As the new legislative year began, several job killer bills were laid to rest again following continued strong opposition from the California Chamber of Commerce, local chambers of commerce and allied groups.
• AB 1000 (Reyes; D-San Bernardino), a de facto ban of warehouses, was pulled from the agenda for a scheduled hearing in the Assembly Local Government Committee, which had rejected a previous version of the bill last year,
• AB 259 (Lee; D-San Jose), seeking to tax all forms of personal wealth, was held on the Assembly Revenue and Taxation Committee Suspense File, but the Governor had already declared that concept not to be an option.
• AB 1156 (Bonta; D-Alameda), creating a costly presumption in the workers’ compensation system by presuming certain diseases and injuries are caused by the workplace, was never scheduled for a hearing following CalChamber opposition efforts.
As amended on January 3, AB 1000 failed to address the list of concerns raised by a CalChamber-led opposition coalition and by some members of Assembly Local Government last year, the coalition pointed out in a letter to committee members.
AB 1000 was still far too prescriptive and would have led to the elimination of high paying jobs, quashed critically needed housing associated with mixed use developments in the region, increased vehicle miles traveled for heavy-duty vehicles coming from California ports, incentivized frivolous litigation with a new private right of action in California law, and exacerbated supply chain issues that would have increased the costs to move goods, thereby increasing the cost of living on all Californians.
As amended, AB 1000 continued to require a setback of 1,000 feet from “sensitive receptors” for all new or expanded logistics use facilities 100,000 square feet or larger in Riverside and San Bernardino counties and any city located within the two counties.
Like all prior versions, AB 1000 relied on significantly outdated information that will in effect create a de facto ban on warehouses throughout the region, which will have statewide implications to California’s goods movement system. AB 1000 continued to create a new private right of action in California that empowered virtually anyone to act as a prosecutor to sue to block a project.
As amended this year, AB 1000 differed from the version rejected by Assembly Local Government last year by changing the alternative pathway provided to local governments from a 750-foot buffer to a 500-foot buffer if a project applicant can satisfy all mitigation measures outlined in the bill. The alternative was illusory because the mitigation measures required were either infeasible or so cost prohibitive that they could not be achieved.
These mitigation measures are in addition to those imposed by the California Environmental Quality Act (CEQA), as well as a plethora of rules and regulations required by the California Air Resources Board (CARB) and the South Coast Air Quality Management District (SCAQMD) that are leading the nation in air quality management and have reduced heavy-duty truck particulate matter emissions by 99% since 2005.
AB 259 sought to tax all forms of personal property or “wealth,” whether tangible or intangible, in addition to California already having the highest income tax in the country.
The CalChamber has worked actively to oppose and kill proposals that raise taxes on Californians.
In its letter on AB 259, CalChamber pointed out that the tax increase would drive high-income earners and their substantial tax payments out of the state.
AB 259 implicitly acknowledged that rates for existing California income taxes have reached beyond their practical or political maximums, so proponents proposed to devise an entirely new tax never before considered for the state.
Not only was the proposed tax audacious in the amount of new revenue to be raised, estimated by some at $21.6 billion a year; it targeted individuals who may have only a fleeting connection with the state—reaching across time and space to seize revenues from successful entrepreneurs and business owners.
AB 259 would have imposed an annual tax beginning on or after January 1, 2024, and before January 1, 2026 at a rate of 1.5% of a resident’s worldwide net worth in excess of $1 billion or in excess of $500 million in the case of a married taxpayer filing separately.
After January 1, 2026, a tax of 1% would be levied upon the worldwide net worth of every resident in this state in excess of $25 million (for married taxpayers filing separately) or $50 million for all other taxpayers. Worldwide net worth would not include any real property directly held by the taxpayer (but would include indirectly held real property).
There would have been an additional 0.5% surtax upon worldwide net worth in excess of $500 million for married taxpayers filing separately and $1 billion for all other taxpayers. Worldwide net worth would be calculated in the manner set forth for calculating the federal estate tax under the Internal Revenue Code and would be the value of all worldwide property owned by the taxpayer on December 31 of each year.
The bill would have authorized the California Franchise Tax Board (FTB) to adopt regulations to prevent the avoidance or evasion of the wealth tax.
AB 1156 would have significantly increased workers’ compensation costs for public and private hospitals by presuming certain diseases and injuries are caused by the workplace and established an extremely concerning precedent for expanding presumptions into the private sector.
Injuries occurring within the course and scope of employment are automatically covered by workers’ compensation insurance, regardless of fault. AB 1156 would have required that hospital employees do not need to demonstrate work causation for specified injuries or illnesses in any circumstance. Instead, these injuries and illnesses would have been presumed under the law to be work related. There is simply no data to support a need for this bill and it would have created a tiered system of benefits that treats employees differently based on occupation and undermined the credibility and consistency of our workers’ compensation system.
The Legislature has consistently rejected all eight versions of this bill, including narrower versions, over the last 14 years.