Bad bills for apartment biz: Most died, but 2 need Brown’s veto

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Gov. Jerry Brown

Gov. Jerry Brown

In 2014, the California Apartment Association helped kill a host of bad bills that would have, among other things, undermined the Ellis Act and encouraged jury trials in eviction disputes.

And while CAA largely succeeded during the legislative session, a couple of bad bills made it to the governor’s desk.The fight continues – see our links to letters — as CAA and a broad coalition of business interests encourage Gov. Jerry Brown to veto the following two bills:

Faulty legislation on the governor’s desk

AB 1897 (D-Hernandez) – Labor: Client Liability: This bill would imposes strict liability on an employer who uses subcontractors from a labor firm. The bill would mandate that employers who use a labor firm be liable for the labor firm’s failure to obey labor laws. So any employer, say a property management company, would be liable if a labor firm failed to pay legal wages or worker’s compensation coverage. Moreover, a landlord would be liable if the labor firm blew off occupational health and safety requirements. It wouldn’t matter if the rental housing professional had nothing to do with alleged violations or the working conditions for the labor firm’s contracted employees. It wouldn’t matter if the property manager had no control over how contracted employeers were paid, their work schedules or their work environment. Link to letter

AB 2617 (D-Weber) – Arbitration Agreements: AB 2617 would unfairly prohibit an employer’s enforcement of arbitration agreements or pre-litigation settlements when they require that employees waive their right to sue over an alleged violation of their civil rights. Link to letter

While efforts continues to keep the above bills from becoming law, the rental housing industry can celebrate the demise of the business-unfriendly proposals summed up below.

Faulty bills that died in the Legislature

AB 2405 (D-Ammiano) – Ellis Act: This bill attempted to convert all Ellis Act court filings to general civil actions, forcing them through a lengthy trial process that could have taken years. The bill also would have allowed a city or county to prohibit use of the Ellis Act by owners if the city or county had failed to identify, or make available, adequate sites to build low‐ and moderate‐income housing to satisfy its portion of the regional housing need. Failed passage in the Assembly Judiciary Committee. Link to Letter

CAA kills Ammiano’s anti-Ellis Act bill

SB 1439 (D-Leno) – Ellis Act: This bill proposed to change state law to authorize San Francisco to prohibit an owner of residential rental property from withdrawing rental units from the market unless the owner of the property had owned the building for five straight years or more. Failed passage in the Assembly Housing and Community Development Committee. Link to Letter

Leno’s anti-Ellis Act bill dies

AB 969 – (D-Ammiano) – Jury Trials and Nonpayment of Rent: AB 969 attempted to do two things:

  • It proposed to create an assumption that a tenant is justified in withholding rent to make repairs that the landlord has failed to do. It would have made it easier for a tenant to claim “retaliation” if the landlord moves forward with an eviction when a tenant withholds rent to make repairs.
  • It proposed to encourage jury trials in eviction cases by adding the term “jury” to the code sections that govern housing habitability.

Failed passage in the Assembly Judiciary Committee. Link to letter

AB 2416 (D-Stone) – Liens: Laborers and Employees: This bill would have crippled California businesses by allowing any employee, governmental agency, or anyone “authorized by the employee” to record super priority liens on an employer’s real property or any property where an employee “performed work” for an alleged, yet unproven, wage claim. This bill would have severely disrupted commercial and personal real estate markets in this state as AB 2416 would allow a wage lien to take precedence over almost all other liens or judgments. Failed passage on the Senate floor. Link to letter

This year, the California Apartment Association analyzed thousands of bills and continues to track hundreds of them.

SB 121 (D-Evans) – Corporations: Politcal Activity: This bill attempted to require corporations annually to issue reports on past political expenditures to California shareholders, notify shareholders within 24 hours prior to contributions made during their fiscal year, and create a civil cause of action for shareholders against corporations that fail to issue the report and meet the notification requirements. Failed passage in the Senate Banking and Financial Institutions Committee – Link to letter

SB 626 (D-Beall) – Workers’ Compensation:  SB 626 attempted to roll-back workers’ compensation reforms dealing with timely, high-quality medical treatment, and a more predictable – and less litigious – permanent disability system.  It would have severely undercut the recent balanced workers’ compensation reform deal agreed to by labor organizations and employers and would have resulted in dramatic cost increases to California employers. Failed passage in the Senate Labor and Industrial Relations Committee. Link to letter

AB 561 (D-Ting) – Documentary Transfer Taxes: AB 561 attempted to change the tax law by allowing a transfer tax to be imposed when there was a “change in control” of the property as opposed to a sale of the property. Failed passage in the Assembly Revenue and Taxation Committee. Link to letter

SB 1021 (D-Wolk) – School Districts: Parcel Taxes: Similar to last year’s AB 59 (D-Bonta), SB 1021 would have overturned a recent court case that prohibits school districts from imposing different parcel tax rates on different types of property. This bill attempted to allow a school district to impose tax assessments within a district based on characteristics such as the size of the parcel, the size of improvements to the parcel, or the use of a parcel. Failed passage in the Assembly and Revenue and Taxation Committee. Link to letter

SB 1372 (D-DeSaulnier) – Corporate Tax Rate: SB 1372 would have changed the flat corporate tax rate of on publicly held corporations to a tax rate based on the salaries of each corporation’s chief operating officer, highest paid employee, and its employees. Failed on the Senate Floor. Link to Letter

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Tagged: Tri-County