“Character is like a tree and reputation like a shadow. The shadow is what we think of it; the tree is the real thing. “
Abraham Lincoln
Please join your CVAR colleagues for our Lincoln Day Breakfast on February 12th. Our breakfast will feature the newly elected members of the California Assembly – Anthony Adams – AD 59th, Charles Calderon – AD 58, Michael Eng – AD 49 and Dr. Ed Hernandez – AD 57. The breakfast will begin at 7:30 am at Blake’s Restaurant in Covina. Cost for CVAR members is $10.00 per person. Please RSVP to Bill Ruh – 909-305-8880 by Monday February 5th.
FEDERAL:
Brownfields Cleanup Expenditures: The general rule for the tax treatment of site preparation expenditures is that the developer must capitalize them into the basis of the land being developed. An exception to this rule expired as of December 31, 2005. The expired provision allowed developers to take deductions for the costs of cleaning up brownfields pollutants in the year the expense is incurred. H.R. 6111 renews the provision retroactive to January 1, 2006. The deduction will remain in effect through December 31, 2007. Notably, the legislation also expands the categories of pollutants eligible for the deduction to include petroleum products.
Construction of Energy-efficient Commercial Buildings: Legislation enacted in 2005 created a tax credit of $1.80 per square foot for the development of energy-efficient commercial buildings. The credit applies if developers adhere to guidelines issued by designated standard-setting bodies. As originally enacted, that credit was available for construction placed in service in 2006 and 2007. TRHCA extends eligibility for the credit through 2008.
Leasehold Improvements: Congress continues its stopgap approach to permitting a 15-year recovery period for leasehold improvements made either by or on behalf of tenants of non-residential real estate. The provision had expired as of December 31, 2005. Congress has renewed it retroactive to January 1, 2006. The provision will remain in effect through December 31, 2007. Had this extension not been enacted, the recovery period for 2006 and 2007 would have been 39 years.
Mortgage Insurance Premiums: The legislation included a one-year-only provision that would allow some 2007 home buyers to deduct the cost of their mortgage insurance (MI) premiums. The deduction applies only to MI policies issued in 2007 for homes purchased in 2007. The deduction would apply not only to private MI, but to FHA, VA and Rural Housing premiums, as well. The new deduction is available to individuals with less than $100,000 adjusted gross income on a joint or single tax return ($50,000 for married filing separately returns) and phases out for incomes above $110,000 ($55,000 for married filing separately). Individuals who claim the deduction are not permitted to prepay premiums that are otherwise due after 2007. The provision expires after 2007.
New Markets Tax Credit: The New Markets Tax Credit was created to facilitate business investment in low-income areas that create a so-called “community development entity” (CDE). The purpose of the CDE is to provide capital for creation of businesses in those communities. The tax credit is available for investors in those entities. The program was originally contemplated as an urban development mechanism. TRHCA extends the tax credit to designated rural areas, as well. A tax credit allocation of $3.5 billion is available for 2007. TRHCA provides an additional $3.5 billion allocation for 2008.
Photovoltaic and Solar Water Heating Property: A tax credit is available in 2006 and 2007 for owners of residential property who install certain qualified alternative photovoltaic and solar water heating property. TRHCA makes the credit available through 2008. Similarly, a tax credit available in 2006 and 2007 is now made available in 2008 for owners of certain commercial property that install these and similar alternative energy technology on their property.
Sale of Principal Residence - $250,000/$500,000 exclusion. In order to utilize the benefits of this exclusion, a home seller must have used the property as a principal residence for two of the preceding 5 years. A special rule was created for military and Foreign Service officers allowing them to suspend the 5-year requirement for as long as 10 years if they were on assignment. That special rule has now been expanded to include individuals who are on assignment from any of several designated intelligence or homeland security positions.
Veteran’s Mortgage Bonds: Proceeds from state-issued private activity bonds may be used to fund mortgages for veterans of active military service who are first-time homebuyers. TRHCA waives the requirement that the qualified veteran be a first-time homebuyer. Thus, mortgages can be offered to all qualified veterans, even if they have previously been homeowners.
