CBPA Weekly Update 👋

California Business Properties Association

ICSC - BOMA California - NAIOP California - IREM California - RILA - Nareit - CALED - ACRE - AIR CRE

Matthew Hargrove

President & CEO

Melissa Stevens

Chief Operating Officer

Rex W. Hime

VP Strategic Communications

Crystal Whitfield

Executive Assistant

Rex S. Hime

Senior Advisor

CBPA

Weekly Update

May 20, 2022

WAREHOUSE/LOGISTIC CENTER BAN HEADS TO FLOOR – CONTACT YOUR ASSEMBLYMEMBERS
SUPPLY CHAIN AND ECONOMIC REINFORCEMENT - ASSEMBLY FLOOR
FISCAL COMMITTEES - SUSPENSE FILE
CALIFORNIA BUDGET - RESPONSES TO GOVERNOR'S MAY REVISION
UNEMPLOYMENT INSURANCE FUND DEBT - REQUEST FOR MORE FUNDS
TAXPAYER PROTECTION ACT - 2024 BALLOT
CALIFORNIA COMMERCIAL REAL ESTATE SUMMIT – AUGUST 9-10, 2022
CBPA 2022 CALENDAR

Warehouse/Logistic Center Ban Heads to Floor -

Contact Your Assemblymembers

AB 2840 (Reyes) the bill that would create a de facto ban on most new warehouse projects will be heard on the Assembly Floor next week.

In the plainest language, AB 2840 attempts to stop the building of any facility 100,000 s.f. or more within 1,000 ft of a “sensitive receptor,” which has a broad definition but is basically most non-industrial uses. Additionally, all projects that are not banned due to proximity to a sensitive receptor must have a skilled and trained workforce agreement to be approved.

Even if your company doesn’t build/own these types of facilities, the precedent set by this bill will have a huge impact on all commercial real estate projects in the future.

In addition to creating new statewide construction buffers in statute, the bill continues to mandate skilled & trained workforce requirements on all warehouse projects 100K s.f. and greater, circumvents local land uses processes, and ignores the nation’s strongest environmental laws.

We are working with our coalition partners in preparation for a floor vote, as seen on this Floor Alert, to make sure the severity of the negative impacts this bill is communicated directly to legislators.

AB 2840 will disrupt California’s ability to move goods effectively and efficiently; will stop local economic development and redevelopment projects; and will kill high wage jobs in areas where they are needed most.

CLICK HERE for more AB 2840 Resources.

To find your local representative, click here.

Contact your local Assemblymember and ask them to OPPOSE AB 2840!

Supply Chain and Economic Reinforcement -

Assembly Floor

AB 1951 (Grayson), a bill that would expand until 2028, the existing partial sales and use tax (SUT) exemption for manufacturing and research and development (MR&D) tangible personal property (TPP) by making the expenditure a full exemption and removing the $200 million cap on qualifying purchases per individual purchaser is headed to the Assembly Floor.

We are part of a coalition led by CMTA supporting this legislation as it moves through the process.

AB 1951 is a key step toward addressing California’s supply chain disruptions, incentivizing businesses to scale up production and capacity with firms purchasing more from California-based suppliers.

This bill will also help with California’s competitiveness with other states. AB 1951 is a full sales and use tax exemption for the purchase of manufacturing equipment, putting California in line with 38 other states and stopping the pattern of “invent here, build there.”

As one of our main priorities this year is the supply chain and goods movement sector, this is a bill we strongly support and will be pushing for its pass on the Assembly Floor.

To read the coalition’s Floor Alert, click here.

Stay tuned for more updates on this legislation in the coming weeks.

Fiscal Committees -

Suspense File

Yesterday, both houses of the California State Legislature dealt with hundreds of bills on their fiscal committee’s “Suspense File.”

Any bill that has a significant cost to the state’s General Fund, generally $150K or more, goes to Suspense. This ostensibly allows the committee members to get a full picture of new costs to the state, prioritize requests, and limit the impact on public funds for new legislative initiatives.

However, the business community has long complained that this process does not also consider costs to private sector companies or impact on jobs – both of which have an indirect impact on the state budget. Even with that, the Suspense File is a place where bills we oppose tend to stall.

Over 950 bills were collectively on Suspense. The Senate held 48 (13%) while the Assembly held 171 (28%). Here are few of the bills held by the committee:

AB 2829 (Low) Certified Access Specialist Inspection Grant Program. (SUPPORT)

The bill would authorize small businesses, defined to mean a business with fewer than 50 employees, as specified, with a physical property in the state, to apply for a grant for a CASp inspection of the small business’s property, in an amount equal to the actual cost of the inspection, not to exceed $3,000 per inspection. The bill would require the State Architect to develop an application and to develop criteria to evaluate and award the grants, as specified, and would require the State Architect to annually submit a report to the Legislature on the results of the program.

AB 1679 (Fong) Governor’s Office of Business and Economic Development: California Business Investment Services Program: Supply Chain Senior Advisor. (SUPPORT)

This bill would require the director to appoint a Supply Chain Senior Advisor within the office to be the principal advocate in the state for the interests of business and industry related to supply chain development and operation and to advise the director on legislation, administrative regulations, and other issues affecting the state’s supply chain.

AB 1858 (Quirk-Silva) Substandard buildings. (OPPOSE)

Extends existing inspections and code enforcement to any buildings used for human habitation, regardless of zoning, and creates tenant protections when buildings are deemed unsafe. The language is vague enough to include your properties.

