Session Scoop: April 26, 2024

Week 7 Report

The seventh week of the session saw the House starting to hear Senate bills, the Senate starting hearing House bills. On Friday, April 26^th, the House sent the Senate the “money bills”, aka the state budget and state capital outlay program, before heading home for the weekend.

This will be a short work week for the House as they are not scheduled to go into session on Thursday or Friday; however, the Senate will likely start meeting more frequently as the money bills have made their way to them.

Read below for summaries of some of the bills Louisiana REALTORS® is supporting or monitoring on your behalf:

Constitutional Convention

HB No. 800, Representative Beau Beaullieu

Status: Pending House Appropriations

Position: Monitor

The bill crafting the framework for an upcoming limited Constitutional Convention was reported out of the House and Governmental Affairs Committee and recommitted to the House Committee on Appropriations pursuant to the House rules requiring bills with a fiscal note of a certain amount to be heard by this committee.

The homestead exemption as well as the constitutional prohibition on transfer taxes would be up for discussion in a Constitutional Convention.

Property Insurance Bills

The momentum continues to grow in the Louisiana Legislature’s push to move forward bills to make Louisiana's insurance laws more like those in other coastal states. The goal of these bills is to attract more property insurers to Louisiana. While the bills are not guaranteed to accomplish this goal, we know the status quo is unsustainable.

SB 295 by Senator Heather Cloud

Status: Pending Senate Concurrence

Position: Support

Senate Bill No. 295 would change Louisiana from requiring "prior approval" of proposed insurance rates to a "file & use" system of approving insurance rates, thereby allowing insurers to begin using an actuarily sound market rate subject to receiving the approval of the Commissioner of Insurance within 30 days. This would allow insurers to manage their business better and have more flexibility to price their products.

House Bill No. 613, by Representative Gabe Firment, is a similar bill and it is pending Senate final passage.

SB 323 by Senator Kirk Talbot

Status: Pending Senate Concurrence

Position: Support

This bill would establish and clarify the rights, duties, and timelines imposed on both the policyholder and insurer to ensure swift resolution of an insured’s claims, including offering insurance companies cure periods to make things right. It would retain the insured's ability to file a bad faith claim and receive damages. The law must allow policyholders to force the insurance company to pay what they owe after a storm, without needing to hire an attorney.

When an insurance company is intentionally underpaying, delaying payment, or otherwise hurting policyholders, they should be heavily penalized, but the claims process must be clear and fair for both the policyholder and the insurer.

HB 611 by Representative Gabe Firment

Status: Pending House Concurrence

Position: Support

With a few exceptions, Louisiana’s 3-year rule essentially prohibits an insurer from canceling or non-renewing a property insurance policy if it is in place for three years. Louisiana is the only place on the planet with this type of law giving us a notorious reputation in the insurance industry worldwide.

This bill would sunset this rule so that it no longer applied to new policies going forward.

It would also allow insurance companies to non-renew up to 5% of their policies currently protected by the law, each year. This would minimize the impact on the overall market, thereby allowing the relatively few policyholders who are nonrenewed time to find coverage with another insurance company. The bill would also prohibit an insurer from charging a homeowners' policy deductible that exceeds 5% of a dwelling's replacement cost value unless the insured requests otherwise.

The House amendment to limit non-renewals in any one parish was removed by the Senate. 

The House is scheduled to decide whether to concur in the Senate amendments on April 29, 2024.

Senate Bill No. 307, by Senator Adam Bass, is similar and is pending final House passage.

HB 120 by Representative Matthew Willard

Status: Passed by the Senate

Position: Support

Currently, the Louisiana Fortify Homes Program will sunset (end) on June 30, 2025. 

This bill would remove the sunset date to allow the program to continue past this date. 

It is important to note that the House passed the state budget with $15 million appropriated for this program. However, the budget is not through the process, so this funding is not certain.

Public Records Bills

SB No. 502, by Senator Blake Miquez

Status: Subject to call; pending Senate floor action

Position: Monitor

This bill would require a Louisiana citizen requesting a public record to provide sufficient information to establish his or her age and identification. 

The bill was amended on the Senate floor to not apply to in-person or online access to records in the custody of the clerk of court. The bill has not made it off the Senate floor yet and will be heard again this week.

