VOLUME 42, NUMBER 29 ● SEPTEMBER 23, 2016
Signed Bills Help CalChamber Presents Business on Tax, Handy Ballot Guide Accessibility Issues Governor This edition Below is a recap of CalChamber Edmund G. ® of Alert positions on November ballot measures: Brown Jr. Special Report: includes a SUPPORT recently signed November seven-page Proposition 51: School Bonds two California Ballot Measures special report Proposition 52: State Fees on Hospitals. Federal Chamber of on the Medi-Cal Matching Funds Commerce-sup- November ballot measures, including brief Proposition 54: Legislative Transparency ported bills that summaries of the California Chamber of Proposition 58: English Language Education improve fairness Commerce reasons for its positions on in the tax law OPPOSE seven of the 17 ballot measures. Support administration Proposition 53: Revenue Bonds On propositions where the CalCham- process, and a third bill that will help Proposition 55: Tax Extension on High Wealth ber has no position, the guide summarizes businesses assess whether commercial Individuals arguments for and against the measures rental property complies with disability Proposition 61: Prescription Drug Purchases. Pricing as presented in the 224-page official voter access laws. information guide prepared by the Cali- For more information, see the special • AB 2201 (Brough; R-Dana Point) fornia Secretary of State. report inside. maintains fairness with regard to the computation of interest on a late elec- tronic payment to the Board of Equaliza- tion (BOE) by reinstating the authority of Tourism Promotion, Governing California the BOE to compute interest on a daily Get Closer Look at CalChamber Board Meeting basis instead of a monthly basis if listed circumstances are satisfied. • AB 2476 (Daly; D-Anaheim) ensures that a property owner has suf- ficient time to potentially challenge the parcel tax if necessary by providing notice and information of a parcel tax to a property owner who does not reside within the jurisdiction of the agency or legislative body. • AB 2093 (Steinorth; R-Rancho Cucamonga) ensures that owners and tenants are aware of any construction- See Signed Bills: Page 4
Inside Caroline Beteta (left), president and CEO of Visit California, recaps for listeners at the CalChamber Board of Directors dinner on September 8 the successes of the program to promote tourism within and • November Ballot to the state, including videos spotlighting restaurants and other travel destinations. Watch the videos on Propositions: Pages 7-13 YouTube or at VisitCalifornia.com/dream365tv. Nancy McFadden (right), executive secretary to Governor Edmund G. Brown Jr., explains at the CalChamber Board of Directors meeting on Septem- • Economic Advisory ber 9 that the administration takes “very seriously” the business of governing California. The top priority has been keeping the state on fiscal track, she says, and the job of shaping legislation also Council: Pages 14-15 includes discouraging bad ideas from being turned into bill proposals. SEPTEMBER 23, 2016 ● PAGE 2 CALIFORNIA CHAMBER OF COMMERCE
Labor Law Corner Premium Pay Applies Just Once Daily Per Missed Break/Meal Welfare Commission (IWC) wage orders penalties are separate) are missed, only address an employer’s obligation to one meal period premium is imposed provide meal periods and rest breaks. each day. Thus, if an employer employed Labor Code Section 226.7 further an employee for twelve hours in one day addresses the requirement to pay a pre- without any meal period, the penalty mium of one hour at the employee’s would be only one hour at the employee’s regular rate for failure to provide a meal regular rate of pay. period or rest break required by the IWC Section 45.3.7: Rest Periods orders. Premium for Failure to Provide Rest Barbara Wilber HR Adviser A court decision clarified that there is Periods is the same as that imposed for one violation for a missed meal break and failure to provide meal periods. Note that Please explain how the meal and rest one violation for a missed rest break in a only one hour for failure to provide a rest break premiums are paid. When an work day. period may be imposed in each day employer fails to provide two rest breaks In answer to your question, only two regardless of the number of rest periods and two meal breaks in the same day, is hours of premium pay is owed because missed. an employee entitled to four hours of the statute requires payment of the pre- premium pay? mium for each work day, not each occur- More Information No, the employee is entitled to only rence during a work day. For additional information about meal two hours of premium pay. and rest break requirements, visit With a few exceptions, both Labor Division Guidance HRCalifornia.com. Code Section 512 and the Industrial Two separate sections of the Division of Labor Standards Enforcement Policies The Labor Law Helpline is a service to and Interpretations Manual provide California Chamber of Commerce preferred additional guidance on this issue: and executive members. For expert explana- California Chamber Officers Section 45.2.8: Meal Periods tions of labor laws and Cal/OSHA regula- Premium for Missed Meal Period Is tions, not legal counsel for specific situations, Michael W. Murphy call (800) 348-2262 or submit your question Chair Only Imposed Once Each Day. No matter how many meal periods (rest period at www.hrcalifornia.com. Susan Corrales-Diaz First Vice Chair Terry MacRae CalChamber-Sponsored Seminars/Trade Shows Second Vice Chair Grace Evans Cherashore More at www.calchamber.com/events. Trade Center and Global Ties San Third Vice Chair Labor Law Francisco. September 30, Oakland. Leaves of Absence. CalChamber. October (415) 528-3541. Joseph M. Otting 6, Pasadena – SOLD OUT. (800) 2016 Sima-Sipsa International Ag Expo. Immediate Past Chair 331-8877. U.S.