BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Tom Torlakson, Chairman
941 (Torrico)
Hearing Date: 8/30/07 Amended: 8/23/07
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, 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 $220
$220 Real Estate
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STAFF COMMENTS: 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, and 9) 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 accept written
comments on the draft 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, often there is not a qualified loan consultant
available who can answer questions from the borrower.
AB 941 is intended to result in streamlining and simplifying the
real estate disclosure process.