Board of Directors Meeting Kaiser Permanente Medical Offices John Heffernan, Chairman Tuesday, February 4, 2020
1. Welcome John Heffernan, Chair a. Flag Salute 2. Self-Introductions and Sign-In All Participants 3. Approval of Minutes Serena Josel, Secretary 4. Industry Insights a. Consulate General of Canada- Zaib Shaikh 5. Government Affairs Report PEAR Strategies a. Two Year Bill Review
b. AB 713 (Mullin) California Consumer Privacy Act of 2018
c. SB 37 (Skinner) Corporation Taxes: Tax Rates
d. Prop 13_March 2020
e. Measure FD_March 2020
f. Measure R_March 2020
g. Sacramento Advocacy Day
6. Office Holders, Administrative Agencies and Community Partners - Please limit your reports to no more than 3 minutes. a. U.S. Chamber of Commerce - Jennings Imel and Vartan Dijhanian
b. League of California Cities - Jeff Kiernan
c. South Bay Cities Council of Governments - Hon. Olivia Valentine
d. Office of Congresswoman Waters - Blanca Jimenez
e. Office of Congressman Lieu – Aurelia Friedman
f. Office of Senator Allen - Sam Liu
g. Office of Senator Bradford - Nital Patel
h. Office of Senator Lena Gonzalez- Tyler Curley
i. Office of Assemblymember Burke - Robert Pullen-Miles j. Office of Assemblymember Gipson - Chris Wilson
k. Office of Assemblymember Muratsuchi – Cody Bridges
l. Office of Assemblymember O’Donnell- Hina Ahmad
m. Office of Supervisor Hahn- Jennifer Lamarque
n. South Bay WIB - Chris Cagle o. South Coast AQMD p. Los Angeles Air Force Base [Officeholder representatives, non-chamber members, and guests are respectfully asked to leave the meeting at this point] 7. Chair’s Report J. Heffernan a. Legislative Mixer 8. Financial Report Charles Gale, Treasurer a. Profit and Loss b. Balance Sheet 9. Adjournment/Announcements All a. Special thanks to Kaiser Permanente for hosting us b. Special thanks to Donna Duperron and the Torrance Area Chamber of Commerce for Breakfast. c. Next SBACC Meeting is Tuesday, March 3, 2020
Board of Directors Meeting Kaiser Permanente Carson Medical Offices John Heffernan, Chairman Tuesday, January 7, 2020 S. Josel, M. Lyon, H. Rogers, C. Bos, P. Donaldson, W. Love, D. Hoffman, J. Heffernan, D. Duperron, D. Leger, M. Garth, E. Hupp, C. Meander, G. Kivett, C. Dunbabin, D.Knoll, E. Swanson, J. Kiernan, S. Kramer, K. Stroman, C. Gale, O. Valentine, M. Hunt, V. Djihanian, D. Gamboa, V. Hart, H. Shofani
1. Welcome John Heffernan, Chair a. Flag Salute 2. Self-Introductions and Sign-In All Participants 3. Approval of Minutes Serena Josel, Secretary a. Motion to Support: P. Donaldson b. 2nd: W. Love c. Motion Carries 4. Industry Insights- a. None in January b. FUTURE TOPICS: Opportunity Zones, Commercial Development, Aerospace, Housing, Water, LA Metro, Cannibis, Tarriffs, Voting in Los Angeles County, LAX, Air Force Base 5. Government Affairs Report PEAR Strategies a. 2020 Legislative Calendar -attached you will find the Senate and Assembly calendars. For the most part they follow each other. Historically, we go to Sacramento in May at the end of bill deadline, we have reached out to CalChamber to confirm when they will be hosting the fly in.
b. CA Employment Development Department AB 5 Seminars LINK AB 5 has a lot of questions attached to it and unfortunately, there is a fair amount of nuance with this bill. Some industries are exempt while others are not. EDD is hosting informational seminars around the state. Attached you will find dates, times, and locations.
c. New CA Laws LINK on the 27th the LA Times put forward a great article of some of the big bills Californians will be experiencing. It’s a great article that breaks down the sections
d. Top 3 Business Issues In your community:
i. Homeless and housing, business and sales taxes, workforce housing, splitroll/Prop 13, sales tax max out, smart development, traffic mitigation, encroachment fees, Local PD vs Sheriff, attracting restaurants, TOT incrase, local control, cost of doing business in CA/regulatory environment 6. Office Holders, Administrative Agencies and Community Partners - Please limit your reports to no more than 3 minutes. a. U.S. Chamber of Commerce - Vartan Dijhanian- passage of USMCA, focus on infrastructure in 2020
b. League of California Cities - Jeff Kiernan- The League’s strategic planning took place and homelessness and housing has risen to the top. E-Commerce and sales tax, climate change and sealevel changes.
c. South Bay Cities Council of Governments - Hon. Olivia Valentine- Moving fwd with the fiber network. Homeless count will be on Jan 22. General Assembly is Thursday, March 19. Hawthorne business expo will be Jan 29th
7. Chair’s Report J. Heffernan 8. Financial Report Charles Gale, Treasurer a. Profit and Loss b. Balance Sheet c. Motion to Approve: D. Hoffman d. 2nd: E. Hupp e. Motion Carries 9. Adjournment/Announcements All a. Special thanks to Kaiser Permanente for hosting us b. Next SBACC Meeting is Tuesday, February 4, 2020 at Kaiser Permanente Carson Medical Offices
20 FACTS ABOUT THE NORTH AMERICAN ECONOMY The United States, Mexico, and Canada are bringing North American free trade into the 21st century with the new United States –Mexico–Canada Agreement (USMCA). For over 25 years, free and open trade has helped North America’s economy grow,
1 2 3 4 5 North America is the Since 1994, NAFTA North America With only 6.5% of the Since 1994, the GDP has allowed for free produces goods of North America has trade among 490 & services valued Canada, the U.S. & increased steadily at the world. million consumers. at more than $23 Mexico together an average annual trillion every year. generate 27% of the rate of 2.5%. world’s GDP.
6 7 8 9 10 Trade among Canada, Canada buys over Canada and Canada and Mexico Trade among the U.S. & Mexico is 57% of its worldwide Mexico remain are the two largest Canada, the U.S. & imports from its two the United States’ agricultural export Mexico supports million per hour. NAFTA partners. largest suppliers of markets for the over 12 million agricultural products. United States.
11 12 13 14 15 The U.S. imports 40% Nearly 5 million Total merchandise Total merchandise On average, Canadian of its crude oil from barrels of crude trade between trade among Canada, goods sold to the Canada and 7% from oil and petroleum Canada and the the U.S. & Mexico U.S. contain 25% Mexico. products cross the U.S. has more than has more than tripled American content. Canada–U.S. border doubled since 1993. since 1993. each day.
16 17 18 19 20 Nearly 50% of U.S. The United States Canadian tourists Canadian companies imports from Canada has a 15% surplus in spend $17 billion in manufactured goods the U.S. each year. U.S. directly employ 18% more than the U.S. manufacturers trade with Canada. 825,000 Americans. products.
@Connect2Canada @CanEmbUSA @AmbCanEUA Consul General of Canada Los Angeles
Zaib Shaikh began his mandate as Consul General of Canada in Los Angeles in December 2018. He is the Government of Canada’s senior representative in Southern California, Arizona and Nevada.
He comes to the posting after an extensive career in the media and entertainment industries having worked as an actor and producer in theatre, film and television. His work includes acting roles in Deepa Mehta’s film Midnight’s Children, as well as starring in the CBC comedy series Little Mosque on the Prairie, which has been seen in more than 80 countries. Mr. Shaikh co-produced the special Long Story Short: CBC Turns 75 and co-wrote, directed and co-produced the film Othello: The Tragedy of the Moor. He also co-founded and served as an artistic producer of the Whistler Theatre Project in British Columbia.
From 2014 until his appointment in 2018, Mr. Shaikh was the Film Commissioner and Director of Entertainment Industries for the City of Toronto. In that role, he oversaw and grew the city’s screen, music, live festival, sporting event and tourism sectors, helping to double the value of film production in Canada’s largest city which surpassed $2 billion in 2016.
Mr. Shaikh has served as a board member for the Institute for Canadian Citizenship, the Canadian Centre for Diversity and Inclusion, and most recently, on the board of AFC (formerly the Actors Fund of Canada). He has served on juries and committees for the Gemini Awards, ACTRA Awards, Ontario Arts Council, and Theatre Ontario Youth Program as well as an ambassador for the Centre for Addiction and Mental Health and for Amnesty International Canada.
Mr. Shaikh is married to Ms. Kirstine Stewart. They have two children.
BERIL UNVER Political-Economic Officer Consulate General of Canada, Los Angeles
Beril Unver is the lead policy advocate on trade/economic development, security/defense, and foreign affairs at the Consulate General of Canada. She additionally serves as federal government liaison for the Consulate’s territory encompassing Southern California, Arizona and Nevada.
Prior to joining the Consulate, Beril served as the Senior Programs Officer responsible for substantive planning for all international delegations and foreign policy events at the Pacific Council on International Policy. Before returning home to Southern California, Beril lived and worked in Washington D.C. for the better part of a decade. While in the U.S. capital, she served in various capacities working for The Washington Institute for Near East Policy, Department of Energy, and U.S. Commission on International Religious Freedom. While working as the Congressional Liaison for a non-profit specializing on U.S. Middle East & Balkan policy issues, Beril established an extensive network of contacts in both the Senate and House with whom she remains in close contact to this day.
