visit REALTOR.org/RESPA.

OCC ASKS OFHEO TO WITHDRAW CUOMO APPRAISAL AGREEMENT
In a letter to the Director of the Office of Federal Housing Enterprise Oversight (OFHEO), the Office of Comptroller of the Currency (OCC) is calling on OFHEO to withdraw the Appraisal Agreement with New York Attorney General Andrew Cuomo. According to the OCC, the Appraisal Agreement may violate federal law and will have severe unintended consequences. Click here to read the letter.

FTC ISSUES ADDITIONAL CAN-SPAM RULES
The Federal Trade Commission (FTC) has revised its rules implementing the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM). These four revisions and additional commentary help clarify the scope of CAN-SPAM. The revisions to the rules clarify: (1) what constitutes an acceptable method for opting out of future emails; (2) revised definition of “sender”, clarifying to whom the rules apply when the email contains multiple advertisements; (3) clarification of what constitutes a valid address for CAN-SPAM compliance; and (4) clarification on the definition of “person”. The new rules will take effect on July 7, 2008. Click here for more information.

To view a complete list of all the legislation OAR is tracking, click here. If you have any questions or need further information, please contact OAR’s Director of Government & Public Affairs Charla Slabotsky at 405.848.9944, 800.375.9944 or Charla@OklahomaRealtors.com.

June 6

STATE ISSUES

SESSION ENDS, ELECTION SEASON BEGINS
Now that elected officials have ended their legislative duties, election season kicks off. For a list of who has filed for various state offices, click here. Monday through Wednesday, 296 Oklahomans filed for public office. Up for grabs were 133 seats, including 125 seats in the Oklahoma Senate and Oklahoma House of Representatives. One U.S. Senate seat and all five of Oklahoma's seats in the U.S. House of Representatives are also up for election this November. The two other seats to be filled this year are on the Corporation Commission.

In the State Senate, 10 senators will be able to keep their seats without an election because they did not draw any opponents or their opponents have already withdrawn. In the state House, 33 incumbents will regain their seats unopposed. Elections could further be affected by contests.

As usual, several candidate filings have been contested for various reasons. Hearings for those contests will be held Friday, June 13.

FEDERAL JUDGE RULES ON IMMIGRATION LAW
On Wednesday, Rep. Randy Terrill, R-Moore, said a federal judge's ruling against his immigration reform bill was a case of "judicial activism."

U.S. District Judge Robin Cauthron issued a preliminary injunction against employer-related portions of the Oklahoma Taxpayer and Citizen Protection Act of 2007. The law was created by Terrill's HB1804, also by Sen. James Williamson, R-Tulsa. The decision of the U.S. District Court of the Western District of Oklahoma found that it was "substantially likely" that the state law unconstitutionally imposes civil sanctions on employers who fail to comply. The sanctions contained within HB1804 include increased tax rates, the loss of contracts and exposure to litigation if an employer "should have known" that an employee was unauthorized to work.

The representative said he may personally intervene in the suit on behalf of Oklahomans who support the law. The suit was brought by the State Chamber of Oklahoma, Greater Oklahoma City Chamber, Tulsa Metro Chamber, Oklahoma Restaurant Association and Oklahoma Hotel and Lodging Association.

Included among the provisions within HB1804 are requirements that every public employer register and participate in a Status Verification System, meaning the Basic Pilot Program (BPP), any other equivalent federal program, any other independent system or Social Security number verification service to verify the work authorization of all new employees. Beginning July 1, 2008, the law requires public employer contractors to participate in a status verification system. After July 1, 2008, the bill designates the discharge of a U.S. citizen or permanent resident alien by an employer who employs an unauthorized alien worker after July 1, 2008 a "discriminatory practice" if the employees had equal responsibilities and skills. If the employing entity was enrolled in and using a status verification system at the time of the discharge, the employer is exempt from liability, investigation or suit arising from any action under the preceding section of the bill.

FEDERAL ISSUES

NAR TESTIFIES IN SUPPORT OF HOMEBUYER TAX CREDIT
The House Small Business Committee held a hearing on June 5 to review the impact of the housing crisis on small businesses and to discuss tax incentives that might help stabilize housing. NAR Treasurer Jim Helsel presented testimony urging that Congress act quickly to move to conference and send a final version of tax credit legislation to the President for his signature. In his comments, Mr. Helsel emphasized the importance of making the credit available for the purchase of any type of residential property that would be used as a principal residence (The Senate version of HR3221 allows the credit only for the purchase of foreclosed property). In addition, he recommended that Congress raise the income limits the House imposes, particularly for those who file single returns.

