BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Tom Torlakson, Chairman
941 (Torrico)
Hearing Date: 7/16/07 Amended: 7/3/07
Consultant: Maureen Ortiz Policy Vote: B. F. & I. 11-0
Judiciary: 5-0
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BILL SUMMARY: AB 941 requires the Department of Real Estate to
review the real property transaction disclosure process, and to
post a draft report on its Internet Web site by July 1, 2008.
The Department would be required to consult with other
departments as necessary, hold two public hearings, and submit a
final report to the Legislature by January 1, 2009.
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Fiscal Impact (in thousands)
Major Provisions 2007-08 2008-09 2009-10 Fund
Admin expenses $330
$330 Special*
*Real Estate Fund
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STAFF COMMENTS: This bill meets the criteria to be referred to
the Suspense file.
The Department indicates total costs of $661,000 for the one
year period of January 1, 2008 through January 1, 2009. The
cost estimate is divided into numerous steps, each based on
hourly costs and includes the following: 1) having to first
determine the intent of each disclosure by reviewing enabling
legislation, 2) reviewing representative business uses of each
disclosure, 3) analyzing the historical and economic impact of
each disclosure on the public, 4) itemizing impact by region and
population groups,
5) preparing gap analysis between intent and actual impact, 6)
determining recommendations to address any gaps found, 7)
drafting those recommendations,
8) preparation of the draft report, 9) holding public hearings,
and 10) preparation of the final report.
There are currently over fifty real estate disclosures that are
now required. The Department of Real Estate (DRE) will be
required to review each one and report on recommendations on how
the process can be improved to ensure a consumer's ability to
better understand the terms of each transaction. The report
will include recommendations on which state-required real
property transfer documents should be added, amended,
consolidated, made optional, or eliminated.
The draft report must be completed by July 1, 2008, be posted on
the Department's Internet Web site and be made available free of
charge to members of the public for review. The DRE will be
required to hold two public hearings, one in northern
California, and one in southern California. It will accept
written comments on the draft
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AB 941 (Torrico)
report through October 31, 2008, and shall submit the final
report to the Legislature by January 1, 2009.
The current disclosure requirements can be extremely
overwhelming to consumers. Many are several pages long, some
documents are duplicative, others supersede earlier provided
documents, and still other critical documents are not provided
until a purchaser is signing final papers. In addition, at the
time of closing, there is no one available who can answer
questions from the borrower. AB 941 is intended to result in
streamlining and simplifying the real estate disclosure process.