-Algeria Business Council. Allan Zaremberg Complying with New Federal, State and October 4–7, Algiers, Algeria. (703) President and Chief Executive Officer Local Overtime and Minimum Wage 418-4150. Rules. CalChamber. October 20, Global Trade Awards Gala. Women in Alert (ISSN 0882-0929) is published weekly Webinar. (800) 331-8877. International Trade—Los Angeles. during legislative session with exceptions by California Chamber of Commerce, 1215 K HR Boot Camp. December 7, San October 6, Long Beach. (213) 545-6479. Street, Suite 1400, Sacramento, CA 95814- Francisco. (800) 331-8877. Fifth Annual U.S.-China Collaboration 3918. Subscription price is $50 paid through Business Resources Delegation. Bay Area Council. membership dues. Periodicals Postage Paid at Air Force Small Business Industry Days. Sacramento, CA. See CalChamber-Sponsored: Page 6 Air Force Space and Missile Systems POSTMASTER: Send address changes to Alert, Center. October 18–20, Los Angeles. 1215 K Street, Suite 1400, Sacramento, CA 95814-3918. Publisher: Allan Zaremberg. (703) 286-0210. Executive Editor: Ann Amioka. Associate Editor: International Trade Sara Espinosa. Art Director: Neil Ishikawa. 2016 Public Forum on “Inclusive Trade.” CalChamber Calendar Capitol Correspondent: Christine Haddon. World Trade Organization. September Permission granted to reprint articles if 27–29, Geneva, Switzerland. Public Affairs Conference: credit is given to the California Chamber of Environmental Law and Free Trade in the November 29–30, Huntington Beach Commerce Alert, and reprint is mailed to Alert at address above. Americas. World Affairs Council of Northern California. September 29, Email: [email protected]. Home page: www.calchamber.com. Sacramento. (415) 293-4601. Diplomacy Begins Here: Northern Next Alert: October 7 California. Northern California World CALIFORNIA CHAMBER OF COMMERCE SEPTEMBER 23, 2016 ● PAGE 3
What California Employers Need to Know About New Federal Overtime Rule
The new federal overtime rule, its effects mum monthly salary thresh- on how California employers pay their old in California is two times employees, and how employers can the state minimum wage, prepare for the change are the subject of a which amounts to $41,600 a free white paper available from the year for a full time employee. California Chamber of Commerce. When state and federal In addition, an upcoming CalChamber overtime laws apply, employ- webinar examines the new federal over- ers must follow whichever is time rule, along with state and local more protective of employees. requirements on overtime and minimum What does this new law wage. mean for California employ- Until recently, California employers ers? Do you increase salaries generally were not concerned with fed- or reclassify employees? The question bonuses, commissions and highly com- eral overtime requirements because involves numerous issues, so it’s not a pensated employees applies; California’s duties and salary tests for clear-cut decision. • Steps you can take to prepare; and certain key exemptions were more strin- • Much more. gent than federal requirements. White Paper That changes as of December 1, when What California Employers Need to Upcoming Webinar the federal salary requirement for the Know About the New Federal Overtime On Thursday, October 20, CalCham- administrative, executive and professional Rule is available for CalChamber mem- ber employment law experts will present exemptions will exceed California’s bers on HRCalifornia. Nonmembers can a webinar on Complying with New Fed- salary test. sign up to download the white paper at eral, State and Local Overtime and Mini- The new federal minimum salary calchamber.com/fedovertime. mum Wage Rules. threshold for an employee to be exempt CalChamber’s white paper covers: For more information or to register, from overtime will increase to $913 per • How the new rule affects the federal visit calchamberstore.com. week (amounting to $47,476 annually for salary test; Staff Contact: Gail Cecchettini Whaley a full time employee). The current mini- • Whether the federal rule relating to National Perspective on 2016 Presidential, U.S. Senate Races
Eileen Braden, vice president of political affairs for the U.S. Chamber of Commerce, gives the CalChamber Board a rundown on the volatile 2016 presidential campaign and key races in the U.S. Chamber’s effort to maintain a pro-business majority in the U.S. Senate. She says the first presidential debate on September 26 may prove to be significant for the 20% of U.S. voters who still were undecided at the beginning of the month. SEPTEMBER 23, 2016 ● PAGE 4 CALIFORNIA CHAMBER OF COMMERCE
Lunch Highlights Strong Norway-California Trade/Investment Ties
The numerous areas that affect trade and investment between Norway and California were the subject of a lively exchange at a September 15 luncheon meeting held at the California Chamber of Commerce. International luncheon attendees (from left): Susanne T. Stirling, CalChamber vice president of international affairs; Ingrid Heggø, Labour Party Member of Parliament (MP); Ove Trellevik, Conservative Party MP; Ingunn Foss, Conservative Party MP; Oskar J. Grimstad, Progress Party MP; Sivert Bjørnstad, Progress Party MP; Morten Ørsal Johansen, First Vice Chair and Progress Party MP; California Senator Richard Pan (D-Sacramento); Line Henriette Hjemdal, Christian Democratic Party MP; Pål Farstad, Liberal Party MP; Frank Bakke-Jensen, Conservative Party MP; Knut Storberget, Labour Party MP; Odd Omland, Labour Party MP; Else-May Botten, Labour Party MP; Jock O’Connell, international trade economist, Beacon Economics; Marit Halleraker, Secretary, Parliamentary Standing Committee on Commerce and Industry; Sindre Bornstein, consul, Norwegian Consulate General; Andrew Grant, president and CEO, Northern California World Trade Center; Hilde Janne Skorpen, Consul General of Norway; and Daniel Lopez, chief of staff for Senator Pan. Read full story at www.calchamber.com/norway.
