2- Agenda Summary - Legislative Committee
Agenda Summary - Legislative CommitteeThursday, January 24, 2008
1:00 p.m. – 5:00 p.m.
Desert Vista Ballroom, Hyatt Grand Champions
Indian Wells, CaliforniaPresiding:
Bill Jansen, Chair
Heath Hilgenberg, Vice Chair
Patricia O'Neill, Vice Chair
Malcolm Bennett, Executive Committee Liaison
Jeanette Way, Executive Committee LiaisonC.A.R. Staff:
Alex Creel
Stan WiegI. Welcome and Opening Remarks – Bill Jansen, ChairII. Overview of the Legislative Climate - Member mobilizationreport – Oral report from DeAnn Kerr, Member Mobilization Director
- Extraordinary legislative sessions – Budget, Health Care, Water – Update from staff on progress of concurrent specialor extraordinary legislative sessions called by the Governor.
- Considerations in sponsoring legislation* Please see included Issues Briefing Paper on factors that merit consideration when deciding whether to commit C.A.R. to sponsored legislation.III. C.A.R. Sponsored Legislation
A. AB 1356, Houston, Agents of Equity Purchasers. This bill will enable legitimate agents to bring in offers from investor purchasers on properties subject to a notice of default (NOD). The bill will replace the current law's unworkable bond requirement with an ability to demonstrate an agent's financial responsibility by possessing E&O insurance. Hearing pending in Assembly Judiciary Committee.
B. SB ___, Machado, Mortgage Loan Broker Disclosure This legislation will include C.A.R. sponsored language requiring a buyer's agent to disclose to all parties whenever the agent under takes to represent the buyer on both the sale and the loan in that sale. The legislation is part of a larger loan regulation package sponsored by the Chair of the Senate Banking Committee
C. AB ___, Mullin, CID Preservation of Right to Rent This legislation will create a statutory protection for an owner's right to rent a housing unit in a CID, to the extent that the right to rent existed at the time the dwelling was acquired.
D. Sex offender status as “just cause” for eviction This legislation will establish a state law that preempts local “just cause eviction” rules to require local jurisdictions to include as “just cause” for eviction the presence of a listed sex offender that is evicted to protect a person at risk.
E. AB 1366, Portantino, Housing Impact Statement Requirement for Local Land Use Decisions This legislation is designed to ensure that when a local jurisdiction denies or prejudices a housing project, it considers the effect of that decision on the regional housing needs and the effect that a denial will have on neighboring jurisdictions.IV. Anti-Deficiency Rule – Possible Legislation* Please see included Issues Briefing Paper. The congress has recently passed HR 3648, which protects home owners from suffering tax consequences from the “phantom income” thatresults from the debt forgiveness of a short sale or foreclosure. California will be soon be considering similar legislation. The paper explores whether C.A.R. should sponsor its own legislation and whether legislation should include expansions of anti-deficiency protection for re-financed mortgages that normally do not enjoy such protection.V. Regulation of Home Inspectors* Please see included Issues Briefing Paper. The paper explores whether C.A.R. should sponsor legislation to require stricter standards for home inspectors, up to and including a contractor's license.VI. Department of Real Estate Oral report on new developments from the DRE.
A. Mortgage loan regulations – In response to SB 385, Machado, DRE and other financial regulators have issued emergency regulations to set common requirements that implement federal guidelines designed to improve the standards of real estate lenders.
B. License number on contact materials – possible legislation- A license number requirement for “first contact” materials soliciting consumers has reportedly been approved as part of DRE's sponsored legislation package. Similar language was included in C.A.R.'s SB 226, Negrete McLeod, which passed the legislature in 2007, but was vetoed for other reasons.
