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Capitol Reopens, Sort Of

Michael Belote, Esq.

By Michael Belote, Esq., California Advocates, UTA California Lobbyist,

This year has been full of surprises in Sacramento.  In the beginning months of the pandemic last year, most legislators were predicting a relatively minor impact on Capitol operations, but in fact the “people’s building” has been functionally closed for the first half of 2021.  Legislators were largely working inside the Capitol, but staff, lobbyists and the general public were allowed inside only on a very limited basis.

As we approach the final two months of the legislative year, the Capitol building has reopened on a limited basis.  At the present time, the staff is gradually returning to work onsite, but the public is limited to 500 persons per day in the Capitol itself.  Most believe that fully open proceedings will not occur until 2022, the second year of the current two-year session.

A second surprise relates to the state budget.  Economists had predicted a pandemic-based recession, and California leaders were bracing for a very substantial budget deficit.  Instead, due to the continuing strength of the stock market, capital gains-based tax revenues have increased, so instead of a deficit the state is now operating with a surplus in the tens of billions of dollars.  And this does not count tens of billions more coming to California from the various federal rescue plans.  Leaders in the legislature are working with Governor Newsom on a plan for the surplus, some of which will be spent on programmatic increases, and some dedicated to the “rainy day fund.”

Clearly, the economy is affecting Californians differently, and many in Sacramento believe that an “eviction tsunami” is still headed our way.  As this column is written, legislators are debating another extension of the eviction moratorium.  At this point, we are not hearing any significant discussion of mortgages and foreclosures, but this could still change in the remaining months of the legislative year, which ends on September 10.

Even so, UTA remains active in Sacramento, with nearly 30 bills in the active legislation folder.  One issue receiving significant attention relates to the implementation of SB 1079 from last year.  As all UTA members are likely aware, SB 1079 created a program where certain tenants and prospective owner-occupants could match or exceed the last and highest bid at a trustee’s sale within 45 days after the sale, and take the property.  The objective is to prevent owner-occupied neighborhoods from being dominated by large investors converting properties into rentals.

UTA worked hard with the author of SB 1079 on workability issues, but the implementing statute is quite complex.  UTA members have identified a number of ambiguities in the statute, and reported some evidence of people trying to create “straw-buyers” or otherwise posing as tenants, proposed owner-occupants, or even eligible nonprofit entities.  We have had extensive conversations with staff for the author of SB 1079, Senator Nancy Skinner, and staff for the judiciary committees in the Assembly and Senate.

Although the legislature is rapidly approaching the end of the legislative year, we remain hopeful that certain implementation questions identified in SB 1079 can be clarified in legislation this year.  Michelle Mierzwa and Andrew Boylan from the UTA Legislative Committee have dedicated substantial time and expertise to suggest clarifying amendments, and the discussion with staff in the Capitol has been quite productive. Changes which are deemed too substantial for cleanup this year may be pursued in 2022.

Additional subjects relevant to UTA under discussion in Sacramento include PACE assessments, further reform of debt collector laws, installment payments of property taxes, and remote online notarization.  On the latter issue, colloquially referred to as “RON”, a large coalition of real estate and notary organizations has been working with the new Secretary of State, Dr. Shirley Weber, and the new Attorney General, Rob Bonta, as well as various consumer and privacy organizations.  The bill proposing to extend RON to California, AB 1093 by Assembly Member Reggie Jones-Sawyer, remains in the Assembly and is a two-year bill, suggesting that enactment is unlikely this year.  But the group is very determined to see online notarization extended to California at the earliest possible time.

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