The testimony also explored the importance of the so-called "small" individual investor and explained the importance of adjusting the exceptions to the passive loss rules so that more small investors will return to the market. The limits for the exception have not been adjusted since their original enactment in 1986.

MORTGAGE FRAUD: “WHITE-COLLAR STREET CRIME”
U.S. Attorney General Michael Mukasey considers the surge in mortgage fraud a very serious problem, but says it doesn't warrant the creation of a national task force such as the panel that investigated the Enron debacle in 2002. In a June 5 briefing for reporters, Mukasey said the mortgage fraud problem is more of a localized issue like white-collar street crime and that he supports the approach the Justice Department has taken.

Mukasey's comments disappointed critics such as Rep. Barney Frank (D-Mass.). "Enron didn't cause a worldwide recession. This has more innocent victims," Frank says. Sen. Christopher Dodd (D-Conn.), also critical of Mukasey's statements on mortgage fraud, adds that the Bush administration "vastly underestimates the scope of this problem."

The FBI has launched 19 major investigations into corporate fraud related to the mortgage crisis, in addition to 1,380 small mortgage fraud cases.

May 23

STATE ISSUES

SUCCESSFUL END OF SESSION FOR OAR
It was a busy week at the State Capitol for OAR, as the legislative session draws to a close. Despite last minute whispers of a special session to deal with bond issues, the legislature will finish business today as expected. Three bills supported by OAR remain on the Governor’s desk awaiting his approval:

HB1564 by Rep Steve Martin, R-Bartlesville, and Sen. Cliff Branan, R-Oklahoma City. This bill requires out-of-state real estate licensees seeking an Oklahoma license to take the section of our licensing exam that is particular to Oklahoma.
SB1672 by Sen. Kenneth Corn, D-Poteau, and Rep. Rex Duncan, R-Sand Springs. This bill specifies that property may be considered a nuisance when a felony conviction occurs under the Uniformed Controlled Dangerous Substances Act, not just a violation of the Act.
HB1453 by Rep. Rob Johnson, R-Kingfisher, and Sen. Earl Garrison, D-Muskogee. This bill creates a Task Force to Study the Digitization of County Records, which will include OAR representation.

Governor Brad Henry has until June 7 to sign these bills into law.

One issue OAR was able to defeat in the closing days was the licensing language contained in SB1725 by Sen. Mike Schulz, R-Altus, and Rep. Sue Tibbs, R-Tulsa. As you might recall, this would limit the discretion the Oklahoma Real Estate Commission has when granting licenses. The troubling language was removed from the bill, which morphed into a task force to study the mental health issues of women in prisons.

GOVERNOR AND LEADERSHIP REACH BOND AGREEMENT
Gov. Brad Henry and legislative leaders reached an agreement Thursday on a three-part, $475 million bond package that lawmakers will be asked to approve on the last day of the legislative session. The agreement includes money for roads, higher education endowed chairs and a series of projects that includes a low-water dam project in Tulsa, flood control dams in rural Oklahoma and the Native American Cultural Center. The plan was announced early Thursday evening, almost 24 hours after negotiations broke off on Wednesday.

Three of the bills authorize issuance of the bonds, and four of the bills appropriate money to pay the debt service on the bonds. The plan provides $300 million for roads, $275 million of which will be used to fund the Oklahoma Department of Transportation's eight-year maintenance plan for state highways and $25 million that will be dedicated to a revolving fund for county roads. The bonds will be issued in two phases and will be paid with a portion of motor vehicle fees.

The agreement also provides $100 million in state matching funds for the endowed chairs program with $6 million dedicated to regional universities and colleges and $94 million split evenly between Oklahoma State University and the University of Oklahoma. The plan also places a temporary moratorium beginning July 1, 2008, on state matches in the program until the state catches up on its remaining backlog of commitments. The plan also places an annual cap on total state matching funds, capping it at 100 percent of the first $250,000 of a private donation and 25 percent of any donation above that level (the annual commitment of the state also will be limited to $5 million).

The third component of the program provides $25 million for the Oklahoma Conservation Commission to repair and replace flood control dams in rural Oklahoma; $25 million for construction of a low-water dam project on the Arkansas River in Tulsa; and $25 million for construction of the Native American Cultural Center in Oklahoma City.

