Michael Belote
By Michael Belote, Esq., California Advocates, UTA California Representative
For those even casually following California politics, the November 2016 general elections moved an already blue California to electric blue, neon blue, pretty much the bluest blue you can imagine. Both the California Senate and Assembly are now constituted with two-thirds supermajorities by Democrats, every statewide constitutional office is held by a Democrat, and in the U.S. Senate race, no Republican even appeared on the November ballot, because none finished in the top two.
Experts believe that it is possible, if not likely, that no Republican candidate will finish in the top two for next year’s gubernatorial race either, leading to another Democrat-on-Democrat general election contest. We are really, deeply blue and potentially becoming even bluer.
In theory, having two-thirds supermajorities gives Democrats the power to raise taxes, place items on the statewide ballot, and override governor’s vetoes, all without Republican votes. In reality, the situation is far more nuanced. When it comes to defeating undesirable legislation promoted by Democrats, or passing legislation opposed by Democrats, it is certainly true that the supermajorities make the mission far more difficult. To defeat majority vote bills, for example, opponents must convince 15 Democrats in the Assembly, or 7 in the Senate, to vote against their Democratic colleagues. It happens occasionally, but it is very difficult.
When it comes to taxes, the equation is different. Under the California Constitution, tax increases require a two-thirds vote by each house of the legislature. This was achieved, barely, in the recent vote to increase gas taxes and car registration fees. But when one Democrat in the Senate refused to vote for the gas tax package, Democrats had to convince a Republican Senator to vote for the package. The one Senator they found is scheduled to leave office next year due to term limits. And one Democratic Senator who voted for the package may be facing a recall later this year. The vote to raise gas taxes and registration fees was a tough, wrenching decision for legislators.
The point is that passing tax increases is very hard, even with two-thirds supermajorities. This is relevant to a bill opposed by UTA, SB 2. This bill would impose a $75 surcharge on recording real estate documents, including notices of default and notices of sale, in order to fund affordable housing. This represents a tax increase, and therefore requires a two-thirds vote. Even though California has been described as having not a housing crisis, but a housing catastrophe, obtaining a two-thirds vote and a Governor’s signature on SB 2 is going to represent a big challenge for proponents.
SB 2 is hardly the only issue pending in California of interest to UTA, and some of the others are majority vote bills. We have been working on SB 242, for example, designed to provide additional consumer protections in PACE transactions. In general, the idea is to treat PACE loans more like real estate loans, but the devil, as they say, is in the details. UTA has been evaluating language relating to forbearances to make sure that SB 242 does not impact nonjudicial foreclosures.
Another majority vote bill is UTA-sponsored SB 467 (Morrell). The bill is intended to address an inadvertent omission in legislation from last year relating to trustee’s fees. While last year’s bill increased base fees by $50, the bill failed to raise the fee applicable upon the trustee’s sale. This year’s bill will correct that omission, but we have been trying to also address the situation where trustees are being fined for the failure to register, inspect, and maintain foreclosed properties. We believe strongly that these are not trustee functions, but state law expressly gives local governments the power to establish their own rules in this area. Thus far we have been unable to convince legislators to override local government authority on this subject, but meetings are being scheduled with representatives of cities and counties to continue the discussion.
In all, UTA is following more than 60 different pieces of legislation for the 2017 legislative year. The mission is to protect nonjudicial foreclosure practice and trustees generally, and UTA is quite successful. But the next time you wonder how the legislature could possibly pass a given bill, or why the Assembly and Senate might refuse to pass a particular idea, remember the lyrics of the old song “blue on blue, heartache on heartache”!