The California Assembly and Senate have now reached the effective mid-point of the 2005 legislative year, a date which brings to mind the old “glass is half-empty or half-full” analogy. The first half of the year has brought resolution to a number of problem bills, but the glass is still at least half-full of issues which must be addressed. And a legislature with half of the year remaining can still do lots of good, and occasionally bad, things.

By now the nearly 3000 bills introduced for 2005 have been heard in their initial policy committees, and those that survived are receiving votes on the floors of the Assembly and Senate. Those still alive after that winnowing process will undergo the same process in the other house. UTA has had a busy year already on a series of bills, but there is still much to be done. This is a good time to assess the status of a number of bills raised in the early months of 2005:

• AB 361 (Runner): Notaries Public. Initially would have created a new felony applicable to notaries who acknowledge instruments when signers do not personally appear before them. The author was advised that the language demonstrated a confusion about the notarial process. There was also broad opposition to the felony provisions. Currently the bill establishes misdemeanor penalties for willfully failing to perform the required duties of a notary. Passed the Assembly, pending referral to Senate policy committee.

• AB 394 (Niello): Housing Discrimination. Once again addresses the problem of old racial covenants and restrictions in deeds. Would simplify the process of eliminating unlawful covenants from the public record. As presently drafted, however, the bill would give those with an interest in property the unilateral right to amend their own CC & Rs. Pending hearing in the Senate Judiciary Committee.

• AB 459 (Oropeza): Supplemental Property Taxes. Initially would have required a seller of residential property to provide an estimate of the amount of supplemental property taxes which will be billed to the buyer by the county. After opposition, the bill was amended to instead require a separate disclosure that the buyer will be receiving a supplemental bill, and that these obligations are typically not paid through impound accounts. Passed the Assembly, pending assignment to a Senate policy committee.

• AB 619 (Leslie): Common Interest Developments. This bill is sponsored by a coalition of CID groups, and is intended as a more moderate alternative to the provisions of SB 137, described later. The bill proposes several changes to the assessment collection and enforcement process, including a requirement to offer homeowners payment plans, a meet and confer obligation between owners and the association, and personal service of notices of default. Unfortunately, in a parliamentary move, the Assembly Judiciary Committee has placed language in SB 619, that its provisions would not become effective unless SB 137 is also enacted. Pending hearing in the Senate Judiciary Committee.

• AB 827 (Goldberg): Student Loans. Intended to address problems with unscrupulous vocational schools, this bill proposes to make unenforceable any loan where proceeds are directed to unlicensed schools. Lenders, UTA and others objected that the bill could invalidate otherwise legitimate real estate loans. The author has decided to make AB 827 a two-year bill, meaning that it will not be enacted this year, while discussions unfold seeking a compromise.

• AB 885 (Keene): Foreclosures. This UTA-sponsored bill presently proposes two changes to foreclosure law. The first would clarify that last known addresses must be physical addresses, and that changes must be supplied by parties in writing. The second would require re-notice for sales occurring more than 180 days after recording the NOD. Other provisions revising the law on publication of notices were amended out of the bill due to intense opposition from the newspaper publishers association. Pending hearing in the Senate Judiciary Committee.

• AB 1078 (Keene): Contaminated Property. This bill is intended to address problems with property contaminated from methamphetamine production. Early versions of the bill raised concerns about how liens could be created and enforced on contaminated property. Later amendments seem to have removed these concerns. Pending in the Assembly Appropriations Committee.

• AB 1161 (Niello): Loans Secured by Personal Property. AB 1161 is designed to clarify the circumstances under which a real estate loan made or arranged by a mortgage broker may be secured by additional personal property collateral. Interested groups have questioned whether any clarification in this area is necessary. UTA has adopted an oppose position because foreclosures of mixed collateral loans may be affected.

• AB 1539 (Bass): Notaries Public. Sponsored by a law enforcement organization, this bill presently proposes a “mandatory reporting” obligation when notaries believe that a document is being signed by a person under coercion or undue influence, or when the person does not seem to understand the contents of the document. Objections have been raised due to the change in the role of the notary, and due to the mandatory reporting obligation. AB 1539 has been designated as a two-year bill to attempt to resolve the concerns.

• SB 137 (Ducheny): Common Interest Developments. This bill would substantially limit the use of nonjudicial foreclosure for delinquent assessment liens, and is basically identical to language vetoed last year by Governor Schwarzenegger. The CID community is very opposed, and UTA is opposed because the bill will dramatically change foreclosure practices. Well-publicized CID foreclosures thus far are making this an attractive target for action by legislators.