Beril received her B.A. in International Studies from UCI and her M.A. in International Policy Studies, with a concentration in non-proliferation and conflict resolution, from the Monterey Institute of International Studies. A WIN-WIN-WIN FOR USMCA 21ST-CENTURY TRADE The United States, Mexico, and Canada are modernizing the North American Free Trade Agreement (NAFTA) to bring it into the 21st Century. The new agreement — the United States-Mexico-Canada Agreement (USMCA) — will build on
PRESERVING FREE TRADE LEVELING THE PLAYING FIELD NAFTA eliminated over 98% of tariffs in North America, Mechanisms to resolve differences fairly and effectively creating one of the largest free trade zones in the world. within a rules-based system are important parts of our Under the USMCA tariffs that were at zero will remain global trading regime. And, we need to make sure rules at zero, and there will be no new tariffs or non-tariff can be enforced so that businesses and investors have barriers. In addition, U.S. producers will have new confidence. To this end, the USMCA retains NAFTA’s opportunities in some agricultural markets, like dairy. impartial binational review panel and state-to-state Overall, the USMCA will help strengthen existing North dispute settlement mechanisms. American supply chains. The USMCA also includes two new chapters on labor and MODERNIZING FREE TRADE These chapters aim to ensure that no USMCA country The USMCA updates our trading rules to reflect the growing importance of the Internet and new ways of doing business. It includes nine new chapters addressing digital trade, regulatory practices, currency, • The labor chapter protects workers against competitiveness, small and medium-sized enterprises, and other modern-day issues. In addition, updates to chapters on customs and trade facilitation cut red-tape, • The environment chapter introduces new enable electronic filing systems, and generally simplify commitments to address global challenges such as processes for exporters. EXPANDING NORTH AMERICAN COMPETITIVENESS source goods and materials in the United States, Canada, and Mexico. For example, new auto rules of origin will require more North American content in vehicles, integrated, and stands to result in higher wages and
“The USMCA will give our workers, farmers, ranchers, and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth. It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.” — Robert Lighthizer, U.S. Trade Representative & Chrystia Freeland, Minister of Foreign Affairs
November 2018 @Connect2Canada @CanEmbUSA @AmbCanEUA AB-713 California Consumer Privacy Act of 2018
Recommended Position
Support
Background Existing law, the California Consumer Privacy Act of 2018 (CCPA), grants a consumer various rights with regard to personal information relating to that consumer collected by a business, including the right to know the categories and the specific pieces of personal information that have been collected and to opt out of the sale of personal information. The act also grants a consumer the right to request a business to delete any personal information about the consumer collected by the business and requires a business to do so upon receipt of a verified request, except as specified. The act excepts certain categories of personal information and entities from its provisions, including medical information, as specified.
The CCPA requires a business to make certain disclosures to consumers, in a specified form, in its online privacy policy, if the business has an online privacy policy, and in any California-specific description of consumers’ privacy rights, or, if the business does not maintain an online privacy policy or policies, on its internet website, and to update that information at least once every 12 months.
Summary AB 713 makes important changes to the California Consumer Privacy Act (CCPA) by exempting information that has been deidentified in accordance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA), and by exempting certain information held by business associates of covered entities governed by HIPAA to the extent that they handle patient data outside HIPAA’s scope and in accordance with HIPAA standards. AB 713 would also broaden the CCPA exemption for clinical trials research and exempt information related to patient and product safety.
According to the author, this bill is an important measure to protect patient care in the health care system and limit unintended consequences for health care research and operations related to implementation of the CCPA. California is currently home to the largest, most innovative and productive life sciences ecosystem in the world. California’s life sciences now include over 3,000 companies that directly and indirectly employ almost 900,000 people and generate $147.7 billion in revenue. The innovations produced in California are saving lives and transforming health care through earlier disease detection, less invasive procedures and more effective treatments.
This bill would provide an important clarification to the law by harmonizing the law with certain areas of health care information already covered under existing medical privacy and confidentiality regulations. Additional clarification is needed for the de-identification standards under HIPAA for the purpose of biomedical research, business associates that handle protected health information, human subject research that falls outside of the area clinical trials, and FDA product and patient safety standards. This bill will provide the necessary clarification in these areas to ensure that California’s life science industry and biomedical research are not adversely affected by the rollout of new privacy standards established by the CCPA.
Status Date Action From committee chair, with author's amendments: Amend, and re-refer to 01/23/20 committee. Read second time, amended, and re-referred to Com. on JUD.
01/09/20 Re-referred to Com. on JUD.
From committee: Do pass and re-refer to Com. on RLS. (Ayes 8. Noes 0.) 01/08/20 (January 8). Re-referred to Com. on RLS.
From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on 01/06/20 HEALTH.
06/13/19 In committee: Set, first hearing. Hearing canceled at the request of author.
06/06/19 Referred to Com. on HEALTH.
05/29/19 In Senate. Read first time. To Com. on RLS. for assignment.
Read third time. Passed. Ordered to the Senate. (Ayes 74. Noes 0. Page 05/28/19 2049.)
05/20/19 Read second time. Ordered to third reading.
05/16/19 From committee: Do pass. (Ayes 18. Noes 0.) (May 16).
04/10/19 In committee: Set, first hearing. Referred to APPR. suspense file.
04/01/19 Re-referred to Com. on APPR. pursuant to Joint Rule 10.5.
04/01/19 Read second time. Ordered to third reading.
03/28/19 Read second time and amended. Ordered returned to second reading.
From committee: Amend, and do pass as amended. (Ayes 15. Noes 0.) 03/27/19 (March 26).
02/28/19 Referred to Com. on HEALTH.
02/20/19 From printer. May be heard in committee March 22.
02/19/19 Read first time. To print. Support: Advanced Medical Technology Association Association of Clinical Research Organizations Biocom Biotechnology Innovation Organization California Hospital Association California Life Sciences Association International Pharmaceutical & Medical Device Privacy Consortium Medical Imaging and Technology Alliance Pharmaceutical Research and Manufacturers of America
Oppose: None received
SB-37 Corporation taxes: tax rates
Recommended Position
Oppose
Background California taxes at a rate of 8.84% the net apportioned business income and allocated net nonbusiness income of corporations doing business in California, or imposes the $800 minimum tax, whichever is greater, with some exceptions. Because federal law and the California Constitution limits the state and local agencies from imposing non- income taxes on banks, banks pay a higher rate to compensate, currently 10.84%. The tax rate is the same for firms those that are required to register with and report to the Securities and Exchange Commission (SEC) under the Securities Act of 1933, which generally regulates “publicly-traded” firms whose ownership shares are offered for public sale, and privately-held companies, which are not generally subject to the Act.
Summary Imposes a targeted tax on California business, which, for certain companies, would raise California’s corporate tax rate – already one of the highest in the nation - up to a staggering 22.26%, which amounts to an increase of about 150% and would undoubtedly discourage companies from locating or further investing in the state.
This bill would, for taxable years beginning on or after January 1, 2020, revise that rate for corporations with net income subject to taxes under that law of $10,000,000 or more to instead impose a tax rate from 10.84% to 14.84%, or for financial institutions, from 12.84% to 16.84%, based on the compensation ratio, as defined, of the corporation. The bill would increase those new applicable tax rates by a factor of 1.5 for those taxpayers that have a specified decrease in full-time employees employed in the United States as compared to an increase in contracted employees or foreign full-time employees, as described.
According to the author, “Income inequality today is extreme; among states California now has the 4th biggest gap between rich and poor. The gap between rich and poor keeps widening during a time when corporate profits are at an all-time time high. In 1980 the average CEO made less than $2 million a year while the average worker made about $50,000. In 2018 the average CEO pockets $17 million or more and the average worker remains at about 1980s levels, making about $56,000 a year—a salary that’s 300 times less than the Executive Suite. Today, when compared to 1970s levels, Executive Suite pay has skyrocketed by 940%. SB 37 is an innovative approach to address income inequality with a tax structure that incentivizes corporations to shrink the gap between CEO pay and average worker pay. SB 37 redesigns the corporate tax rate structure to reward corporations that either have a low gap between CEO pay and average employee pay or are willing to lower that gap. SB 37 only applies to corporations with a net income of $10 million or above, about 0.2% of corporations that do business in the state. It adds a progressive increase to these large corporations’ tax rate based on the disparity between the company’s executive pay and its average worker pay.”
Status Date Action 01/16/20 Read second time and amended. Re-referred to Com. on RLS.
From committee: Do pass as amended and re-refer to Com. on RLS. 01/15/20 (Ayes 4. Noes 2. Page 3099.) (January 15).
01/08/20 Set for hearing January 15.
01/06/20 Re-referred to Com. on GOV. & F.
From committee with author's amendments. Read second time and 04/03/19 amended. Re-referred to Com. on RLS.
01/16/19 Referred to Com. on RLS.
12/04/18 From printer. May be acted upon on or after January 3.
12/03/18 Introduced. Read first time. To Com. on RLS. for assignment. To print.
Support: American Federation Of State, County And Municipal Employees Local 3299; Berkeley Federation of Teachers, Local 1078, AFL-CIO; CA Conference Board of the Amalgamated Transit Union; California Conference of Machinists; California Labor Federation; California School Boards Association; California State PTA; California Teachers Association; California Voices For Progress; Canyon Democrats; Colusa County Democratic Central Committee; Contra Costa AFL-CIO Labor Council; Courage Campaign; Democrats of the Desert; Engineers and Scientists of CA, IFPTE Local 20, AFL-CIO; Inland boatmen's Union of the Pacific; La Jolla Democrat Club; Professional and Technical Engineers, IFPTE, Local 21, AFL-CIO; San Francisco Labor Council; San Mateo County Central Labor Council; South Beach District 6 Democratic Club of San Francisco; Stanislaus and Tuolumne County's Central Labor Council; Stonewall Young Democrats; UDW/AFSCME, Local 3930; United Teachers of Pasadena; UNITED- HERE, AFL-CIO; Utility Workers of America; Wellstone Democratic Renewal Club.
Opposition: Advanced Medical Technology Association (ADVAMED); Bay Area Council; Biocom; Building Owners and Managers Association of California; California Bankers Association; California Business Properties Association; California Business Roundtable; California Chamber of Commerce; California Forestry Association; California Independent Petroleum Association (CIPA); California Life Sciences Association; California Manufacturers &Technology Association; California Railroads; California Restaurant Association; California Retailers Association; California Taxpayers Association (CALTAX); California Trucking Association; Chamber of Commerce Alliance of Ventura and Santa Barbara Counties; Chino Valley Chamber of Commerce; Contra Costa Taxpayers Association; Council on State Taxation; Family Business Association of California; Fontana Chamber of Commerce; Greater Coachella Valley Chamber of Commerce; Greater Ontario Business Council; Hesperia Chamber of Commerce; Inland Empire Economic Partnership (IEEP); International Council of Shopping Centers; Kern County Taxpayers Association; Moreno Valley Chamber of Commerce; Murrieta Wildomar Chamber of Commerce; Naiop of California, the Commercial Real Estate Development Association; National Federation of Independent Business (NFIB); Orange County Business Council; Orange County Taxpayers Association; Rancho Cucamonga Chamber of Commerce; Redlands Chamber of Commerce; San Gabriel Valley Economic Partnership; Santa Maria Valley Chamber of Commerce; Securities Industry and Financial Markets Association; Silicon Valley Leadership Group; Solano County Taxpayers Association; Spidell Publishing, Inc.; Technet; Upland Chamber of Commerce; Valley Industry and Commerce Association; Victor Valley Chamber of Commerce; West Coast Lumber & Building Material Association; Western States Petroleum Association.
