The California Legislature never ceases to amaze with some of their most creative, imaginative schemes to tax, regulate, and mandate small businesses and taxpayers in new ways. It’s a dangerous game—one minute, we might joke in passing about how California would love to figure out a way to assess property taxes on a satellite orbiting the planet—and the next minute, the County of Los Angeles tries to do just that. The legislature reminds us to be careful what we joke about.
In just the first three months of the new 2017-18 legislative session, legislators have been busy introducing roughly 2,500 bills, although about 500 are ‘spot’ placeholder bills which will suddenly morph into entirely new bills with little notice or analysis.We will be watching closely to see how well the legislature abides by new transparency requirements under Proposition 54, and how they may try to skirt the new 72-hours-in-print rule.
For now though, we have zeroed-in on current legislation which will have the greatest impact, either negative or positive, on small businesses across the state. NFIB California’sThe Good, The Bad, & The Uglybill list is the go-to legislative source for small business owners and all Californians concerned with supporting job creation in this state. Of the 70 bills currently on the list, we are encouraged by the fact that half are good bills, and among those 35 good bills, nearly 50% are authored by Democrats and 50% are authored by Republicans. This would suggest that there should be nothing partisan about advancing commonsense, pragmatic proposals to support small business.
With that said, there is also no shortage of bad and ugly bills which we are working hard to defeat. Below are a few quick highlights ofThe Good, The Bad, & The Uglybills, and you can always find the current list at www.nfib.com/ca/gbu
The Good Bills
AB 12 (Cooley): Agency Review of Regulations – Support: Requires all agencies to do a full review of their regulations to see if they are outdated, too costly, or overlap with other rules. Such a full-scale review has not happened in decades.
AB 77 (Fong): Legislative Approval of Costly Regulations – Support: Requires legislative approval for any regulations with an impact of over $50 million.
AB 281 (Salas): PAGA Reform – Support: Amends the Private Attorneys General Act to allow aggrieved employees to only collect civil penalties for an employer violation that the employee actually suffered harm from. It also increases the employer’s right to cure from 33 to 65 days, and limits the exclusions from the right to cure to only health and safety violations.
SB 600 (Galgiani): Manufacturing and R&D Tax Credit – Support: An intent bill that will create tax incentives for manufacturing and research and development in order to create more high-wage jobs.
The Bad Bills
AB 43 (Thurmond): Department of Corrections Contracting Tax – Oppose: Imposes a 10% tax on businesses that contract with CDCR for the “privilege” of having a state contract in order to fund education programs designed to discourage future criminals. It sets a bad precedent by taxing businesses just for having a state contract.
AB 479 (C. Garcia/Gonzalez): Alcohol Tax – Oppose: Implements a new tax on hard alcohol to fund a sales tax exemption for feminine hygiene products and diapers. Taxing one industry to subsidize another is not good policy.
AB 570 (Gonzalez-Fletcher): Workers’ Compensation Apportionment – Oppose: This bill sets a huge precedent by barring specific factors from being considered as pre-existing conditions when a workers’ comp settlement is being negotiated. Specifically, pregnancy, childbirth, or other medical conditions related to pregnancy or childbirth cannot be considered as contributing to a workplace injury. This new precedent will result in more expensive claims against employers.
AB 1099 (Gonzalez-Fletcher): Tipping – Oppose: This nanny government bill requires any industry where tipping could occur, and that allows credit/debit card payments for services, to also accept tips via credit/debit cards. Requires new formatting of credit card receipts.
The Ugly Bills
AB 5 (Gonzalez-Fletcher): Opportunity to Work Act – Oppose: Requires employers with 10 or more total employees to offer more hours to their part-time employees before they can hire new workers, including temporary or seasonal staff. It creates a new right to sue your employer if you don’t get more hours.
AB 274 (C. Garcia): Sales Tax on Snack Foods – Oppose: Reinstates a sales tax on snack foods by reversing a 1992 voter initiative that repealed a previous tax. This is the implementation bill for ACA 2 by the same author, and will define “snack foods.”
SB 49 (De Leon/Stern): Environmental Laws – Oppose: Requires all state and local environmental laws to be at least as stringent as federal policy before January 1, 2017. Creates an individual right to sue to enforce the law. Eliminates flexibility in the law and will lead to yet more litigation in our litigious state with overburdened courts.
SB 640 (Hertzberg): Sales Tax on Services – Oppose: An intent bill that will expand the state sales tax to services. Small businesses would have to collect a new tax, and also pay the tax when they hire out for services.
Tom Scott is the State Executive Director for NFIB California, which represents 22,000 dues-paying small business members across the state.