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Realtors Lose First Round in Title Industry Fight

September 19, 1997

Round one of what looks to be a major bout in the Legislature between California Realtors and the title insurance industry was a clear victory for the title insurance industry.

The 95,000-member California Assn. of Realtors saw its flagship piece of legislation go down to defeat in the Assembly on Sept. 12, the last day of the session. SB 319 would have allowed holders of residential or commercial title insurance to keep their old policies and update them with cheaper interim policies when they refinance.

In a major effort, the California Land Title Assn. rallied opposition from attorneys, urban leagues, building associations and county tax collectors to convince legislators to defeat the measure.

Realtors have been pushing to open up the title industry to competition, arguing that much of the information needed for title searches is routinely--and more cheaply--available on the Internet.

In the "natural evolution in the market" that they envision, the corner title office would disappear, replaced by broker-conducted instantaneous electronic title searches and services at a fraction of the $800 to $1,000 now charged.

"Title companies themselves do their searches online," said Stan Wieg, a lobbyist for the California Assn. of Realtors. "It's only a matter of time before consumers and lenders do them online too.

AB 308, by Assemblyman Bill Leonard (R-San Bernardino), is one Realtor-sponsored bill the industry did manage to see passed, with gubernatorial approval expected.

It amends the state commercial bribery statute to create a new crime for a title or escrow company employee to offer a bribe, or for a broker to accept one, to place business with a particular company.

Finally, a title industry-sponsored bill, SB 997 by Sen. Adam Schiff (D-Burbank), will set up an investigative unit within the Insurance Department to go after title employees who offer illegal rebates.

Funded by $280,000 collected annually from title companies, the new division has been welcomed by the Insurance Department, which lopped 10 investigators from its rolls last year.

Realtors declared a temporary truce to back this bill, but vow to return next year with a renewed assault on what they call the title industry's monopoly on issuing insurance.

HOT BILLS

Stiffer Penalties for Violating Labor Laws

* Bottom line: Would increase penalties, up to $1 million in some instances, for a willful violation of occupational safety or health standards that result in serious injury or death.

* Chances: Despite heavy opposition from business interests, AB 1015 passed the Senate by a 23-16 margin and the Assembly on a 43-34 vote during the last week of the legislative year.

* Next step: The bill awaits action by Gov. Pete Wilson.

* Details: AB 1015 author Wally Knox (D-Los Angeles) can be reached at (916) 445-7440.

Expanded Subpoena Power

* Bottom line: An oil refinery fire in Contra Costa County prompted legislation that would expand the ability of county health departments to subpoena businesses when a hazardous material has been released into the air. The California Chamber of Commerce and other business advocates oppose the measure, calling it one of the worst environment-related bills of the year for its potential impact on business.

* Chances: AB 1190 passed the Senate by a 22-17 margin last week. The Assembly OKd changes made in the upper house on a 41-37 vote.

* Next step: The bill is on Gov. Wilson's desk, where it awaits action.

* Details: AB 1190 author Tom Torlakson (D-Antioch) can be reached at (916) 445-7890.

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