SAVE PROP 13!

Posted: February 8, 2020 | Posted by Crystal Whitfield | No Comments

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, 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.

CA PROPOSES RECORD SPENDING ON SCHOOLS

Posted: February 8, 2020 | Posted by Crystal Whitfield | No Comments

In his budget proposal for the 2020-21 fiscal year, Governor Gavin Newsom proposes record-high spending of $77.1 billion on K-12 schools and higher education, a 75 percent increase from the $43.9 billion spent in 2011-12.

The Governor noted that per-pupil spending has increased more than $7,200 since 2011-12, with the state planning to spend $17,964 per student in 2020-21 with revenue from existing taxes.

California’s K-12 education and higher education would account for 50.4 percent of the state’s general fund budget under Newsom’s proposal.

According to the Governor’s website, this is the “Largest K-12 education per-pupil expenditure in history.”

With spending at record levels, our industry argues there is no reason to undo Proposition 13 with a split roll.

NEW YEAR – NEW JOB KILLERS

Posted: February 8, 2020 | Posted by Crystal Whitfield | No Comments

As proud members of the California Chamber of Commerce, we work closely with the organization on bills that impact our members.  Each year we provide input on both the Job Killer and Job Creator lists.

Job Killers represent the worst-of-the-worse ideas that will harm the state’s economy and shrink employment.  Already in 2020 two bills have been tagged as Job Killers, and one bill is left over from last year:

SB 850 (Leyva; D-Chino) Work Hours: Scheduling – The bill requires an employer, which includes a grocery store establishment, restaurant, or retail store establishment, to provide its employees with a 21-day work schedule at least 7 calendar days in advance.  Among other provisions, the bill would require an employer, except as specified, to pay its employees modification pay for each previously scheduled shift that the employer cancels or moves to another date or time, for any previously unscheduled shift that the employer requires an employee to work, or for each on-call shift for which an employee is required to be available but is not called in to work that shift.

SB 850 is a job killer because it will eliminate flexibility in the workplace for both employers and employees, deny employees the opportunity to work additional hours if desired, limit employers’ ability to accommodate customer demands, and subject employers to unnecessary layers of penalties, investigative actions and costly litigation.

SB 873 (Jackson; D-Santa Barbara) Gender Discrimination: Pricing – The bill prohibits price differences for two substantially similar products that are intended for or marketed to different genders.

CalChamber has identified SB 873 as a job killer because it includes a private right of action with a minimum of $4,000 in damages per alleged violation, which will expose small and large businesses to a flurry of costly litigation for claims that two products are substantially similar, even though they may be different, and that any price differential is based on gender, when it is actually based upon legitimate non-gender related reasons.

AB 345 (Muratsuchi; D-Torrance) Oil and Gas Development Ban — Threatens to eliminate thousands of high paying California jobs, result in California importing even more foreign oil, and raise oil and gas prices by requiring the California Geologic Energy Management Division to adopt regulations with predisposed setback requirements for new and existing oil and gas wells. By pre-determining arbitrary setback requirements before the agency analyzes safety requirements during formal rule making, the bill politicizes and undermines the state agency responsible for managing oil and gas operations that would likely lead to significant and unnecessary increases in costs for all Californians.

LLC – BROKER BILL PASSES ASSEMBLY

Posted: February 8, 2020 | Posted by Crystal Whitfield | No Comments

 

On a bipartisan 56-0 vote, AB 687 (Daly; D-Anaheim) passed the California State Assembly.  This bill will allow real estate brokers to incorporate as a limited liability company (LLC), in addition to a C or S corporation.

This is a measure that our industry has been pursuing for years, and the Department of Real Estate notes there is pent-up demand for this change in law, estimating more than 30,000 brokers would seek to incorporate as an LLC, which has become commonplace since first being introduced.

AB 687 updates the statute to reflect that evolution in the industry and allow brokers to operate as an LLC.  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.

COMMUNITY AIR PROTECTION PROGRAM INPUT SOUGHT

Posted: February 8, 2020 | Posted by Crystal Whitfield | No Comments

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.

NEWSFLASH: COURT HALTS CONTROVERSIAL ARBITRATION LAW

Posted: January 31, 2020 | Posted by Crystal Whitfield | No Comments

Business groups today are hailing a ruling in the case against California’s new law banning employers from requiring arbitration agreements as a condition of employment.

In the case, United States District Court Judge Kimberly J. Mueller ruled: “having carefully considered all relevant briefing, including supplemental briefing, the court GRANTS plaintiffs’ motion for a preliminary injunction in full. In the coming days the court will explain its reasoning in a detailed, written order.”

The California Chamber of Commerce hailed the ruling which halts the enforcement of and invalidating in full AB 51, a law that would have banned employers from, as a condition of employment, entering into arbitration agreements for claims brought under the Fair Employment and Housing Act and Labor code.
Our industry was part of a large coalition of employers led by the CalChamber that fought the bill in the Legislature, requested a veto which did not happen, and then challenged the law in court, arguing that AB 51 conflicted with federal law.

