By Penney De Pas, CAE, Executive Director

The Omnibus Budget Reconciliation Act of 1993 made that portion of membership dues of trade associations allocated to lobbying expenses non-deductible. A trade association may choose either to pay a 35 percent "proxy tax" on the amount of money over $2000 it spends annually on lobbying or to inform its members of the percentage of their annual dues dollars that are not deductible because they will be used for lobbying purposes. Since the North Carolina General Assembly meets for two years, we have found that issuing a separate dues invoice for Underwriter and Agent members of NCLTA as a "special assessment" helps us in informing members of the amount of dues dollars that are not tax-deductible, segregating those funds for exclusive use in the government relations area, as well as only invoicing members biennially for the special assessment to cover the two-year legislative session.

Fifteen years ago, when I first began as the NCLTA executive director, I learned that the association had fallen on financially hard times. Then NCLTA President Joe Parker appointed a taskforce, consisting of T. Alfred Gardner, John Noblitt, and me to bring recommendations to the executive committee to rectify the financial situation. NCLTA still operates under those recommendations:

1. To solicit the title company membership each year for sponsorship funding of the Real Property Section annual convention rather than funding the sponsorship from the NCLTA operating budget,
2. To cap the expenses of the president to travel to the ALTA annual convention,
3. To create a board appropriated fund for government relations to which, each year that the association has a surplus in its operating income, to transfer 50 percent of such surplus. (When these funds are used, the proxy tax must be paid on the amounts expended over $2,000.)
4. To assess the Regular membership for anticipated lobbying expenses.

This biennial, the special assessment has been earmarked for retaining Moore and Van Allen lobbyists (and attorney members of NCLTA) Chip Killian and George Teague. Specifically, NCLTA is working towards passage of a manufactured housing bill (see related articles) as well as monitoring the plans of the NC Insurance Commissioner's office with regard to proposed amendments to the NC Insurance Information and Privacy Protection Act through NCLTA attorney member applicant Don Lampe of Smith, Helms, Mulliss, and Moore. We will also be doing what we can to support other legislation favorable to the title industry proposed by other groups, including the NC Bar Association.

In 1992, when NCLTA anticipated sponsoring changes to Chapter 44A with regard to the mechanics lien law, the special assessment was $2,800 for underwriters. For 1993-1994, while still working on passage of the mechanics lien law amendments, the assessment was $1500 for underwriters and voluntary for agents. For the 1995-1996 session, underwriters were assessed $4,500 and agents $500; the legislative agenda for that year included support of the Good Funds Settlement Act and revised legislation providing for liens on real property for furnishing of rental equipment and certificates of satisfaction for canceling deeds of trust. Without a significant legislative agenda for the 1997-98 session, NCLTA funded low-level legislative monitoring from a pool of monies set aside for government relations.

Both the 1999-2000 and the 2001-2002 special assessment rates were $1500 for Underwriters and $500 for Agents in addition to the normal membership dues. The 1999-2000 legislative agenda provided support for various real property lobbying efforts, including the cartway amendment, foreclosure notice, predatory lending practices, and elimination of stamps and seals.

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