CBPA's California Legislative Update 02/28/2020
- INDUSTRY LEADERS GATHER IN SACRAMENTO
- KEEP CALIFORNIA SAFE INITIATIVE
- AIR CRE INTERVIEW WITH JON COUPAL ABOUT SPLIT ROLL
- BIRD STRIKE! REGULATIONS BEING CONSIDERED
- BILLS! BILLS! BILLS!
- HOUSING FEE REFORM BILLS
- SAVE PROP 13!
- CBPA 2020 CALENDAR
INDUSTRY LEADERS GATHER IN SACRAMENTO
Leaders from the commercial, industrial, and retail real estate sectors gathered in Sacramento this week to chart the legislative and regulatory course for the coming year at the first California Business Properties Association (CBPA) meeting of the new decade. Issues ranging from the Governor’s proposal to eliminate homelessness and enable more housing, to a review of legislation introduced so far were discussed.
After a morning of policy discussion, the group was joined by veteranAssemblymember Jim Cooper (D-Elk Grove) who talked about life under the Dome and gave our leadership first-hand insight about some of the Governor’s budget proposals and talked about upcoming elections.
The CBPA Board consists of leaders from all facets of our industry. They meet quarterly to discuss issues, provide input, and assure the strategic direction of policy positions in Sacramento reflect the priorities of member companies.
KEEP CALIFORNIA SAFE INITIATIVE
Assemblymember Jim Cooper, a retired Sacramento County Sherriff, also discussed the initiative which he initiated and is the main champion, to reduce crime. Officially known as “The Reducing Crime and Keeping California Safe Act of 2020,” which will appear on the ballot in November.
The initiative was drafted in response to AB 109, and Propositions 47 and 57, which collectively made some prisoners eligible for early parole, allowed for the reduction of some felonies to misdemeanors (including some crimes most people would consider violent), and has disrupted the collection of DNA which has been helpful recently in solving several “cold cases.”
One of the very tangible reforms this initiative is proposing within our industry, is that it revises the theft threshold by adding a felony for serial theft when a person is caught for the 3rd time stealing with a value of $250.
Prop. 47 changed the dollar threshold for theft to be considered a felony from $450 to $950. As a result, there has been an explosion of serial theft and an inability of law enforcement to prosecute these crimes effectively. According to Assemblymember Cooper, theft has increased by 12% to 25%, with losses of a billion dollars since the law was passed.
Like the split roll property tax initiative, the Keep California Safe initiative has yet to be assigned a proposition number. But you can click here to learn more about the campaign.
AIR CRE INTERVIEW WITH JON COUPAL ABOUT SPLIT ROLL
Mike Foxworthy, Jr., of Daum Commercial, and active with AIR CRE, recently interviewed Jon Coupal, President of the Howard Jarvis Taxpayers Association about split roll property tax.
AIR CRE is a member of CBPA which is the largest coalition of real estate groups on the West Coast.
In this podcast, Mike and Jon discuss the initiative on the November ballot, that if passed, will eliminate Prop 13 protection for commercial properties, with devastating effects on all aspects of the CRE industry.
“What these proposals do, is eliminate, for commercial property, the limitation on annual increases in taxable value."
“Commercial and industrial property would be reassessed on a continuing basis and the legislative analyst has projected that that would cost business owners and owners of industrial property 12 billion dollars a year.”
“Most small businesses in California rent their commercial property and most of those leases are NNN leases so the tax liability that is imposed on the property owner will automatically flow through to small businesses…”
Click here to listen or read the transcript.
BIRD STRIKE! REGULATIONS BEING CONSIDERED
As many of you know, birds flying into tall buildings is an issue that our industry has adopted mitigations to minimize. However, there are some that believe the state should adopt a stringent “Bird Strike” building standard to minimize the Bird v. Building collisions.
We believe addressing bird strike is better handled through a guidance document for use by architects and local jurisdictions where this is an issue (some areas are more prone to bird strike due to migratory issues). As an industry, are not unsympathetic to the issue, however, we don’t think a statewide building standard is warranted at this time and will be asking the commission to work on a guidance document, similar to how many “green building” issues have been handled over the years.
This has been proposed again and will be heard at the Building Commission hearing next week. We will be there to ask that the Commission consider a guidance document instead of a full blow building standard regulation.