Of particular concern to employers were provisions of the law that placed the extraordinary burden of criminal penalties punishable by imprisonment and fines.
We are relieved at Judge Mueller’s decision granting plaintiffs’ motion for a preliminary injunction in full.  And we thank the California Chamber of Commerce for once again standing up for employers.

Legal documents in Chamber of Commerce of the United States of America et al. v. Becerra et al. can be found here.

LLC – BROKER BILL PASSES ASSEMBLY

Posted: January 31, 2020 | Posted by Crystal Whitfield | No Comments

On a bipartisan 56-0 vote, AB 687 (Daly; D-Anaheim) passed the California State Assembly.  This bill will allow real estate brokers to incorporate as a limited liability company (LLC), in addition to a C or S corporation.

This is a measure that our industry has been pursuing for years, and the Department of Real Estate notes there is pent-up demand for this change in law, estimating more than 30,000 brokers would seek to incorporate as an LLC, which has become commonplace since first being introduced.

AB 687 updates the statute to reflect that evolution in the industry and allow brokers to operate as an LLC.  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.

BALLOT MEASURE CHALLENGING AB 5 GAINS MOMENTUM

Posted: January 31, 2020 | Posted by Crystal Whitfield | No Comments

California’s new law, AB 5, attempting to clarify the Dynamex Court ruling has been drawing lots of complaints for having a variety of unintended consequences.  Our industry worked hard to clarify that Real Estate Brokers were not included in the law, however another major issue we had was that the bill was not clear in how it impacted business-to-business contracts between two incorporated entities and are seeking to clarify that issue further in clean up legislation this year.

However, there are many unincorporated contractors to which the bill applies, and they protested at the Capitol this week to highlight the impacts of the bill.  The bill is having a particularly outsized impact on artists and musicians that are true independent operators.

Beyond that some of the major players in the “gig economy” are fighting back hard.  A coalition of rideshare services as well as other app-based companies have vowed to spend upwards of $100 million to put a proposition on the ballot to overturn the law.  This week they reported that have reached 25% of the signatures needed and are investing heavily in obtaining the needed signatures.

This issue shows the intersection of old-fashioned labor and new-fangled technology hitting square on.

On behalf of the commercial, retail, and industrial real estate industry we are in the middle of this battle and trying to protect your interests.  However, as we have recently learned, even when the law is deemed “clarified” in statute there is a lot of confusion about how the law is applied in the Real World.

If there are questions about your own operations, we highly recommend consulting a labor law specialist that can provide technical advice and help keep you out of the crosshairs of a lawsuit.

In the meantime, for some basic information on the topic, click here.

HOUSING DENSITY BILL FAILS – TWICE

Posted: January 31, 2020 | Posted by Crystal Whitfield | No Comments

A measure that has made lots of headlines over the past year, that would set aside some local ordinances to clear the way for more dense housing near transit corridors, failed twice this week in two votes on the Senate Floor.

SB 50 (Weiner; D-San Francisco) attempts to help break the housing logjam in the state by overriding local zoning rules to encourage apartment construction in cities and counties.  It needed 21 votes and only was able to muster 18, in the Democrat-dominated State Senate.

In the past several years our legislature has considered hundreds of bills meant to “fix” the housing crisis.  SB 50 was one of the more promising – but also more controversial – as local government decried land use planning from Sacramento.

Although our industry liked many parts of the bill – and many others – we are disheartened that the number one issue to get more housing built in the state continues to be ignored.  CEQA reform.  It’s the “elephant in the room,” that is keeping housing costs high and supply much lower than demand, but powerful advocacy groups in the state won’t allow CEQA to be fixed, because it’s such a powerful tool to veto projects.  So, we continue to look for other, more complicated and less effective ways to resolve the housing crisis.

Our housing crisis is of such a large proportion that SB 50’s failure even received national news coverage which you can read here.

COMMUNITY AIR PROTECTION PROGRAM INPUT SOUGHT

Posted: January 31, 2020 | Posted by Crystal Whitfield | No Comments

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.

LLC – BROKER BILL PASSES COMMITTEE UNANIMOUSLY

Posted: January 24, 2020 | Posted by Crystal Whitfield | No Comments

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

Posted: January 24, 2020 | Posted by Crystal Whitfield | No Comments

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

Posted: January 24, 2020 | Posted by Crystal Whitfield | No Comments

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

Posted: January 24, 2020 | Posted by Crystal Whitfield | No Comments

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.

AG’S BIASED TITLE AND SUMMARY FOR SPLIT ROLL SPARKS OUTRAGE

Posted: October 25, 2019 | Posted by Crystal Whitfield | No Comments

The San Diego Union-Tribune published a scathing editorial opposing California Attorney General Xavier Becerra’s biased title and summary for the split-roll measure.

According to leadership at Californian’s to Stop Higher Property Taxes, the biased wording gives the proponents an unfair advantage at passing their $12.5 billion-a-year property tax increase.

