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2011 GAD Institute

2011 GAD Institute. August 25, 2011. Alexander E. Creel Senior Vice President / Chief Lobbyist California Association of REALTORS®. C.A.R. Sponsored Bills 2011. C.A.R Sponsored Legislation .

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2011 GAD Institute

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  1. 2011 GAD Institute August 25, 2011 Alexander E. Creel Senior Vice President / Chief Lobbyist California Association of REALTORS®

  2. C.A.R. Sponsored Bills 2011

  3. 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

  4. 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

  5. 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

  6. 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

  7. 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

  8. C.A.R Sponsored Legislation • SB 510 (Correa) - Establishes a designated officer requirement for managing real estate offices. • Pending on Assembly Floor

  9. 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

  10. State Budget Deficits: Recent Budget Turmoil

  11. First Quarter 2011Budget Deficit Projection According to the Office of the Governor - $26.6 billion

  12. 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

  13. 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

  14. Budget Deficit Projection Remaining Deficit - $15.4 billion $6.6b in additional revenues received by the State in early June

  15. 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

  16. 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)

  17. 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 !!

  18. 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

  19. 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

  20. 2011 State Threats State Budget - $?????? Tax Commissions Exchanges Flat Tax Transfer Tax Split Roll Withholding

  21. Mortgage Interest DeductionLegislative Analyst’s Office Conclusion 2007 “. . . 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 . . .”

  22. 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 . . .”

  23. Issues Briefing Papers September 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

  24. Task Force Reports September Meetings • Distress property progress report. Include dual track and press conference agenda • Political Activities Task Force • Report on the Public Policy survey

  25. Questions?

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