(April 16, 2013) Two California Chamber of Commerce-opposed “job killer” bills were held yesterday in committees of their house of origin, pending reviews of the bills’ fiscal impacts.
AB 188 (Ammiano; D-San Francisco) unfairly targets commercial property by redefining “change of ownership” so that such property is more frequently reassessed, which will ultimately lead to higher property taxes that will be passed on to tenants, consumers, and potentially employees.
SB 404 (Jackson; D-Santa Barbara) makes it virtually impossible for employers to manage their employees and exposes them to a higher risk of litigation by expanding the Fair Employment and Housing Act (FEHA) to include a protected classification for any person who is, perceived, or associated with an individual that provides “medical or supervisory” care to a family member.
Increases Property Taxes
Ultimately, increasing property taxes for commercial property will have detrimental impacts on the general public, including small businesses, apartment residents, employees, and consumers.
Any higher taxes imposed on companies who own commercial property will likely be passed on to the tenants of such property through higher rent, including businesses as well as individuals who rent apartments in which to live. The increased costs could result in reduced employee benefits, workforce reductions, or even higher prices for consumers.
Moreover, the proposed definition of “change of ownership” under AB 188, will trigger reporting requirements for multiple “owners” of these entities. Despite the percentage of ownership acquired, an individual or entity will be required to report this change in ownership or face a penalty up to 20% of the assessed fair market value of the commercial property. A penalty for failure to file a statement is imposed even if the county assessor ultimately determines no “change of ownership” has occurred. This duplicative and onerous reporting requirement that AB 188 seeks to impose creates a potentially unfair monetary trap for a minority owner in a company who is unaware that a 100% change of ownership has even taken place within the previous three years.
AB 188 will be considered by Assembly Revenue and Taxation at the suspense file hearing in May and may be voted off the suspense file at that time and sent to the full Assembly for a vote.
Contact your Assembly representatives and members of Assembly Revenue and Taxation Committee and urge them to oppose AB 188.
The burden that SB 404 creates will have an impact on small businesses because the Fair Employment and Housing Act (FEHA) applies to any employer with five or more employees. Accordingly, SB 404 will subject these small businesses to potentially costly litigation based on the allegation that an employee who suffered an adverse employment action provided familial medical or supervisory care, was perceived as providing such care, or was associated with someone providing such care.
Employees Already Protected
California already protects employees from discrimination on the basis of sex, pregnancy, medical condition, mental disability, or physical disability. Similarly, California provides employees with leave to care for the serious medical condition of family members, which may be compensated through California’s Paid Family Leave Act.
In addition, California also requires “kin care,” mandating that an employee be allowed to use at least half of any accrued sick leave to care for family members. These various leaves and protections are in addition to those provided by federal law. Given these existing protections, there is no reason to include under California law the broad protected classification SB 404 proposes, other than to increase litigation opportunities.
Approximately 19,500 discrimination claims citing FEHA were filed in 2010 with the state Department of Fair Employment and Housing, which was 1,000 complaints more than in 2009. Notably, more than 4,000 of these complaints were dismissed due to lack of evidence of any violation. Adding this new expansive classification to FEHA will only cause such cases to increase dramatically, thereby burdening the state agency as well as California employers with costly litigation.
SB 404 will be considered by Senate Appropriations at the committee’s next hearing and may be voted off the suspense file and sent to the full Senate for a vote.
Contact your Senate representatives and members of Senate Appropriations and urge them to oppose SB 404.