The measure received its title and summary last week, sparking outrage across the state for the blatant misrepresentation in what is supposed to be a nonpartisan, impartial analysis for voters.

Proponents of the split-roll property tax hike are now collecting signatures to qualify the measure for the November 3, 2020, ballot.  The editorial states:

The union-led Schools & Communities First coalition has moved to scrap its original planned 2020 initiative that would require commercial and industrial properties to be taxed at their present value, ending the Proposition 13 protection that their property taxes can go up no more than 2% each year. Now the coalition has launched a revised version that’s friendlier to small businesses but still creates a “split roll” allowing the collection of as much as $12 billion in new annual tax revenue from commercial and industrial properties.

The ballot summary that Attorney General Xavier Becerra approved for the original measure starts off by citing how it would affect such properties, then explores how the increased revenue would be used. The far vaguer new summary focuses on the benefits to public schools, community colleges and local governments from “changing” property taxes.

Read the full editorial by clicking here and share with all your friends and colleagues!

Learn more about how to fight the attempt to raise your property taxes at Californian’s to Stop Higher Property Taxes.  You can help by donating to your defense by clicking here.

SPLIT ROLL PROPONENTS DECEIVING VOTERS FROM THE START

Posted: October 25, 2019 | Posted by Crystal Whitfield | No Comments

Proponents of the flawed $12.5 billion a year split-roll property tax measure have begun gathering signatures for their second, equally flawed split-roll property tax measure, which, if passed, will be the LARGEST TAX INCREASE IN CALIFORNIA HISTORY.

The campaign, desperate for support, is deceiving voters as signature gathers are telling them that the measure “will protect Prop 13” – the exact opposite of the measure’s intended purpose.

This comes after a September poll by the Public Policy Institute of California (PPIC) found that only 47 percent of likely voters support a split-roll property tax, but 64 percent of likely voters support Prop 13.

“This $12.5 billion a year property tax increase will hurt the pocketbooks of seniors living on fixed-incomes, hardworking families, and all Californians. Ultimately, the split-roll property tax will drive up the cost of living in one of the most expensive states in the country and make life even more difficult for those already struggling to get by,” said Deborah Howard, Board Member of the California Senior Advocates League. “California already has the highest percentage of population living in poverty. Destroying Prop 13 will put more families in jeopardy.”

Don’t be fooled by the deceiving nature of this campaign.  The purpose of this measure is to break up Proposition 13 benefits by going after commercial properties first.  Residential properties are next.

Learn more about how to fight the attempt to raise your property taxes at Californian’s to Stop Higher Property Taxes.  You can help by donating to your defense by clicking here.

COMPANY DOWNSIZES OFFICE PORTFOLIO DUE TO SPECTRE OF SPLIT ROLL

Posted: October 25, 2019 | Posted by Crystal Whitfield | No Comments

If you are still wondering if the threat to destroy split roll is “real” and if it will have any impact on your business, just look at this recent announcement by Decron Properties that is divesting in California because of the potential that Prop. 13 protections will evaporate:

“Decron Properties has sold Ocean Plaza, an 8.6-acre mixed-use office and retail complex in Huntington Beach, California, to Vancouver, Canada-based Onni Group for $97.25 million.

“Located at 17011 Beach Boulevard, the property features a 207,645-square-foot, 14-story Class A office tower, 108,785-square feet of retail and restaurant space and a six-level parking garage accommodating 863 automobiles.

“The sale of Ocean Plaza is part of Decron’s ongoing business strategy to divest itself of its commercial office assets prior to the possible changes to California’s Prop 13 that would alter the structure of property taxes for commercial properties within the state.” (emphasis added).

Our industry has been warning for years that removing Proposition 13 protections from property owners will directly result in such sell offs reshape the state’s economic activity in ways that may be harmful.  See Decron’s full press release here.

LAWSUIT TRIES TO BRING SANITY TO PROP 65 LITIGATION

Posted: October 25, 2019 | Posted by Crystal Whitfield | No Comments

The California Chamber of Commerce filed a lawsuit in early October to stop the multitude of Proposition 65 warnings for the presence of acrylamide in food.  The lawsuit asks the U.S. District Court, Eastern District of California to stop the Proposition 65 litigation over acrylamide in food.

According to the Chamber, acrylamide is not a chemical that is added intentionally to food products. Rather, it forms naturally in many types of foods when they are cooked at high temperatures, whether at home, in a restaurant or in a factory. Common sources of acrylamide in the diet (and subjects of Proposition 65 litigation) include baked goods, breakfast cereal, black ripe olives, coffee, grilled asparagus, French fries, peanut butter, potato chips, and roasted nuts.

“The effect of too many bogus warnings is no warnings,” said CalChamber President and CEO Allan Zaremberg in a statement. “This case is about clarifying for both businesses and consumers that food does not require Proposition 65 warnings for acrylamide. This will reduce unnecessary fear for consumers and litigation threats for businesses.”

Prop. 65 warning have become ubiquitous in commercial, industrial, and retail real estate buildings.  As CalChamber members we hope they are successful in this effort to bring some sanity to this area of law.  Click here for more information.