FEDERAL ISSUES

U.S. SENATE STRIKES HOUSING RESCUE DEAL
Democrats and Republicans in the Senate have ended weeks of negotiations with a plan that would allow the federal government to insure up to $300 billion in refinanced loans for struggling home owners. The bipartisan accord, which represents the clearest sign yet that Congress is ready to pass sweeping legislation on housing, also seeks to tighten up oversight of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, which provide funding for mortgages.

Republicans had been concerned that taxpayers would be responsible for what amounts to a bailout, but a provision calls for initial losses on defaulted loans to be covered by fees charged to the two GSEs. Even President Bush has recognized the Senate's efforts in recent days, easing off earlier veto threats.

NAR CONCERNED WITH RESPA REFORM
The U.S. Department of Housing and Urban Development’s proposed Real Estate Settlement Procedures Act reform “tips the balance in favor of the largest financial industry players, opens the door to legal challenges, and does little if anything to benefit consumers,” according to NAR.

“NAR appreciates the House of Representatives’ request to HUD to extend the comment period for 60 days, but HUD only granted 30 days. This reform, and getting it right, is too important to try to push it through without full consideration,” Adam D. Cockey Jr., chair of NAR’s Real Estate Services Forum, told the House Committee on Small Business today. “We would like to see HUD withdraw its RESPA proposal, refocus it and republish.”

Reform should focus on reformatting the Good Faith Estimate (GFE) and HUD-1 for clearer disclosures that help borrowers better understand and compare mortgage products and closing costs. “We believe it is in the best interest of home buyers to have just one set of simplified rules and disclosures. The current proposal will require expensive and time-consuming changes to the industry at a time when the industry and consumers can least deal with controversial wholesale changes,” Cockey said.

NAR opposes the current rule, which is too complex, and requests its withdrawal. NAR recommends reissuing the rule with narrowly focused disclosure changes that are consistent with the consensus developed during HUD’s seven roundtables in 2005.

In a recent memo on new regulation, White House Chief of Staff Josh Bolton quoted President George W. Bush in saying “the American people deserve ‘a regulatory system that protects and improves their health, safety, environment, secures rights, and ensures a fair and competitive economic system, while respecting their perogative to make their own decisions and not imposing unnecessary costs.’”

“The RESPA proposal fails this test, limiting choice and competition and imposing costs and confusion on consumers and industry,” Cockey said.

May 19

STATE ISSUES

WEEK IN REVIEW
As the House and Senate prepare for what is expected to be their last week of session, both bodies sent legislation on to the governor during the week of May 12-16 and continued work on the final versions of their bills to be heard before the Legislature adjourns. Floor work was limited on the floors of both houses, partially due to a logjam in signing out conference committee reports in the Senate. House members are supposed to file their first conference committee reports by the close of business today.

LICENSING BILL ON WAY TO GOVERNOR
The OREC-sponsored bill, HB1564 by Rep. Steve Martin, R-Bartlesville, and Sen. Cliff Brannan, R-Oklahoma City, passed the House with a unanimous vote and will now move to the governor for approval. In addition to clean-up language, the bill requires out-of-state licensees seeking an Oklahoma license to take the section of our real estate exam that is particular to Oklahoma.

REALTOR® ISSUES REMAIN AT STATE CAPITOL
With less than five days left in the legislative session, only a few issues remain. OAR has sponsored language in SB1672 by Sen. Kenneth Corn, D-Poteau, which addresses an issue landlords and property managers are facing in Tulsa. The City of Tulsa has asked landlords to abate properties as public nuisances when an arrest occurs under the Oklahoma Uniform Controlled Dangerous Substances Act. Concerns were raised that an arrest is not a conviction, and should the landlord evict a tenant who is eventually found to be innocent, the landlord might be subject to legal action. The language in SB1672 specifies that property may be considered when a felony conviction occurs under the Uniform Controlled Dangerous Substances Act, not just a violation of the Act. This bill is awaiting a hearing in the Senate General Conference Committee on Appropriations.

OAR is also working closely with Rep. Rob Johnson, R-Kingfisher, on HB1453 creating the statewide task force to study the digitization of county records. This task force would include REALTOR® representation, and HB1453 is also awaiting a hearing in the Senate GCCA.

OAR is also closely following SB1725, by Sen. Mike Schulz, R-Altus, and Rep. Sue Tibbs, R-Tulsa. This bill contains the licensing language OAR is particularly concerned with, and is currently stalled in conference committee. We’ve expressed our concerns to both authors of the legislation and will watch carefully as the session winds down.

