CBPA's California Legislative Update 9/27/19
- 2020 MAY SEE TAX BATTLE ROYAL
- SPLIT ROLL BALLOT MEASURE – “THREE TIME LOSER”
- LEGISLATIVE BILL WATCH
- GOVERNOR’S SIGNING MESSAGE ON AB 5
- CALCHAMBER STATEMENT ON AB 5
- LACTATION ROOM BILL SENT TO GOVERNOR
- RENT CAP / “JUST CAUSE” BILL SENT TO GOVENOR
- CBPA 2019/2020 CALENDAR
2020 MAY SEE TAX BATTLE ROYAL
Dan Walters, from Sacramento Bee Political Columnist, now writing for CalMatters lays out some thoughts on the looming expensive fight on split roll and other tax items in 2020:
Although the state is enjoying multibillion-dollar budget surpluses, thanks largely to a vibrant economy, California voters may face a bewildering array of tax increase proposals next year.
This seemingly contradictory situation is being driven by an assumption — probably accurate — that the November 2020 election will see a massive turnout of voters eager to oppose President Donald Trump’s re-election.
Those anti-Trump voters, it’s also assumed, would likely be willing to impose new taxes on corporations and wealthy individuals. So, tax advocates see it as a golden, even unique, opportunity.
One measure, which would remove some of Proposition 13’s property-tax barriers, has already qualified.
However, the union-led backers of that “split roll” measure, which would raise taxes on warehouses, hotels, office buildings and other commercial properties by an estimated $11 billion a year for schools and local governments, set it aside after spending several million dollars to qualify it. They are now proposing a substitute.”
Their initiative had drawn sharp criticism from county property-tax assessors about its workability and opposition from small-business owners who said it would raise their rents.
So, the backers, the “Schools and Communities First” coalition, made several revisions to quiet the critics before launching a new signature-gathering effort, although it’s uncertain the group will succeed.
The commercial real estate industry and its allies have pledged to spend $100 million to defeat the split roll measure. The California Taxpayers Association and others have formed “Californians to Stop Higher Property Taxes” to marshal opposition. And the California Chamber of Commerce has created the “California Tax and Budget Project” to block extension of sales taxes to services.
Click here to read the full story at CalMatters.
SPLIT ROLL BALLOT MEASURE – “THREE TIME LOSER”
Our friend Loren Kay, the President of the California Foundation for Commerce and Education, walks us through the “iterative” process the proponents next year’s split roll property tax measure are taking to try to tweak the measure in manner they better sell that stinkbomb to the voters:
Oops, they did it again.
Proponents have submitted a third attempt at a ballot initiative to create a “split roll,” hiking property taxes by up to $11 billion.
This latest version presumably won’t restart the clock, since it amends a month-old measure already being reviewed by the Attorney General and Legislative Analyst.
But the changes aren’t trivial. Most important, the new language would siphon off tens of millions of dollars to support the crushing implementation obligations on state and local governments. County state agencies must hire hundreds of new bureaucrats – tax collectors, appraisers, hearing officers, accountants and lawyers – to support the burdensome obligations newly delivered to state and local officials.
Tens of millions of dollars that will be intercepted before they can be used to hire any new school teachers, police officers or firefighters.
But wait, there’s more.
The measure requires that the State use general taxes to pay for the massive start-up costs to implement this tax hike, in advance of the first dollar to roll in from the new taxes. Even though local governments and schools will be the beneficiaries, money dedicated to state education, law enforcement and safety net programs must subsidize the hiring of new local tax collectors.
And if California were to suffer a recession after this measure passes? Doesn’t matter, proponents have given constitutional protection to these new lawyers, accountants and tax collectors – shielding the General Fund subsidies from any cuts that all other state programs would be subject to.
Even after making a third pass at getting it right, proponents have not abandoned Split Roll 1.0.
Though twice demeaned and found wanting by its own creators, the measure lingers in the ballot cue as a hedge against their inability to qualify version 3.0.
I can’t be the only one curious as to how proponents can justify keeping a ballot measure primed for a statewide vote after admitting and admitting again its inadequacies.