AB 2570 (Daly) Unemployment insurance: Unemployment Fraud. (SUPPORT)

This bill would make a one-time transfer of $7,250,000,000 from the General Fund to the Unemployment Fund for the purpose of paying down outstanding debt in that fund.

California Budget -

Responses to Governor's May Revision

Last Friday, California Governor Gavin Newsom proposed a $300.7 billion budget to provide relief for Californians.

We are making a strategic push with the greater business community to call for the allocation of more budget funds for desperately needed areas that would be beneficial to California.

Our main priorities are infrastructure for housing, transportation and water needs, cost of living, such as energy, water, and inflation, as well as paying down the Unemployment Insurance Fund Debt.

CalChamber President and CEO Jennifer Barrera stated,

“CalChamber urges elected leaders to offset additional costs on employers, including paying down the Unemployment Insurance Fund debt. CalChamber looks forward to working with the administration and lawmakers to address the underlying causes of rising prices and provide relief to employers and their employees.”

Additionally, the Legislative Analyst Office released on Monday their initial comments in response to the May Revise.

The LAO shared a cautious viewpoint on the size of the budget in their Key Takeaways.

“May Revision Sets Up Fiscal Cliff for 2023-24. While the administration meets the SAL requirements across the prior and current year, the Governor leaves $3.4 billion in unaddressed SAL requirements in 2022-23. Moreover, we estimate the state would face an additional SAL requirement of over $20 billion in 2023-24. The Governor’s May Revision does not have a plan to address this roughly $25 billion requirement. As a result, the state would very likely face a significant budget problem next year, which could require reductions to programs. Recession Risk Heightened. Predicting precisely when the next recession will occur is not possible. However, certain economic indicators historically have offered warning signs that a recession is on the horizon. Many of these indicators currently suggest a heightened risk of a recession within two years.”

If you would like to get into the weeds on this May Revise of the Budget proposal, click here.

See below for updates on one of our coordinated efforts for funding on paying off the UI Debt.

Unemployment Insurance Fund Debt -

Request for More Funds

We are part of a large CalChamber led coalition requesting $10 billion for Unemployment Insurance Fund (“UI Fund”) relief be included in the 2023 budget. We are asking for both short-term and long-term relief, as it is imperative to staving off the consequences of the UI Fund’s debt.

Specifically, we are asking for $1B to reimburse employers for the 2023/20024 tax increases. This would cover the payroll tax increases caused by the UI Fund’s Debt. Additionally, we are requesting $9B to reduce the outstanding debt and address future tax increases in 2025 and beyond.

Now is the time to protect California’s fledgling recovery by taking action on California’s UI Fund. California’s businesses are trying to re-hire and rebuild – and increasing per-employee taxes will only slow that recovery. Moreover, such spending is a win-win because it will simultaneously avoid Gann limit concerns and will help reduce the state’s future budget obligation.

To see the entire coalition and read our budget request letter, click here.

This is a high priority for our industry and the business community as whole, stay tuned for more news on this request in the coming weeks.

Taxpayer Protection Act -

2024 Ballot

The Taxpayer Protection Act (TPA) which has collected over 1 million Signatures and will qualify for the November 2024 statewide ballot.

Below, please find a statement by the campaign on their commitment to the voters and updates on this initiative.

“Despite being on the streets for just three months, we have already collected more than 1.1 million signatures – making us the most popular of all the ten measures that have been competing for signatures in this election cycle.

It’s clear that with our highest cost of living and state/local taxes that voters want more of a say over new and higher taxes in the future in addition to much-needed oversight and accountability for unelected bureaucrats who are making policy and regulatory decisions that raise costs on all working families.

To ensure that voters have that say in the future, we have made the decision to keep our commitment to you (and the voters) by continuing to collect our full 1.5 million signatures to ensure we qualify for the ballot. By making this decision we are now moving forward for the 2024 election instead of the 2022 election. Rest assured: you will have the opportunity to support and vote for the Taxpayer Protection and Government Accountability Act in 2024.”

As we prepare to assure this important measure PASSES in the 2024, we will also be focusing on other important statewide ballot measures. We will also get more involved with helping to stop some of the local tax proposals using the Upland Loophole to pass taxes with a bare majority, 50% of votes, such as the L.A. City Real Estate Documentary Transfer Tax that will cost our industry $800M per year in that one city alone unless we stop it.

California Commercial Real Estate Summit -

August 9-10, 2022

The California Commercial Real Estate Summit (CCRES) previously schedule for early June, is now scheduled for August 9-10, 2022.

We apologize for the postponing, lingering impacts of COVID restrictions made space availability an issue and the proximity with the primary election and a change in the legislative schedule was not conducive to securing meetings with legislators.

We respects your time, and we did not want to ask you to travel to Sacramento unless it would be worth the effort and expense. We believe August is a better time this year.

Thank you for your flexibility and understanding that postponing CCRES is the prudent thing to do, we apologize for any inconvenience this causes.

CCRES is the one time of year that industry leaders from all sectors of the commercial, industrial, and retail real estate industry join come together from across the nation and hear from top policymakers and California State Legislators.

In the very near future, more information on hotels, meeting space, and agenda items for the event will be provided as we prepare for a great CCRES!

We look forward to seeing you there!