HOUSE TWICE FAILS TO OVERRIDE HENRY’S VETOES
On Monday and Thursday, two members of the House attempted to gain the support of their house to override the governor's vetoes of their legislation. Both attempts were unsuccessful. In a vote of 55 to 42 Monday, the House rejected a motion by Rep. Colby Schwartz, R-Yukon, to allow his HB2458, also by Sen. Charlie Laster, D-Shawnee, to become law notwithstanding the governor's veto. The bill contains requirements for plaintiffs in civil actions for professional negligence to provide a written opinion of a qualified expert. It also contains language regarding requests from defendants for copies of written opinions of qualified experts and access to the plaintiff's medical records.

The bill also modifies language related to the Governmental Tort Claims Act, modifying who constitutes employees of the state to include any person who is licensed to practice medicine, who is under an administrative professional services contract with the Oklahoma Health Care Authority and who is limited to performing administrative duties such as professional guidance for medical reviews, reimbursement rates, service utilization, health care delivery and benefit design for OHCA. In his veto message, Gov. Brad Henry said the bill conflicted with language from a law already ruled unconstitutional by the Oklahoma Supreme Court. In Monica Belinda Zeier vs. Zimmer Inc. and Theron Nichols M.D., the court ruled that a law requiring expert affidavits in medical malpractice lawsuits was unconstitutional because it was a special law and because it placed a monetary barrier to accessing the courts. Schwartz tried to argue that Henry's veto should be overridden because the executive branch of state government is not given the authority to determine what is or is not constitutional. However, he failed to receive the two-thirds vote necessary to override that veto.

On Thursday, Rep. Phil Richardson, R-Minco, came closer but still missed the mark in gaining support to override the veto of his HB2547, also by Sen. Mike Schulz, R-Altus. The bill modifies the fine for trespassing on private farm, ranch or forestry land, implementing a fine of not less than $500. It grants a court the authority to require violators to forfeit their hunting or fishing licenses for a maximum of one year. The bill prohibits hunting or fishing on lands primarily devoted to farming, ranching or forestry purposes without express permission. It also modifies language related to retrieval of damages, making the language applicable to wrongful injuries to crops or livestock. The veto override attempt failed to get enough support in a vote of 62 to 35.

In his veto message, Henry cited the bill's conflict with a bill he signed into law in late April. That bill - SB2111, by Sen. John Sparks, D-Norman, and Rep. T.W. Shannon, R-Lawton - establishes multiple violation penalties for trespassers on private farming, ranching or forestry land.

VOTER REGISTRATION DEADLINE APPROACHING
For those wishing to change party affiliation for upcoming primaries, only weeks remain before deadlines. Doug Sanderson, secretary of the Oklahoma County Election Board, said he wants to make sure voters are aware of the deadlines and registered properly for the upcoming primaries and general election. According to a recent press release, voters are prohibited from changing party affiliation on even-numbered years between June 1 and Aug. 31. May 31 is the last day for Oklahomans to switch parties for statewide primaries. In the state of Oklahoma, voters must be registered as a member of the party to be eligible to vote that party's primary. According to the Oklahoma Election Board, the parties can choose to allow extra-party participation, but neither has chosen to do so for this election cycle. All registration changes submitted after the deadline will be held until Sept. 1 and then activated for subsequent elections. The deadline to register for the primaries without switching parties will be July 4. Michael Clingman, secretary of the Oklahoma Election Board, said that party switching has not been as much of a trend in Oklahoma as it may have been elsewhere. There have been no significant levels of party switching so far, and Clingman said he does not expect to see any. There have been more than 28,000 new registered voters so far this year, again, not as much of an increase as seen in other states. Clingman said the state would likely see around 200,000 more registrants before the Oct. 10 general election registration deadline.

FEDERAL ISSUES

OKLAHOMA REALTORS® VISIT CONGRESSIONAL DELEGATION
Last Wednesday, Oklahoma REALTORS^® headed to Capitol Hill to share their concerns with Oklahoma’s congressional delegation. Issues discussed include FHA Modernization, GSE Reform, Homebuyer Tax Credits, Flood and Property Insurance, and Small Business Health Care. Thanks to all our congressional members for listening to the voice of real estate in Oklahoma.

U.S. FARM BILL GETS ATTENTION AT HOME AND ABROAD
Though the broad support given to the U.S. Farm Bill may not suggest potential problems, the final version passed last week by Congress includes more than $300 billion in spending and has received its share of criticism. Congressional Democrats praised the bill, specifically the $209 billion included for nutritional programs such as food stamps. According to the New York Times, only $35 billion will actually be spent on agricultural commodities. House Speaker Nancy Pelosi, D-California, said that the inclusion of food stamp funding was reason enough to vote for the bill and that the bill would help families cope with high food prices.