SENATE COMMITTEE ON GOVERNANCE AND FINANCE Senator Mike McGuire, Chair 2019 - 2020 Regular
Bill No: SB 37 Hearing Date: 1/15/20 Author: Skinner Tax Levy: Yes Version: 4/3/19 Fiscal: Yes Consultant: Grinnell
CORPORATION TAXES: TAX RATES
Creates a new corporate tax rate schedule for firms with more than $10 million in apportioned net income that increases the rate in accordance with the taxpayer’s “compensation ratio.”
Background
California taxes at a rate of 8.84% the net apportioned business income and allocated net nonbusiness income of corporations doing business in California, or imposes the $800 minimum tax, whichever is greater, with some exceptions. Because federal law and the California Constitution limits the state and local agencies from imposing non-income taxes on banks, banks pay a higher rate to compensate, currently 10.84%. The tax rate is the same for firms those that are required to register with and report to the Securities and Exchange Commission (SEC) under the Securities Act of 1933, which generally regulates “publicly-traded” firms whose ownership shares are offered for public sale, and privately-held companies, which are not generally subject to the Act.
California applies the combined report method of corporate taxation, which requires a corporation computing its California tax liability to include the tax returns of its unitary subsidiaries and affiliates into one report, and divide the corporation’s overall income among the taxing jurisdictions in which it does business. While determining whether a subsidiary or affiliate is unitary for tax purposes is often subject to disputes, the combined report method generally allows for the cancellation of any intercompany transactions, such as dividends paid from a subsidiary to its corporate parent. However, taxpaying corporations can elect to exclude the income and expenses of its foreign subsidiaries from its combined report, called the “water’s edge” election, with some exceptions.
Recent studies show income inequality and corporate executive compensation increasing, while wages for most nonexecutive employees struggling to keep pace with inflation. The author wants to revise California’s corporate income tax rates to increase commensurate with the ratio between the compensation levels of its highest-paid executives and its median worker.
Proposed Law
Senate Bill 37 creates a new corporate tax rate schedule for firms with more than $10 million in apportioned net income, effective in the 2020 taxable year. SB 37’s schedule imposes a rate that increases commensurate with a corporation taxpayer’s compensation ratio as follows:
SB 37 (Skinner) 4/3/19 Page 2 of 7
If the compensation ratio is: The applicable tax rate is:
Over zero but not over 50 10.84% upon the basis of net income
Over 50 but not over 100 11.84% upon the basis of net income
Over 100 but not over 200 12.84% upon the basis of net income
Over 200 but not over 300 13.84% upon the basis of net income
Over 300 14.84% upon the basis of net income
For banks, the rates in the above schedule are increased by 2%. Additionally, the bill provides that the rates above are increased an additional 50% if the taxpayer reduces its total number of full-time employees in the United States in the taxable year by more than 10% compared to the preceding taxable year, while during the same taxable year also increasing its total number of contracted or foreign full-time employees. The bill directs that for purposes of the additional 50% rate increase, that full-time employment be determined on a full-time equivalent basis. The measure sets forth a methodology to calculate full-time equivalents.
The compensation ratio is derived by dividing the numerator by the denominator. The numerator is equal to the greater of the compensation of the chief executive officer, chief operating officer, or the highest paid employee of the taxpayer averaged over the three calendar years preceding the taxable year. The denominator is equal to the median compensation of all employees employed by the taxpayer including all contracted employees under contract with the taxpayer in the United States for the calendar year preceding the taxable year.
The bill defines compensation for purposes of the numerator and the denominator differently. Taxpayers must calculate employee compensation according to the Internal Revenue Code’s provisions for Social Security Taxes, which includes almost any kind of compensation paid by the taxpayer to the employee, such as wages, benefit contributions, the value of stock options and deferred compensation. For executives, compensation is based on the Summary Compensation Table the firm reports to the Securities and Exchange Commission, and includes salary, bonus, grants of stock options and stock appreciation rights, long-term incentive plan awards, pension plans, and employment contracts and related arrangements.
Instead of calculating a compensation ratio for each taxpayer within the combined report, the bill requires the taxpayer calculate one ratio for all taxpayers authorized to be included in the combined report. The measure requires taxpayers to provide a detailed compensation report to the Franchise Tax Board (FTB). SB 37 (Skinner) 4/3/19 Page 3 of 7
SB 37 allows FTB to prescribe rules, guidelines, and procedures to implement the bill that are exempt from the Administrative Procedures Act. The measure defines several terms, and prescribes a methodology for measuring full-time equivalents.
The bill also states that after reserving amounts for the Proposition 2 reserve, and Proposition 98’s education funding guarantee, any remaining revenues generated by the bill should flow to the General Fund to offset the fiscal impact of any child tax credit, as well as for the Legislature to appropriate to support early childhood programs and other educational program. The bill also states that its rate increase is inoperative for any taxable year in which the federal corporate income tax rate is 35% or more.
State Revenue Impact
According to FTB, SB 37 results in revenue increases of $1 billion in 2019-20, $3.5 billion in 2020-21, and $4.1 billion in 2021-22. However, these estimates assumed the measure would be enacted in 2019.
Comments
1. Purpose of the bill. According to the author, “Income inequality today is extreme; among states California now has the 4th biggest gap between rich and poor. The gap between rich and poor keeps widening during a time when corporate profits are at an all-time time high. In 1980 the average CEO made less than $2 million a year while the average worker made about $50,000. In 2018 the average CEO pockets $17 million or more and the average worker remains at about 1980s levels, making about $56,000 a year—a salary that’s 300 times less than the Executive Suite. Today, when compared to 1970s levels, Executive Suite pay has skyrocketed by 940%. SB 37 is an innovative approach to address income inequality with a tax structure that incentivizes corporations to shrink the gap between CEO pay and average worker pay. SB 37 redesigns the corporate tax rate structure to reward corporations that either have a low gap between CEO pay and average employee pay or are willing to lower that gap. SB 37 only applies to corporations with a net income of $10 million or above, about 0.2% of corporations that do business in the state. It adds a progressive increase to these large corporations’ tax rate based on the disparity between the company’s executive pay and its average worker pay.”
2. Sure, but will it work?. In an effort to address income inequality, the City of Portland in 2016 imposed a surcharge of 10 percent on top of its gross receipts business license tax on publicly traded companies that pay their Chief Executive Officers (CEOs) 100 to 250 times more than their median worker, based on the firms’ SEC disclosures. Companies with a CEO pay ratio above 250 times must pay a 25 percent surcharge. A recent article in the Oregonian indicated that no evidence exists to indicate that the surcharge has affected CEO compensation among firms doing business in Portland, citing a recent pay package awarded to the CEO of the Intel Corporation.1 While SB 37 would apply to any firm doing business in California, and could significantly increase tax rates on companies with high pay ratios, the Committee may wish to consider whether the measure will be effective in limiting CEO pay, or otherwise ameliorating income inequality.
3. Compliance and enforcement burden. SB 37’s direction to taxpayers to calculate its ratio will add to the general compliance burden, as well as test FTB’s finite resources to ensure that the
1 “Portland expects up to $3.5 million from unique CEO tax,” The Oregonian, February 2, 2019. SB 37 (Skinner) 4/3/19 Page 4 of 7 corporation is paying the correct amount of tax. Each year, corporations file almost one million tax returns with FTB. For small corporations, a return can be reasonably simple, but larger corporations have returns that can include thousands of subsidiaries and affiliates around the world, involve complex unitary group determinations and apportionment computations, and apply millions of dollars in tax credits based on a variety of circumstances. While the bill only applies to firms with more than $10 million in net income, the compliance burden to correctly calculate the ratio will be significant. The bill directs taxpayers to compute the ratio’s denominator by determining the wages paid to the firm’s median worker – a single person - when a firm can have hundreds if not thousands of subsidiaries and affiliates, and potentially hundreds if not thousands of employees or contract workers. Employees enter into and out of employment and contract work several times in a year, at various levels and models of compensation. Additionally, companies create, merge, and dissolve subsidiaries and affiliates all the time. FTB must verify that taxpayers correctly calculate SB 37’s ratio as part of its duty to ensure that each corporation has paid the correct amount of tax for that tax year, which will require significant investments of personnel and information technology, and perhaps an audit. Firms will also file claims for refund for past taxes paid if it thinks its calculations regarding the compensation amounts that derived the rate were not accurate at the time it filed the return, which FTB will again be compelled to verify. The Committee may wish to consider whether FTB can administer SB 37 with current resources, as well as the compliance burden it poses taxpayers.
4. Who is affected? While individuals pay tax based on income from whatever source derived unless exempt or excluded, corporations generally pay taxes based only on their net income, or their gross receipts less deductions. As a result, SB 37’s potential rate increase will likely result in higher tax payments for corporations with high compensation ratios, but only when they generate positive net income in a taxable year; a corporation with no taxable net income is unlikely to be affected by a rate increase. According to FTB, 936,211 corporations filed returns in California for the 2017 taxable year, of which 557,853, or about 60%, reported net income. Additionally, SB 37 only affects taxpayers with more than $10 million in apportioned net income in a taxable year. According to FTB, only 2,020 corporations reported income of more than $10 million in 2017, comprising 0.2% of all corporations filing returns that year. While constituting a small share of total corporations, these taxpayers paid almost $6 billion, or 2/3, of total corporation tax revenues.
5. AB 91. In the early 1990s, Congress limited a corporation’s ability to deduct executive compensation that exceeded $1 million, unless the compensation is pegged to performance, in which case it is fully deductible. The disconnection of the limit on performance-based compensation resulted in more than $30 billion in revenue losses to the federal government between 2007 and 2010, according to the Economic Policy Institute. In 2017, Congress enacted HR 1, which comprehensively changed federal personal income and corporation taxes, including a provision that eliminated the exception for performance-based compensation subject to the deduction limit. Last year, the Legislature enacted the Loophole Closure and Small Business and Working Families Tax Relief Act of 2019, which conformed state law to HR 1’s limitation on the deductibility of executive compensation (AB 91, Burke).