Signed Bills Help Business on Tax, Accessibility Issues From Page 1 • the taxpayer filed for an oral hearing information to the property owner so the related access violations and therefore with the BOE. owner may take action, if desired. have the opportunity to resolve any viola- On January 2, 2016, the discretion of tion before a lawsuit is filed by requiring the BOE to modify the interest assessed to AB 2093: CASp Program clarity in commercial property leases avoid an “inequitable” result expired. AB California runs a voluntary CASp regarding whether the property has been 2201 corrects this by allowing the BOE to program that offers access to experienced inspected by a Certified Access Specialist utilize its discretion to determine if assess- site inspectors to help small businesses (CASp) and any CASp reports. AB 2093 ing one month of interest on an electronic comply with the requirements of the took effect immediately upon being payment that is one day late is inequitable. federal Americans with Disabilities Act signed by the Governor on September 16. (ADA). These specialists inspect buildings AB 2476: Parcel Tax Notice for compliance with applicable state and AB 2201: Tax Administration AB 2476 requires a local agency to federal accessibility laws and regulations. Until January 1, 2016, the BOE had provide notice to property owners that do AB 2093 mandates that tenants receive the discretion to modify the interest not reside within the jurisdiction of a copies of any relevant CASp inspection assessed on a late electronic payment to a taxing agency, of its vote to place a parcel reports that have been completed for a daily rate instead of a monthly rate. The tax on the ballot as well as information property, so that all parties are aware if BOE was allowed to modify this assess- regarding the parcel tax. ADA violations have been identified. The ment if it determined that the assessment Timely notice of a proposed parcel tax bill provides transparency to give busi- of one month of interest was inequitable to affected property owners is important nesses the opportunity to correct violations as the taxpayer satisfied the following so that the property owners may voice and avoid costly litigation. factors: their concern, inquire into the amount or For more information on CASp, visit • the payment was only one day late; purpose of the parcel tax, or even prepare dgs.ca.gov/dsa/Programs/programCert/ • the taxpayer was granted relief from for the potential tax increase. AB 2476 casp.aspx. all penalties; and requires notice and provides necessary Staff Contact: Jennifer Barrera CALIFORNIA CHAMBER OF COMMERCE SEPTEMBER 23, 2016 ● PAGE 5
‘Europe Matters’ German Marshall Fund President Emphasizes Europe’s always was speculation that having a even more today, Donfried said, describ- importance to monetary union without a common fiscal ing the Transatlantic Trade and Invest- both the United policy might be problematic. The mul- ment Partnership (TTIP) as the one pro- States and tiple bailouts for Greece are one symptom active transatlantic project. California was of the Eurozone difficulties, she com- TTIP would boost both U.S. and the focus of a mented. European growth, she said, but there are INTERNATIONAL recent California • Russia’s change in its approach to barriers to moving forward. Chamber of Europe, marked by its “illegal annexa- • During the U.S. presidential cam- Commerce international breakfast. tion” of Crimea. Moreover, the refugee paign, both major party candidates have Featured speaker Dr. Karen Donfried, and migration crisis exacerbated by the voiced opposition to another trade agree- president of the German Marshall ment, the Trans-Pacific Partnership Fund of the United States, empha- (TPP), and a key congressional sized to breakfast attendees the leader has said the TPP will not be need to “double down” on the taken up this session. With TPP transatlantic relationship “because being the first agreement to be it really matters to us. It’s critical signed, it might be difficult for that we as the United States con- TTIP to leapfrog ahead, Donfried tinue to be the leader in this rela- said. tionship.” On the other hand, labor and environmental issues—frequently Strong Economic the focus of Democratic opposition Connection to trade agreements—don’t exist She reminded attendees that the with TTIP because European U.S.-European Union economic standards are higher than U.S. relationship remains the world’s ones, she commented. largest, accounting for a third of • But European politics on TTIP total trade in goods and services, have gotten more complicated, nearly half of global output with according to Donfried. When the transactions of $2.7 billion daily. first of the 14 rounds of TTIP Transatlantic trade and investment, negotiations began in 2013, the UK she said, is directly responsible for and Germany were the two key 6.8 million jobs, promoting eco- champions of the agreement. nomic prosperity on both sides of France had traditionally been more Dr. Karen Donfried the Atlantic Ocean. protectionist, she said, and it was Europe matters to California, as well, civil war in Syria, has led to tension hoped that Germany could bring France she noted. EU nations are the destination because not all EU nations are willing to along. for 17.6% of California exports (more accept refugees. Now, anti-globalization, anti-Euro- than $29 billion in 2015), she said. • The threat of terrorism on the Euro- pean Union and anti-American forces Among the states, California ranks No. 1 pean continent, exemplified by the tragic have combined to produce loud public in jobs provided by European affiliates, attacks in France and Belgium, has gener- opposition to the TTIP in Germany, said with investment generating 378,000 jobs, ated fear fueling the growth of populism Donfried. and 33,000 of the new jobs between 2006 across Europe. With the UK working on leaving the and 2015. • Brexit: Because the United Kingdom EU following the Brexit vote, lots of is the second largest economy in Europe, questions remain about the nation’s trade Europe Under Stress the British public referendum on June 23 agenda. Although there were hopes that Europe today is under stress due to a with 52% expressing a preference to the British could negotiate a separate confluence of crises that have yet to be leave the EU was a serious blow to the UK-U.S. trade deal, she said, President resolved, Donfried said, including: European Union. Barack Obama was just the latest person • The Eurozone crisis, sparked by the to say such an agreement is not likely to financial crisis in 2008. Although 19 of Transatlantic Relations happen in the short-term. the 28 EU member states have the euro as Because of the confluence of crises in Staff Contact: Susanne T. Stirling a common currency, Donfried said, there Europe, transatlantic relations matter