It may not be often that Pelosi and Oklahoma's U.S. Sen. Jim Inhofe, R-Tulsa, agree, but he, too, supported the measure. Of interest to Inhofe was the boost to the state's agriculture industry, particularly in biofuels. "While Oklahoma has long been a leader in oil and natural gas production, our state is quickly emerging as a leader in the field of cellulosic biofuels," Inhofe said. "Today, world-class scientists at Oklahoma State University and the Noble Foundation are working with farmers across Oklahoma to develop cellulosic bioenergy crops, like switchgrass, that don't compete with feed for livestock." Sen. Tom Coburn, R-Muskogee, was not as impressed. "As food and gas prices reach record highs and families are feeling the strain on their budgets, this bill does nothing to help improve the quality of life for farmers and hard-working families," Coburn said in a news release. "Rather, this bill gives billions to huge conglomerates, special interest groups and inefficient nutrition programs. Congress has put their elections and parochial interests ahead of traditional farmers and middle class families." President George W. Bush was also among the first to criticize the bill, though he had supported a similar measure when he was up for re-election. Part of his problem with the final version of the bill is that it includes subsidies for farms with incomes up to $750,000 and for individual farmers up to $500,000. Bush had previously tried to limit those income qualifications to less than $200,000. The New York Times reported Thursday that Bush would likely try to veto the bill, but with the bill receiving broad support in both houses, any veto effort would likely see a legislative override. Also an issue is the lack of reform in the bill, which U.S. Secretary of Agriculture Ed Schafer said would be crucial. Remarking on the final product released last week, Schafer said he was concerned about the growth in spending and a long list of extras. "The United States House and Senate announced the completion of a farm bill that unfortunately fails to include much needed reform and increases spending by nearly $20 billion," said Schafer in a statement. "At a time of record farm income, Congress decided to further increase farm subsidy rates, qualify more people for taxpayer support, and move programs toward more government control."

But in Oklahoma, the bill has been well received. Mike Spradling, Oklahoma Farm Bureau president, said on Friday that the measure "provides stability for farmers, ranchers and consumers at a time when domestic food security is more important than ever." Spralding lauded the bill for its conservation, nutrition and research provisions. "The three-legged safety net of direct payments, marketing loans and counter-cyclical programs gives producers an essential level of security," said Spradling. "This is especially important now as markets and production expenses are so volatile."

Across the globe, the Farm Bill is sowing a different kind of seed. The Sydney Morning Herald reported Friday that Australia would take a serious hit in its own agriculture sector, placing blame on election-year politics in the United States. Australian Prime Minister Kevin Rudd had even lobbied in Washington, trying to make lawmakers aware of the problems it could cause for Australian agricultural exports. Of primary concern are provisions that require country-of-origin labeling on meat products, requirements that the United States buy 85 percent of sugar products from domestic sources and continue subsidies for wheat, cotton and barely production.

May 9

STATE ISSUES

ANOTHER QUIET WEEK
It was another quiet week for the real estate industry at the State Capitol. With two weeks left to go in this legislative session, much of the work is being done behind the scenes in the conference committee process. Stay tuned to see what bills make the cut!

OREC MEETING
At Wednesday’s OREC meeting, much of the discussion centered around the Broker Relationships Act and the Residential Property Condition Disclosure Form. Although no action was taken, the Commission may choose to study these issues further at future meetings. The next meeting is scheduled for June 18, where the commissioner will hear from representatives from the Texas Real Estate Center at Texas A&M and discuss different options for a similar center in Oklahoma.

FEDERAL ISSUES

REALTORS® TAKE OVER CAPITOL HILL
Next week is NAR’s Midyear Legislative Meetings in Washington, DC, where thousands of REALTORS® from across the country visit their congressional delegations to discuss real estate issues. Watch for daily updates on REALTOR.org.

HOUSE TO VOTE ON TAX CREDIT PROPOSAL
House lawmakers are slated to vote this week on a housing tax relief package that includes a one-year $7,500 tax credit for the purchase of a principal residence by first-time homebuyers whose income doesn't exceed $70,000 ($140,000 on a joint tax return). The Senate version of the credit is limited to $7,000 and is available to any buyer of a principal residence, but it would be restricted to purchases of foreclosed properties. A side-by-side look at the two approaches is online.