REGISTER NOW FOR THE STRATEGIC ISSUES CONFERENCE

Posted: October 25, 2019 | Posted by Crystal Whitfield | No Comments

The 2019 Strategic Issues Conference is just around the corner!  This year’s conference is being held at the recently renovated Embassy Suites in Napa, California on December 5-6.

The goal of the Strategic Issues Conference is to increase public policy and political awareness of state and national issues, and to foster collaborative efforts among business leaders from all sectors of the California economy.

Ten major business groups have come together to host an event you don’t want to miss!  California Business Properties Association (CBPA), American Council for Engineering Companies (ACEC), Building Owners and Managers of California (BOMA CAL), California Alliance for Jobs (CAJ), California Building Industry Association (CBIA), California Business Roundtable (CBRT), California Manufacturers & Technology Association (CMTA), California Retailers Association (CRA), NAIOP, Commercial Real Estate Development Association (NAIOP), National Federation of Independent Business (NFIB) and Retail Industry Leaders Association (RILA).

CLICK HERE to register now.  For more information on this exciting event CLICK HERE.

For hotel accommodations, please contact the Embassy Suite, Napa Valley directly at 707-253-9540. Group rate cut-off date is almost here – October 30, 2019. In order to get the special conference room rate of $209.00 you must reserve your room by October 30, 2019.

We hope to see you in December!

2020 MAY SEE TAX BATTLE ROYAL

Posted: September 27, 2019 | Posted by Crystal Whitfield | No Comments

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”

Posted: September 27, 2019 | Posted by Crystal Whitfield | No Comments

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

Posted: September 27, 2019 | Posted by Crystal Whitfield | No Comments

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

 

AB 857 (Chiu D) Public banks.

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

Posted: September 27, 2019 | Posted by Crystal Whitfield | No Comments

“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

Posted: September 27, 2019 | Posted by Crystal Whitfield | No Comments

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

Posted: September 27, 2019 | Posted by Crystal Whitfield | No Comments

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

Posted: September 27, 2019 | Posted by Crystal Whitfield | No Comments

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.

FINAL WEEK OF LEGISLATIVE SESSION

Posted: September 6, 2019 | Posted by Crystal Whitfield | No Comments

The final week of the 2019 Legislative year is upon us.  The Legislature is feverishly working its way through hundreds of bills that will impact our state and your business before they adjourn sometime around Midnight next Friday.

There are still many significant pieces of legislation that will impact our industry that we are following closely, including bills to drastically change independent contracting, add strike benefits to public employee unions, address housing, and much much more.

LACTATION ROOM MANDATE ON ASSEMBLY FLOOR

Posted: September 6, 2019 | Posted by Crystal Whitfield | No Comments

SB 142 (Weiner; D-San Francisco) the bill seeking to require lactation rooms in all buildings, will be voted on next week.  We have opposed the bill all year as redundant in light of the fact that AB 1976 (Limon; D-Santa Barbara) was just signed last year and was substantially similar; and we have specifically objected to the fact that this bill sought to mandate significant building code requirements, would increase the potential for PAGA lawsuits, and had no ability for workplaces that cannot accommodate a lactation space due to size or safety issues, be exempted.

We are pleased to announce that one of those issues, regarding the building code, has been addressed.  The Appropriations Committee forced language into the bill that would change the mandatory language into a guidance document on how to comply the law when a tenant had an employee to accommodate.

However, while we appreciate the amendment, we still oppose because of its redundancy and harmful impacts on companies in our own industry and our tenants.

And interesting not 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.

RENT CAP / “JUST CAUSE” BILL PASSES SUSPENSE

Posted: September 6, 2019 | Posted by Crystal Whitfield | No Comments

A bill that seeks to bring residential rent caps to California, AB 1482 (Chiu; D-San Francisco), will be heard next week.  A “grand deal” between the Governor and supporters of the bill has come together.

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 is in print today and we are working to analyze its impact on our industry.

For the time being we remain OPPOSE UNLESS AMENDED, hoping we can get some of the “Just Cause” language fixed.

DYNAMEX/GIG ECONOMY BILL UP NEXT WEEK

Posted: September 6, 2019 | Posted by Crystal Whitfield | No Comments

Since 1989, California courts and regulators applied a set of rules called the Borello test for deciding whether a worker was an independent contractor. This approach weighed nine different factors to account for the variety of California industries and professions that would be regulated.

Despite this test being used for over three decades, the California Supreme Court made a surprising and unprecedented departure in April 2018 by replacing these nine factors with a one-size-fits-all approach consisting of just three factors which are also far more restrictive.

This new test, called “ABC,” has never existed in any form of California law, either in statute or by regulation. The ABC test is the first time in U.S. history that such a test has been imposed by a court, without legislative approval, with three independently dispositive factors.

A bill you have probably read about, AB 5 (Gonzalez; D-San Diego), seeks to codify the court decision in a manner that some industries think brings clarity and certainty to while others see it as a threat to how they do business.

