Even as CEA and the entire title and escrow community waits to see how the saga with the proposed regulations of the Department of Insurance plays out, a new legislative session has begun. And even while we know that “the only constant is change”, the change in the legislature for 2007 is positively crazy! Because of term limits, 36 of 80 Assembly seats changed hands in the November elections; of those, 33 had absolutely no prior experience in the legislature. Imagine running an escrow operation where over 40% of the employees are brand new! No, wait…

The challenge for CEA, and for all other groups with a stake
in legislation, is to begin acquainting all of these new members
with our issues. And it isn’t as if these newcomers are sitting around thinking about real estate issues 24/7 like we do!

Of course, it isn’t just that there are 33 brand new people in the Assembly. Staffs must be hired, offices situated, computers reconfigured, committees appointed, and all the rest. Thus, the early weeks and months of the legislative session, always a little chaotic, are especially full of change this year.

The challenge for CEA, and for all other groups with a stake in legislation, is to begin acquainting all of these new members with our issues. And it isn’t as if these newcomers are sitting around thinking about real estate issues 24/7 like we do! In order to vote on bills intelligently, legislators must begin to know a little bit about literally thousands of issues, and to accomplish this, they must begin to know thousands of organizations and their representatives. Further, for many, their only exposure to escrow, and real estate in general, was their purchase of a personal residence. We simply cannot expect them to understand the subtleties of AITDs, bulk sales, wire transfers, and all the other things that CEA members confront daily.

So, while new members are literally finding their way around the Capitol in Sacramento, the new session is beginning. If the past is any indication, there will be 2500-3000 new bills introduced before the deadline for introducing bills on February 23. People often ask why so many bills are introduced. There is both a cynical and a sincere answer. The cynical answer is that, just as the product for Intel is computer chips, the “product” of legislators is bills. If legislators are not passing bills, they may not feel productive, so the mission is to identify problems needing solving, and passing bills to solve the problems. Unfortunately, sometimes bills solve non-problems!

The sincere answer is that California law is highly statutory. In contrast with the federal system where Congress delegates a great deal of rulemaking authority to administrative agencies, California has codified a great deal of law in statutes. These statutes deal with an amazing variety of issues, and often require legislative correction and updating. For this reason, a large percentage of the bills passed each year are quite technical and non-controversial. Hence, the large number of bills.

After the February 23 bill introduction deadline, each bill must be read for possible effects on escrow. At least four or five dozen are certain to be relevant to CEA, whether relating to liens, recordings, mobilehomes, bulks, or others. These are thoroughly dissected and discussed by the CEA Bill Review Committee, with recommendations to the CEA Board of Directors for appropriate positions. These positions are then communicated to the legislature.

Over the years, CEA’s voice has been heard on literally dozens of issues in the legislature. Anyone who doubts whether the actions of the legislature can affect escrow practice need not say any more than “Radian Lien Protection”, or “real estate withholding”, or “assumable title”. These are all examples of issues in past years of critical interest to our industry.

Stay tuned … there will be issues again in 2007!

by Michael D. Belote
California Advocates, Inc., Sacramento

New Year,
New Legislators,
New Bills