HOUSE COMMITTEE PASSES FORECLOSURE BILL
The House Financial Services Committee last week approved the FHA Housing and Homeowner Retention Act, which would encourage servicers to write down the principal of a troubled mortgage by substantial amounts. The bill would permit FHA to insure the revised mortgage in exchange for the homeowners sharing a portion of future appreciation with the government. The bill is expected to be on the House floor this week as part of a Housing Stimulus package.

NAR URGES CONGRESS TO MAKE LOAN LIMIT HIKES PERMANENT
Congress should support the Homeowner Opportunity Act, H.R. 5958, introduced by Reps. Jerry McNerney, D-Calif., and Gary Miller, R-Calif., to make the FHA and conforming loan limit increases permanent as part of the 2008 Housing Stimulus bill. Permanent increases will "achieve an immediate increase in liquidity" in mortgage markets, NAR President Dick Gaylord says in a letter to House members this week. The stimulus bill could be considered in the House before the end of this week. "Increased liquidity should help drive down mortgage costs and create stability in the mortgage market."

FREDDIE MAC EASES DECLINING MARKETS POLICY
In a softer approach for areas with falling home prices, Freddie Mac is allowing mortgage originations for 95 percent LTV given certain underwriting safeguards: 1) the mortgage is used for purchase or "no cash-out" refi, 2) it's secured by a one-unit residence, and 3) its application receives an "Accept Risk Class" from Freddie's automated underwriting software, Loan Prospector. Prior to the easing, Freddie restricted the LTV to less than 95 percent for originations in declining markets. Fannie Mae has announced easing its declining markets policy, too.

TIP OF THE WEEK
Do you like to keep tabs on what Congress is doing? Want to find out what your Member of Congress is doing or votes he or she might have? Open Congress is a new Web site that is a very useful tool that you can personalize to your Member of Congress, specific issues or bills, or states. You can have a look for yourself at OpenCongress.org.

NOTE: The next update will be on Monday, May 13 due to the NAR Midyear Legislative Meetings.

May 2

STATE ISSUES

ABSTRACTING BILL SIGNED BY GOVERNOR
The final piece in a three-year effort of reforming the abstracting industry was signed into law this week and will go into effect on November 1. SB1575 by Sen. Clark Jolley, R-Edmond, and Rep. Trebor Worthen, R-Oklahoma City, passed both chambers with unanimous votes and was signed by the Governor on Tuesday. To open a new abstracting company under current law, the potential company must create a complete set of records for the county. In some counties, there have been fires at the county courthouses, or records have gotten lost over time. It is impossible for a new abstract company to open in these counties because they can’t compile the necessary records. SB1575 addresses this issue by allowing a new set of abstract records to be based on the records currently available for reproduction at the county offices. This ensures that new abstract companies will be allowed to open, particularly in those counties that do not have sufficient records to meet the current requirement. We applaud the state legislature and the Governor for their support of this important piece of legislation.

THREE WEEKS LEFT TO GO!
With the end of session quickly approaching, it was a fairly quiet week at the State Capitol. Most of the bills still alive are headed to conference committee. It’s an easy time for changes to be made to legislation, and each new conference committee report will be reviewed for its potential impact on the real estate industry.

FEDERAL ISSUES

NAR COMMENTS ON NEW APPRAISAL REGULATIONS
NAR has released the following statement regarding the new appraisals regulations including the “Home Valuation Code of Conduct”:

The National Association of REALTORS ® supports the independence of appraisers and the integrity of the appraisal process. We recognize the New York State Attorney General Andrew M. Cuomo and both government sponsored enterprises (GSE), Fannie Mae and Freddie Mac, for their efforts to address appraisal fraud in the mortgage industry. While the agreement addresses appraisal fraud, we have concerns with the implementation of the proposed “New Home Valuation Protection Code” through the newly created “Independent Valuation Protection Institute.” NAR has met with GSE regulator, the Office of Federal Housing Enterprise Oversight (OFHEO), to discuss the agreement and will be providing comments to both GSEs by the April 30, 2008, deadline.

Click here to review background information and a FAQ on the agreement between the New York State Attorney General and the GSE’s.

April 18

STATE ISSUES

LICENSING BILL REMAINS ON HOUSE AGENDA
On Wednesday, OAR issued a Call to Action on SB1725. To date, more than 500 e-mails have been sent from REALTORS® to their Representatives asking them to oppose this legislation. For more information or to respond to the Call to Action, click here.