Initially, AB 5 exempted doctors, insurance agents, and securities advisers from what would become the new standard. While we agreed that these professionals should be exempted from the application of Dynamex and AB 5, we fought hard to include commercial real estate brokers and real estate agents and were successful.  That exemption remains in the bill.

This is an odd and complicated bill, but we are hoping to be able to support AB 5 once it is in a shape to deal with the professional and licensed classifications in a way that maintains their true independence.

AB 5 will be voted on next week.

LEGISLATIVE UPDATE – SEPTEMBER 2019

Posted: September 6, 2019 | Posted by Crystal Whitfield | No Comments

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.

Bills on the Senate Floor:

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 IF AMENDED

AB 51 (Gonzalez D) Employment discrimination: enforcement.

Summary: Prohibits arbitration agreements as a condition of employment.

Position: OPPOSE

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

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: Mon/OPP.  Negotiated AMENDMENTS to lessen burden of information.

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

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.

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

AB 857 (Chiu D) Public banks.

Summary: Allows local governments to get into lending which would destabilize banking through introducing non-fiscal requirements for loans.

Position: OPPOSE

AB 1066 (Gonzalez D) Unemployment insurance: trade disputes: eligibility for benefits.

Summary: Would allow striking workers to receive unemployment checks.

Position: OPPOSE

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

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

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

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

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

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

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

 

 Bills on the Assembly Floor:

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.

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. Working on language to protect against unnecessary tax increases.

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

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

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

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

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

 SB 451 (Atkins D) Rehabilitation of certified historic structures.

Summary: Creates a tax credit for the rehabilitation of certain certified historic structures.

Position: SUPPORT

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

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.

SB 749 (Durazo D) California Public Records Act: trade secrets.

Summary: Requires trade secrets be released under certain Public Records Requests.

Position: OPPOSE

SCA 5 (Hill D) Taxation: school districts: parcel tax.

Summary: Lowers voter threshold to 55% on certain local taxes.

Position: OPPOSE

SPLIT ROLL; POLITICS OVER POLICY

Posted: April 18, 2019 | Posted by Crystal Whitfield | No Comments

CBPA’s own Rex Hime penned the following article that was run in several statewide publications this week.  This article refutes some the basic arguments posed by those pursuing the split roll property tax initiative that is on the November 2020 ballot.  Please feel free to reprint this commentary in your own publications:

Politics won over good policy, and now Californians face even more taxes.

Californians complain their state is unaffordable. The cost of living is at a record high, housing prices are astronomical, and taxes continue to rise.

A recent Public Policy Institute of California survey found that 63% of likely voters believe they pay more in state and local taxes than they should and 80% believe California’s tax burden is above average.

They are, without a doubt, correct. California is one of the highest taxed states in the nation. According to the nonprofit Tax Foundation, California has the highest state sales tax and personal income tax, and the second highest gas tax. It’s no wonder that so many families are struggling to make ends meet.

Fortunately, there is one tax left that isn’t sky-high in California – the property tax.

Voters passed Proposition 13 in 1978 due to steep property tax increases that were forcing businesses to shut their doors and pushing families out of their homes. Proposition 13 changed the way properties are taxed in California by:

* Limiting property taxes to no more than one percent of the assessed value for both residential and business properties.

* Capping annual increases in assessed value at two percent per year.

Four decades later, homeowners and businesses have certainty about property taxes and are protected from being taxed out of their homes when property values rise quickly.

While Proposition 13 continues to protect taxpayers, there is one provision in the implementing language passed by the Legislature after the voters passed Proposition 13 that allows some properties to avoid reassessment, even when the ownership fully changes hands. This was not the intent of Proposition 13.

The business community has spent many years sponsoring legislation that would fix this language and raise an estimated $70 million per year.

In 2014, my organization, the California Business Properties Association, and the California Business Roundtable sponsored Assembly Bill 2372 by Democratic Assemblyman Tom Ammiano of San Francisco. This bill would have fixed the “change of ownership” language by triggering reassessment when at least 90% of a property’s ownership changes hands within three years.

Unfortunately, special interests who have spent decades trying to undo Proposition 13 saw the bill as something else—a political liability. They knew that leaving the problem unfixed would be a good talking point in a campaign to undo Proposition 13 and implement a split roll property tax in California. A legislative solution would hurt them politically, so they pushed hard to kill the bill.

AB 2372 never made it to Gov. Jerry Brown’s desk.

Because politics won over good public policy, local governments and schools are missing out on millions of dollars’ worth of property taxes every year that they would have received if AB 2372 had passed.

Now, Californians, who just told the PPIC they feel overtaxed, will see an initiative on the November 2020 ballot that would raise property taxes by $11 billion, and dismantle Proposition 13 by requiring reassessment of business properties every three years, whether the property is newly purchased or not.

Most importantly, raising property taxes on businesses means they will pass on the costs to every Californian by increasing prices on just about everything we buy and use, from diapers and day care to gasoline and groceries.