STATE:
Beginning January 1st 2007 Californians will have 910 new laws on the books. With an unusually high number of legislators being termed out in 2006, lawmakers sought to leave a legacy and passed 1,172 bills. Governor Arnold Schwarzenegger signed 910 of them into law. Among those new laws are:
Brownfields. SB 989 (Senate Environmental Quality Committee) encourages investment in brownfields by limiting the liability associated with clean-up of contaminated properties.
Cellular phones: SB 1613 (Simitian, D-Palo Alto) bans drivers from using a cell phone in a moving vehicle unless it is a hands-free device. But this law doesn't take effect until July 1, 2008. Violators will face a $20 fine for a first offense and a $50 fine for each subsequent offense.
Employment/Workplace: Employers must display new employment posters in the workplace. The four mandatory posters are:
· The Department of Fair Employment and Housing (DFEH)-162 poster;
· Your Rights Under the Uniformed Services Employment and Reemployment Rights Act (USERRA) notice;
· The state minimum wage posting reflecting new rates for 2007 and 2008; and
· The Employment Development Department (EDD) Notice to Employees.
In addition California employers must distribute the following pamphlets to employees:
· For Your Benefit (DE 2320). This pamphlet explains California’s unemployment insurance and disability insurance programs and must be distributed when an employer discharges or lays off an employee, or places an employee on a leave of absence.
· State Disability Insurance Provisions (DE 2515). This pamphlet explains an employee’s disability insurance rights and must be distributed to all new hires and again if an employee goes out on disability leave.
· Workers’ Compensation Rights and Benefits pamphlets. Give all new employees the workers’ compensation pamphlet at time of hire.
· Sexual Harassment Information Sheet. Every California employee and independent contractor must receive a sexual harassment information sheet from his/her employer.
· Paid Family Leave pamphlets. This pamphlet explains California’s Paid Family Leave (PFL) program. Give it to new employees and employees requesting time off for a covered reason.
Enterprise Zones. AB 1550 (Arambula; D-Fresno) continues a tax credit to businesses while their enterprise zone is pending redesignation.
Farmworker Housing. SB 1802 (Ducheny; D-San Diego) permits growers to build housing for up to 36 farmworkers in group quarters to alleviate chronic farmworker housing shortages.
Lead Based Paint: AB 2861 (Ridley-Thomas; D-Los Angeles) Landlords who fail to remedy lead hazards face tougher penalties
Minimum wage: AB 1835 (Lieber; D-Mountain View) California's lowest wage earners will see their hourly pay go up by 75 cents to $7.50 starting Jan. 1. The minimum wage rate will get another 50-cent boost at the beginning of 2008.
Native American Sites: AB 2641 (Coto; D-San Jose) Requires the identified descendents of Native American human remains to make recommendations or preferences for treatment of those remains within 48hours of being granted access to a Native American burial site.
Phone records: SB 202 (Simitian; D-Palo Alto), prohibits anyone from selling or purchasing the telephone-calling records of another without the individual’s written consent.
Plumbing: AB 1953 (Chan; D Oakland) Lead plumbing: lowers maximum lead level in plumbing fixtures
Roofing Contractors: Assembly Bill 881(Emmerson; R-Rancho Cucamonga) Requires all roofing contractors to have workers' compensation insurance, even if they don't have any current employees. It orders annual inspections by insurance companies, and the removal of the roofing license from contractors that fail to comply.
Senior Citizens: SB 1018 (Simitian, D-Palo Alto) Will protect seniors by making bank, savings and loan, and credit union employees mandated reporters of elder financial abuse to Adult Protective Services or police. Health care professionals, social workers, nursing home workers and clergy are already mandated by law to report suspected elder abuse.
Small Business Advocacy: AB 2330 (Arambula D-Fresno) requires the state to study of the cost impact of state regulations on California small business.