PROPERTY TAXES STUDY REQUESTED
Two state representatives who voted against a proposed property tax freeze for seniors said the idea deserves consideration. Reps. Joe Dorman and Ryan Kiesel, members of the House Rules Committee, voted last Wednesday against Senate Joint Resolution 59. The proposed referendum, which was supported by OAR, would have asked voters whether to lower the maximum increase from 5 to 3 percent annually on property valuation increases. Dorman, D-Rush Springs, and Kiesel, D-Seminole, requested an interim study on the issue. Interim studies are heard by legislators after the legislative session.

SPEAKER PRAISES NBA QUALITY JOBS ACT BILL; GOVERNOR QUICKLY SIGNS IT INTO LAW
With the signature of Governor Henry, Oklahoma has done its part to attract its first major league sports team following the House passage of an expansion of the Quality Jobs Program on Thursday. The legislation, which expands the program to include the NBA and the 170 jobs with a $74 million payroll estimated it would bring to the state, passed the House and went to Henry for action; he quickly signed it into law. Senate Bill 1819 also extends the Act to cover a 15-year period and puts a reimbursement cap on the incentives from the state to not exceed the top tax rate in Oklahoma. Currently the tax rate is 5.5 percent. The change is part of a requested financial package the team needed to make the move to Oklahoma. The NBA relocation committee is expected to vote today on a request to move the SuperSonics basketball team from Seattle to Oklahoma City. It is estimated that local and state tax revenue to the state over a 15 year period will be $11.2 million.

STATEWIDE TERM LIMITS MEASURE PASSES HOUSE
Statewide office holders would be limited to a maximum of 12 years in office if legislation passed out of the House Thursday becomes law. The change would also have to be approved by a vote of the people this fall. Currently, state lawmakers are limited to 12 years in office, and the governor is limited to two four-year terms. Senate Bill 1987, by Rep. Trebor Worthen, would add all statewide elected officials like the lieutenant governor and the attorney general to the state’s term limits law. The governor would remain limited to eight years in office. The resolution would appear on the ballot in November, and if approved, would then apply to officeholders first elected in the 2010 election. The bill passed the House today with a vote of 56-44 and will now return to the Senate for final consideration. The measure does not require the governor’s signature.

MCMAHAN LIKELY TO AVOID IMPEACHMENT
THIS SESSION
A House of Representatives committee looking into possible impeachment proceedings against State Auditor and Inspector Jeff McMahan won't begin hearing from witnesses until after the legislative session, a committee co-chairman said last week. "It's unlikely at this point we will call any witnesses prior to Sine Die (the last day of session),” said Rep. Rex Duncan, the Republican co-chairman of the committee. He had earlier thought it would be possible the committee's work could be finished before the end of the session, but federal prosecutors have yet to provide the committee with any information, Duncan said.

McMahan and his wife, Lori, have been indicted on federal charges of mail fraud, bribery and conspiracy. Their trial is set for June 2. When the House committee finishes its work, a one-day special session would have to be called for it to report its recommendation to the full House.

FEDERAL ISSUES

HOMEBUYER TAX CREDITS
Last week the U.S. House Ways and Means Committee approved, by a vote of 35-5, a bill (H.R. 5720) that would make nearly all first-time homebuyers eligible for a tax credit of up to $7500 for the purchase of a home. The tax credit would be available for purchases between April 8, 2008 and April 1, 2009. Eligible purchasers could buy any property – existing home or newly constructed – as long as the house would be used as a principal residence. H.R. 5720 will likely be considered in the full House next week.

April 11

STATE ISSUES

INDEPENDENT CONTRACTOR BILL
A bill which would have required registration of independent contractors to register with the Oklahoma Employment Security Commission will not be moving forward this session since it was not heard by the House Economic Development & Financial Services Committee within the necessary timeframe. SB1550, by Sen. Charlie Laster, R-Shawnee, and Rep. Ken Miller, R-Edmond, would have required employers and anyone utilizing an independent contractor to complete the registration if they thought the contractor would be earning more than $600 in a year. This bill was proposed by the Department of Human Services in an attempt to collect more child support payments. While the intent of the bill is a good one, the proposed legislation would have placed a tremendous burden on many businesses, including all of Oklahoma’s real estate brokers.

