All the piercing analysis in last month’s Update was for naught. With the excuse that they didn’t know what they were voting on when they approved it (where else have I heard that one recently?), the Arizona Legislature repealed the law making a defaulting borrower liable for the difference between the value of a residence and the amount borrowed if the borrower didn’t live in the residence for at least six months. The law was adopted in early July and repealed at the beginning of September, making this what must be one of the Legislature’s fastest about-faces ever.

Just to be clear, the Legislature adopted, and Governor Brewer signed, a bill during the just completed special session that simply removed from the “anti-deficiency” statute the words that were added by the amendment that was adopted at the end of the last regular session. Since the effective date of legislation adopted in the last regular session hadn’t arrived yet, and since the bill adopted in the special session contained a provision making it effective before that date, the amendment never took effect. In other words, “never mind.”

As long as I’m on the subject, here are a few other tidbits that are in the bill adopted in the special session:

• In a non-judicial foreclosure (a trustee sale) on a single family residence, the notice of trustee sale must be mailed to the property address even if the borrower has a different address. This is to provide notice of the trustee sale to non-borrower occupants of the property. The occupants get notice anyway because the notice of trustee sale must be posted on the property. I suppose the mailing requirement makes it double-sure that the occupants will know that there is going to be a foreclosure, and maybe lets them know sooner.

• Shifting gears slightly, the bill also says:

Beginning June 30, 2009 through June 30, 2011, any new or modified residential or commercial building code or other related code that is adopted by a municipality does not apply to a residential or commercial building that received a final site plan or subdivision plat, planned area development or similar approval by a municipality before June 1, 2009. This Section does not prohibit any code changes to the extent and duration required to comply with conditions for federal stimulus funding.

I think this means that if you got your site plan approved before June 1 of this year, any changes the city makes in the building code don’t apply to the buildings you’re going to build on that site if you finish the project by June 30, 2011. Unless of course the changes are required to comply with conditions for federal stimulus funding, whatever those might be (?).

• A residential landlord is no longer required to inform his or her tenant that a free copy of the Arizona Residential Landlord and Tenant Act is available through the Arizona Secretary of State’s office. Now the landlord must inform the tenant that the Arizona Residential Landlord and Tenant Act is available on the Secretary of State’s website. They’re dealing with this kind of minutiae in a special session that’s being held because the state has a budget crisis?


I found this item on a web site I recently discovered called “Club for Growth’s Dumb Laws” ( According to that site, the item is from the Honolulu Advertiser newspaper:

A new bill signed into law… has some frequent Las Vegas visitors and local CPAs scratching their heads.

[N]o longer will gamblers be able to offset their winnings with their losses for Hawai’i state income tax purposes. Previously gamblers would be taxed only on their net winnings, but now they will be taxed on gross winnings.

A Hawai’i resident who wins $10,000 in a year, for example, and loses $9,000 in the same year used to be taxed only on the $1,000 in net winnings. Under the new law, that resident would be taxed on the full $10,000 in winnings.

Even if you end up a net loser, you will still be taxed on whatever you won along the way.

Dennis Kohara, a certified public accountant in Honolulu, called the law “ridiculous.” “You sit down at the blackjack table. You win a hand. You lose the next one. You win another hand. You lose the next one,” he said. And, under the new law, you now owe taxes on all the winning hands, which are not offset by any of the losing hands, Kohara said.

What a great idea! Let’s apply this to everyone! So, when I buy something from a retailer, then return it and get a refund, the retailer still has to pay tax on the income from the sale! Or, when your shares of stock increase in value from $1 to $100, then go back down to $50, then you sell them, let’s tax you as if your gain was $99, not $49! It’s a bonanza for the taxing authorities! And what fun for them to enforce!