BILLS! BILLS! BILLS!
Last Friday was the Legislature’s “Bill Introduction Deadline,” and the number of bills that went across the desk topped 2,300. You read that right – two thousand three hundred new bills for us to read, sort, prioritize, and work on your behalf!
At this point, we have already identified 315 bills that will have some impact on the commercial, industrial, and retail real estate industry, and we expect that number to climb to over 400 once we coordinate with other employer groups, and “spot” bills are amended with substantive language.
Here are a few of the interesting bills we are already working on:
AB 687 (DALY D) Real Estate Brokers LLC’s. This bill will allow real estate brokers and brokerage firms to incorporate as an LLC, as opposed to and S or C Corp.
SB 1247 (Stern D) Dual Agency Transactions. This bill is currently a “spot” bill, meaning it’s a placeholder, but it has been identified as a bill that will deal with dual agency real estate transactions. We have been told it will not be as extreme as the attempt to ban the practice from a few years ago, and we are working with the authors office to identify what changes to this area of law may be warranted.
AB 1997 (Nazarian D) Earthquake Standards. This bill is attempting to move the State of California towards a “functional recovery” standard for building codes as they relate to seismic events. Our industry supports strong seismic standards – our state has the most stringent in the nation – and we support measures that strengthen the peer-reviewed consensus-based code process.
AB 2053 (Rodriguez D) Trauma Kits in large buildings. This bill would require trauma kits with tourniquets in any building currently required to install an AED.
AB 3287 (Gloria D) Building Grades for Energy Efficiency. This bill would require large buildings, 50,000 s.f. or more, to post energy efficiency “grades” based on Energy Star.
AB 3211 (Bauer-Kahan D) Local Air Pollution Control Districts. This is currently a “spot” bill that deals with Air Quality Management Districts. Last year SCAQMD sought authority to become a taxing agency, and we are watching this bill closely to make sure it doesn’t become a vehicle for that entity or BAAQMD to become another layer of taxation on California businesses.
We are watching these bills, and many others, and engaging to assure the policy makes sense.
HOUSING FEE REFORM BILLS
A group of Assemblymembers including Rob Bonta (D-Oakland), David Chiu (D-San Francisco), Jesse Gabriel (D-Encino), Todd Gloria (D-San Diego), and Tim Grayson (D-Concord) have introduced a package of bills which are designed to combat the housing crisis in California by addressing issues related to fees:
AB 1484: Reform of the nexus standards that cities and counties use to determine their fees.
AB 1924: Requires jurisdictions to assess fees on a per-square-foot basis
AB 3144: State funding for waiver of impact fees on affordable projects.
AB 3145: Ceiling for development fees based on the median home price in a jurisdiction.
AB 3146: Housing data reports to the Department of Housing and Community Development.
AB 3147: Allows impact fees are payable under protest.
AB 3148: Reduced impact fees paid on affordable housing units built under state density bonus.
AB 3149: Notification for new fee or service charge.
In addition to these bills, nearly 60 bills have been introduced to address “affordable housing” and “homelessness” issues.
On initial look we are appreciative of these efforts and hope they pass in some form, as builders in this state face significant fees that can price some projects out of existence.
However, no amount of fee reform can replace the need to address and reform the ill impact that the California Environmental Quality Act (CEQA) and labor work rules are having on the skyrocketing price of homes and rent in this state.
SAVE PROP 13!
The campaign to save Proposition 13 against being dismantled by the split roll property tax measure on the November 2020 ballot is gaining momentum and is signing-up more people and companies every day!
Are you doing what you can to protect yourself from an $11 BILLION yearly tax increase?
Click here to check out the new website, Californians to Save Prop 13 and Stop Higher Property Taxes, now known as "Save Prop 13," and join the effort.
The website is where you will find information about the benefits of Prop. 13 and how removing protections from commercial properties will have a massively negative impact on the state’s economy.
CBPA 2020 CALENDAR
Thursday, April 9
CBPA Industrywide Legislative Meeting
Southern California
Tuesday-Wednesday, June 9-10
California Commercial Real Estate Summit
Cal Chamber, Sacramento
Thursday, November 5
CBPA Board Meeting & Industry Awards Dinner
The Renaissance Hotel, Newport Beach
