2011 GAD Institute

Alexander E. Creel

Senior Vice President / Chief Lobbyist

California Association of REALTORS®

August 25, 2011

C.A.R. Sponsored

Bills 2011

C.A.R Sponsored Legislation

- SB 458 (Corbett) – Expansion of SB 931 (2010) that requires 1st mortgage holders to accept agreed upon short sale as full payment of outstanding loan balance: Extends SB 931 to junior liens. Urgency

- Signed by the Governor

C.A.R Sponsored Legislation

- SB 150 (Correa) – Protects a CID unit owner’s right to rent – If owners had that right when unit was purchased – they continue to have that right as long as they own it.

- Signed by the Governor

C.A.R Sponsored Legislation

- SB 837 (Blakeslee) - Follow-up SB 407 (2009): Implements TDS disclosure requirement for the installation of water conservation devices in ALL housing.

- Signed by the Governor

C.A.R Sponsored Legislation

- AB 771 (Butler) – Statutorily details the materials that must be given to prospective HOA unit buyers; prohibits the bundling of those with other materials.

- On the Governor’s Desk

C.A.R Sponsored Legislation

- AB 278 (Hill) - Permit DRE to issue citations and fines > $2,500 for minor infractions and allows appeal through the current hearing process.

- Pending on Senate Floor

C.A.R Sponsored Legislation

- SB 510 (Correa) - Establishes a designated officer requirement for managing real estate offices.

- Pending on Assembly Floor

C.A.R Sponsored Legislation

- AB 392 (Alejo) - Require local governments to post meeting agendas and staff reports 72 hours prior to a scheduled meeting

- “Two Year” Bill

State Budget Deficits: Recent Budget Turmoil

First Quarter 2011Budget Deficit Projection

According to the Office of the

Governor

- $26.6 billion

Gov. Brown Proposed Budget $12.5b - spending reductions; $12b - revenue extensions; $1.9b - other

solutions

- Eliminate tax benefits for enterprise zone- Phase out redevelopment agencies - Program Reductions: $1.7b Medi-Cal; $1.5b CalWORKs; $750m

Dept. Dev. Services; $500m University CA; $308m 8-10% pay cut/state employees; $200m state gov’t operations

- Additional cuts to state gov’t, corrections, the judiciary and resources

- June Ballot Measure: 5 yr. extension of VLF, personal income tax and sales tax

Enacted Budget Solution - $11.2b $8.2b - spending reductions; $0.3b - revenues;

$2.6b - other solutions

- Program Reductions: $861m Mental Health Services; $82.2m Healthy Families; $1.127b CalWORKs; $1.78b In-Home Support Services;

$177m Supplemental SSI; $272.6m Dept. Dev. Services; $500m University CA

- Additional cuts to state gov’t, corrections, the judiciary and resources

- Increased higher education student fees- Loans, transfers, deferred payments and tax

enforcement

Budget Deficit Projection

Remaining Deficit

- $15.4 billion$6.6b in additional revenues received by the

State in early June

Additional Enacted Solutions in July - $ 9.6 billion

$4b - additional revenues (estimated); $3b – spending reductions; $3b – delayed payments

- Delayed payments and cuts to education- Eliminating/restructuring redevelopment agencies

- Cuts to the court system/court construction- Fee increase for rural homeowners - $90 ($150) increase

- VLF increase for drivers- Amazon Tax

Proposition 26

- Broadened the definition of a “tax” – now included many payments that used to be considered fees

- Some things remain “fees” (i.e., User fees; Property development charges; Property assessments)

Current Budget Situation

- As of August 16th, the CA state Controller shows revenues down 10.3% from the estimates in the

July budget

We will be short again !!

Shortfall Trigger Cuts Beginning December 15

- $1b shortfall = $600m in cuts

• Cuts to higher education, health and human services, public safety

• Increase community college fees by $10 a unit

• Increase fees for counties sending juveniles to state facilities

Shortfall Trigger Cuts Beginning December 15

- $2b shortfall = additional $1.9b in cuts

• Cuts to community colleges

• Shorten K-12 school year by 7 days

• Eliminate school transportation

2011 State Threats

State Budget- $??????Tax CommissionsExchangesFlat TaxTransfer TaxSplit RollWithholding

“. . . that a case can be made for not having a state MID. This is primarily because the deduction is an ineffective means of increasing homeownership . . .”

Mortgage Interest DeductionLegislative Analyst’s Office Conclusion 2007

Service TaxCommission on 21st Century Economy:

Findings September 1, 2010

Sales tax on ALL services

“. . . State tax rates on sales of goods and services could be set initially at about 4 percent . . .”

Issues Briefing PapersSeptember Meetings

- Confidential Brown Act hearings

- New issues following up on SB 458 and short sales, e.g. State Bar bill

- Foreclosure debt relief/dual track prohibition

- Mortgage Interest Deductibility

- Statutory definition of "cost effective" for retrofits.

- Considerations in sponsoring legislation 

Task Force ReportsSeptember Meetings

- Distress property progress report. Include dual track and press conference agenda

- Political Activities Task Force

- Report on the Public Policy survey

 

Questions?