FOLLOW CALCHAMBER ON twitter.com/calchamber SEPTEMBER 23, 2016 ● PAGE 6 CALIFORNIA CHAMBER OF COMMERCE
Multiple Channels for Information Business Leaders Need Information about subjects of interest and reports on upcoming hearings or votes on calchamber.com/hrwatchdog to receive concern to the business community are priority business legislation. Sign up at updates via the blog app or email. available in multiple formats from the calchamber.com/newsletters. • HRCalifornia Extra e-newsletter: California Chamber of Commerce. • HRWatchdog blog: Shares insights Presents twice monthly reports on the • CalChamber Alert app: For easy several times a week from CalChamber latest labor news and court cases and how viewing of Alert articles on smartphones experts on federal and state legislation, these developments could affect employ- or tablets, download the app at court cases and governmental agency ers. Sign up at calchamber.com/ calchamberalert.com/app. The app also actions that affect employment law. Visit newsletters. offers news updates between regularly scheduled editions of the print Alert. • The free weekly Trade Update e-newsletter keeps readers in touch with the latest international issues, offering international headlines, trade policy
● FEBRUARY 5, 2016 updates, a calendar of events and links to VOLUME 42, NUMBER 4 EEOC Proposes stories about CalChamber members. Sign Collecting Pay Data Chamber Opposition Stops from W-2s In a significant up at calchamber.com/newsletters. 2015 Job Killer Holdovers departure from would have potentially shut down certain existing require- A number of California in-state oil production operations by ments, the Equal • Daily Headlines: This free email Chamber of Commerce- redefining critical components of the Employment opposed job killer bills Underground Injection Control program Opportunity first identified in 2015 which would, in turn, have compromised Commission appear to be dead for oil production without providing any (EEOC) recently offers convenient links each workday to this year after missing additional environmental and groundwa- announced that it legislative deadlines or ter protections beyond those recently is seeking to being amended. proposed by state regulators. require large AB 356 was placed on the Assembly the CalChamber top story of the day, as Missed Deadlines employers to report pay data to the Inactive File on June 11, 2015, thereby agency, including aggregate information • AB 244 (Eggman; D-Stockton) missing the January 31, 2016 deadline to from employee W-2s. jeopardized access to credit for home pass the house in which it was introduced The EEOC is proposing to revise the well as a selection of news clippings from mortgages and increased the challenge to in 2015. federal EEO-1 report to include collect- attract business to California because of • AB 357 (Chiu; D-San Francisco) ing pay data from employers with more high housing prices by extending the would have imposed an unfair, one-size- than 100 employees. The EEOC said it is homeowner’s bill of rights to others, fits-all, two-week notice scheduling man- seeking the new data to assist in identify- major newspapers throughout the state. thereby opening the door to more private date on certain retail and food employers ing possible pay discrimination in the rights of action. that penalized these employers with “addi- workplace. AB 244 was held in the Assembly tional pay” for making changes to the EEOC Chair Jenny Yang stated that The top story presents readers with the Banking and Finance Committee on schedule with less than two weeks notice, the proposal will provide the EEOC with February 17, 2015, therefore missing the and additionally imposed a new, protected insight into “pay disparities across indus- January 15, 2016 deadline for any com- leave of absence from work for employees tries and occupations” and will allow the mittee to advance a bill introduced in that who are seeking public assistance. EEOC “to more effectively focus investi- latest developments on legislation, regu- house last year. See CalChamber Opposition: Page 6 gations, assess complaints of discrimina- • AB 356 (Williams; D-Carpinteria) tion, and identify existing pay disparities that may warrant further examination.” According to Yang, pay discrimination lations, court cases and other activities goes undetected due to lack of informa- tion about what people are paid. The EEOC announced the proposal at affecting businesses in California. Sign a White House equal pay event com- memorating the seventh anniversary of the federal Lilly Ledbetter Fair Pay Act. up at calchamber.com/newsletters. See EEOC Proposes: Page 6 Inside • Inside the Capitol: Distributed each Paid Sick Leave Law week during the most active periods of Questions: Page 3 the legislative session (generally March through September), this e-newsletter
CalChamber-Sponsored Seminars/Trade Shows From Page 2 Milken Institute California Summit. Exporting Best Practices. California October 10–14, Shanghai, Hangzhou, Milken Institute. October 25, Los Centers for International Trade Beijing, China. (415) 946-8777. Angeles. (310) 570-4600. Development. November 8, Clovis. Think Canada Global Business Summit. California-China Clean Tech Trade (559) 324-6401. Think Canada. October 19–20, Mission. CalAsian Chamber. October Business H2O Summit—Water Manage- Niagara Falls, Canada. 26–November 5, Beijing, Guangzhou, ment Best Practices from the U.S. and GetGlobal. Geoskope. October 20–21, Shenzhen, Nanjing, and Shanghai, Israel. U.S. Chamber. December 12, Los Angeles. China. (916) 446-7883. Las Vegas. (202) 463-5875.
