US Supreme Court

U.S. Supreme Court Rules Property Owners Can Go Directly To Federal Court With Claims

In a 5-4 decision on Friday, June 21, the US Supreme Court overturned decades of precedent by ruling that “property owners can go directly to federal court with claims that state and local regulations effectively deprive landowners of the use of their property.” The REALTORS Land Institute stands behind this ruling, which gives more power to private property owners over their land. This decision will especially impact cities and properties on the coasts which tend to have strict regulations for development. Developers and private property owners often find themselves battling red tape with zoning rules and other state or local regulations which often effectively take their property for public benefit.

Read more on this topic:

RLI at the REALTOR Legislative Meetings and Trade Expo

RLI Attends 2019 REALTOR® Legislative Meetings & Trade Expo

REALTORS® Land Institute leadership and members attended the REALTORS® Legislative Meetings and Trade Expo in Washington, DC, from May 13-18. Check out these key highlights from the event to see RLI’s presence and impact while at the event:

  • The morning of Tuesday, May 14, RLI hosted its RLI Leadership and Member Meeting where Russell Riggs, RLI’s Legislative Liaison to the National Association of REALTORS®, gave an update on the latest legislative issues affecting the land industry and Aubrie gave an update about the RLI 2017-2020 Strategic Plan.
  • RLI Leadership again attended the NAR Commercial Reception in the evening on Thursday, May 16 to make sure our organization’s presence was felt.
  • While in town, RLI 2018-19 National President Jeramy Stephens, ALC, and RLI CEO Aubrie Kobernus visited the Capitol to thank Senator Cotton (R-AR) for sponsoring SR 115 which congratulates RLI on its 75th Anniversary this year!
  • Finally, on Friday, May 17, RLI 2016 National President Bob Turner, ALC, was invited to the stage by US President Donald Trump to speak on Opportunity Zones. Turner is considered the REALTOR® expert on the topic. President Trump started off his speech discussing how his policies have helped strengthen private property rights in the land industry. He came back to discussing land-related issues various times throughout the speech to his audience of REALTORS®, referencing the positive impacts of his administration’s polices being implemented by the Environmental Protection Agency, the benefits landowners may see from the recent tariff policies, and more.

 

Qualified Opportunity Zones

Qualified Opportunity Zones

Environmental Protection Agency and Army propose a new definition of the WOTUS

 

On December 11, the U.S. Environmental Protection Agency (EPA) and the Army proposed a new definition of the Waters of the United States rule (WOTUS). This proposal is the final step in the process to review and revise the controversial rule following President Trump’s 2017 “Restoring the Rule of Law, Federalism, and Economic Growth by Renewing the ‘Waters of the United States’ Rule” Executive Order.

 

“Our proposal would replace the Obama EPA’s 2015 definition with one that respects the limits of the Clean Water Act and provides states and landowners the certainty they need to manage their natural resources and grow local economies,” said EPA Acting Administrator Andrew Wheeler. “For the first time, we are clearly defining the difference between federally protected waterways and state protected waterways. Our simpler and clearer definition would help landowners understand whether a project on their property will require a federal permit or not, without spending thousands of dollars on engineering and legal professionals.”

wotus proposal epa signing december 11

RLI Past President Bob Turner, ALC, attended the official signing. “We will finally have clarification of the rules, we will be able to easily determine what is Federal waters and what is not without having to hire engineers, consultants and lawyers to get a determination,” said Turner. “This will allow landowners, farmers, developers, home builders, and conservationist to own, improve, develop, maintain and pass on to future generations with a clear, understandable and implementable definition.” Read more.

Land and Congress: Just The Facts

It seems like the more news there is, the harder it is to find out the facts. Important news about land legislative issues, such as tariffs and WOTUS, can get lost in a sea of opinion pieces. Let’s take a look at the simple facts surrounding five of the most pressing issues in the land industry.

Waters of the United States (WOTUS) rule

WOTUS is one of the most controversial land legislative issues in the land industry. This law was written to clarify water resource management but sparked a debate about property rights.

“Many (wetlands) are already covered under the Clean Water Act,” said Russell Riggs, RLI’s Government Affairs Liaison for  the National Association Of REALTORS® (NAR) and Senior Regulatory Representative for NAR, in an interview with REALTOR® magazine. “This expands it beyond navigable waterways to little streams, ditches, and isolated wetlands that were never really intended to be covered by the Clean Water Act. WOTUS would sweep in thousands of smaller water bodies under the authority of the Environmental Protection Agency and now you’re talking about all kinds of different permitting, regulatory burdens, as well as infringements of property rights.”

Many land organizations, including RLI, opposed the rule and have been avid advocates for its repeal and reform. In response to the land industry, the Trump Administration put the rule under review. At time of publication, WOTUS has been revived in 26 states.

Russell Riggs will be speaking on key land legislative issues at the 2019 National Land Conference in Albuquerque, NM, giving an update on the latest legislation affecting the land real estate industry.