6. SEC requirement. In 2015, the SEC adopted a final rule that requires a public company to disclose the ratio of the compensation of its chief executive officer to the median compensation of its employees. The rule required firms to report these ratios for the first fiscal year beginning on or after January 1, 2017, so researchers have been able to make some observations regarding SB 37 (Skinner) 4/3/19 Page 5 of 7 these ratios. In October, 2018, the Harvard Business School published “the CEO Pay Ratio: Data and Perspectives from the 2018 Proxy Season,” which found, among other conclusions:
• The pay ratio averaged 144:1 with a median of 69. There were quite a few cases where the ratio was at or near zero, which were outliers in cases where the CEOs either declined to receive pay or were paid a nominal sum. • Companies in the consumer discretionary and consumer staples sectors were at the higher end at 384 and 295 on average, respectively. Energy, financials, and utilities, had average ratios ranging from 59 to 80. • For those companies under $300 million in annual revenue, the average pay ratio was 32, as compared to those companies at $3 billion and higher, where ratios average close to 290. • Companies with fewer than 500 employees had an average pay ratio of 36, compared to those with employee populations over 10,000 with average pay ratios of 337. • One of the strongest correlations and predictors of pay ratio was the percent of company employees located overseas. The lowest pay ratio band had roughly 9% of its employees located outside of the US, while those companies with a pay ratio of over 150 had more than a third of their workforce overseas. • The lowest average three-year total shareholder return (TSR) was associated with the lowest pay ratio band. While the highest average three-year TSR correlated with the band of ratios between 35 and 74, it then dropped off as the ratio increased.
7. Deductibility. Among other changes, HR 1 limited the deduction from income for state and local taxes paid by individuals to $10,000 per taxable year, not indexed for inflation. HR 1 did not affect the deduction for state and local taxes paid when carrying out a trade or business. The Joint Committee on Taxation estimated that the change would result in an additional $70 - $100 billion in federal revenues annually, mostly from higher-tax states such as California: in 2015, more than five million Californians deducted more than $80 billion in state and local taxes from their federal returns, according to the IRS. As a result, California taxpayers cannot offset any increase in personal income or property taxes by deducting these taxes from income for federal tax purposes, as had been the case before HR 1. However, businesses could continue to deduct any additional business taxes for federal purposes, such as SB 37’s corporate tax rate increase.
8. Fair share? HR 1 enacted several changes that significantly reduced federal taxes on corporations, including lowering the statutory rate from 35% to 21%, allowing immediate expensing when purchasing or leasing new equipment, and adopting a “territorial” system that mostly excludes from tax the income of a U.S. company’s foreign subsidiaries. As a result of these changes, the Institute on Taxation and Economic Policy recently found in a sample of 397 companies for the 2018 taxable year that the effective federal income tax rate is only 11.3%, or less than half of the new statutory rate, with many prominent firms paying no federal taxes at all. In California, the Legislative Analyst’s Office (LAO) has found that the corporation tax’s share of total general fund revenues has declined from 16% in the 1950s and 60s to 9% in the early 2010s.2 LAO states that changes in state law made since the mid-to-late 1980s and increased usage of tax credits reduced annual revenues by approximately $3 billion annually. The Committee may wish to consider SB 37 in the context of determining whether corporate taxpayers are paying a sufficient share of the costs of public services.
2 Letter to Honorable Mark Leno, March 12, 2014. SB 37 (Skinner) 4/3/19 Page 6 of 7
9. Related legislation. In 2014, the Committee approved SB 1372 (DeSaulnier), which was similar to this bill. The measure subsequently failed passage on the Senate Floor.
10. Scope. SB 1372 and Portland’s pay ratio tax applied solely to publicly-traded firms, but SB 37 applies to both publicly-traded and privately held firms. As a result, privately held firms would have to disclose new information to FTB to ensure the correct calculation of the applicable rate under SB 37. Because the ratio would be used to calculate the rate on its tax return, any ratio used for tax purposes under SB 37 would be confidential, and not subject to public disclosure.
11. Technicals. FTB and Committee staff recommend the following technical amendments:
• Restore stricken language on Page 4, lines 5 and 6. • Clarify that the measure applies only to C corporations, and not all entities considered corporations for tax purposes, such as limited liability companies electing to be taxed as corporations. • Change the measure’s definition of wages to mean compensation as defined under the Internal Revenue Code. • Add “or incurred” after “paid” on Page 5, line 13. • Add references to R&TC sections 25102, 25104, and 25110 on Page 5, line 33, to include other applicable combined reports. • Add a definition for “detailed compensation report.” • Clarify that the potential rate increase of 50% is an increase of 50% of the applicable rate (14.84% to 22.26%), not an explicit addition of 50% to the bill’s revised rate (14.84% to 64.84%). • Clarify that the trigger for the potential rate increase measures foreign full-time employment or contract employees separately, not in combination. • Strike “within the meaning of Section 515 of the Labor Code,” on Page 7, line 3, as FTB does not have access to sufficient information to make a legal determination regarding whether an employee meets the standards of that definition.
Support and Opposition (1/10/20)
Support: American Federation Of State, County And Municipal Employees Local 3299; Berkeley Federation of Teachers, Local 1078, AFL-CIO; CA Conference Board of the Amalgamated Transit Union; California Conference of Machinists; California Labor Federation; California School Boards Association; California State PTA; California Teachers Association; California Voices For Progress; Canyon Democrats; Colusa County Democratic Central Committee; Contra Costa AFL-CIO Labor Council; Courage Campaign; Democrats of the Desert; Engineers and Scientists of CA, IFPTE Local 20, AFL-CIO; Inlandboatmen's Union of the Pacific; La Jolla Democrat Club; Professional and Technical Engineers, IFPTE, Local 21, AFL-CIO; San Francisco Labor Council; San Mateo County Central Labor Council; South Beach District 6 Democratic Club of San Francisco; Stanislaus and Tuolumne County's Central Labor Council; Stonewall Young Democrats; UDW/AFSCME, Local 3930; United Teachers of Pasadena; UNITED-HERE, AFL-CIO; Utility Workers of America; Wellstone Democratic Renewal Club.
Opposition: Advanced Medical Technology Association (ADVAMED); Bay Area Council; Biocom; Building Owners and Managers Association of California; California Bankers SB 37 (Skinner) 4/3/19 Page 7 of 7
Association; California Business Properties Association; California Business Roundtable; California Chamber of Commerce; California Forestry Association; California Independent Petroleum Association (CIPA); California Life Sciences Association; California Manufacturers & Technology Association; California Railroads; California Restaurant Association; California Retailers Association; California Taxpayers Association (CALTAX); California Trucking Association; Chamber of Commerce Alliance of Ventura and Santa Barbara Counties; Chino Valley Chamber of Commerce; Contra Costa Taxpayers Association; Council on State Taxation; Family Business Association of California; Fontana Chamber of Commerce; Greater Coachella Valley Chamber of Commerce; Greater Ontario Business Council; Hesperia Chamber of Commerce; Inland Empire Economic Partnership (IEEP); International Council of Shopping Centers; Kern County Taxpayers Association; Moreno Valley Chamber of Commerce; Murrieta Wildomar Chamber of Commerce; Naiop of California, the Commercial Real Estate Development Association; National Federation of Independent Business (NFIB); Orange County Business Council; Orange County Taxpayers Association; Rancho Cucamonga Chamber of Commerce; Redlands Chamber of Commerce; San Gabriel Valley Economic Partnership; Santa Maria Valley Chamber of Commerce; Securities Industry and Financial Markets Association; Silicon Valley Leadership Group; Solano County Taxpayers Association; Spidell Publishing, Inc.; Technet; Upland Chamber of Commerce; Valley Industry and Commerce Association; Victor Valley Chamber of Commerce; West Coast Lumber & Building Material Association; Western States Petroleum Association.
-- END --
January 8, 2020
TO: Members, Senate Governance and Finance Committee
FROM:
SUBJECT: SB 37 (SKINNER) CORPORATION TAXES: TAX RATES OPPOSE/JOB KILLER – AS AMENDED APRIL 3, 2019 SCHEDULED FOR HEARING – JANUARY 15, 2020
We must respectfully OPPOSE SB 37 (Skinner), as amended April 3, 2019, as a JOB KILLER because this bill proposes one of the steepest tax increases ever contemplated in California. For certain companies, this bill would bring California’s corporate tax rate – already one of the highest in the nation - up to 22.26%, which amounts to staggering increase of about 150%. If SB 37 passes, California will have the highest corporate tax rate in the country and the highest or second highest tax rate nationally for income taxes, sales taxes, and motor vehicle fuel taxes. This will undoubtedly discourage companies from locating or further investing in the state.
California currently imposes a flat 8.84% income tax on all corporations (10.84% for banks and financial corporations). SB 37 requires that for taxable years beginning on or after January 1, 2020, the rate for corporations with net income of $10 million or more be revised to instead impose a tax rate from 10.84% to 14.84%, or for financial institutions from 12.84% to 16.84%, based on the compensation ratio of CEOs to employees of the corporation.
SB 37 would further increase the tax rate by another 50% – to a maximum of 22.26% (24.26% for banks and financial corporations) – for publicly held corporations that have a specified decrease in full-time employees in the United States while increasing the number of contracted and foreign full-time employees.
While we appreciate that that the bill is attempting to address outsourcing and alleged wage disparity within some corporations or financial institutions, driving businesses out of this state through a punitive tax proposal will have little effect on these stated objectives. Instead, SB 37 will actually further harm California workers, who will pay for this attempt at wage equalization with their jobs because companies will attempt to offset the costs of higher taxes by reducing their presence in California.
Further, the substantial tax increases proposed by SB 37 to target a small percentage of California companies – will put these companies at a tremendous disadvantage. This could cause a reduction of the value of the impacted companies, which would have an adverse effect on shareholders. Notably, more than 20% of household assets are in stocks and retirement plans own a majority of corporate stock.
Increasing corporate tax rates as a means of attempting to influence executive compensation is simply bad tax policy. Our economic system is built upon a free market; one that allows individuals to earn on their capital and labor whatever the market will bear. Through minimum wage laws and other benefit and leave mandates, California has provided compensation cushions for low and mid-wage workers. But the penalties at the upper end envisioned by SB 37 will only cause unintended consequences to the California business and investment climates.
Further, executive pay is already subject to tax limits. A publicly traded corporation is already prohibited from deducting more than $1 million per year in compensation paid to CEOs and the most senior executive officers and the exemption for commission and performance-based pay was recently eliminated as well.
Finally, the 2019-20 state budget enjoys a $20+ billion cushion of surpluses and reserves, and the budget for 2020-21 is forecast to include multi-billion dollar reserves, as well. Thus, there is no justification for the tremendous burden SB 37 will impose on California businesses and the damage that it will do to California’s economy.
