CBPA's California Legislative Update 1/24/2020
- LLC – BROKER BILL PASSES COMMITTEE UNANIMOUSLY
- PERSONAL SERVICES CONTRACTS – OPPOSE
- COMMUNITY AIR PROTECTION PROGRAM INPUT SOUGHT
- NEW EMPLOYMENT LAWS – INCLUDING LACTATION AND INDEPENDENT CONTRACTORS
- CBPA 2020 CALENDAR
LLC – BROKER BILL PASSES COMMITTEE UNANIMOUSLY
After years of trying, and months of negotiations with interested stakeholders, we are pleased to report that our sponsored bill, AB 687 (Daly; D-Anaheim) to allow limited liability companies (LLC) to operate as a real estate broker has moved through the Assembly Judiciary Committee and, yesterday, the Appropriations Committee, on bipartisan votes.
Real estate broker licensing was not extended to LLCs when other types of licensing were extended to LLCs over 20 years ago because at that time our industry standard was to operate as corporations. Over time the business has shifted and now many companies within the real estate industry use LLCs extensively to hold and operate real property. AB 687 updates the statute to reflect that evolution in the industry and allow brokers to operate as an LLC.
The Department of Real Estate thinks that the bill will be popular with licensees estimating that a third of California’s 130,000 licensed brokers would take advantage of law should it pass.
Enabling brokerage firms to form as an LLC will allow greater flexibility in management and operations which will be particularly helpful for smaller firms. AB 687 also will enable a savings of both time and costs for these firms as operating as an LLC means more streamlined entity reporting and filing requirements than a corporation.
Finally, AB 687 will simplify taxation at the entity level as gains and losses are passed through and taxation occurs at the individual owner level. Although Subchapter S corporations do offer the same income tax pass-through feature, limitations on number and types of owners and other restrictions make the Subchapter S vehicle less readily available.
The realtors have expressed concerns with several portions of the measure and we hope to work with them to craft language that will allow the policy to move forward.
We thank Assemblymember Tom Daly from Anaheim for being our champion on this important policy change. The bill will next be heard in the Assembly Appropriations Committee next week.
PERSONAL SERVICES CONTRACTS – OPPOSE
As part of an employer coalition, we OPPOSE AB 790, which would require that targeted companies provide notices to personal service workers of another entity regarding the personal service workers’ right to form or assist labor organizations as permitted under federal law.
Specifically, AB 790 requires that the Department of Industrial Relations identify employers with a market capitalization of at least $1,000,000,000 and owns, operates, maintains, or rents any building in California. Those employers who enter into a personal service contract with a separate entity would need to provide the employees of that separate entity with specified information regarding the employees’ right to form or assist labor organizations as provided for by federal law.
“Personal services” is broadly defined as janitorial, housekeeping, custodial, food service, laundry service, window cleaning, bus driving, security guard, or any other “similar services” as the Department of Industrial Relations (DIR) identifies.
From a practical standpoint, this bill is nearly impossible to ensure compliance because AB 790 would require that a client company provide notices to workers of another entity. How is the client company supposed to ensure that employees of another entity are receiving notices from the client company?
For example, what if a different window cleaner cleans the outside of the building because another window cleaner called in sick. Does the replacement window cleaner need to be provided the notice if they have never received one from the client company? How is the client company supposed to keep track of the fact that a new window cleaner cleaned their windows that day and did or did not receive the required notice that day or previously?
Compliance becomes even more concerning considering the broadly defined entities it would apply to. For example, the bill encompasses public companies whose evaluation is over $1,000,000,000; however, the client company does not need to be headquartered or own property in the state for AB 790 to apply, simply renting “any” property in California suffices. Thus, a client company would need to ensure that they provide these notices to personal service contract workers providing services at a rental property when the client company doesn’t even have business in California, but simply rents property in the state.
The bill is on the Floor next week and we oppose.
COMMUNITY AIR PROTECTION PROGRAM INPUT SOUGHT
Assembly Bill 617 signed into law in 2017, directs the California Air Resources Board to establish the Community Air Protection Program. The program a community-focused action to reduce air pollution and improve public health in communities that experience disproportionate burdens from exposure to air pollutants.
On September 27, 2018, the Board selected ten communities for the first year of this program to implement community emissions reduction programs, community air monitoring, or both. At the same meeting, the Board also approved the “Community Air Protection Blueprint” (Blueprint), which contains detailed requirements for community emissions reduction programs, community air monitoring plans, and other elements of the Program.
CARB will conduct a public meeting in Fresno to consider the South Central Fresno Community Emissions Reduction Program. Businesses located in Fresno are sought to review the program, policies, and provide input to the board. Click here for more information.
NEW EMPLOYMENT LAWS – INCLUDING LACTATION AND INDEPENDENT CONTRACTORS
On January 1, hundreds of new laws came into effect. Our friends at Cox, Castle & Nicholson have provided some information on the high priority laws that our industry should be immediately aware of. Many of these have been covered in past eWeeklys, but we are providing again because it’s so important your business know about these new laws and get into compliance.
Click here to read the list which covers everything from the new Independent Contractor law you have read so much about, to new Lactation in the Workplace accommodation requirements.
CBPA 2020 CALENDAR
Wednesday, February 26
CBPA Winter Board Meeting
Cal Chamber, Sacramento
Thursday, April 2
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