The 2018 Farm Bill

On September 30th, 2018, the 2014 Farm Bill expired. The Farm Bill expired because Congress couldn’t reach an agreement on the many influential land legislative issues that this bill governs, such as:

This bill covers dozens of incredibly important and complex land legislative issues. Changes made to this bill will impact every corner of the land industry. Landowners, investors, and consumers will all be impacted. It’s important that your representatives in D.C. hear what you have to say about the Farm Bill. RLI has a strong voice in D.C., thanks to our member-driven Government Affairs Committee and by keeping members informed on the latest land laws in blog posts, social media, and D.C. Updates.

Update: The Farm Bill Passed

Tariffs

Tariffs are a tax a country puts on a product made abroad. The intention is to motivate Americans to buy local products at a cheaper price. At the time of publication, there is a ten percent tariff adding up to $200 billion on Chinese imports. President Trump is expected to raise tariffs in the future.

In retaliation, China imposed tariffs on American products, including soybeans, pork, milk, fruit, and many other crops. Soybeans, in particular, have struggled. The Chinese tariffs have driven soybeans prices down and some soybean farmers are struggling to pay the bills.

“Farmers see that pain right now,” said American Soybean Association CEO Ryan Findlay in an interview on CNBC. “You have to have the prices to pay the bill — and the prices aren’t there right now.”

During a record production year, many farmers are storing soybeans in the hopes that the trade war will soon end.  The long-term impacts, good or bad, are unknown right now.

Bailout

To help ease the economic stress of the ongoing tariff war, the USDA authorized a $12 billion bailout plan for farmers.

Farmers who met the criteria would receive incremental payments from USDA programs. The first $6 billion was distributed in late August. Additionally, the USDA’s Agricultural Marketing Service (AMS) set up the Food Purchase and Distribution program to buy $1.2 billion in American goods that were impacted by the tariffs.

Endangered Species Act

In an 8-0 vote, the Supreme Court ruled to limit which habitats can be protected under the Endangered Species Act. The central point of the debate was if lands where endangered species weren’t currently living, but might one day, protected under the law.

“Only the ‘habitat’ of the endangered species is eligible for designation as critical habitat,” the chief justice said highlighting how the scope of the law as written now is limited. “Even if an area otherwise meets the statutory definition of unoccupied critical habitat because the secretary finds the area essential for the conservation of the species, [the law] does not authorize the secretary to designate the area as critical habitat unless it is also habitat for the species.”

Staying up to date on land news is tricky, especially when so many key land legislative issues are always being updated or debated. We hope this article offered a no-nonsense look at the current state of several pressing land laws. If you’d like to get more involved with the Advocacy side of RLI, consider applying for our Governmental Affairs Committee and make sure to check back regularly to our DC Updates page for the latest news about the latest legislative issues affecting the land industry. Remember – your voice deserves to be heard in Congress!

About the Author: Laura Barker is a freelance writer based out of California for the REALTORS® Land Institute. She has been with RLI since October 2017.

Supreme Court Limits Reach Of Endangered Species Act

In an 8-0 ruling, the Supreme Court ruled to limit the broad habitat protections of the Endangered Species Act. A key debating point was how the law could impact the dusky gopher frog, an endangered species in Louisiana. Environmental groups argued that protecting land that could be used as a habitat for the frogs could save the species, while development companies questioned how the land could be “critical” if the frogs did not live there and could not live there without changes to the land there.

“Only the ‘habitat’ of the endangered species is eligible for designation as critical habitat,” the chief justice said highlighting how the scope of the law as written now is limited. He continued “Even if an area otherwise meets the statutory definition of unoccupied critical habitat because the secretary finds the area essential for the conservation of the species, [the law] does not authorize the secretary to designate the area as critical habitat unless it is also habitat for the species.” Read more.

wotus

WOTUS Rule Sees Revival in Twenty-six States

The controversial Waters of the US (WOTUS) Rule is being re-implemented in 26 states after a federal judge’s ruling that the EPA and Army Corps of Engineers improperly suspended it. “U.S. District Judge David Norton in South Carolina agreed with environmental groups that the agencies failed to follow the public-comment requirements of the Administrative Procedures Act in implementing a suspension rule this year that was intended to delay enforcement of the 2015 rule. The APA requires agencies to take public comment on regulatory actions before implementing them,” stated a recent article on AgWeek.

The REALTORS® Land Institute and National Association of REALTORS® support the review of the WOTUS rule as laid out by President Trump’s Executive Order to ensure that both private property rights and clean waterways are protected.

States Under Jurisdiction of WOTUS as of 9.20.2018

This image represents the most current information available as of September 20, 2018.

DC update

IRS Guidance Out on 20 Percent Business Income Deduction

“On December 22, 2017, President Trump signed the “Tax Cuts and Jobs Act”.

All individual provisions of the measure are generally effective after December 31, 2017 for the 2018 tax filing year and expire on December 31, 2025 unless otherwise noted. The provisions do not affect tax filings for 2017 unless noted. To read NAR’s analysis of the bill’s provisions impacting real estate, please go to “The Tax Cuts and Jobs Act – What it Means for Homeowners and Real Estate Professionals.