That’s the last thing hardworking families need.

Rex Hime is the president and chief executive officer of the California Business Properties Association, rexhime@cbpa.com. He wrote this commentary for CALmatters.

Editor’s note: This commentary is a response to “After 40 years, let’s finally reform Proposition 13,” March 31, 2019.

Click here to read Rex’s article at the Calmatters website.

SPRING RECESS IN THE LEGISLATURE

Posted: April 18, 2019 | Posted by Crystal Whitfield | No Comments

All the Senators and Assemblymembers have gone home for the week to spend Spring Recess in their district.  The Halls of the Capitol are very quiet this week but will spring back to life next week.

AB 142 – LACTATION ROOMS; CONCERNS IN PLAIN ENGLISH:

Posted: April 12, 2019 | Posted by Crystal Whitfield | No Comments

Once again, we are dealing with a bill in the legislature that mandates expanded access to Lactation Rooms in commercial buildings.  The bill, AB 142 by Senator Weiner from San Francisco, is very similar to a bill he carried last year that was vetoed by Governor Brown.

As an industry our main concerns with the bill is that it brings building owners and managers into the middle of an employer-employee relationship in which we do not belong.

In terms of building code issues, the bill is very owner-occupied-centric.  The issues we have mainly occur with multi-tenant situations where responsibility for tenant improvements may be 100% on the owner, 100% on the tenant, or some combination thereof, but as the bill is written it ignores how leases are written and agreed upon.

Also, this bill assumes that all real estate markets across the state are the same – akin to those in coastal cities – and will be much more difficult to comply with in areas where tenants have less capital to work with.

Over the past week we have been working with our legislative committee, the author, and his staff to identify our specific issues and try to resolve them.  Here they are, and you are encouraged to share this information with local legislators:

ISSUE 1. The entity responsible for making modifications should be who is responsible for providing the space (it is common for tenants to control their own space).  This is how it is in S.F.’s ordinance.

SOLUTION:  Clarify the entity triggering the law is the responsible party for the accommodation (that may be a building owner, manager, or tenant).

ISSUE 2.  Currently the bill triggers a Tenant Improvements in spaces that not part of the qualifying event.  An improvement in one tenant’s Premises should not trigger requirements in other Premises in building/center.  Shifts cost and/or requires use of common space that may not exist.

SOLUTION:  Clarify this only trigger for the space triggering the law.

ISSUE 3.  If no reasonable space within Premises and no need to provide space elsewhere in building/center if no room in Premises.  This commonly occurs in an industrial campus setting where each company has its individual space.  SOLUTION:  Provide an exemption for properties that do not have common space/office space.

ISSUE 4.  Number of employees at one location instead of companywide.  Bill currently could trigger based on company employees not the actual number on site.

SOLUTION:  Clarify occupancy load pertains to the onsite employees only.

ISSUE 5. Technical issue.  “Daily occupancy” language is not a common term used in law.  There are fire marshal standards for max occupancy but there are not statewide standards for occupancy load.

SOLUTION:  Work with the Local Building Officials Association to determine now local building officials would determine how many employees will be on premises daily.

ISSUE 6. Technical/Governance issue.  We think the building code references are unneeded. The provision of lactation accommodation is a “service” as opposed to a physical occupancy.  Meaning that the “service accommodation” will be triggered at some point post-initial construction and will be dependent on the staffing needs of individual tenants in the building.  So, the appropriate response to this will be the provision of lactation accommodation by the employer (as opposed to the building owner).

SOLUTION:  Strike the building code references and provide direction through the Labor Code and or to local government inspectors.

We are suggesting a simpler way to write the bill would be to take the Labor Code provisions in current law and just require as part of that accommodation the table, chair, refrigerator, etc. be available. We will keep you posted.

LANDLORD/TENANT AND RENT CONTROL BILLS

Posted: April 12, 2019 | Posted by Crystal Whitfield | No Comments

As you know from past eWeeklys there are over 200 bills trying to address the “housing” crisis.  We think the best way to address the shortage of housing in California is to build more housing by reforming laws that make homebuilding so difficult and expensive.

However, many legislators have some other unique and interesting ideas, many of which would roll back some of your rights as a property owner.  Here are some of the worst of the worst.  Ranging from bills that would implement rent control – even after voters resoundingly defeated it at the polls in November – to bills that would make it very difficult to evict problem tenants.

Although many of these bills are currently focused on residential properties, they would also apply to mixed-use projects, and would have a deleterious effect on commercial leasing as many statutes do not distinguish between commercial/residential leasing and/or the bills will eventually bleed over into commercial leasing:

AB 36 (Bloom D) Residential tenancies: rent control. Proposes amendments to the State’s Costa Hawkins Rental Housing Act that would establish a form of statewide a rent control.  Would modify existing law to authorize an owner of residential real property to establish the initial and all subsequent rental rates for a dwelling or unit that has been issued its first certificate of occupancy within 10 years of the date upon which the owner seeks to establish the initial or subsequent rental rate, or for a dwelling or unit that is alienable separate from the title to any other dwelling unit or is a subdivided interest in a subdivision and the owner is a natural person who owns 2 or more residential units within the same jurisdiction as the dwelling or unit for which the owner seeks to establish the initial or subsequent rental rate, subject to certain exceptions.  POSITION:  OPPOSE.