For these and other reasons, we OPPOSE SB 37 (Skinner) as a JOB KILLER. cc: Legislative Affairs, Office of the Governor Zachary Leary, Office of Senator Skinner Robert Ingenito, Senate Appropriations Committee Scott Chavez, Senate Republican Caucus
SENATE COMMITTEE ON HEALTH Senator Dr. Richard Pan, Chair
BILL NO: AB 713 AUTHOR: Mullin VERSION: January 6, 2020 HEARING DATE: January 8, 2020 CONSULTANT: Vincent D. Marchand
SUBJECT: California Consumer Privacy Act of 2018
SUMMARY: Establishes new exemptions from the California Consumer Privacy Act with regard to certain types of medical information, including exemptions for information that has been deidentified under specified federal requirements, and medical information collected as part of regulated research activities.
Existing law: 1) Establishes the Confidentiality of Medical Information Act (CMIA), which among other things, generally prohibits a provider of health care, health care service plan, or contractor from disclosing medical information regarding a patient or enrollee without first obtaining an authorization.
2) Establishes the California Consumer Privacy Act of 2018 (CCPA), which grants consumers certain rights with regard to the collection of personal information by businesses, including, among other rights, the right to request that a business disclose the categories and specific pieces of personal information it has collected, the right to request that a business delete any personal information that it has collected, and the right to direct a business not to sell their personal information. [CIV §1798.100, et seq.]
3) D a a , CCPA, c d a information that identifies, relates to, describes, or could reasonably be linked, directly or indirectly, with a particular consumer or household. Includes within the definition of a a , a , d c a a a a a personal identifier, commercial information, biometric information, internet activity information, geolocation data, and inferences drawn from any personal information to create a profile about a consumer. [CIV §1798.140 (o)(1)]
4) E c d d d d a d a a , a d d d d d a information that cannot reasonably identify, relate to, describe, or be linked, directly or indirectly, to a particular consumer, and requires a business that uses deidentified information to implement technical safeguards that prohibit reidentification, implement business processes that specifically prohibit reidentification, and implement business processes to prevent inadvertent release of deidentified information. [CIV §1798.140 (h)]
5) E c d a a c a d a a , a d d a a c a a a a a a category of consumers, from which individual consumer identities have been removed, that is not linked or reasonably linkable to any consumer or household, including via a device, and c d d a a c a d d a consumer records that have been deidentified. [CIV §1798.140 (a)] AB 713 (Mullin) Page 2 of 9
6) E c d b c a a ab a d a a , is lawfully made available from federal, state, or local government records, but specifies that b c a c c d b a b c d is not b c a a ab . [CIV 1798.140 ( )(2)]
7) Provides other specific exemptions from the provisions of the CCPA, including the following as it relates to health care:
a) Medical information governed by the CMIA or protected health information (PHI) that is collected by a covered entity or b a c a , a d d a d governed by the privacy, security, and breach notification rules under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the Health Information Technology for Economic and Clinical Health Act (HITECH) [CIV §1798.145(c)(1)(A)]; b) A provider of health governed by the CMIA or a covered entity governed by HIPAA [CIV §1798.145(c)(1)(B)]; and, c) Information collected as part of a clinical trial subject to the Federal Policy for the Protection of Human Subjects (Common Rule), good clinical practice guidelines issued by the International Council for Harmonisation, or human subject protection requirements of the United States Food and Drug Administration (FDA). [CIV §1798.145 (c)(1)(C)]
This bill: 1) Exempts from the CCPA information that meets all of the following conditions:
a) It is deidentified in accordance with the requirements for deidentification set forth under specified provisions of HIPAA; b) It is derived from PHI, medical information, individually identifiable health information, or identifiable private information, consistent with the Common Rule; and, c) A business or its business associates, as defined, does not attempt to reidentify the information.
2) Requires a business that sells or discloses information that is exempted from the CCPA pursuant to 1) above to disclose on its online privacy policy whether the business discloses deidentified health information derived from personal information, and if so, whether that deidentified health information was deidentified pursuant to one or more of the following: the deidentification methodology commonly known as the HIPAA expert determination method, as specified; or the deidentification methodology commonly known as the HIPAA safe harbor method, as specified.
3) Exempts from the CCPA a business associate of a covered entity governed by HIPAA, to the extent the business associate maintains, uses, and discloses patient information only in accordance with the legal requirements of the privacy, security, and breach notification rules applicable to PHI under HIPAA.
4) Exempts from the CCPA personal information that is collected for, or used in biomedical research subject to institutional review board standards and the ethics and privacy requirements of the Common Rule, good clinical practice guidelines issued by the International Council for Harmonisation, or human subject protection requirements of the FDA. AB 713 (Mullin) Page 3 of 9
5) Exempts from the CCPA personal information that is collected for, or used in research, subject to all applicable ethics and privacy laws, if the information is either individually identifiable health information, as defined under HIPAA, or medical information governed by the CMIA.
6) D a c , 4) a d 5) ab , as having the same meaning as a specified provision of HIPAA, which specifies that research means a systematic investigation, including research development, testing, and evaluation, designed to develop or contribute to generalizable knowledge.
7) Exempts from some of the provisions of the CCPA, including the requirement to delete personal information upon request, personal information collected by a business that meets all of the following conditions:
a) The business uses the information only for the following purposes: product registration and tracking consistent with FDA regulations and guidance; public health activities and purposes as described in specified provisions of HIPAA; and activities related to quality, safety, or effectiveness regulated by the FDA; b) The information is subject to all confidentiality and privacy provisions applicable under federal or state law other than the CCPA and is not sold or used except as provided in a) above; and, c) The business discloses the categories and types of personal information that is collected, the categories of sources where the information was collected, the purpose of collecting the information, the categories of third parties with whom it shares the personal information, and disclosure of the business purposes for selling or disclosing personal information. Additionally, subjects the business to the civil enforcement provisions for violations of the CCPA.
8) D a a , a a d ca a a d exemptions to the CCPA, as all of the following:
a) I d d a d ab a a a d d HIPAA, a c d; b) Id ab a a a d d F d a P c P c Human Research Subjects, as specified; and, c) M d ca a a d d CMIA.
FISCAL EFFECT: This bill has not been analyzed by a fiscal committee.
PRIOR VOTES: Not relevant.
COMMENTS: 1) A h a emen . According to the author, this bill is an important measure to protect patient care in the health care system and limit unintended consequences for health care research and operations related to implementation of the CCPA. California is currently home to the largest, most innovative and productive life sciences ecosystem in the world. Ca a c c c d 3,000 c a a d c a d d c employ almost 900,000 people and generate $147.7 billion in revenue. The innovations produced in California are saving lives and transforming health care through earlier disease detection, less invasive procedures and more effective treatments. This bill would provide an AB 713 (Mullin) Page 4 of 9
important clarification to the law by harmonizing the law with certain areas of health care information already covered under existing medical privacy and confidentiality regulations. Additional clarification is needed for the de-identification standards under HIPAA for the purpose of biomedical research, business associates that handle protected health information, human subject research that falls outside of the area clinical trials, and FDA product and patient safety standards. This bill will provide the necessary clarification in these areas to a Ca a c c d a d b d ca a c a ad affected by the rollout of new privacy standards established by the CCPA.
2) Creation of the CCPA. Californians for Consumer Privacy is an organization that was founded and chaired by Alastair Mactaggart to protect and expand privacy rights for Californians. Californians for Consumer Privacy sponsored a ballot referendum that qualified for the November 2018 ballot to enact the CCPA. After the initiative qualified, the Legislature passed AB 375 (Chau, Chapter 55, Statutes of 2018), which enacted a version of the CCPA into law, and Californians for Consumer Privacy withdrew the ballot initiative. The CCPA grants a set of rights to consumers with regard to their personal information, including enhanced notice and disclosure rights regarding information collection and use practices, access to the information collected, the right to delete certain information, the right to restrict the sale of information, and protection from discrimination for exercising these rights.
3) HIPAA Privacy Rule. The HIPAA Privacy Rule establishes national standards to protect d d a d ca c d a d a a a , a d a a insurance plans, health care clearinghouses (which are organizations that process health information and convert data into types that conform to HIPAA standards), and health care providers such as hospitals, doctors and pharmacies that transmit health information electronically (c c , a ca d c d ). HIPAA a a a business associate, which is defined as a person who, on behalf of a covered entity, creates, receives, maintains, or transmits protected health information for a function or activity regulated under HIPAA, including claims processing or administration, data analysis, quality assurance, billing, and other services. HIPAA sets limits and conditions on the uses and disclosures that may be made of such information without patient authorization, and also gives patients certain rights over their health information, including rights to examine and obtain a copy of their health records.
4) Explanation for each of the major changes proposed by this bill. This bill makes four substantive changes to the CCPA: a) exempting information that was deidentified under HIPAA rules from the CCPA; b) exempting business associates regulated under HIPAA from the CCPA; c) broadening the exemption for clinical trials research to incorporate medical research more generally; and, d) exempting information related to product and patient safety. Context and the proponents rationale for each of these changes follows:
a) HIPAA deidentification. The CCPA already exempts personal information that has been deidentified, as described in comment 5) below. However, because the specific language in the CCPA concerning deidentification is different than the language pertaining to deidentification in HIPAA, proponents are concerned that deidentified data sets under HIPAA might not meet the definition laid out under the CCPA, which would subject this data to the obligation under CCPA to delete the personal information. Proponents point out that if deidentified data becomes reidentified, it would once again be considered PHI, and subject to the penalties associated with unauthorized release of individually AB 713 (Mullin) Page 5 of 9
identifiable information. This bill does two things: it exempts information that has been deidentified under HIPAA standards, but it also requires that a business that discloses or sells information that is exempted because it has been deidentified to disclose on its online privacy policy the fact that the business discloses deidentified health information. Additionally, this bill requires the business to disclose which of the two HIPAA deidentification methods described in comment 5) below was used to deidentify the information.
b) Business associates. The CCPA exempts covered entities under HIPAA (i.e., health plans and health care providers), but when it comes to business associates, it only exempts the PHI that collected by a business associate, not the business associate itself. Proponents point out that business associates sometimes handle a small percentage of health information that is technically not PHI under HIPAA, such as providers that do not take health insurance. However, because the bulk of the data they handle is subject to HIPAA protection, business associates will treat all information under the rules set by HIPAA. This bill exempts business associates, but only to the extent that they use and disclose patient information in accordance with the requirements of HIPAA.
c) Medical research. There is currently an exemption in the CCPA for information that is collected as part of a clinical trial, but that is only a small portion of all regulated medical research. For example, proponents point out that there are long-term, observational drug safety studies, opioid abuse prevention and outcomes research, and observational drug comparative effectiveness studies, none of which fall under the clinical trial exemption. This bill exempts personal information from the CCPA that is collected for or used in biomedical research that is subject to the Federal Policy for the Protection of Human Subjects (Common Rule), good clinical practice guidelines issued by the International Council for Harmonisation, or human subject protection requirements of the FDA. Additionally, this bill exempts personal information collected for or used in research, if the information is individually identifiable health information subject to the applicable ethics and privacy laws of HIPAA or medical information subject to the protections of the CMIA.
d) Product safety. Proponents point out that FDA-regulated manufacturers are required to track certain products, especially medical devices, from manufacturing through the distribution chain in the event they receive an order from the FDA to implement a tracking system to facilitate notifications and recalls. Similarly, the FDA mandates adverse event reporting for drug manufacturers, but this adverse event data may not otherwise be exempt from the CCPA because it is no longer clinical data subject to HIPAA during the adverse event reporting lifecycle. This bill provides a limited exemption for personal information collected by a business for product tracking under FDA regulations, and other federally regulated public health activities and purposes, but the exemption is only for some of the provisions of the CCPA, including those requiring deletion upon a patient request, and the specific prior notice requirements. This information would still be subject to the disclosure and enforcement provisions of the CCPA.