Small Business Liaison: Improved Access to Government. SB 1436 (Figueroa; D-Fremont) seeks to re-establish the Small Business Ombudsman program to improve small businesses’ access to information on proposed regulations affecting their businesses
Small Business Emergency Planning: Assembly Bill 3058 (Figueroa; D-Fremont) Requires the Small Business Advocate to help prepare a small-business emergency and disaster preparedness handbook.
The law mandates every state agency to have a small business liaison, and requires them to create subsections on their Internet sites to collect information specifically relevant to small business.
Smoking in the workplace: Assembly Bill 2067 (Oropeza; D-Long Beach) Clarifies smoking prohibition in the workplace. According to the new regulation, it is forbidden to smoke, or knowingly permitting anyone to smoke, in any enclosed space except covered parking lots.
Swimming pools: AB 2977 (Mullin, D-San Francisco) Any new or remodeled pool or spa must include at least one safety feature to prevent drowning, under AB 2977 by Assemblyman Gene Mullin, D-San Francisco.
Tax deadbeats: AB 1418 (Horton, D-Inglewood), instructs the Board of Equalization and the Franchise Tax Board to make public a list of the top 250 taxpayers with delinquencies in excess of $100,000.
Tenants: AB 1169 (Torrico; D-Fremont) - Landlords must give a 60 day notice of eviction instead of the previous 30-day notice, before evicting month-to-month tenants who have lived in the rental for at least a year and have done nothing to warrant an eviction.
Workers’ Compensation: Designation of Physician. AB 2068 (Nava; D-Santa Barbara) Expands the definition of personal physician to include a medical group.
Looking to the future, California lawmakers introduced 132 bills after they made a brief return to the Capitol in December. These are just a trickle of what is sure to be an onslaught as the 2007 legislative year moves to center stage. Gov. Arnold Schwarzenegger has dubbed his highest priority for 2007: providing health insurance to the 6 million uninsured. Lawmakers already have submitted 24 bills devoted to health issues, including sweeping universal health care bills by both Assembly Speaker Fabian Nun ez, D-Los Angeles, and Senate leader Don Perata, D-Oakland. Although the bulk of the remaining bills introduced so far fall into the categories of Redrawing the political maps and marriage., REALTORS® should know that the CAR legislative plan will be comprehensive and will begin to take full form in the upcoming weeks.
Governor Schwarzenegger has signed an Executive Order Creating the Commission to Address Unfunded Health Care and Pension Liabilities. The Commission, will quantify governments' unfunded public employees' retirement benefits - namely, health and dental care benefits and pension obligations. The Commission will evaluate various approaches for addressing the liabilities and make a recommendation to the Governor and the Legislature. Additionally the Commission will identify the full amount of retirement health and dental benefits for which California governments are liable but which remain unfunded. Evaluate and compare the various approaches for addressing governments' unfunded retirement health care and pension obligations, and propose a plan to do so. The Commission will be made up of 12 members, six of whom will be appointed by the Governor. Three of the members will be appointed by the Speaker of the Assembly and three will be appointed by the Senate President Pro Tempore. The Governor will appoint a chairperson.
REGIONAL
San Bernardino County:
SAN ANTONIO HEIGHTS:
The San Bernardino County Board of Supervisors recently approved a $720,005 flood control project that will provide protection for residents in the unincorporated foothill community. Construction for the San Antonio Heights Storm Drain project involves capturing water at the point of entry, Paloma Curve and Ravina Curve, and redirecting it underground through 60-inch pipes along San Antonio Avenue to connect with the channel. The new storm drain will attach to an existing storm drain owned and operated by Upland.
LOCAL
CHINO:
Hormel Foods Corp. has acquired Provena Foods, a maker and distributor of pepperoni and pasta, for about $12 million. Hormel will also assume about $6 million in Provena debt.. Provena, of Chino, sells to pizza makers and packaged-food companies and anticipates annual sales of approximately $60 million. Under the terms of the agreement, each outstanding share of Provena common stock has been converted into the right to receive 0.08 shares of Hormel Foods common stock. Approximately 296,000 shares of Hormel Foods common stock are expected to be issued to the Provena shareholders.