AB 53 (Jones-Sawyer D) Rental housing discrimination: applications: criminal records. This bill makes it unlawful for the owner of any rental housing accommodation to deny the rental or lease of a housing accommodation without first satisfying specified requirements relating to the application process. The bill would prohibit the owner of a rental housing accommodation from inquiring about or requiring an applicant for rental housing accommodation to disclose, a criminal record during the initial application assessment phase, as defined, unless otherwise required by state or federal law. POSITION:  OPPOSE.

AB 724 (Wicks D) Rental property data registry. This bill requires the Department of Housing and Community Development to create a rental registry online portal, which would be designed to receive specified information from landlords regarding their residential tenancies and to disseminate this information to the public. The bill would require landlords who own or operate property that includes more than 15 dwelling units to register within 90 days and annually thereafter. POSITION:  OPPOSE.

AB 1110 (Friedman D) Rent increases: noticing.  This bill would require 90 days’ notice if a landlord of a residential dwelling with a month-to-month tenancy increases the rent by more than 10%, but no more than 15%, of the amount of the rent charged to a tenant annually. This bill would require 120 days’ notice if a landlord of a residential dwelling with a month-to-month tenancy increases the rent by more than 15% of the amount of the rent charged to a tenant annually. POSITION:  OPPOSE.

AB 1188 (Gabriel D) Dwelling units: persons at risk of homelessness.  This bill authorizes a tenant to temporarily permit the occupancy of their dwelling unit by a person who is at risk of homelessness, regardless of the terms of the lease, without negative repercussions from the owner or landlord of the property. POSITION:  OPPOSE.

AB 1399 (Bloom D) Residential real property: rent control: withdrawal of accommodations. A public entity acting pursuant to the Ellis Act to require an owner who offers accommodations against for rent or lease within a period not exceeding 10 years from the date on which they were withdrawn, as specified, to first offer the unit to the tenant or lessee displaced from that unit by the withdrawal, subject to certain requirements. If the owner fails to comply with this requirement, the owner is liable to a displaced tenant or lessee for punitive damages not to exceed 6 months’ rent. This bill would prohibit a payment of the above-described punitive damages from being construed to extinguish the owner’s obligation to offer the accommodations to a prior tenant or lessee, as described above. POSITION:  OPPOSE.

AB 1481 (Bonta D) Tenancy termination: just cause.  This bill prohibits a lessor of residential property from terminating the lease without just cause stated in the written notice to terminate. This bill would require, for curable violations, that the lessor give a notice of violation and an opportunity to cure the violation prior to issuing the notice of termination, unless the notice to terminate states just because that is related to specific illegal conduct that creates the potential for harm to other tenants. POSITION:  OPPOSE.

AB 1482 (Chiu D) Tenancy: rent caps.  This bill prohibits an owner of residential real property from increasing the rental rate for that property in an amount that is greater than an unspecified percent more than the rental rate in effect for the immediately preceding year.  The bill would prohibit a landlord from terminating a tenancy for the purposes of avoiding these provisions and would create a rebuttable presumption that the termination of a tenancy is for the purposes of avoiding these provisions in the absence of a written statement showing cause for the termination. POSITION:  OPPOSE.

AB 1697 (Grayson D) Housing: tenancy termination: just cause. This bill would prohibit a lessor of residential property in which the tenant has occupied the property for 12 months or more, from terminating the lease without just cause, stated in the written notice to terminate. POSITION:  OPPOSE.

AB 1795 (Kamlager-Dove D) Civil actions: unlawful detainer: court records.  This bill would prohibit the access to the records of certain unlawful detainer actions. POSITION:  OPPOSE.

SB 529 (Durazo D) Tenant associations: eviction for cause: withholding payment of rent. This bill would declare that tenants have the right to form, join, and participate in the activities of a tenant association, and withhold rent for any purpose they deem needed regardless of lease documents.  POSITION:  OPPOSE.

BILL TARGETING WAREHOUSE CONSTRUCTION OPPOSED

Posted: April 12, 2019 | Posted by Crystal Whitfield | No Comments

This week we testified against AB 485 by Assemblymember Jose Medina (D-Riverside) which is a re-introduction of a bill from last year that our industry opposed and was vetoed by Governor Brown.  The bill comes up with a complicated set of reporting requirements that certain industrial projects must provide before a city can offer economic incentives over a certain amount.

Our industry strongly opposes the bill again this year as it unreasonably targets one building type, warehouses, when working together with a local government on economic development subsidies.  Those decisions should be left under the purview of local government authorities.

Current law already requires extensive disclosure of information by all project types getting such subsidies.

Here is the Governor’s veto message of this idea from last year.