SB No. 423, by Senator Jay Morris

Status: Pending Senate floor action

Position: Monitor

This bill would require a public records request to only be from a Louisiana citizen. 

It was amended by the Senate and Governmental Affairs Committee to not be construed to limit access to readily available public records, including, but not limited to, mortgage and conveyance records.

REALTOR® Related Legislation Summaries

SB No. 506 by Senator Rick Edmonds (The Senate Commerce Committee reported former SB No. 322 by a substitute and therefore a new bill number was assigned)

Status: Pending House Commerce

Position: Support

Louisiana REALTORS® requested this legislation be filed to curb the predatory practice of what is commonly called the “40-year listing agreement”. 

The bill would do this by making it an unfair trade practice to secure a right in a “real estate service agreement” with a mortgage or other encumbrance on a home. Additionally, the bill would provide a simple mechanism for individuals to petition courts to remove these encumbrances from a property title.

The bill defines a “real estate service agreement” as a document executed by a homeowner granting a broker the right to list their home for sale at any time the owner or their heirs want to sell it in exchange for compensating the homeowner. 

By signing these agreements, a homeowner -- usually unknowingly - grants a mortgage on their home to secure obligations in the agreement. And the only way to extinguish the mortgage is to pay the real estate broker holding it – whether the real estate broker listed the home for sale or not. 

These are not listing agreements, rights of first refusals, or options but instead a hybrid mish-mash of things that keep property out of commerce and increase the costs of the home-buying transaction. And must be reined in.

The legislation is now headed to the House after passing unanimously by both the Senate Commerce Committee and Senate.

HB No. 366 by Representative Paula Davis

Status: Pending Senate Commerce, Consumer Protection and International Affairs

Position: Support

House Bill No. 959 pertains to a few matters that Louisiana REALTORS® identified as needing to be addressed over the past year or two.

For instance, Louisiana law often uses the term “real estate agent” which could be interpreted to not include a “real estate broker” due to the common practice of referring to “real estate salespersons” as “agents” and “real estate brokers” as “brokers”.

If interpreted this way, real estate brokers could be held liable for certain things real estate salespersons would not be held liable for, real estate salespersons could be eligible for certain work real estate brokers may not be eligible for, and real estate brokers could not be qualified to serve on certain local entities while real estate salesperson could.

To prevent this from happening, this bill would amend the definition of “agent” in the real estate law to say that both “agent” and “real estate agent” mean a licensee acting under the provisions of the Louisiana Real Estate License Law in a real estate transaction.” 

The bill also would “clean up” a few issues with defined terms in the Louisiana Real Estate Licensing Law, such as amending the definition of “listing agent” to ensure it would only be read to mean someone licensed by LREC to engage in real estate transactions and not LREC licensed real estate education providers or continuing education vendors.

HB No. 959 by Representative Daryl Deshotel (became HB No. 972)

Status: HB No. 959 was reported by substitute; HB No. 972 is pending House floor action)

Position: Monitor

This bill would have “sunset” the existence of professional and occupational licenses by setting a date for them to expire unless “renewed” by the passage of future legislation. It would have included real estate licenses, real estate appraiser licenses, and all others except medical and law licenses. This concept is referred to as “sunsetting”.

However, a substitute bill was adopted in the House Commerce Committee that no longer applies to the real estate profession and instead only allows the Louisiana State Board of Medical Examiners to grant certain temporary permits and licenses.

SB No. 456 by Senator Thomas Pressley

Status: Pending House Commerce

Position: Monitor

Senate Bill No. 456, Senator Thomas Pressley, has a sunset provision similar to that of the original House Bill No. 959, but it is much more involved. It includes all professional and occupational licenses including those involving real estate just as House Bill No. 959 originally did. 

When the sunset concept was first implemented for state departments, each entity appeared before its legislative oversight committee to discuss department activities.  A bill would then be filed in the next legislative session to “renew” the department.   While these hearings are no longer a common occurrence, a bill is still filed to “renew” departments each time one is set to “sunset”.

Louisiana REALTORS® has no reason to believe the process of “sunsetting” professional and occupational licenses would work any differently and therefore has a neutral position on the bill.