5) CCPA deidentification vs. HIPAA deidentification. Under the existing CCPA, personal information that is deidentified is exempt from the definition of personal information, and therefore exempt from the CCPA. Similarly, under HIPAA, information can be deidentified, and would therefore remove it from the privacy requirements applicable to PHI. However, AB 713 (Mullin) Page 6 of 9
the two laws define deidentification differently. Under CCPA, d d d a a a ca a ab d , a , d c b , b ca ab b associated with, or be linked, directly or indirectly, to a a c a c . Add a , CCPA goes on to require that a business that uses deidentified information comply with the following: a) implement technical safeguards that prohibit reidentification of the consumer to whom the information may pertain; b) implement business processes that specifically prohibit reidentification of the information; c) implement business processes to prevent the inadvertent release of deidentified information; and, d) make no attempt to reidentify the information. Under HIPAA, on the other hand, a a a d d a individual and with respect to which there is no reasonable basis to believe that the a ca b d d a d d a d d a d ab a information. HIPAA permits a covered entity to determine that health information is not individually identifiable only if one of the following two deidentification methods are used:
a) Expert determination. Under this method, a person with appropriate knowledge of and experience with generally accepted statistical principles and methods for rendering information not individually identifiable, applying such principles and methods, determines that the risk is very small that the information could be used, alone or in combination with other reasonably available information, by an anticipated recipient to identify an individual who is a subject of the information. The expert is required to document the methods and results of the analysis that justify such a determination; or,
b) Safe harbor. Under this method, a long list of identifiers of the individual or of relatives, employers, or household members of the individual, are removed, including: all geographic subdivisions smaller than a State except for the initial three digits of a zip code; all elements of dates directly related to an individual, including admission or discharge date or dates of birth; device identifiers and serial numbers; health plan beneficiary numbers; and so on.
HIPAA also provides for a mechanism for reidentification by permitting a covered entity to assign a code or other means of record identification to allow information deidentified to be reidentified by the covered entity, provided that the code or other means of record identification is not derived from or related to information about the individual, and the covered entity does not use or disclose the code or other means of record identification for any other purpose and does not disclose the mechanism for reidentification.
6) HIPAA and CMIA definitions. This bill, as well as parts of the existing CCPA, cross- reference a number of terms defined elsewhere in federal or state law, including the following:
a) Individually identifiable health information is defined under HIPAA as information that is a subset of health information, including demographic information collected from an individual, and that meets all of the following conditions: (1) it is created or received by a health care provider, health plan, employer, or health care clearinghouse; (2) it relates to the past, present, or future physical or mental health or condition of an individual; the provision of health care to an individual; or the past, present, or future payment for the provision of health care to an individual; and (3) it identifies the individual, or there is a reasonable basis to believe the information can be used to identify the individual.
AB 713 (Mullin) Page 7 of 9
b) PHI is defined under HIPAA as individually identifiable health information that is transmitted by electronic media; maintained in electronic media; or is transmitted or maintained in any other form or medium. The definition of PHI excludes individually identifiable health information that is (1) in records covered by the Family Educational Rights and Privacy Act, as specified; (2) is in employment records held by a covered entity in its role as employer; or (3) is in regards to a person who has been deceased for more than 50 years.
c) Medical information is defined under the CMIA as any individually identifiable information, in electronic or physical form, in possession of or derived from a provider of health care, health care service plan, pharmaceutical company, or contractor regarding a a d ca , a ca c d , a . I d d a ly d ab d d a d ca a a c d c a a personal identifying information sufficient to allow identification of the individual, such a a a , add , c c a add , b r, or social security number, or other information that, alone or in combination with other publicly a a ab a , a d d a d .
d) Identifiable private information is defined under the Federal Policy for the Protection of Human Research Subjects (Common Rule) as private information, which is information that has been provided for specific purposes by an individual and that the individual can reasonably expect will not be made public, such as a medical record, for which the identity of the subject is or may readily be ascertained by the investigator or associated with the information.
7) Referral to the Senate Committee on Rules. The most recent amendments to this bill deleted the prior contents and replaced it with a new bill. Should this bill pass out of this committee, it will be referred to the Senate Committee on Rules for consideration of additional committee referrals.
8) Related legislation. AB 873 (Irwin of 2019) d d d d a d a d a a CCPA. T b b personal information subject to the protections of the CCPA. AB 873 failed passage in Senate Judiciary Committee, and was granted reconsideration.
AB 874 (Irwin, Chapter 748, Statutes of 2019) expands the scope of "publicly available" information that is exempted from the "personal information" definition in the CCPA to ensure that "publicly available" information includes any information that is lawfully made available from government records. AB 874 also revises the personal information definition so that it includes information that is "reasonably capable" of being associated with a particular consumer or household, as opposed to "capable" of being associated.
AB 981 (Daly of 2019) a a c a b d c a a d CCPA c a a a c a information to complete an insurance transaction requested by the consumer. It also strengthens privacy protections for the information of insureds. AB 981 is pending consideration the Senate Insurance Committee.
AB 1146 (Berman, Chapter 751, Statutes of 2019) exempts from the opt-out and deletion protections and provisions of the CCPA vehicle information, including ownership AB 713 (Mullin) Page 8 of 9
a , a d b a c d a a d c a ac , the vehicle information is shared for the purpose of effectuating, or in anticipation of effectuating, a vehicle repair covered by a vehicle warranty or a recall and is not sold, shared, or used for any other purpose.
AB 1416 (Cooley of 2019) establishes exceptions to the CCPA for a business that provides a c a a a a c ca out a government program or sells the personal information of a consumer who has opted-out a c a a a r person for the sole purpose of detecting security incidents, protecting against malicious, deceptive, fraudulent, or illegal activity, and prosecuting those responsible for that activity. This bill is currently in pending consideration the Senate Judiciary Committee.
9) Prior legislation. AB 375 (Chau, Chapter 55, Statutes of 2018) enacted the CCPA.
SB 1121 (Dodd, Chapter 735, Statutes of 2018) amended the CCPA to make technical fixes and to address various stakeholder concerns. Among the changes to the CCPA made by SB 1121 were a series of exemptions for medical information, including medical information that is governed by the CMIA, PHI governed by HIPAA, and information collected as part of a clinical trial. SB 1121 also exempted providers of health care governed by CMIA and covered entities governed by HIPAA.
10) Support. This bill is supported by a coalition of organizations that include Advanced Medical Technology Association (AdvaMed), the California Hospital Association, the California Life Sciences Association, the International Pharmaceutical & Medical Device Privacy Consortium, and the Association of Clinical Research Organizations (collectively, the Coalition). According to the Coalition, it supports this bill to incorporate additional technical but critical cleanup amendments to the CCPA. The Coalition states that the organizations that a Ca a d c a a ca a b c a a last clarified in 2018 to identify areas for additional improvement for the health care system that are already regulated under complex existing federal and state medical privacy and confidentiality laws. The Coalition states that each of the amendments in this bill clarify existing provisions in the CCPA and are intended to reduce difficulties for health care and medical research entities in comply with federal and state laws. Specifically, the Coalition states that this bill would expressly recognize the HIPAA deidentification standard as an acceptable standard for deidentification of health information under the CCPA, thereby eliminating potential uncertainty. The Coalition states that this bill would also supplement the existing clinical trial exemption by also exempting other biomedical research to the extent it is regulated under specified federal or international requirements. Additionally, the Coalition states that this would broaden the existing exemption for HIPAA-related business associates, but only to the extent that they handle any patient data outside HIPAA in accordance with the strict protections and operational controls of the HIPAA privacy, security, and breach notification rules. Finally, the Coalition states that this bill would add an exemption for information needed for FDA-regulated product registration and tracking and for other public health activities related to the qualify, safety, or effectiveness of an FDA- regulated product or activity.
11) Suggested clarifying amendment. In Section 2 of this bill, there is an exemption from the entirety of the CCPA for information that is deidentified under HIPAA. However, in Section 1, b a b a d c a b c AB 713 (Mullin) Page 9 of 9
disclose which of two deidentification methods permitted under HIPAA it used to deidentify the information. This requirement added to the CCPA to disclose the method of deidentification conflicts with the provision exempting this type of information from the CCPA entirely. A similar conflict, where information related to product safety was exempted , b a CCPA, a d b c a a , a d a a c d a a d a a clarify that the exemption for information deidentified under HIPAA is still subject to the disclosure requirements elsewhere in the bill.
SUPPORT AND OPPOSITION: Support: Advanced Medical Technology Association Association of Clinical Research Organizations Biocom Biotechnology Innovation Organization California Hospital Association California Life Sciences Association International Pharmaceutical & Medical Device Privacy Consortium Medical Imaging and Technology Alliance Pharmaceutical Research and Manufacturers of America
Oppose: None received
-- END --
UPDATED
January 23, 2020
The Honorable Kevin Mullin California State Assembly State Capitol, Room 3160 Sacramento, CA 95814
SUBJECT: AB 713 (MULLIN) CALIFORNIA CONSUMER PRIVACY ACT OF 2018 SUPPORT AS AMENDED JANUARY 6, 2020
Dear Assemblymember Mullin:
The California Chamber of Commerce and the listed organizations are pleased to SUPPORT your AB 713 (M i ), as amended January 6, 2020. AB 713 makes important changes to the California Consumer Privacy Act (CCPA) by exempting information that has been deidentified in accordance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA), and by exempting certain information held by business associates of covered entities governed by HIPAA to the extent that they handle patient data outside HIPAA s scope and in accordance with HIPAA standards. AB 713 would also broaden the CCPA exemption for clinical trials research and exempt information related to patient and product safety. Because the CCPA s standard for deidentification of health information is inconsistent with long standing HIPAA standards, the resulting uncertainty subjects information that is critical for health research and patient services to greater risk of loss or deletion, resulting in slowed research and additional costs. These amendments are necessary to bring harmony between CCPA and HIPAA so that the health care system is not disrupted by attempting to comply with two inconsistent standards.
