Hyatt Grand Champions
3 p.m. – 5 p.m.
Thursday Feb. 4, 2010
Indian Wells, California

Presiding:
Pat "Ziggy" Zicarelli, Chair
Linda Harrison, Vice Chair
Steve White, Vice Chair

Executive Committee Liaisons:
Annette Graw
Kevin Brown

Staff:
Alex Creel
Stan Wieg

I. Welcome and Opening Remarks - Pat "Ziggy" Zicarelli, Chair

II. Review of Reorganized Policy Committee Structure

III. Legislative Overview
a. Member Mobilization Report - DeAnn Kerr- Oral update from staff on member mobilization programs for 2010.

b. Budget and special sessions - Oral update on the latest developments in the on-going state budget confrontation, with emphasis on its potential effect upon REALTORS®.

c. Considerations in sponsoring legislation* - Please see included Issues Briefing Paper on factors that should be taken into consideration in deciding whether to sponsor legislation to achieve policy objectives.

IV. 2010 Sponsored Legislation - Please see the State Legislative Program Report on the car.org website for a more complete description of sponsored legislation and real estate related legislation of others.

a. SB 206 (Dutton) - REO homebuyer tax credit - C.A.R. is sponsoring SB 206, which as introduced, would have, like federal law, created a first-time homebuyer's tax credit, equal to 10% of the sale price of a home, not to exceed $8,000, for homes purchased as the principal residence of the taxpayer. Due to the state's fiscal crisis, C.A.R.'s Board of Directors at its June 2009 meeting decided to limit this proposed tax credit to REO properties purchased as a principal residence by homebuyers. The bill will be effective for one year from the date of its enactment. SB 206 was amended to utilize a funding source from federal stimulus funds instead of the state general fund. Unfortunately, this source proved to be unavailable for tax credit purposes. Efforts are continuing to be made by C.A.R. to locate a federal funding source for this tax credit.

b. Local property maintenance ordinances - This legislation will pre-empt overreaching local vacant property maintenance ordinances that may adversely effect the market or unfairly expose REALTORS® to liability.

c. Anti-Deficiency protection - This legislation will extend the existing borrower protections against personal liability (beyond the property) for a purchase money mortgage to a re-finance of that mortgage debt or additional debt for improvements to the extent that it increases the value of the property.
 
d. CID unit owner right to rent - Over the last few years, C.A.R. members noticed a trend among some homeowner associations to adopt restrictions that limit the ability of unit owners to rent their dwellings in common interest developments (CID). C.A.R. sponsored AB 2259 (Mullin) in 2008 which was approved, almost unanimously, by the legislature. Unfortunately, the Governor vetoed AB 2259 saying that owners of a unit in a CID agreed, when they purchased their unit, to abide by the rules of the HOA, and understood that any decision to change those rules would be governed by the HOA. C.A.R.'s Board of Directors has approved the sponsoring of legislation in 2010 to require two-thirds of the unit owners in a CID to approve, by written ballot, any amendment of the governing documents that would prohibit owners from renting or leasing their unit.

e. Portable appraisals - Current law permits, but does not require, lenders to utilize current appraisals ordered by a different lender. C.A.R.'s Board of Directors has approved the sponsoring of legislation in 2010 to require lenders to accept a "portable" appraisal at the request of the borrower. Put simply, if an appraisal is ordered and prepared for one lender on a particular property, the second lender would be required to accept that appraisal to support a mortgage even though the lender did not order that appraisal.

f. Appraisal Management Company (AMC) regulatory oversight - Appraisal Management Companies (AMCs) have grown enormously over the last two years, driven primarily by the Home Valuation Code of Conduct adopted by Fannie Mae and Freddie Mac. In 2009, C.A.R. supported SB 237 (Calderon), which was signed into law, and subjects AMCs to registration and review by the Office of Real Estate Appraisers (OREA). C.A.R.'s Board of Directors has approved the sponsoring of legislation in 2010 to clarify and enhance OREAs oversight of Appraisal Management Companies.

g. DRE "poison pill" reserve protection - During the 1990’s the Governor and Legislature both raided and borrowed DRE reserve funds to help balance out the budget’s general fund during budget crises. In response, C.A.R. sponsored legislation to create a two part “poison pill” that would roll back licensee fees to 1982 levels if DRE funds were again raided and/or borrowed by the general fund or if DRE reserves exceed 18 months. As a part of the 2009 budget bill, the legislature loaned $500,000 from the DRE operating reserve to the Department of Justice to start up a new foreclosure consultant registration program. This loan did not trigger the so-called “poison pill” statute and roll back license fees because the recipient was another special fund and not the state’s general fund. C.A.R.'s Board of Directors has approved the sponsoring of legislation in 2010 to prevent DRE reserve fund transfers (“loans”) to other special fund accounts.

h. Advance fee definition clarification - SB 94 (Calderon) was signed into law in 2009 to prohibit "cash up front" loan modification contracts. C.A.R. negotiated amendments with the author and DRE to clarify the definition of an advance fee and to ensure licensees’ ability to engage in a fee for service contract (e.g. a listing agreement). Even with C.A.R.’s amendments, the current statute is confusing. C.A.R.'s Board of Directors has approved the sponsoring of legislation in 2010 to clarify the current "advance fee" statute established by SB 94 in order to make very clear that fee for service contracts do not trigger the advance fee requirements.

V. Reports of Policy Committees - Please see included Issue Briefing Papers for additional information on issues considered by policy committees.

a. Housing - Le Francis Arnold
Governor's Proposed Housing Tax Credit* (As announced in his January "State of the State" Message.) - Please see included Issues Briefing Paper on the Governor’s proposed housing tax credit. The attached IBP weighs the legislative environment surrounding the Governor's proposed tax credit as well as the options available to C.A.R. if this proposal acquires "legs."

b. Land Use and Environmental - Phyllis Carmichael

c. Taxation and Government Finance - Dennis Badagliacco

d. Transaction and Regulatory - Liz Fitzgerald 
1. DRE increased fines and penalties* - Please see included Issues Briefing Paper on a proposal regarding increased fines and penalties. No legislation or regulation is authorized now.

2. DRE cost of prosecution recovery* - Please see included Issues Briefing Paper on DRE recovery of costs of prosecution from a disciplined licensee; No legislation or regulation is authorized now.

3. DRE changing 4-year license to 2-year license* - Please see included Issues Briefing Paper on changing (shortening) the term of the real estate license. No legislation or regulation is authorized now.
VI. Ballot Propositions* - Please see included Issues Briefing Paper on qualified ballot propositions for the June and November election ballots.
PROPOSITION NUMBER PENDING: Elections: Open Primaries. Legislative Constitutional Amendment - This proposition proposes to establish the “Top Two Candidates Open Primary Act,” which will require all state and congressional candidates, regardless of party registration, to be listed on a single primary election ballot.
VII. Other
VIII. Adjournment