CalCham er u lic A airs Con erence
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i b ctober or earl i co t Special Report: November Ballot Measures ®
CALIFORNIA CHAMBER OF COMMERCE SEPTEMBER 23, 2016 ● PAGE 7
Overview of November Ballot Measures
Following are brief summaries of the PAYCHECK STUFFERS, no coercion, and their families) and communications measures that will appear on the Novem- no rewarding or punishing employees (or to external audiences (such as nonstock- ber 8 General Election ballot. When the threatening to do so) for their political holder retirees, outside vendors, custom- California Chamber of Commerce has activities or beliefs. ers and passersby). taken a position, the reasons for that For more guidelines on political For more information on the ballot position are summarized. communications to employees, see the measures, see the links listed below or The CalChamber encourages employ- August 12 Alert story or the brochure at visit the website of the Secretary of State ers to share this information with their www.calchamber.com/guidelines. Note at www.sos.ca.gov. employees. Businesses are within their the distinction between internal com- rights to do so—just remember: NO munications (to employees, stockholders,
School Bonds. Funding for K–12 Reasons for Position Proposition 51 School and Community College The state should continue the School Facilities. Initiative Statute. Facility Program and its use of general Authorizes $9 billion in general obliga- obligation bonds to support school tion bonds for new construction and facilities because the alternative—forcing modernizing K–12 public school, charter local governments to raise property tax SUPPORT schools and vocational education, and rates significantly and levy much higher California Community Colleges facilities. developer fees—will limit the develop- ment of new affordable housing. Cal- Placed on Ballot by: Petition signatures. Chamber has supported all 41 education facilities bond measures placed on the CalChamber Position: Support ballot since 1949.
More Information: www.yeson51.com
Medi-Cal Hospital Fee Program. Reasons for Position Proposition 52 Initiative Constitutional Amendment Extending the current fee program and Statute. provides certainty about the availability Extends indefinitely the existing law of federal matching funds (more than $3 imposing fees on hospitals to fund billion a year) for hospitals and health SUPPORT Medi-Cal health care services, care for care services for children, seniors and uninsured patients and children’s health low-income families. By requiring a coverage. two-thirds vote, the proposition increases the difficulty for the Legislature to make Placed on Ballot by: Petition signatures. any changes. The measure also prohibits the Legislature from diverting the money CalChamber Position: Support for other purposes without voter approval.