Click here to read the original story on Fox and Hounds.
LEGISLATIVE BILL WATCH
Below is a summary of bills that we are focused on that impact the commercial, industrial, and retail real estate sectors, during the final two weeks of the 2019 Session. The Governor has until Midnight on October 13 to sign or veto measures on his Desk.
AB 5 (Gonzalez D) Worker status: employees and independent contractors.
Summary: Addresses the Dynamex Court case on independent contractors. Amendments exempting commercial real estate brokers and brokerage firms are in the bill. Negotiating final amendments regarding business-to-business transactions and other technical issues.
Position: SUPPORT – SIGNED BY GOVERNOR
AB 51 (Gonzalez D) Employment discrimination: enforcement.
Summary: Prohibits arbitration agreements as a condition of employment.
Position: OPPOSE – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
AB 170 (Gonzalez D) Employment: harassment: liability.
Summary: Increases the amount of time employers can be sued and sets new standards for liability of sexual harassment in the workplace. Will increase litigation.
Position: OPPOSE – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
AB 485 (Medina D) Local government: economic development subsidies.
Summary: Requires local governments to receive comprehensive information about warehouse projects prior to releasing economic development incentives.
Position: OPPOSE – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
AB 520 (Kalra D) Public works: public subsidy.
Summary: Defines “public works” to include a project that receives a de minimis public subsidy less than $500,000 and 2% of the total project cost.
Position: OPPOSE – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
AB 547 (Gonzalez D) Janitorial workers: sexual violence and harassment prevention training.
Summary: Requires Janitorial Companies to provide specified training on sexual violence and harassment prevention.
Position: NEUTRAL. Negotiated AMENDEMENTS. – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
AB 684 (Levine D) Building standards: electric vehicle charging infrastructure.
Summary: requires the state to propose building standards for the installation of electric vehicle (EV) charging infrastructure for parking spaces for existing multifamily and non-residential developments.
Position: NEUTRAL. Assured bill doesn’t create a mandate or put building code in statute.
AB 729 (Chu D) Carpet recycling: carpet stewardship.
Summary: Triples the carpet recycling fee.
Position: OPPOSE – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
Summary: Allows local governments to get into lending which would destabilize banking through introducing non-fiscal requirements for loans.
Position: OPPOSE – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
AB 1066 (Gonzalez D) Unemployment insurance: trade disputes: eligibility for benefits.
Summary: Would allow striking workers to receive unemployment checks.
Position: OPPOSE – FAILED TO PASS LEGISLATURE.
AB 1080 (Gonzalez D) California Circular Economy and Plastic Pollution Reduction Act.
Summary: Would enact the California Circular Economy and Plastic Pollution Reduction Act, increasing fees and responsibilities of property owners to recycle and compost.
Position: OPPOSE – FAILED TO PASS LEGISLATURE.
AB 1100 (Kamlager-Dove D) Electric vehicles: parking requirements.
Summary: Allows EV parking space to be counted as at least one standard automobile parking space for the purpose of complying with any local minimum parking requirements.
Position: SUPPORT – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
AB 1188 (Gabriel D) Dwelling units: persons at risk of homelessness.
Summary: Puts requirements on residential landlords to allow tenant to allow people not on the lease to stay in dwelling.
Position: OPPOSE – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
AB 1281 (Chau D) Privacy: facial recognition technology: disclosure.
Summary: Requires a business in California that uses facial recognition technology to disclose that usage in a physical sign that is clear and conspicuous at the entrance of every location.
Position: OPPOSE – FAILED TO PASS LEGISLATURE.
AB 1478 (Carrillo D) Employment discrimination.
Summary: Creates a private cause of action against an employer for disputes regarding the right under the law to time off or reasonable accommodations to deal with issues such as jury service or related to being a victim of domestic violence, sexual assault, or stalking.
Position: OPPOSE – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
AB 1482 (Chiu D) Tenancy: rent caps.
Summary: Imposes a 5% plus inflation residential rent cap and codifies “just cause” eviction requirements.
