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A Snapshot of Legislation Moving through Sacramento
The Good
AB 2031 (Dahle) – Provides relief for certain retailers who must collect the Lumber Products Assessment (LPA) by excluding those who sell less than $25,000 in qualifying products annually. LPA is a 1 percent tax on purchases of lumber products and engineered wood products.
This bill provides a much needed break for smaller retailers who sell lumber products many of which cannot afford to remain in business if they are required to upgrade computer systems and inventory practices. Also saves money for the State Board of Equalization, by reallocating the money spent collecting from these small retailers, towards other issues..
AB 1839 (Gatto and Bocanegra) – Expands the film and television tax credit to remain competitive with other states. Encourages film and television productions to locate or remain in California.
While we should be cutting taxes for all to help increase employment in the state, that option was not available to me and other like-minded legislators this year. As you know, the retroactive income tax increase passed last year with Proposition 30 hurt small businesses that pay taxes as personal income tax rather than Corporate tax. In my opinion, any tax credit is worthy if it helps create jobs, and this bill will help keep thousands of jobs in the film and television industry. The jobs range from directors and editors, to costumes and catering. We need to see greater use of tax credits, and oversll tax reductions, in other areas of the economy focused on the creation and retention of jobs in the state.
The Bad
Taxes Fees and Fines
SB 1021 (Wolk) – Would allow more than 1,000 school districts to impose non-uniform parcel taxes. This bill would complicate property tax rates by separating parcels by classifications resulting in different levels of tax.
SB 1021 complicates property tax assessments, potentially raising property taxes for families as well as businesses. Property taxes should be transparent and standardized based on an equal formula. For example a flat rate for all properties, or a square footage basis would be easy to assess, comprehend, and ensure a fair tax structure.
AB 1188 (Bradford) – Lowers the vote threshold from two-thirds to 55 percent to authorize new debt to fund specified public safety facilities and structures.
Despite the fact that the majority of property tax and bond debt proposals are approved by voters at the current ⅔ vote requirementpass required under Propodition 13, the Majority party continues to try to make exceptions. This bill definitely makes it easier to increase debt and property tax.
AB 2393 (Levine) – Doubles a tax that counties may impose on annual vehicle registrations to fund the purchase and operation of automated fingerprint identification systems, from $1 to $2 ($2 to $4 for commercial vehicles), without a two-thirds vote of the Legislature or of the local electorate. Undermines the will of voters, imposes an unconstitutional tax increase on vehicle owners, and violates Proposition 26 (2010), Proposition 218 (1996), and Proposition 13 (1978).
AB 1324 (Skinner) – Authorizes Alameda County to double the fee on motor vehicles from $1 to $2 ($2 to $4 for commercial vehicles) without a vote of the people, per Proposition 26 or Proposition 218. The revenue would be spent on programs that enhance the deterrence, investigation, and prosecution of vehicle theft crimes in local communities.
Another example of the majority party passing tax increases without the proper vote threshold. Californian’s already experience one of the highest tax burdens in the nation, and “fees” such as this one are routinely added on each year.
Job Killers
SB 935 (Leno) – Will increase the minimum wage to $11 an hour on January 1, 2015 with following increases in the next two years to reach $13 an hour in 2017. After that the minimum wage will be adjusted for inflation on a yearly basis.
This bill will disproportionately harm small business in the state. The minimum wage is already set to increase to $9 an hour next month, and $10 an hour on January 1, 2016. Most businesses will be unable to adjust quickly enough without reducing workers hours, reducing staff, and in some cases going out of business altogether. If it costs more to hire an employee (this applies to wages as well as healthcare,etc), then prices must increase to compensate. If the price becomes prohibitive there are 2 choices: reduce staff to cut salary expense, or close up. We in California have seen many businesses close and/or relocate out of state. With high unemployment and high under-employment, now is not the time for the state to force salary increases.
AB 1897 (Hernández) – this bill would force employers to pay wages, taxes and workers compensation on labor subcontractors if a contracting agency reneges on that responsibility.
An attorneys dream becomes another employer nightmare. This bill puts companies at risk of having to pay twice for work performed, once to the contractor and again to the contractor’s employee if the contractor doesn’t pay his/her bills. Incidentally, it provides no justification as to why public employers are excluded from the bill.
The Ugly
YIKES! Litigation Nightmares
AB 2416 (Stone)– Would authorize any employee, employee representative, or the Labor Commissioner be authorized to file a pre-judgment lien against the employer’s real or personal property, or a property where work was performed on the basis that the employee believes he or she has a valid wage claim against the employer.
A litigation nightmare, the liens allowed under this bill can be filed without any judge determining that wages are actually owed. Fuels more litigation, and provides the opportunity for a former employee to place a lien against a former employer. This bill also allows for a lien to be filed against third party individuals who own the property where work took place, who likely have no involvement or knowledge of the wage dispute.
AB 2617 (Weber) – Interferes with private dispute resolutions by prohibiting the enforcement of arbitration agreements or pre-litigation settlement agreements that require the individual to waive their right to pursue a civil action for the alleged violation of civil rights.
Arbitration has evolved into a productive and useful method for resolving disputes, allowing parties to solve cases in a usually faster and cheaper manner than litigation. This bill harms this process and could lead to costly litigation while discouraging job creation.
SB 1188 (Jackson) – Exposes merchants to tort liability after the expiration of a product’s express warranty for “material” omissions regarding the product that are wholly unrelated to health and safety concerns.
This bill would render warranties meaningless, and do nothing but fuel trial lawyers.
ACA 6 (Gatto) – Increases the vote threshold for the People to adopt a constitutional amendment proposed by citizen initiative, from a simple majority to a 55% vote.
This proposal takes power away from the people of California by making it more difficult to pass initiatives such as Prop. 13 and Prop. 26 (2/3 vote for fee increase). It keeps in place the 50 percent threshold for Legislature proposed initiatives creating an uneven double standard.
A Few More…Bad Mandates
AB 1444 (Buchanan) – Mandates that all children must complete one year of kindergarten before they are allowed to be admitted to first grade, regardless of their ability to perform at grade level.
Another example of costly one size fits all mandates in education.
AB 1992 (Quirk) – Allows the Air Resources Board to require fuel wholesalers, producers, and importers, to include between 0.25% and 2% of very low carbon transportation fuel as part of its fuel sales in the state.
These businesses are already mandated to reduce the carbon intensity of their fuels by 10% by the year 2020. Instead of focusing on this effort, this bill would require the entities to also procure up to an additional 2% of very low carbon transportation fuel. California already has some of the highest fuel costs in the nation this bill will help to further increase them.
Ending on a Humorous Note…Are You Kidding Me?
SB 967 (De León) – Seeks to address the problem of rape and sexual assault on college campuses by requiring each campus to institute policies to require affirmative, unambiguous, and conscious decision by each participant to engage in mutually agreed-upon sexual activity. This would also apply to those in committed relationships.
Rape and sexual assault are serious matters. This solution proposed in this bill will do little to prevent future incidents, and puts in place a confusing and hard to enforce mandate that impinges on the legal private behavior of the majority of campus residents. Are men and women going to have to sign disclosure documents?