More Information: www.yesprop52.org
Revenue Bonds. Statewide Voter Placed on Ballot by: Petition signatures. Proposition 53 Approval. Initiative Constitutional Amendment. CalChamber Position: Oppose Requires statewide voter approval before any revenue bonds can be issued or sold by Reasons for Position OPPOSE the state for projects that are financed, Will stop or delay vital public works owned, operated or managed by the state or construction projects, including those any joint agency created by or including the involving water security and highway state, if the bond amount exceeds $2 billion. See Next Page Special Report: November Ballot Measures ®
CALIFORNIA CHAMBER OF COMMERCE SEPTEMBER 23, 2016 ● PAGE 8
improvements, by adding an unnecessary major infrastructure projects for their Proposition 53 level of cost, bureaucracy and delay to a own purposes. Will impede the ability for From Previous Page process already bogged down. Will take a emergency repairs to be made after a widely used and fiscally responsible natural disaster. financing mechanism off the table. Also would encourage litigation and increase More Information: NoProp53.com the ability of special interests to leverage
Legislature. Legislation and Proceed- bill online, in its final form, for at least 72 Proposition 54 ings. Initiative Constitutional Amend- hours before voting on it would give the ment and Statute. legislators time to review the legislation, Prohibits the Legislature from passing hear from their constituents, and be held any bill unless published on the Internet accountable for the laws they pass. In for 72 hours before vote. Requires addition, requiring the Legislature to post SUPPORT Legislature to record its proceedings and online a complete video record of every post on Internet. legislative meeting that is supposed to be open to the public would allow citizens to Placed on Ballot by: Petition signatures. watch legislative proceedings and keep informed. By ensuring the video records CalChamber Position: Support would be kept online, freely available for CalChamber President and CEO Allan public viewing, for at least 20 years, the Zaremberg signed ballot arguments in act will provide a valuable resource for support of the measure. the public, the press, and the academic community. Reasons for Position Requiring the Legislature to post each More Information: www.YesProp54.org
Tax Extension to Fund Education and of a dire financial situation. An extension Proposition 55 Healthcare. Initiative Constitutional of Proposition 30 would make the tax Amendment. virtually permanent, even when the Extends by 12 years the temporary state’s budget is balanced. personal income tax increases enacted in The state currently has in excess of $3 OPPOSE 2012 on earnings over $250,000, with billion in reserves and has a balanced revenues allocated to K–12 schools, budget that pays down debt and saves community colleges, and, in certain even more for future economic down- years, healthcare. turns. Also, revenue from the personal income tax is highly volatile and any Placed on Ballot by: Petition signatures. anticipated revenue from Proposition 55 might be significantly reduced when Cali- CalChamber Position: Oppose fornia is faced with future recessions. Passing an extension now is prema- Reasons for Position ture, because Proposition 30 taxes do not CalChamber did not oppose the original expire until the end of 2018. Proposition 30 tax increase in 2012 because the measure was supposed to be More Information: www.hjta.org temporary and the state was in the midst
Cigarette Tax to Fund Healthcare, Placed on Ballot by: Petition signatures. Proposition 56 Tobacco Use Prevention, Research, and Law Enforcement. Initiative Constitu- CalChamber Position: No Position tional Amendment and Statute. Increases cigarette tax by $2 per pack, Ballot Arguments For with equivalent increase on other tobacco Proponents say Proposition 56 works like products and electronic cigarettes a user fee, taxing tobacco to help pay for containing nicotine. See Next Page Special Report: November Ballot Measures ®
CALIFORNIA CHAMBER OF COMMERCE SEPTEMBER 23, 2016 ● PAGE 9
smoking prevention and health care so Ballot Arguments Against Proposition 56 smokers pay their fair share for costs. The Opponents say this $1.6 billion tax From Previous Page American Cancer Society Cancer Action increase gives $1 billion to special Network sponsored Proposition 56 to interests. Only 13% of the revenue goes prevent kids from smoking and save lives. for smoking prevention and the rest goes to Med-Cal provider rate increases. More Information: YesOn56.org More Information: www.NoOnProposition56.com
Criminal Sentences. Parole. Juvenile rehabilitating juvenile and adult inmates Proposition 57 Criminal Proceedings and Sentencing. and saving tens of millions of taxpayer Initiative Constitutional Amendment dollars. Governor Edmund G. Brown Jr. and Statute. signed the ballot arguments in support of Allows parole consideration for nonvio- the measure. lent felons. Authorizes sentence credits for rehabilitation, good behavior and More Information: Vote4Prop57.com education. Provides juvenile court judge decides whether juvenile will be prose- cuted as adult. Ballot Arguments Against Opponents say the proposition authorizes Placed on Ballot by: Petition signatures. early release of violent criminals, including those who rape unconscious CalChamber Position: No Position victims; authorizes immediate release for 16,000 dangerous criminals, even Ballot Arguments For convicted murderers; amends the Proponents point out that California California Constitution; takes rights away public safety leaders and victims of crime from victims; and grants more rights to support Proposition 57—the Public criminals. Safety and Rehabilitation Act of 2016— because it focuses resources on keeping More Information: dangerous criminals behind bars, while www.StopEarlyRelease.com
English Proficiency. Multilingual on its ability to prepare a workforce Proposition 58 Education. Initiative Statute. educated to compete in a global economy. Amends and repeals portions of Proposi- Top education systems in the world all tion 227, the initiative approved by voters require students to learn multiple in June 1998 to mandate that all children languages. Yet California, with its natural SUPPORT in California public schools be taught reserve of diverse linguistic resources has English by being taught in English unless failed to develop a multilingual work- parents have gone through a waiver force. The right to sue has had the effect process. Repeals existing law giving of doing away with most bilingual parents/guardians standing to sue for programs/classes. enforcement and making public school Sixty-six percent of people around the administrators and teachers personally world speak more than one language liable for failing to provide an English- while only 20% of people in the U.S. only curriculum. speak multiple languages. Students with a strong proficiency in English who also Placed on Ballot by: SB 1174 (Lara; speak another language are better D-Bell Gardens), Chapter 753, Statutes of equipped to compete in the global work- 2014. force and offer California employers a more prepared and educated workforce. CalChamber Position: Support More Information: Reasons for Position www.SupportProp58.com California’s economic success depends Special Report: November Ballot Measures ®
CALIFORNIA CHAMBER OF COMMERCE SEPTEMBER 23, 2016 ● PAGE 10
Corporations. Political Spending. message to Congress to get big money Proposition 59 Federal Constitutional Protections. out of politics and to overturn misguided Legislative Advisory Question. Supreme Court ruling saying unlimited Asks whether California’s elected campaign spending is free speech and officials should use their authority to that corporations have the same constitu- propose and ratify an amendment to the tional rights as people. federal Constitution overturning the U.S. Supreme Court decision in Citizens More Information: United v. Federal Election Commission. www.yesonCAProp59.com The decision ruled that laws placing certain limits on political spending by corporations and unions are unconstitu- Ballot Arguments Against tional. Opponents say the Legislature should stop wasting taxpayer dollars by putting Placed on Ballot by: SB 254 (B. Allen; do-nothing measures on the ballot that D-Santa Monica), Chapter 20, Statutes of ask Congress to overturn the Supreme 2016. Court. Instead, politicians in Sacramento should focus on transparency and CalChamber Position: No Position bringing jobs to California.