CLAREMONT:
Negotiations between Claremont and the owners of Johnsons Pasture have still not still resolved the price of the land. A previous offer of $12 million did not meet State of California requirements to trigger a state grant. In order for Claremont to receive a $ 1 million grant, the total price for Johnsons Pasture could not exceed $11.5 million. Because Claremont let the purchase agreement lapse on December 1, the owners of Johnsons Pasture can field offers from other potential buyers. In November Claremont voters approved Measure S which authorizes the City to issue up to $12.5 million in general obligation bonds to purchase the 180 acre open space parcel.
COVINA:
COVINA - The City Council approved a downtown condominium project fueling a debate between slow-growth and high-density advocates. The 52-unit project, to be built on a 2.5-acre parcel on North Citrus Avenue, will replace a former RV storage lot, car wash and burger stand. Design plans from developer John Maddux show three-story, Spanish- revival style attached units with wrought iron balconies, lush landscaping. Units will range from 1,050 to about 1,700 square feet cost from the high $300,000s to around $500,000. A staff report stated the development would increase property tax revenues for the city from $5,900 a year to roughly $35,000. Additional community facility assessments on each unit would bring a total of about $24,000 each year. Maddux presented the council with letters of support from 12 of the 17 residential properties adjacent to the project, as well as letters from businesses across the street. The two dissenting council members, George Chadwick and Peggy Delach, objected to the General Plan amendment allowing the conversion of the lot from commercial to residential. The developer faces one more hurdle as current tenant P & G Burger claims his lease allows him to remain at the property until 2014.
DIAMOND BAR:
City officials unanimously approved an agreement land deal projected to bring in $1 million in tax revenues annually. Despite opposition voiced from environmentalists and county officials, the City Council passed a planning and pre-annexation agreement with Aera Energy, which wants to build 2,800 homes on 1,940 acres that could be annexed to the city. Also included in the proposed project is a 200,000-square-foot commercial development, a fire station, a kindergarten- through eighth-grade school, and opportunity for new parks and open space. Aera owns nearly 2,935 acres immediately south of Diamond Bar's boundary. Aera is also proposing to build 800 houses on 995 acres that fall in Los Angeles and Orange counties
GLENDORA:
Reacting in part to an ongoing lawsuit, Glendora city officials made updates to their public records policies to correct what they called out-of-date or illegal requirements. The council revoked a $25 fee for copies of maps and blueprints on Wednesday. A potentially illegal recommendation that would have charged "for the expense of the person operating the copy machine," on top of an existing $3-per-page fee, was deleted from the new rule. A lawsuit by Glendora resident Gil Aguirre, who has been in an ongoing disagreement with the city over the fees for a proposed lighting district, accused the city of having illegal requirements to access public records. Among other things, Aguirre contested the $25 fee the city eliminated in the ordinance.
ONTARIO:
A local family whose poultry farm sits in the middle of a giant housing development is hoping the project won't impact their business after a recent City Council decision. The council approved plans that keep two new streets off the land occupied by Jong's Egg Ranch, whereas previous plans had the roads crossing onto their property. The Council did allow a "right-of-way" that covers a portion of the 10-acre farm's land - which troubles the Jong family, despite promises that the developers won't encroach onto their property. The ranch on Edison Avenue is one of the few farms whose land was not sold to make way for the New Model Colony, a massive development of more than 20,000 homes planned for southern Ontario. The project is being built by a consortium of several large developers. The Jongs have been approached on several occasions by developers interested in buying their land, but the family wasn't willing to sell, even for more than what their property was worth.
