Thank you, Mr. Chairman, for allowing us this opportunity to appear before you today. We would be pleased to answer any questions the subcommittee may have. [The prepared statement of Mr. Belin, on behalf of the American Land Development Association, with attached exhibits, follows:] Statement of J.B. BELIN, JR. Before the Subcommittee on Housing and Community Development House Committee on Banking, Finance and Urban Affairs Concerning Interstate Land Sales Full Disclosure Act Amendments Mr. Chairman and members of the Subcommittee, my name is Bruce Belin. I am president and owner of Belin and Associates in Houston, Texas, a real estate development company currently developing five recreational, resort and residential projects in Texas, including the Award-winning April Sound project near Houston. I am presently serving as president and chairman of the board of the American Land Development Association (ALDA). Accompanying me today are Gary A. Terry, our Association's executive vice president; William B. Ingersoll, general counsel; and George G. Potts, director of public affairs. The American Land Development Association represents leading national and international companies which develop recreational, resort and residential real estate. Our members build and sell vacation homes, condominiums, planned unit developments, destination resorts, new and retirement communities, mobile hame parks and recreational vehicle parks and campgrounds. While our membership includes the real estate development subsidiaries of some of the nation's largest corporations operating in interstate commerce, many of our member companies are family-owned or are limited partnerships and can be classified as small, intrastate developers. Some of our member firms, large and small, are considered builders of primary residential homes, and a few operate as real estate agencies. Nevertheless, the Interstate Land Sales Full Disclosure Act (ILSFD/Act) of 1968 affects directly most, if not all, of our members. I hasten to point out, however, that in our opinion the ILSFD/Act was not intended to regulate some of these companies namely those operating primarily on an intrastate basis or as home builders or real estate brokers. Background and Explanation of the Act It would be appropriate at this point, Mr. Chairman, to provide the Subcommittee with a brief background and explanation of the Act, its intended scope and how it has been administered from our point of view - for nearly ten years now by the Department of Housing and Urban Development (HUD). However, in the interest of time, we have attached this information as Exhibit A, and I respectfully request that it, as well as several other exhibits related to that information, be included in the hearing record. Since the enactment ten years ago of the Interstate Land Sales Full Disclosure Act, we have seen HUD's Office of Interstate Land Sales Registration (OILSR) expand its regulatory authority over segments of our industry which we feel were not intended by Congress to be covered under the Act. In our opinion, the ILSFD/Act was intended, and should continue to be a disclosure rather than regulatory statute. Yet, through its ability to withhold effective registration and through various informal requirements, we believe OILSR has generated regulatory powers in administering the Act. Moreover, the companies which the law was intended to cover are suffering unduly today from what often seems to be uneven formal and informal rules and procedures employed by OILSR. The agency's registration policies - which we as well as the feel are too stringent and lack flexibility and predictability sheer complexity of the rules themselves have resulted in a substantial regulatory burden for all who have had to cope with the Act, especially for small developers. We are aware that much of OILSR's expansion of its regulatory role, and many of the attendant problems, were those inherent in administering a new program with new people. In fairness, we feel that the agency and the Act have in fact stopped many abuses by a few unscrupulous developers and have likely prevented others from occuring. It is not our intention to hamper OILSR's efforts to help buyers inform themselves and to protect themselves from the irresponsible element which exists in real estate as, unfortunately, in every other business. But we do not believe such protection has to be at the expense of the honest, responsible developers who predominate in our industry. We therefore are compelled to speak out against what we consider are perhaps well intended, but nevertheless overly restrictive, attempts to legislate even more regulation of our industry. I would like now to comment on the three major proposals which have been put forth to amend the ILSFD/Act. H.R. 12574, "Interstate Land Sales Reform Act of 1978" This proposed legislation, introduced originally as H.R. 10999, would amend the Act in several ways, with the apparent intent of strengthening the law to provide greater protection for real estate buyers by increasing the regulation of land sales. Unfortunately, under many of its provisions, the measure would not produce the desired results and would do considerable harm to developers indeed perhaps forcing many of them out of business altogether. - The bill would extend the Act's coverage to include subdivisions of 40 or more lots, replacing the threshold of 50 or more lots in the present Act. Admittedly, smaller developers, often the very ones who least deserve regulation and can least afford the additional burden, would be brought in under federal regulation. In short, this seems to be just another example of expanding the Act's jurisdiction with little or no corresponding benefit to the consumer. Would it be 30 lots next year? And 20 by 1980? The Act's jurisdiction would also be expanded, under this proposal, to cover lots which are less than 40 acres in size, i.e. eliminate the present exemption for lots five acres or larger. Proponents of this provision point out, perhaps correctly, that the so-called "five acre exemption" often tempts irresponsible developers to subdivide property into larger unusable lots in order to escape regulation; attracts "fly-by-night" subdividers; and results in the subdividing of marginally usable land. Conversely, consumers purchasing lots in excess of |