Ballot Arguments For More Information: Proponents say vote “yes” to send a [email protected]
Adult Films. Condoms. Health phers accountable for worker safety and Proposition 60 Requirements. Initiative Statute. health in California’s adult film industry. Requires adult film performers to use condoms during filming of sexual More Information: Voteyesprop60.com intercourse. Requires producers to pay for performer vaccinations, testing, and medical examinations. Requires produc- Ballot Arguments Against ers to post condom requirement at film Opponents say Proposition 60 is a sites. 13-page measure that is so poorly drafted that it is the only initiative opposed by the Placed on Ballot by: Petition signatures. California Democratic Party and the California Republican Party. The propo- CalChamber Position: No Position nent wants you to believe this is about worker safety, but this disguises the real Ballot Arguments For impact of the measure: the creation of an Proponents say Proposition 60 protects unprecedented lawsuit bonanza that will California adult film workers from cost taxpayers “tens of millions of disease. Porn producers refuse to provide dollars” and threatens the safety of a safe workplace for their performers. As performers. a result, thousands of workers have been exposed to serious and life-threatening More Information: DontHarassCa.com diseases. It is time to hold the pornogra-
State Prescription Drug Purchases. Placed on Ballot by: Petition signatures. Proposition 61 Pricing Standards. Initiative Statute. Prohibits state from buying any prescrip- CalChamber Position: Oppose tion drug from a drug manufacturer at price over lowest price paid for the drug Reasons for Position OPPOSE by U.S. Department of Veterans Affairs The CalChamber opposes this measure (USDVA). Exempts managed care because it will increase what most programs funded through Medi-Cal. Californians must pay for health care See Next Page Special Report: November Ballot Measures ®
CALIFORNIA CHAMBER OF COMMERCE SEPTEMBER 23, 2016 ● PAGE 11
premiums and out-of-pocket health care uses the discounts to establish an artificial Proposition 61 costs by shifting the cost of prescription market cap for one group of purchasers. From Previous Page drugs from government purchasers to The approach will simply shift costs to private payers, including employers. The other payers in the system. initiative ignores why the USDVA is able to negotiate lower drug prices and instead More Information: NoProp61.com
Death Penalty. Initiative Statute. be kept with other maximum-security Proposition 62 Repeals the death penalty and replaces it inmates. with life imprisonment without possibil- ity of parole. Applies retroactively to More Information: Yeson62.com existing death sentences. Increases the portion of life inmates’ wages that may be applied to victim restitution. Ballot Arguments Against Opponents say we all know California’s Placed on Ballot by: Petition signatures. death penalty system is broken. Death row inmates are now able to file one CalChamber Position: No Position frivolous appeal after another, denying justice. The answer is to mend, not end Ballot Arguments For California’s death penalty laws. Prosecu- Proponents say California’s death penalty tors, law enforcement, and the families of system has failed. Taxpayers have spent murder victims oppose Proposition 62 more than $5 billion since 1978 to carry because it jeopardizes public safety, out 13 executions—a cost of $384 million denies justice and closure to victims’ per execution. Proposition 62 replaces a families, and rewards the most horrible costly failed system with a strict life killers. sentence and zero chance of parole. Instead of being housed in expensive More Information: private cells on death row, murderers will noprop62yesprop66.com
Firearms. Ammunition Sales. Initiative law-abiding Californians to own guns for Proposition 63 Statute. self-defense, hunting, and recreation. Requires background check and Depart- ment of Justice authorization to purchase More Information: safetyforall.com ammunition. Prohibits possession of large-capacity ammunition magazines. Establishes procedures for enforcing laws Ballot Arguments Against prohibiting firearm possession by specified Opponents say Proposition 63 is over- persons. Requires Department of Justice whelmingly opposed by the law enforce- participation in federal National Instant ment community and civil rights groups Criminal Background Check System. because it will burden law-abiding citizens without keeping violent criminals Placed on Ballot by: Petition signatures. and terrorists from accessing firearms and ammunition. The measure would divert CalChamber Position: No Position scarce law enforcement resources away from local law enforcement and overbur- Ballot Arguments For den an already-overcrowded court system Proponents say more than 300 Americans with the enforcement of flawed laws that are shot each day, more than 80 of them will turn harmless, law-abiding citizens fatally. Proposition 63 will save lives by into criminals. In fact, New York recently closing loopholes to prevent dangerous abandoned its enforcement of a similar criminals, domestic abusers, and the proposal after it was passed, finding that dangerously mentally ill from obtaining it was impossible to implement and and using deadly weapons. The measure effectively maintain. keeps guns and ammo out of the wrong hands, while protecting the rights of More Information: stoptheammograb.com Special Report: November Ballot Measures ®
CALIFORNIA CHAMBER OF COMMERCE SEPTEMBER 23, 2016 ● PAGE 12