NAR will be providing ongoing updates and guidance to members in the coming weeks, as well as working with Congress and the Administration to address additional concerns through future legislation and rule-making. Lawmakers have already signaled a desire to fine tune elements of The Tax Cuts and Jobs Act as well as address additional tax provisions not included in this legislation in 2018, and REALTORS® will need to continue to be engaged in the process.

NAR worked throughout the tax reform process to preserve the existing tax benefits of homeownership and real estate investment, as well to ensure as many real estate professionals as possible would benefit from proposed tax cuts. Many of the changes reflected in the final bill were the result of the engagement of NAR and its members over several years.” – NAR Tax Reform Info

The Treasury/IRS recently released its proposed regulations on the Sec. 199A 20% deduction for pass through businesses.

NAR wrote a letter to Treasury and IRS advocating that a wider range of real estate professionals should be eligible for this deduction.  NAR was successful in getting a carve-out for real estate agents and brokers.  The proposed guidance from Treasury/IRS has specifically stated that services provided by real estate agents and brokers are not considered “specified service businesses” and can be eligible for the Sec. 199A deduction above and below the income thresholds of $157,500 (single) and $315,000 (married).

NAR has also published additional information, including a Realtor Mag piece and Comm Blog that has been posted on the NAR website. To learn more, there is a series of FAQs on the IRS website that can also be shared.

Bottom Line:

This is a pretty straightforward deduction for pass through business owners making under the income thresholds.  Agents/brokers who are above the income thresholds:

This proposed guidance from Treasury/IRS is good news because real estate brokerages are not considered “specified service businesses” and can be eligible for the Sec. 199A deduction above the income thresholds of $157,500 (single) and $315,000 (married).  The calculation will depend on how your business is structured (S-corp, LLC, etc) and the deduction cannot exceed the greater of 1) 50% of the W-2 wages paid by the business, or 2) the sum of 25% of those W-2 wages paid plus 2.5% of the original cost of “qualified property.”  This is generally the original cost of the business’s depreciable property during its useful life.  This is a very basic explanation and there are other considerations, particularly if you have multiple qualified businesses. Consult your tax advisor to give you guidance on eligibility and how to file for the deduction.  NAR will release additional information about the Sec. 199A tax deduction and its impact on real estate professionals once we have done more analysis on the proposed rule. 

Drone news

The Latest On Drones

New Drone News

Drones have been around a while now. We are long past the days when legal battles were being fought over whether a drone could be used for commercial real estate purposes. We now have a system put in place by the Federal Aviation Administration (FAA) that allows for reasonable licensing and operation of drones that seems to be working well. The rules have seen a couple of tweaks since they were first published. And there are numerous cities and municipalities that have enacted more specific and restrictive laws to better manage drone operation and use.

All of that is old news. However, there is no shortage of new… news. Drones continue to be used in more creative and innovative ways. Many start-up companies are conceived with new ideas on how to employ drones more effectively to solve real-world problems, save time or money, and complete ever day tasks more safely and efficiently.

Unless you’re combing the internet daily for the latest on drone development and employment you might not have seen some of the recent stories. I’d like to save you a bit of time and give you a few recent articles for your enjoyment and professional development:

Drones: A Life Saving Technology

Whether in search and rescue, first-responder services, or delivery of critical medical supplies, drones are saving lives. A recent report published by DJI asserts that drones saved 65 lives last year alone.

Drones Save Lives

Drones Spark Software Startup

Drones are sometimes a bother to people on the ground who are not familiar with their operation and impeccable safety record. Researchers at the University of Nebraska-Lincoln and developing software to help ease the bystanders’ discomfort of drones.

Drones article

Drone Divisions = Innovation

Start-ups aren’t the only companies in the drone game. Well-established companies are exploring new technologies and ways to integrate them. Ford has even established a drone division and is investigating, among other things, lighting technology for drone identification.

Ford drone division

Drone Defense Systems Popping Up

Amid concern for bad actors with drones, some are developing anti-drone systems. In Tampa, FL a company called Sierra Nevada is developing a mobile drone defense platform for a U.S. Department of Defense customer.

counter drone system

Drones Save Puppies, Too!

Finally, who doesn’t like a feel-good story about a drone saving a puppy?

drone saves puppy

The drone story is no longer about when and how we can use them. These days, the story is more like “what will they think of next?” And that question continues to be answered with more and more interesting and creative solutions. I tend to view the current drone world like the early days of the Internet or the introduction of the smartphone. I don’t think we’ve really even scratched the surface of the total drone capability universe. When it comes to drone technology, development, and news, it’s not so much keeping up as it is hanging on for dear life.

This post is part of the 2018 Future Leaders Committee content generation initiative. The initiative is directed at further establishing RLI as “The Voice of Land” in the land real estate industry for land professionals and landowners. For more posts like this, click here.

About the author: Caleb McDow, ALC, is a land specialist and vice president for Crosby & Associates in Winter Haven, FL. He holds a Master of Science in Real Estate (MSRE), the CCIM Designation, and is a licensed private pilot and drone operator. McDow joined RLI in 2014 as a Military Transition Program (MTP) member. He is an active member of RLI, serving on the 2017-2018 RLI Board of Directors and as Chair of the 2018 Future Leaders Committee. He also regularly shares his expertise on real estate issues for various industry blogs.