C. Subdivision disclosures for CID conversions - DRE has proposed new regulations that require the same disclosures for CID conversions as would be required for new developments.VII. Ballot Propositions for 2008* Please see included Issues Briefing Paper. Please note that the paper includes materials on new propositions and some propositions for which C.A.R. has already take a position.VIII. Reports of Standing Committees and Task Forces
A. Commercial Investment –
B. Common Interest Development – Susan Tilling
C. Equal Opportunity-Cultural Diversity - Raymond Rodriguez
D. Housing Opportunity – Le Francis Arnold
E. Land Use and Environmental – Liz Fitzgerald
F. Local Governmental Relations – Leslie McBride
G. Manufactured Housing – David Hale
H. Property Management – Kevin Brown
I. Real Estate Finance – Patricia Bouie-Hinds
J. Taxation – Skip Zeleny
K. Tax Basis Portability Task Force – Deborah Ritchey
L. Troubled Loan Task Force – Greg Galli
M. Mortgage Broker Licensing Task Force - Heide Wolf-Reid
N. Public Policy Committee Reorganization Task Force – Annette GrawIX. Bills of Others
SB ___, Machado; Conformity to federal safe harbor for debt forgiveness
Pending first hearing- Please see item IV above. This legislation is designed to create partial conformity to recent federal law which created a 3-year safe harbor against tax liability for the “phantom income” that occurs as the result of debt forgiveness in a short sale.SB 1007, Machado; IRC 1031 Exchange Accommodator regulation
Pending hearing. Please see also the issues Briefing Paper prepared for the Taxation Committee in October 2007SB 127, Kuehl; Timing of disclosures As introduced, this bill would have required all transactional disclosure documents to be delivered within three days of the “execution” of an offer to purchase. As amended, this measure would require all transactional disclosure documents to be delivered within ten days of the “execution” (by which the author means acceptance) of an offer to purchase. C.A.R. opposed SB 127 because it would have imposed a “one size fits all” time frame which would make compliance difficult for many transactions, and would not have allowed time frames to be negotiated. C.A.R. was successful in obtaining amendments that allow both parties to the transaction to agree to change, in writing, the time period for delivering transaction disclosures. Withthis amendment, C.A.R. had removed its opposition. The most recent amendments to the bill, however, have renewed C.A.R.’s opposition. As amended, SB 127 requires a separate document when both parties to the real estate contract negotiate for a disclosure delivery time longer than ten days and would not allow the agreement to be contained within a single contract or deposit receipt. C.A.R. opposes the bill because it would create unnecessary compliance burdens.Pending Assembly floor voteSB 464, Kuehl; 3-year pre-requisite for Ellis Act The Ellis Act prohibits any public entity from forcing owners of residential rental property to continue to offer their property for rent or lease. As introduced, SB 464 granted local governments the authority to require landlords of all rental property, including single family dwellings, to keep the property on the rental market for a minimum of 5 years after the purchase of that rental property. Furthermore, SB 464 requires landlords to give all tenants a one-year notice of termination of tenancy if even one disabled or senior citizen, defined as 62 years of age or older, resides within their rental units. SB 464 was amended to reduce the required operating time to a minimum of 3 years. The author offered to reduce the operating time to a minimum of 2 years, but was unsuccessful in garnering enough support to pass the bill on the Senate Floor. C.A.R. strongly opposed SB 464 because it discouraged investment in rental housing by placing a substantial limitation on a property owner’s right to legitimately take a property off the rental market, thus negatively affecting property values. Furthermore, no other business is required to operate for 3 years when they open for business.Reconsideration pending Senate FloorAB 239, Desaulnier; $25 recording fee surcharge for real affordable housing; Originally a re-introduction of SB 521 from 2006, AB 239 would have authorized Contra Costa County to impose a document recording fee surcharge of $1 per page after the first page on the recordation of real estate related documents. As amended, AB 239 wouldauthorize Contra Costa County, as well as San Mateo County, to impose a flat $25 document recording fee on all real estate related documents that are longer than one page. The revenue collected would be used for the development of affordable housing for extremely low, very low, lower and moderate income households. C.A.R. has historically viewed document recording fees as “transfer taxes” if they apply to the recording of documents facilitating the transfer of property. C.A.R. opposes AB 239 because it imposes a document recording fee without exempting documents already subject to the documentary transfer tax, and because the funds generated by the document recording fee would be used for purposes which bear no relation to document recording. Reconsideration pending Senate Housing CommitteeAB 1574, Houston; CBIA Private Transfer Tax bill; AB 1574 is the builder-sponsored response to C.A.R. sponsored SB 670. A loophole in California law lets developers and other non-government entities impose PTTs on homes every time the property is sold – with no oversight, no accountability and no limit on the number of separate private transfer taxes thatcan be piled onto a home. As introduced, AB 1574 legitimized the practice of imposing these “taxes” by making that loophole permanent. As amended, AB 1574 requires that the Department of Real Estate provide oversight of the imposition of PTTsand allows PTT revenue to only be directed to a public entity or a nonprofit organization providing a public benefit within the property’s region.AB 1574 allows the PTT to be imposed for a period up to 99 years, allocates a maximum of10 percent of the proceeds for administrative costs, caps the amount of the PTT at two percent of the home sale price and prohibits the use of PTT funds for lobbying. C.A.R. continues to oppose AB 1574 because it legitimizes PTTs.Pending Senate Committee voteX. OtherXI. AdjournmentNote: “*” denotes an item with accompanying written materials