The CCPA defines “deidentified information as information that cannot reasonably identify, relate to, describe, be capable of being associated with, or be linked, directly or indirectly, to a consumer. This CCPA definition is inconsistent with the existing HIPAA definition of “deidentified which means health information that does not identify an individual and with respect to which there is no reasonable basis to believe that the information can be used to identify an individual. Accordingly, information that is deidentified under HIPAA standards may not be considered deidentified under the CCPA. AB 713 would remove this inconsistent deidentification standard by exempting information that is deidentified under HIPAA standards from the CCPA. At the same time, AB 713 balances this exemption by requiring businesses that disclose or sell information deidentified under HIPAA standards to inform consumers of that fact by disclosing it on their online privacy policies, along with the HIPAA method used to deidentify such information.
Additionally, even though the CCPA exempts certain information held by covered entities under HIPAA, it only exempts certain information held by business associates to the extent that they hold or process Protected Health Information (PHI) as defined under HIPAA. AB 713 will broaden this exemption to include information that is not considered PHI under HIPAA so long as business associates use and disclose that information in accordance with HIPAA standards. This broadening will relieve business associates of the risks and legal costs associated with maintaining non-PHI in a manner that is inconsistent with already existing HIPAA standards. Further, the CCPA s exemption for information collected as part of a clinical trial is limited in its effect because clinical trials represent only a small portion of all regulated biomedical research. AB 713 expands the CCPA exemption for information collected as part of a clinical trial by exempting personal information that is collected for or used in biomedical research that is subject to existing Federal or California law, including the Federal Policy for the Protection of Human Subjects (Common Rule), good clinical practice guidelines under the International Council for Harmonisation, and the human subject protection requirements of the United States Food and Drug Administration (FDA). Without this exemption, the CCPA would hinder non-interventional research that is necessary to develop new and safer therapies, procedures, medicines, and diagnostic tools.
For these reasons, CalChamber and the listed organizations SUPPORT your AB 713.
Sincerely,
Shoeb Mohammed Policy Advocate California Chamber of Commerce
Advanced Medical Technology Association American Benefits Council Biocom California Business Properties Association California Hospital Association California Manufacturers and Technology Association California Retailers Association Kaiser Permanente National Coalition For Assistive & Rehab Technology
Cc: Legislative Affairs, Office of the Governor Laura Fitzgerald, Office of Assemblymember Mullin
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DELTA CONVEYANCE PROJECT: MESSAGE POINTS/SAMPLE LETTER
The California Department of Water Resources has released a project description for a proposed new Delta conveyance project, starting the environmental review process for a single tunnel in the Delta.
Key Message Points
Strong Leadership to Modernize the State Water System A new Delta conveyance project will be a game-changer in modernizing California s aging infrastructure, ensuring we can efficiently move water statewide and manage our water supply through climate extremes. We appreciate Governor Newsom s support for the project and for initiating the environmental review process by issuing the Notice of Preparation.
Business, Labor, Agriculture and Urban Communities Support the Project The State Water Project is an indispensable lifeline to Southern California. Our $1.6 trillion economy depends on reliable supplies of water from Northern California as part of a diverse portfolio of imported water, local supplies and conservation. There is widespread support for a new Delta conveyance program from vastly diverse and prominent interests - from labor and business to public agencies, nonprofits and agriculture.
Investing in Reliability Southland businesses and residents have invested billions of dollars to build and maintain the State Water Project system. We must protect this investment. Investing in a Delta conveyance project is the most cost-effective way to secure our water future. A water shortage would come with a severe economic cost. Securing the reliability of our imported supply will protect nearly one million jobs statewide, based on a recent University of California study.
Project Will Help Achieve Co-Equal Goals The project would capture available supplies from winter storms and take advantage of large flows in the Sacramento River And as we ve seen in recent years, the state s precipitation is increasingly coming in the form of such big storms. It also would help protect the Delta ecosystem by allowing increased flexibility in how water supply operations are managed and by support habitat restoration activities.
Securing Our Water Future Southern California has a long tradition of investing in water projects to meet the needs of future generations, resulting in one of the world s most vibrant economies Given that 27 million Californians get some or all of their water from the Delta, it is imperative to prepare this vital segment of our statewide water delivery system for the future. This project does not represent the only step we must take for water resilience. But it is an indispensable project and we fully support the Newsom administration as it moves forward in the Delta conveyance planning process in a thorough and expeditious manner.
Sample Comment Letter for Delta Conveyance, Scoping Process Deadline to Submit Letters is March 20, 2020
Delta Conveyance Scoping Comments Attn: Renee Rodriguez California Department of Water Resources P.O. Box 942836 Sacramento, CA 94236
On behalf of xxxxxxx, I am pleased to provide input for the scoping process of the single-tunnel Delta conveyance project being advanced by the Department of Water Resources. We appreciate Governor Newsom s leadership to help ensure, safe, affordable and reliable water supplies to much of California.
More than percent of Southern California s water supply comes from the Sierra Nevada and it provides the backbone water supply for millions of people, our $1.6 trillion economy, farms and our environment. Modernizing and upgrading our state s aging infrastructure with a single tunnel properly sized to convey 6,000 cubic-feet-per-second of water supply for the State Water Project will allow us to more efficiently move water, restore the Delta ecosystem and manage our water supply through climate extremes.
We are not alone in our support. There is widespread backing for the project in Southern California and throughout the state from diverse and prominent interests, ranging from labor and business to public agencies, nonprofits and agriculture. We all recognize that a severe water shortage would come with an enormous economic cost and the time to move forward is now.
This project is not the only step we must take to ensure water resiliency. Ensuring Southern California has a reliable water supply in the future requires a diverse portfolio of both imported and local supplies and conservation. Much progress and significant investments are being made on a wide range of local projects and water efficiency, but the Delta conveyance project remains vitally important.
We support the Newsom administration s work to move forward in the planning process in a manner that achieves the goals of water supply reliability and ecosystem restoration. With our largest and most affordable supply at risk, we need the reliability the proposed Delta conveyance project will provide.
memo
Company name
To: SBACC Board of Directors From: Henry Rogers CC: Recipient names Date: February 1, 2020 Re: March Ballot
Comments: What it would do:
Recommended Support This Proposition 13 would authorize a $15 billion bond for school modernization and construction projects. Here’s how it would break down: $9 billion for K-12 schools ,and $2 billion each for community colleges and the state’s two public university systems, the California State University and University of California.
What it would cost taxpayers:
The nonpartisan Legislative Analyst’s Office estimates it would cost the state about $740 million a year over the next 35 years to repay the costs of the bond, with interest. That’s a total estimated cost of $26 billion: the bond itself plus an added $11 billion in interest.
Why it’s on the ballot:
Lawmakers, Democrat and Republican, overwhelmingly voted to put this on the ballot, stressing California’s urgent need to modernize its facilities. Academics say that addressing a backlog of those needs would cost about $117 billion over the next decade. California voters approved a $9 billion school bond in 2016, but all that money has been accounted for and oversubscribed.
Arguments in favor:
One of the main selling points by advocates of the measure, including Gov. Gavin Newsom: This bond measure is structured differently from previous state bonds, focusing more on school modernization than new construction. Prop. 13, they say, will prioritize health and safety issues – such as mold and asbestos – and puts an end to the first-come, first-served application process that critics say has favored richer districts at the expense of needier ones.
Arguments against:
No organized campaign against the measure has yet surfaced. But opponents including the Howard Jarvis Taxpayers Association contend that Gov. Gavin Newsom and the Legislature should have spent the state’s $21 billion surplus to upgrade school facilities instead of “wasting our money on their own pet projects.” As a result, opponents note in ballot arguments, “Wasteful money pits in the vast education bureaucracy will grab much of this money” for “wasteful construction projects that benefit special interests.” Measure FD The Board of Los Angeles County Supervisors voted unanimously on Tuesday 12/5 to place a measure to raise “much-needed” revenue for the Los Angeles County Fire Department. This measure will appear on the March 2020 ballot. Should voters approve by a two-thirds vote, the resulting parcel tax of $0.06 per square foot would collect approximately $134 million a year from residents. Government parcels, non-profits, and low- income seniors would be exempt from the parcel tax.
• Carson
• Dominguez
• Lomita
• Palos Verdes Estate
• Rancho Dominquez
• Rancho Palos Verdes
• Rolling Hills
• Rolling Hills Estate Measure R A ballot measure concerning the Sheriff's Civilian Oversight Commission, jail populations, and incarceration rates is on the ballot for Los Angeles voters in Los Angeles County, California, on March 3, 2020.
A yes vote is a vote in favor of amending the Los Angeles County Code to authorize the Sheriff Civilian Oversight Commission to develop a Comprehensive Public Safety Reinvestment Plan,
which would aim to reduce jail population and incarceration, and grant the commission subpoena power to investigate complaints.
A no vote is a vote against amending the Los Angeles County Code to grant the commission subpoena power to investigate complaints, thereby leaving the power with the Office of Inspector General.