Position: OPPOSE UNLESS AMENDED – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
ACA 1 (Aguiar-Curry D) Local government financing: affordable housing and public infrastructure: voter approval.
Summary: Lowers the vote threshold for raising local taxes to 55%.
Position: OPPOSE – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
SB 1 (Atkins D) California Environmental, Public Health, and Workers Defense Act of 2019.
Summary: Require agencies to take prescribed actions regarding certain federal requirements and standards pertaining to air, water, and protected species.
Position: OPPOSE. – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
SB 5 (Beall D) Affordable Housing and Community Development Investment Program.
Summary: Makes changes to the Enhanced Infrastructure Finance District (EIFD) law and Redevelopment 2.0. Makes it easier for local district to set up Tax Increment Financing for infrastructure.
Position: NEUTRAL. Worked to protect against unnecessary tax increases. – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
SB 44 (Skinner D) Medium- and heavy-duty vehicles: comprehensive strategy.
Summary: Requires the Air Resources Board (ARB) to update its 2016 mobile source strategy to include a comprehensive strategy for the deployment of medium- and heavy-duty vehicles in the state.
Position: SUPPORT – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
SB 54 (Allen D) California Circular Economy and Plastic Pollution Reduction Act.
Summary: Enacts the law to achieve a 75% reduction in single-use packaging and priority single-use plastic products by 2030. Puts onerous requirements on property owners and businesses.
Position: OPPOSE – FAILED TO PASS LEGISLATURE.
SB 127 (Wiener D) Transportation funding: active transportation: complete streets.
Summary: Requires CalTrans to design bicycle and pedestrian facilities on all projects the state undertakes. Estimated cost is in the billions to the state.
Position: OPPOSE – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
SB 142 (Wiener D) Employees: lactation accommodation.
Summary: Expands current lactation accommodation mandates for employers and requires the Building Standards Commission to design a guidance document. We negotiated significant amendments to this bill, including removing the mandatory building code provisions, however the employer requirements are onerous and expensive and increases potential for lawsuits.
Position: OPPOSE – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
SB 190 (Dodd D) Fire safety: building standards: defensible space program.
Summary: Requires the Office of the State Fire Marshal to develop, in consultation with our industry, a model defensible space program to reduce threat of wildfire.
Position: SUPPORT – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
SB 330 (Skinner D) Housing Crisis Act of 2019. Temporarily bans cities from imposing a moratorium on new housing construction, prohibits changing zoning law to prevent denser housing like apartment buildings, and prevents cities from raising fees during the development approval process.
Position: SUPPORT – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
SB 451 (Atkins D) Rehabilitation of certified historic structures.
Summary: Creates a tax credit for the rehabilitation of certain certified historic structures.
Position: SUPPORT – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
SB 531 (Glazer D) Local agencies: retailers.
Summary: Prohibits local agencies from entering into certain economic development agreements with companies for locating in the local jurisdiction.
Position: OPPOSE – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
SB 638 (Allen D) Leases: electric vehicle charging stations: insurance coverage.
Summary: Enables installation of EV chargers by removing the requirement to obtain a general liability insurance policy and instead require personal liability coverage
Position: NEUTRAL. Assured bill stayed focused on past agreements. – ON GOVERNOR’S DESK AWAITING SIGNATURE/VETO
SCA 5 (Hill D) Taxation: school districts: parcel tax.
Summary: Lowers voter threshold to 55% on certain local taxes.
Position: OPPOSE – FAILED TO PASS LEGISLATURE.
GOVERNOR’S SIGNING MESSAGE ON AB 5
“To Members of the California Assembly: Assembly Bill 5 is landmark legislation for workers and our economy. It will help reduce worker misclassification-workers being wrongly classified as ‘independent contractors,’ rather than employees, which erodes basic worker protections like the minimum wage, paid sick days and health insurance benefits. The hollowing out of our middle-class has been 40 years in the making, and the need to create lasting economic security for our workforce demands action.