POMONA:
After months of construction, Reservoir Street between Monterey Avenue and Second Street reopened to traffic.. At the same time East End Avenue will close to traffic from Via Pueblo to Third Street for what is expected to be 18 months. The opening of one street and the closure of the other is part of efforts to complete two underpasses that will facilitate traffic flow in the area at the same time that train traffic increases. At this time vehicle traffic is affected when trains making their way east from the ports travel through the area. With the closure of East End, Price Street will also close and become a permanent cul-de-sac, the statement said. School buses will be able to access Village Academy High School and Pueblo Elementary School by using Via Pueblo.
RANCHO CUCAMONGA:
Plans to build Station 177 on the southeast portion of Heritage Park were stopped when the draft environmental impact report recommended the fire district build its next station at an alternate site. Residents living near the Alta Loma park - many of whom are horse riders and owners - have been vocal against the station location, citing concerns over possible erratic horse behavior and losing public park space. The 40-acre Heritage Park is much-frequented by equestrians who take advantage of its trails and facilities. The City Council, acting as the Fire District Board, voted to approve the concept plans for Station 177 to be built on surplus flood control property on the west side of Hellman Avenue, south of Hillside Road. The approval gives the district the go-ahead to negotiate with the San Bernardino County Flood Control District on the new site. The county has appraised the property at $850,000. The city must also discuss with the county the need to fill and compact the site.
The city had introduced a Telephone and Online Permit System, or RCTOPS, which will let the public complete applications for certain permits and review the results of construction inspections online.
The new system will also let inspectors update information in real time via their cell phones.
Each year, the city issues more than 6,000 construction permits. RCTOPS aims to streamline the process by giving customers free access to the city's permit, plan check and inspection information 24 hours a day, seven days a week. For more information about RCTOPS, visit www.rctops.org or call Trang Huynh at (909) 477-2710, Ext. 4201
The California Department of Motor Vehicles is seeking developer interest in building a mixed-use facility at its property on 8629 Hellman Ave. The office, which once processed 276,000 transactions annually, closed in October 2000 because it was plagued with mold. It opened a temporary location on 8678 Archibald Ave. The DMV is hoping a developer will be interested in building a mix of business and residential facilities, which will include a DMV office, on Hellman Avenue. The single-story building's woes began in 1994 when it sustained significant water damage. The office was repaired several times before mold was discovered in the building in 1998.
SOUTH EL MONTE:
A housing developer building a mixed-use project to accommodate the elderly and shops is asking the city for nearly $5 million to complete it. DC Corp., in a letter, said it needed $4.8 million from the city's Community Development Commission to complete the second phase of the project, located at Durfee and Michael Hunt avenues. The developer paid for the first phase. When the project was first approved in June 2005 by the commission - which is comprised of the members of the City Council - there was no dollar amount attached to it, officials said. The first phase was the building of 10 single-family homes. Donald Cook, vice president of DC Corp. said that the second phase will consist of underground parking, 17,000 square feet of retail space underneath 72 senior apartments, according to the city's staff report. Of the 72 apartments, 60 will be set aside for low- and moderate-income elderly people. Rent for the six very-low income apartments will be about $454 monthly, low will be $533 monthly, moderate will be $924 monthly and the 12 market-rate units will be $1,350 monthly, according to city records. In the original agreement with the city, DC Corp. had pitched 21,000 square feet of retail space underneath 60 senior-housing units.
UPLAND:
The city's first fire station, at 171 E. D St., will be transformed into a museum filled with memorabilia such as equipment and photographs from the early 1900s to the present day. Built in 1915, the station went up after a fire spread through Upland destroying businesses on the east side of Second Avenue, south of Ninth Street. The station housed the city's first motorized fire engine. The San Bernardino County Board of Supervisors approved an agreement with Upland recently to provide funding for the restoration of the station. Money for the museum came after Supervisor Paul Biane requested $125,000 in one-time funding last year to help create an emergency operations center at the Walker-Eisen Building on East D Street. But city officials decided not to pursue the project and requested the funding be redirected to the fire station.