Updated Jan. 15, 2010

Legislative Committee
Housing Committee
Land Use and Environmental Committee
Taxation and Government Finance Committee
Transaction and Regulatory Committee

The following is for study only and has NOT been approved by Legislative Committee, Policy Committees, Executive Committee, or the Board of Directors.

Issue:
What strategic questions should C.A.R. consider in evaluating proposals for sponsored legislation?

Action:
Not Required

Options:
Not applicable

Status/Summary:
Sponsoring legislation expends political "capital," which reduces C.A.R.'s ability to react to legislation of others and can come at the expense of defensive legislative activity. Since the early 1990s, C.A.R. Directors have taken into account C.A.R'.s available political capital, but have still been more willing to sponsor legislation with a calculated risk.

Given the dramatic turnover of membership in the legislature as the result of term limits, and the consolidation of legislative power in one party, reactive ability is increasingly important for lobbying entities like C.A.R. In response, C.A.R. has reduced the number of sponsored bills and increased reliance on so-called "targets of opportunity" presented in legislation of others. In addition, the on-going California budget crisis has made it dramatically more difficult to acquire a legislative author, and of course, to pass any legislation that has a fiscal effect.

C.A.R. has already voted to sponsor eight bills in 2010 to:

a. SB 206 (Dutton) - REO homebuyer tax credit
b. Local property maintenance ordinances
c. Anti-Deficiency protection
d. CID unit owner right to rent
e. Portable appraisals
f.  Appraisal Management Company (AMC) regulatory oversight
g. DRE "poison pill" reserve protection
h. Advance fee definition clarification

Set out below is a discussion of some of the considerations relevant to whether or not additional legislation should be sponsored.

Discussion:
Unanticipated Challenges - In each legislative session it seems that some major, but unanticipated, reactive challenge emerge. Recent high profile opposition issues have ranged from restructuring the real estate lending license; to DRE reserve fund raids and department elimination; to point-of-sale water and energy retrofits, Ellis Act repeal and various tax changes. Due to the states continued budget shortfall, C.A.R. is sure to face additional of battles in 2010 that could include transfer tax, service tax, flat tax, split roll, independent contractor withholding, new point-of-sale issues, changes in the license structure and new liability exposure.

Member Mobilization Implications - If C.A.R. sponsors a bill, will the whole Real Estate industry, including the rank and file volunteers, turn out to support it? Or, will their enthusiasm be exhausted by multiple demands on their time? C.A.R.'s legislative prowess has historically been based upon the ability, or perceived ability, to mobilize its membership on a particular issue. Any strategic decision regarding sponsored bills must also take into account the allocation of member mobilization resources.
 
Important Questions to Consider:
What is C.A.R.'s real goal? Is there a major policy goal to be achieved in the proposed legislation? How significant is the proposed change to the whole real estate industry and the everyday activities of REALTORS®? Bills that are introduced just to posture may needlessly expend resources and erode C.A.R.'s credibility with the legislature. Further, little legislative sympathy is given to attempts to fix more than the problem at hand.

Is it Real Estate Related?" C.A.R. is regarded as a powerhouse within its particular "turf," but like other lobbying entities, C.A.R.'s influence declines rapidly as it moves away from "core" concerns.

Does the political "cost" justify the improvement that might be gained by the bill? Because sponsored legislation comes at the expense of reactive efforts, even a well thought out, desirable change, may not be as important to REALTORS® as other competing proposals. It should be remembered that, whether described as "chits," "bullets," or "trips to the well;" any lobbying entity's ability to marshal votes declines with the number of issues attempted. How big an effect on day to day real estate practice will result?

Has it been tried before? How come it didn't work then? Even in this era of term limits, the legislative "do-ability" of various types of proposals changes relatively slowly. Once a proposal has been tried and found wanting, any repeat attempt should take into consideration whether or not previous opposition can be dealt with before it is reintroduced.

Does C.A.R. really need to be the sponsor? Oftentimes REALTOR® policy goals may be paralleled by other interest groups and C.A.R. can simply "piggyback" by supporting their legislation rather than sponsor a parallel competing measure; or, C.A.R. can sometimes force a desired change as a price of removing opposition.

Position Options (Based on the necessary investment of political capitol and resource allocation; 1 being the least, 4 being the most):

1.  Support, but not Sponsor - Active efforts in support. The proposal is not an appropriate subject to expend the level of legislative resources (at this time) that actual sponsorship would require.
2.  Sponsor as an Amendment - Actively seek to insert the proposal in relevant bills of others as opportunities present themselves.
3.  Co-Sponsor - Share in the drafting, control and required expenditure of resources with another lobbying entity. This option requires much more political resources than simple support of legislation of others, but carries with it more control of the final product.
4. Sponsor - Adopt as a portion of C.A.R.'s own legislative program which results in the highest investment and legislative resource priority.

Please see the State Legislative Issues Report for a detailed discussion of the implications of the various possible positions on legislation of others.