“Assembly Bill 5 is an important step. A next step is creating pathways for more workers to form a union, collectively bargain to earn more, and have a stronger voice at work -- all while preserving flexibility and innovation. In this spirit, I will convene leaders from the Legislature, the labor movement and the business community to support innovation and a more inclusive economy by stepping in where the federal government has fallen short and granting workers excluded from the National Labor Relations Act the right to organize and collectively bargain.
“Sincerely, GOVERNOR GAVIN NEWSOM”
CALCHAMBER STATEMENT ON AB 5
The California Chamber of Commerce today released the following statement on AB 5 (Gonzalez; D-San Diego):
“CalChamber is pleased with the number of professions that AB 5 recognizes should not fall under the independent contractor test set forth in the Dynamex decision. AB 5 provides clarity and certainty for those industries. The fact that the Legislature recognized in AB 5 — and in related legislation — that so many professions and industries include workers who are not appropriately classified as employees is strong evidence that the Dynamex decision should not apply to everyone and there are many industries that still need to be added.
“Simply put, much work remains to be done on the Dynamex issue. As such, the business community will be aggressively pursuing further exemptions next year. The test set forth in the Dynamex ruling does not correctly contemplate the realities of the modern economy nor fairly consider the sweeping impracticalities it would bring to the California economy.”
Please note, commercial real estate brokers/brokerage firms are “exempted” from this law, based partially on the argument that the profession is highly regulated. This is about as good of an outcome as we had hoped for – this was a complicated bill based on a court case that threatened to upend our entire way of doing business.
We thank the CalChamber and the CA Association of Realtors for being such excellent partners in this effort.
LACTATION ROOM BILL SENT TO GOVERNOR
On A 57-13 vote in the Assembly, and then a 28-11 vote in the Senate, the amended bill dealing with lactation rooms in workplaces has been sent to Governor Gavin Newsom.
SB 142 (Weiner; D-San Francisco) initially sought to require lactation rooms in all buildings, was amended twice in the last two weeks to take the building code provisions out of the bill. While this is a improvement to the bill, we have remained opposed to the bill in light of the fact that that AB 1976 (Limon; D-Santa Barbara) was just signed last year and was substantially similar; we have specifically objected to the fact that this bill seeks additional employer mandates that create potential for PAGA lawsuits, labor issues regarding meal and rest breaks, and has no “safe harbor” provisions for workplaces that cannot accommodate a lactation space due to size or safety issues.
An interesting note is that the Governor’s Department of Finance, agreed with us about cost estimates on the bill and released an analysis stating it would cost the state millions of dollars to comply with construction costs in state buildings. DOF estimates a cost of $149,000 in each impacted state building and it seems the argument prevailed; while it estimated $50,000 in private buildings.
The Governor has until October 13 to sign or veto the measure.
RENT CAP / “JUST CAUSE” BILL SENT TO GOVENOR
A bill that seeks to bring residential rent caps to California, AB 1482 (Chiu; D-San Francisco), passed the Senate 25-10, and then passed the Assembly 48-25. A “grand deal” between the Governor and supporters of the bill came together several weeks ago which all but guaranteed passage of the controversial measure.
This bill has been a top priority for us to defeat. However, the deal points with the Governor has pushed many of our allied opposing groups accept the compromise language. The new bill did make several adjustments to the Just Cause Eviction issue we had been asking for which made the bill tolerable for many of our members. However, we do not support the idea of rent control nor making it harder to evict problem tenants.
The Governor has until October 13 to sign the bill, which he has stated he will do.
CBPA 2019/2020 CALENDAR
2019
Thursday-Friday, December 5-6
Strategic Issues Conference
Embassy Suites Napa Valley
2020
Wednesday, February 26
CBPA Winter Board Meeting
CalChamber, Sacramento
Thursday, April 2
CBPA’s Industry-Wide Legislative Committee Meeting
Southern California
Tuesday-Wednesday, June 9-10
California Commercial Real Estate Summit
& Annual Meeting
CalChamber, Sacramento
Thursday, October 22
Industry Awards Dinner
The Renaissance Hotel, Newport Beach