INDUSTRY SUPPORTS DISTRIBUTED ENERGY BILL

Posted: April 12, 2019 | Posted by Crystal Whitfield | No Comments

SB 288 (Wiener; D-San Francisco) a measure designed to reduce barriers to the deployment of distributed energy resources by addressing needed changes in utility tariffs and reducing interconnection challenges.  This bill is dubbed the Solar Bill of Rights.  It passed the Senate Energy, Utilities, and Commerce Committee this week on a unanimous vote.

SB 288 would ensure that California businesses and homeowners are able to make, store and use clean energy on their property without undue interference from the utility; connect clean energy technologies to the grid in a quick and efficient manner; be free from inequitable fees and charges associated with installing onsite clean energy technologies; and increase the reliability and resiliency of the state’s electric grid.

As wildfires and other climate-related challenges become more frequent and destructive, California must build a power grid that is more reliable, resilient and safe. By reducing climate pollution, increasing the state’s reliance on distributed energy resources, and giving customers a way to keep the lights on when the grid goes down, local solar, batteries, and other smart clean energy technologies are an important piece of a cleaner and more reliable energy future.

PLEASE TAKE THE ARB CHARGING STATION SURVEY

Posted: April 12, 2019 | Posted by Crystal Whitfield | No Comments

The California Air Resources Board (CARB) is tasked with leading the state’s effort to reduce carbon emissions.  Many strategies are being employed but one that impacts our industry the most is increased energy efficiency through the state building code.

CARB is collecting anonymous data to measure the conversion rate of electric vehicle (EV) Capable spaces to EV charging spaces in new commercial buildings in California.  EV Capable spaces are parking spaces that include basic EV charging infrastructure including raceway (enclosed conduit) and panel capacity to accommodate future installation of a Level 2 EV charger.

CARB staff are also trying to better understand any barriers encountered with the installation of Level 2 EV chargers.  Results of this survey will be used to inform development of the California Green Building Standards (CALGreen) Code.

The questionnaire will take about five minutes to complete.  This survey is anonymous and you have until April 12, 2019:

Nonresidential Developer Survey of Electric Vehicle (EV) Charger Installations

Multifamily Developer Survey of Electric Vehicle (EV) Charger Installations

Please take the time to complete this survey.  The results will inform future requirements on your properties!

CBPA BOARD MEETS – ENDORSES HIME FOR SENATE!

Posted: March 1, 2019 | Posted by Crystal Whitfield | No Comments

This week the Board of Directors for the California Business Properties Association met in Sacramento for its annual meeting, had lunch with several new legislators to discuss issues important to the commercial, retail, and industrial real estate industry, and heartily endorsed long time President and CEO Rex Hime in his bid to earn the Senate District 1 seat recently vacated.

The CBPA Board joins several other major industry groups in giving Rex their endorsement.  Other groups including statewide associations NAIOP California, BOMA California, AIR Commercial Real Estate Association, several local chapters and scores of industry leaders from across the spectrum of our industry have gotten involved in this race.

Rex S. Hime who has been the primary force in California advocating on behalf of California taxpayers who own commercial, industrial, and/or retail private property for over 35 years in his role as President and CEO of California Business Properties Association has answered the call of public service and filed paperwork to fill the seat of the district he has lived in for decades.

Rex has long talked about the importance of people from within the commercial real estate industry stepping-up and getting involved in elective politics.  He is putting those words into action.

Former-Governor Pete Wilson, and the Founder and President of the National Tax Limitation Committee Lew Uhler, are serving as Rex’s Campaign Chairs. Rex has also quickly garnered many endorsements including two former Senators who previously held the seat, Senator Tim Leslie (ret.) and current Congressmember John Doolittle, and the California Republican Veterans Association.

Senate District 1 is a massive district stretching all the way from the Eastern part of Sacramento County, to Lake Tahoe, then all the way up to the Oregon border stretching to the middle of the State and back down.  The district is known as one of the most conservative areas of the state.

For more information about Rex’s run for California Senate District 1 click here.

GO REX GO!

STATE OF EMERGENCY DECLARED IN FIVE COUNTIES

Posted: March 1, 2019 | Posted by Crystal Whitfield | No Comments

Fires now floods.  As severe winter storms continue across California, Governor Gavin Newsom has issued an emergency proclamation for the counties of Amador, Glenn, Lake, Mendocino and Sonoma to help communities respond to and recover from dangerous flooding, mudslides and damage to critical infrastructure.

On February 21, the Governor previously issued emergency proclamations for the counties of Calaveras, El Dorado, Humboldt, Los Angeles, Marin, Mendocino, Modoc, Mono, Monterey, Orange, Riverside, San Bernardino, San Diego, San Mateo, Santa Barbara, Santa Clara, Shasta, Tehama, Trinity, Ventura, and Yolo.

The emergency proclamations direct Caltrans to formally request immediate assistance through the Federal Highway Administration’s Emergency Relief Program and the Office of Emergency Services to provide assistance to local governments.

Please do what you can to stay safe.

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