Assault on Prop. 13 protection stopped—for now
State Director John Kabateck and Policy Director Shawn Lewis report from Sacramento
After a quiet summer recess in Sacramento, the Legislature has returned to finish the first half of the 2019-20 session before adjourning September 12. After that, Gov. Gavin Newsom has until October 13 to sign or veto legislation, which is a top concern given that his predecessor, Gov. Jerry Brown, vetoed only a handful of bad bills in recent years. With this new governor, NFIB is working hard to stop a number of issues from reaching his desk in these final weeks.
- Over the summer recess, NFIB and other employer groups offered amendments to Assembly Bill 5 to provide a broad exemption from the new, problematic independent contractor rules under Dynamex for clear business-to-business contractual relationships. This exemption would provide broad relief to most small business structures in California, rather than narrowly exempting specific industries. The author of Assembly Bill 5 and labor interests have been resistant to our definition of “business-to-business” and have rejected our amendments so far in the process. AB 5 currently sits in the Senate Appropriations Committee but is expected to move to the Senate Floor next week, where NFIB will continue to oppose it unless amended to include this business-to-business exemption, while also rectifying retroactive application concerns.
- This week, NFIB was victorious in stopping another tax increase by defeating Assembly Constitutional Amendment 1, which sought to lower the voter threshold to raise local taxes from two-thirds to 55 percent. For years, tax-and-spend advocates have fought against this Prop. 13 protection, and this week the State Assembly brought it to a floor vote, where it failed. Since it is an ACA rather than a regular Assembly Bill, it is not subject to deadlines, and very likely will return to the Assembly Floor for another vote before session adjourns this year.
- As we get down to these final weeks of the session, there are always a few surprises “gut-and-amend” bills which appear at the last minute, and AB 1270 is one that NFIB started aggressively opposing this week because it would create a new wave of litigation under a California-specific False Claims Act. In short, AB 1270 would give plaintiffs’ attorneys the power (and profit motive) to sue any tax-filer—individual and/or small business—for fraud under the False Claims Act, which dramatically lowers the legal standard for fraud to something as minor unintentional record-keeping errors. We are urging the Senate to reject this legislation as it would create the potential for ADA-style shakedown lawsuits for minor, unintentional tax-filing errors.
- In these final weeks, NFIB is also pushing back against AB 1080/SB 54, which are companion bills seeking to prohibit manufacturers from producing and retailers from distributing any non-recyclable single-use packaging by 2030. This radical environmental proposal would clearly lead to increased costs and regulatory complications to small business owners.