2
SBACC Status Report Friday, January 31, 2020
Measure Summary Status / Location Organizati Position on
AB 36 Residential tenancies: rent control. Status: 4/25/2019-Re-referred SBACC Oppose The Costa-Hawkins Rental Housing Act prescribes to Com. on RLS. pursuant to Bloom D statewide limits on the application of local rent control Assembly Rule 96(a). with regard to certain properties. This bill would Location: 4/25/2019-A. RLS. modify those provisions to authorize an owner of residential real property to establish the initial and all subsequent rental rates for a dwelling or unit that has been issued its first certificate of occupancy within 20 years of the date upon which the owner seeks to establish the initial or subsequent rental rate, or for a dwelling or unit that is alienable separate from the title to any other dwelling unit or is a subdivided interest in a subdivision and the owner is a natural person who owns 10 or fewer residential units within the same jurisdiction as the dwelling or unit for which the owner seeks to establish the initial or subsequent rental rate, subject to certain exceptions. ( Amended: 4/22/2019 html pdf )
AB 535 Personal income taxes: credit: professional Status: 1/23/2020-In SBACC Support license fees. committee: Set, first hearing. Brough R Would allow a credit against personal income taxes Referred to APPR. suspense file. for each taxable year beginning on or after January 1, In committee: Held under 2021, and before January 1, 2026, in an amount equal submission. In committee: Set, to 50% of the cost paid or incurred during the taxable first hearing. Referred to year for an initial professional license fee. The bill also suspense file. would include additional information required for any Location: 1/23/2020-A. APPR. bill authorizing a new income tax credit. ( SUSPENSE FILE Amended: 1/15/2020 html pdf )
AB 628 Employment: victims of sexual harassment: Status: 1/3/2020-Read third SBACC Oppose protections. time. Refused passage. (Ayes 36. Bonta D Current law prohibits an employer from discharging Noes 15. Page 2130.). Motion to or discriminating or retaliating against, an employee reconsider made by Assembly who is a victim of domestic violence, sexual assault, or Member Bonta. (Set for hearing stalking because of the employee’s status as a victim, on 1/6/2020 ) if the employer has notice or knowledge of that status. Location: 1/3/2020- Current law additionally prohibits an employer with 25 A. RECONSIDERATION or more employees from discharging, or discriminating or retaliating against, an employee who is a victim, in this regard, who takes time off to obtain specified services or counseling. This bill would extend these employment protections to victims of sexual harassment, as defined. The bill would also extend these employment protections to specified family members, as defined, of the victims for taking time off from work to provide assistance to the victims when seeking relief or obtaining those services and counseling, as specified. ( Amended: 5/16/2019 html pdf )
Page 1/5 AB 764 Sugar-sweetened beverages: nonsale Status: 1/17/2020-Ordered to SBACC Oppose distribution incentives. inactive file at the request of Bonta D Would regulate promotion and marketing activities Assembly Member Bonta. related to sugar-sweetened beverages, as defined, by Location: 1/17/2020- prohibiting a beverage company, as defined, A. INACTIVE FILE manufacturer, or distributor, as defined, from giving or offering incentives or other financial support to compensate distributors or retailers for the cost of promotional offers, coupons, or other incentives offered to consumers for branded products of the beverage company. The bill would exempt from that prohibition contracts between a beverage company, manufacturer, or distributor and a theme or amusement park, zoo, other attraction, or professional sports stadium that include nonfood promotions. ( Amended: 5/28/2019 html pdf )
AB 882 Discrimination in employment: drug Status: 1/24/2020-Failed SBACC Oppose rehabilitation programs. Deadline pursuant to Rule 61(b) McCarty D Under the California Fair Employment and Housing (2). (Last location was APPR. on Act, it is unlawful to engage in specified discriminatory 1/8/2020) employment practices, including hiring, promotion, Location: 1/24/2020-A. DEAD and termination based on certain protected characteristics, including race, unless based on a bona fide occupational qualification or applicable security regulations. The act also prohibits housing discrimination based on specified personal characteristics, including physical or mental disability. This bill would revise the definitions of “physical disability” and “mental disability” to include a person who has completed, or is in the process of completing, a rehabilitation program to end illegal drug use, or who is erroneously regarded to be engaging in illegal drug use. ( Amended: 1/6/2020 html pdf )
AB 1066 Unemployment insurance: trade disputes: Status: 1/13/2020-Ordered to SBACC Oppose eligibility for benefits. inactive file at the request of Gonzalez D Would restore eligibility for unemployment benefits Senator Leyva. after the first 3 weeks of a trade dispute for an Location: 1/13/2020- employee who left work because of the trade dispute. S. INACTIVE FILE The bill would also codify specified case law that holds that employees who left work due to a lockout by the employer, even if it was in anticipation of a trade dispute, are eligible for benefits. The bill would specify that the bill’s provisions do not diminish eligibility for benefits of individuals deprived of work due to an employer lockout or similar action, as specified. ( Amended: 8/30/2019 html pdf )
Page 2/5 AB 1907 California Environmental Quality Act: Status: 1/30/2020-Referred to SBACC emergency shelters: supportive and Coms. on NAT. RES. and H. & Santiago D affordable housing: exemption. C.D. Would, until January 1, 2029, exempt from Location: 1/30/2020-A. NAT. environmental review under CEQA certain activities RES. approved by or carried out by a public agency in furtherance of providing emergency shelters, supportive housing, or affordable housing, as each is defined. The bill would require a lead agency that determines to carry out or approve an activity that is within this CEQA exemption to file a notice of exemption, as specified. ( Introduced: 1/8/2020 html pdf )
ACA 1 Local government financing: affordable Status: 8/19/2019-Read third SBACC Oppose housing and public infrastructure: voter time. Refused adoption. Motion Aguiar-Curry D approval. to reconsider made by Assembly The California Constitution prohibits the ad valorem Member Aguiar-Curry. tax rate on real property from exceeding 1% of the full Hearing: 2/3/2020 #3 cash value of the property, subject to certain ASSEMBLY MOTION TO exceptions. This measure would create an additional RECONSIDER exception to the 1% limit that would authorize a city, county, city and county, or special district to levy an ad Location: 5/20/2019- valorem tax to service bonded indebtedness incurred A. RECONSIDERATION to fund the construction, reconstruction, rehabilitation, or replacement of public infrastructure, affordable housing, or permanent supportive housing, or the acquisition or lease of real property for those purposes, if the proposition proposing that tax is approved by 55% of the voters of the city, county, or city and county, as applicable, and the proposition includes specified accountability requirements. ( Amended: 3/18/2019 html pdf )
ACA 14 University of California: support services: Status: 9/14/2019-Read third SBACC Oppose equal employment opportunity standards. time. Refused adoption. Gonzalez D Would enact the University of California Equal Reconsideration granted. Employment Opportunity Standards Act, which would, Hearing: 2/3/2020 #6 effective January 1, 2021, except as specified, require SENATE ASSEMBLY BILLS - the regents to ensure that all contract workers, as THIRD READING FILE defined, who are paid to perform support services for students, faculty, patients, or the general public at any Location: 9/3/2019-S. THIRD campus, dining hall, medical center, clinic, research READING facility, laboratory, or other university location, are at all times subject to and afforded the same equal employment opportunity standards, as defined, as university employees performing similar services. ( Amended: 8/30/2019 html pdf )
Page 3/5 SB 37 Corporation taxes: tax rates. Status: 1/16/2020-Read second SBACC Oppose The Corporation Tax Law imposes taxes according to time and amended. Re-referred Skinner D or measured by net income at a rate of 8.84%, or for to Com. on RLS. financial institutions, at a rate of 10.84%, as specified. Location: 1/15/2020-S. RLS. This bill would, for taxable years beginning on or after January 1, 2020, revise that rate for corporations with net income subject to taxes under that law of $10,000,000 or more to instead impose a tax rate from 10.84% to 14.84%, or for financial institutions, from 12.84% to 16.84%, based on the compensation ratio, as defined, of the corporation. The bill would increase those new applicable tax rates by a factor of 1.5 for those taxpayers that have a specified decrease in full-time employees employed in the United States as compared to an increase in contracted employees or foreign full-time employees, as described. ( Amended: 1/16/2020 html pdf )
SB 246 Oil and gas severance tax. Status: 1/14/2020-January 15 SBACC Oppose Current law imposes various taxes, including taxes on hearing postponed by Wieckowski D the privilege of engaging in certain activities. The Fee committee. Collection Procedures Law, the violation of which is a Location: 1/6/2020-S. GOV. & F. crime, provides procedures for the collection of certain fees and surcharges. This bill would impose an oil and gas severance tax upon any operator for the privilege of severing oil or gas from the earth or water in this state at specified rates, calculated as provided. ( Amended: 1/6/2020 html pdf )
SB 567 Workers’ compensation: hospital employees. Status: 1/17/2020-Failed SBACC Oppose Would define “injury,” for a hospital employee who Deadline pursuant to Rule 61(b) Caballero D provides direct patient care in an acute care hospital, (1). (Last location was L., P.E. & R. to include infectious diseases and musculoskeletal on 1/8/2020) injuries. The bill would create rebuttable Location: 1/17/2020-S. DEAD presumptions that these injuries that develop or manifest in a hospital employee who provides direct patient care in an acute care hospital arose out of and in the course of the employment. The bill would extend these presumptions for specified time periods after the hospital employee’s termination of employment. The bill would also make related findings and declarations. ( Amended: 1/8/2020 html pdf )
SB 669 Water quality: Safe Drinking Water Fund. Status: 5/16/2019-May 16 SBACC Support Would establish the Safe Drinking Water Fund in the hearing: Held in committee and Caballero D State Treasury and would provide that moneys in the under submission. fund are continuously appropriated to the State Water Location: 5/13/2019-S. APPR. Resources Control Board. The bill would require the SUSPENSE FILE state board to administer the fund to assist community water systems in disadvantaged communities that are chronically noncompliant relative to the federal and state drinking water standards and do not have the financial capacity to pay for operation and maintenance costs to comply with those standards, as specified. ( Introduced: 2/22/2019 html pdf )
Page 4/5 SB 749 California Public Records Act: trade secrets. Status: 9/15/2019-Failed SBACC Oppose Would provide that specified records of a private Deadline pursuant to Rule 61(a) Durazo D industry employer that are prepared, owned, used, or (15). (Last location was INACTIVE retained by a public agency are not trade secrets and FILE on 9/13/2019)(May be acted are public records, including certain records relating upon Jan 2020) to employment terms and conditions of employees Location: 9/15/2019-A. 2 YEAR working for a private industry employer pursuant to a contract with a public agency, records of compliance with local, state, or federal domestic content requirements, and records of a private industry employer’s compliance with job creation, job quality, or job retention obligations contained in a contract or agreement with a state or local agency. ( Amended: 9/10/2019 html pdf )
SCA 5 Taxation: school districts: parcel tax. Status: 5/21/2019-Ordered to SBACC Oppose The California Constitution generally conditions the inactive file on request of Hill D imposition of a special tax by a city, county, or special Senator Hill. district, including a school district, upon the approval Location: 5/21/2019- of 2/3 of the voters of the city, county, or special S. INACTIVE FILE district voting on that tax. This bill would condition the imposition, extension, or increase of a parcel tax, as defined, by a school district or community college district upon the approval of 55% of its voters voting on the proposition, if the proposition meets specified requirements. The measure would also make conforming changes to related provisions. ( Amended: 4/22/2019 html pdf ) Total Measures: 15 Total Tracking Forms: 15
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