FINAL BILL REPORT

HB 435

PARTIAL VETO

                                  C 514 L 87

BYRepresentatives Hankins, H. Sommers and Brooks; by request of Department of General Administration

Revising provisions on inactive real estate licenses.

House Committe on Commerce & Labor

Senate Committee on Commerce & Labor

SYNOPSIS AS ENACTED

BACKGROUND:

REGULATION OF REAL ESTATE BROKERS AND SALESPERSONS - STATE EMPLOYEES.  Currently, state law does not prohibit a state employee who conducts real estate transactions on behalf of the state from maintaining an active real estate license.  Some agencies, by policy, require such licensed employees to be inactive.  A person who has been inactive for more than three years must complete a 30-clock hour course in real estate within one year prior to applying to return to active status.

REGULATION OF PROFESSIONS - SUNRISE REVIEW.  Recent debate has occurred regarding the utility of professional regulation.  One view is that regulation may not be necessary to protect the public but instead creates unnecessary barriers to entry into a profession and raises costs to consumers.

In 1983, Washington established a sunrise review process for health professions.  Legislative intent is stated that no regulation shall be imposed except for the purpose of protecting the public interest.  Upon request by the appropriate legislative committee, any interest group seeking regulation of a health profession not presently regulated or which proposes to substantially increase the scope of practice of a profession currently regulated must justify its proposal by addressing statutory criteria.  The interest groups must submit the information to the state health coordinating council, which then makes recommendations to the legislature.

TAXATION OF REAL ESTATE TRANSACTIONS.  Currently, the assumption of the balance due on an obligation secured by a mortgage or deed in lieu of forfeiture is exempt from real estate excise taxation when no other payment is received by the original borrower.  If, however, the holder of the obligation required payment in full and refinancing, for example, the transfer would not be exempt and would be subject to the tax.

SUMMARY:

REGULATION OF REAL ESTATE BROKERS AND SALESPERSONS - STATE EMPLOYEES.  State employees conducting real estate transactions on behalf of the state are prohibited from holding active real estate licenses.  Such persons are exempt from the requirement that licensees inactive for more than three years must complete a 30-clock hour course within one year prior to applying to return to active status.

REGULATION OF PROFESSIONS - SUNRISE REVIEW.  A sunrise review process for business professions is created.  An interested party proposing regulation of a business professional group not currently regulated must justify its proposal by addressing statutory criteria, to the extent requested by the legislature.  The requirements also apply to interested parties proposing legislation to substantially increase the scope of practice or level of regulation of a currently regulated profession.  Proposals relating solely to continuing education are excluded.

The criteria are the same as those applicable to the sunrise review of health professions.  Among other factors, an interested party must explain why regulation is needed, the alternatives considered, and the costs of regulation.  Reviews will be conducted by the Department of Licensing.

TAXATION OF REAL ESTATE TRANSACTIONS.  Transfers of property where no other consideration passes to the vendor beyond relief from debt are exempt from the real estate excise tax.

VOTES ON FINAL PASSAGE:

      House 97   0

      Senate    49     0(Senate amended)

      House       (House refused to concur)

Free Conference Committee

      Senate    41     2

      House 97   0

EFFECTIVE:July 26, 1987

Partial Veto Summary:  The provision adding a real estate excise tax exemption is vetoed.  (See VETO MESSAGE)