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Playing Musical Chairs in Sacramento

Michael Belote, Esq.,

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

January 3 marked the return of the California Assembly and Senate to Sacramento, to begin the second year of the 2021-2022 two-year session. The first order of business in the second year of every session is to process the straggling bills left over from 2021, which are still in their “house of origin”.  Known as “two-year bills”, the rule is quite simple:  Assembly bills must be passed by the Assembly, and Senate bills by the Senate, by January 31 of the second year. Bills which meet this deadline remain alive until the end of the session at midnight, August 31.  Those which don’t meet the deadline officially died on January 31.

This two-year bill deadline is of more than academic interest, because some of the most controversial bills from last year were held over for action in January.  Included in this list of “crunchy” bills was AB 1400, creating a breathtakingly expensive “single-payer” health care system in our state, and AB 854 modifying the “Ellis Act” for owners of residential real property wishing to evict tenants.  Both bills failed to achieve the requisite votes in the Assembly and died at the end of the month.

Next, the attention of the legislature turned to the deadline of February 18 for introducing new, 2022 bills. When that date passed, over 2000 new bills were introduced, most of them right around the February 18 deadline.  All of these bills have been read for potential impact on UTA members.  Beyond that, each bill will typically be amended perhaps four or five times before it passes or dies, and each amendment must also be read, because a bill which originally had nothing to do with UTA could suddenly be amended to be a problem.  The California Legislature is not referred to as a “bill factory” for nothing!

The 2022 legislative environment will be conducted in the face of three distractions. The first, no surprise, is the pandemic.  Although omicron may finally be receding, so far the legislative year has been largely remote.  Infection outbreaks have occurred within the ranks of legislators, staff and security personnel.  Most legislative staffers have been working from home, and nearly all public (and lobbyist) participation in hearings has been conducted via telephone conference calls.  This is far from optimal, as legislating is far better conducted face to face.

The second distraction relates to the Capitol building itself.  While the original Capitol, completed in 1874 and restored in 1980, is in beautiful condition, the office building “annex” attached to the Capitol was built in the late 1950s and never restored. Asbestos-ridden and non-ADA compliant, the building is decades past its functional obsolescence. Every legislator, plus the governor and lieutenant governor, has been moved out of the Capitol into a new office tower south of the Capitol, while the Capitol building itself is being rebuilt over the coming four or five years.  Everyone is now adjusting to this new arrangement, but for the foreseeable future, we will be “walking the halls” of this new office tower, not the Capitol itself.

The third distraction is the biggest one of all. Every ten years an independent citizens commission redraws the boundaries for state legislative and congressional districts. This means that every single legislator will run for reelection in a redrawn district.  Some legislators have been thrown into districts together, and must run against friends.  Some will see their ratio of Democrat and Republican voters change significantly, which can be either good or bad.  All of this uncertainty, plus the effects of the pandemic, is resulting in what has been described as the “great resignation” in the legislature.  A number of legislators have resigned outright, and many others have announced an intention not to run for reelection this year.  Musical chairs, indeed!

Of the more than 30 bills identified of potential interest to UTA, a number are very significant.  These include:

– AB 1837 (Bonta): Foreclosures. This bill proposes further changes to the SB 1079 post-sale process. Sponsored by an association of nonprofit land trusts, UTA is working closely with the author on this bill. We have made a number of suggestions to clarify the operation of SB 1079 and prevent fraud, and will have more to announce on the subject soon.

– AB 2170 (Grayson): Post-Foreclosure Sales. Sponsored by the California Association of Realtors, this bill proposes a sort of “First Look” program on properties after trustee’s sales. UTA is examining how this program might interact with provisions of SB 1079.

– SB 975 (Min): Coerced Debt. This bill would essentially make unenforceable against debtors any debt incurred by coercion. Real property-secured debt is not exempt from the bill, resulting in very uncertain impacts on foreclosures.

– SB 1323 (Archuleta): Equity Sales. This bill would very dramatically alter the foreclosure process, by creating a category of “equity sales” and requiring such properties to be listed for sale prior to foreclosure, with the trustee authorized to reduce the listing price if offers are not received within a 20-day period.  How this process might affect the actual owners of the affected properties is not entirely clear.

The UTA Legislative Committee will be busy in 2022!

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