ABSTRACTOR BILL MOVES FORWARD
The final piece in a three-year effort of reforming the abstracting industry is one step closer to becoming law. SB1575 by Sen. Clark Jolley, R-Edmond, and Rep. Trebor Worthen, R-Oklahoma City, passed out of the House Economic Development & Financial Services Committee on Wednesday. To open a new abstracting company under current law, the potential company must create a complete set of records for the county. In some counties, there have been fires at the county courthouses, or records have gotten lost over time. It is impossible for a new abstract company to open in these counties because they can’t compile the necessary records. SB1575 addresses this issue by allowing a new set of abstract records to be based on the records currently available for reproduction at the county offices. This ensures that new abstract companies will be allowed to open, particularly in those counties that do not have sufficient records to meet the current requirement. The legislation will now appear before the House of Representatives and then will be on its way to the Governor.

ACCESS LANGUAGE REMOVED FROM BILL
Language addressing handicapped accessibility to buildings has been removed from pending legislation. HB2703, by Rep. Kris Steele, R-Shawnee, and Sen. Connie Johnston, D-Oklahoma City, would have placed certain requirements on construction or alterations to buildings or facilities beginning Nov. 1, 2008. The language would have also required buildings open to public use provide an automatic door, and that two-story buildings open to public use provide at least one handicapped accessible restroom with an automatic door on each floor. This language was removed, and as the bill moves forward it will focus on Medicaid claims on all purchased wheeled mobility.

LICENSING LANGUAGE SHOWS UP IN ANOTHER BILL
Language opposed by OAR that was defeated earlier in the session has shown up as an amendment in another piece of legislation. SB1725, by Sen. Mike Shulz, R-Altus, and Rep. Sue Tibbs, R-Tulsa, contains language that limits the authority of the Oklahoma Real Estate Commission to impose sanctions on a licensee if convicted of a crime involving moral turpitude. Instead, the OREC could only take action against the licensee if the crime substantially related to the practice of real estate. OAR is concerned that the proposed language is too narrow, and it might be difficult to determine if crimes “substantially relate to the practice of real estate.” We will continue to work on this legislation and keep you posted as it progressed through the legislature.

LEADERSHIPOAR DAY AT CAPITOL
Thursday was LeadershipOAR day at the Capitol, with future REALTOR® leaders from across the state gathering to learn more about real estate law and the legislature. The LeadershipOAR class visited their legislators and helped promote Oklahoma’s housing market throughout the State Capitol. For more information on LeadershipOAR, visit LeadershipOAR.com.

SENATOR’S PERSONAL E-MAILS PUBLISHED ON POLITICAL BLOG
The fight over Oklahoma’s new immigration law reached new highs (and lows!) this week, with the publication of Senator’s correspondence with various lobbyists discussing different ways to repeal and/or challenge the provisions of the controversial new law. In a press conference Thursday, Sen. Harry Coates, R-Seminole, accused what he said was a "small fanatical group of people" who are "against immigration, both legal and illegal" of publishing stolen e-mails. Some of Coates' e-mails, however they were obtained, have been released on the Oklahoma Political News Service Web site. Senate investigation into the matter is currently under way, and the matter has been reported to the Attorney General's Office. Coates said that they are reviewing surveillance footage to see if anything turns up. In a separate press conference on the same day, Senate Co-President Pro Tempore Glen Coffee, R-Oklahoma City, said that Coates had "asked that we make some internal investigations to find out what's going on, and I believe he has also spoken with the attorney general. I absolutely am concerned if we have security issues within members' offices," Coffee said. "That's not something that we take lightly, and we will certainly address aggressively." Coffee stated that, for the moment, he and President Pro Tempore Mike Morgan, D-Stillwater, are just trying to figure out what has happened internally, though he suggested that the Oklahoma State Bureau of Investigation might get involved.

SENATE SETS EARLY ADJOURNMENT
Rumors usually begin circulating around this point in the legislative session concerning a potential early adjournment. The Senate made it official Thursday, approving a resolution that calls for lawmakers to finish one week early. SCR71, by Sen. Glenn Coffee, R-Oklahoma City, Sen. Mike Morgan, D-Stillwater, and Rep. Chris Benge, R-Tulsa, states that the Legislature will adjourn sine die no later than 5 p.m. May 23. It was adopted by boisterous unanimous consent.

Explaining the resolution, Morgan said, "We were actually allotted 17 weeks as opposed to the normal 16 weeks to complete our business by the constitutionally required sine die adjournment date. In recognition of how we normally do our business and the confident expectation that we can do it again, I bring the resolution to you and recommend that we pass the resolution adopting our intended sine date not later than 5 p.m. on Friday, May 23, 2008." The resolution now goes to the House for its consideration.

ABSTRACTING BOARD APPOINTMENTS APPROVED
All 14 executive nominations heard by the Senate Business and Labor Committee Monday were approved.