Marijuana Legalization. Initiative year to help California. And it could save Proposition 64 Statute. tens of millions of dollars annually in Legalizes marijuana under state law, for reduced law enforcement costs. Together, use by adults 21 or older. Imposes state that is a benefit of $11 billion over the taxes on sales and cultivation. Provides next decade. for industry licensing and establishes standards for marijuana products. Allows More Information: yeson64.org local regulation and taxation. Provides that employers will be able to continue to require a drug-free workplace. Ballot Arguments Against Opponents say Proposition 64 has five Placed on Ballot by: Petition signatures. huge flaws that affect Californians: doubles highway fatalities; allows CalChamber Position: No Position marijuana growing near schools and parks; increases black market and drug Ballot Arguments For cartel activity; could roll back the total Proponents say it’s time to implement prohibition of smoking ads on TV; and is proven reforms so marijuana will be safe, an all-out assault on underprivileged controlled and taxed. The measure neighborhoods already reeling from incorporates best practices from states alcohol and drug addiction problems. The that already legalized adult marijuana measure is radically different from use, and adheres closely to the recom- legalization measures in other states, and mendations of California’s Blue Ribbon may weaken countless consumer protec- Commission on Marijuana Policy, which tions just passed last year and signed into included law enforcement and public law by Governor Brown. health experts. By collecting unpaid taxes from marijuana, Proposition 64 will bring More Information: NoOn64.net in more than $1 billion of revenue every
Carryout Bags. Charges. Initiative and every year unless voters say yes on Proposition 65 Statute. Proposition 65. That money should be Redirects money collected by grocery dedicated to the environment, not more and certain other retail stores through profits for corporate grocery chains. mandated sale of carryout bags. Requires stores to deposit bag sale proceeds into a More Information: SayYesOn65.com special fund to support specified environ- mental projects. Ballot Arguments Against Opponents say Proposition 65 is without Placed on Ballot by: Petition signatures. real significance, designed to distract from the issue at hand: phasing out CalChamber Position: No Position plastic shopping bags. All 65 would do is direct funding from the sale of paper bags Ballot Arguments For (an option under the plastic bag ban) to a Proponents say Proposition 65 is needed new state fund. The money for this fund to stop grocery stores from keeping all is a drop in the bucket and will shrink the money collected from carryout bag over time as people adjust to bringing taxes as profit instead of helping the reusable bags. environment. Grocery stores stand to gain up to $300 million in added profits each More Information: cawrecycles.org Special Report: November Ballot Measures ®
CALIFORNIA CHAMBER OF COMMERCE SEPTEMBER 23, 2016 ● PAGE 13
Death Penalty. Procedures. Initiative taxpayers money because heinous Proposition 66 Statute. criminals will no longer be sitting on Changes procedures governing state court death row at taxpayer expense for 30+ challenges to death sentences. Designates years. superior court for initial petitions and limits successive petitions. Requires More Information: appointed attorneys who take noncapital noprop62yesprop66.com appeals to accept death penalty appeals. Exempts prison officials from existing regulation process for developing Ballot Arguments Against execution methods. Opponents say Proposition 66 is a poorly written initiative that will add more layers Placed on Ballot by: Petition signatures. of government bureaucracy, causing more delays, cost taxpayers money, and CalChamber Position: No Position increase California’s risk of executing an innocent person. Evidence shows more Ballot Arguments For than 150 innocent people have been Proponents say Proposition 66 was sentenced to death, and some have been written by frontline death penalty executed because of poorly written laws prosecutors who know the system inside like this one. According to nonpartisan and out. They know how the system is analysis, Proposition 66 could cost “tens broken, and they know how to fix it. of millions of dollars annually” with Proposition 66 was written to speed up “unknown” costs beyond that. Instead of the death penalty appeals system while adding new layers of government ensuring that no innocent person is ever bureaucracy and increasing costs, we executed. Proposition 66 means the worst deserve real reform of our justice system. killers receive the strongest sentence. The Proposition 66 is not the answer. measure would bring closure to victims’ families, protect public safety, and save More Information: NoonCAProp66.org
Ban on Single-Use Plastic Bags. plastic bags. These laws have already Proposition 67 Referendum. been a success; some communities have A “Yes” vote approves, and a “No” vote seen a nearly 90% reduction in single-use rejects, a statute that prohibits grocery bags, as well as strong support from and other stores from providing custom- consumers. ers single-use plastic or paper carryout bags, but permits sale of recycled paper More Information: cayeson67.com bags and reusable bags.
Placed on Ballot by: Petition signatures. Ballot Arguments Against Opponents say Proposition 67 is a $300 CalChamber Position: No Position million per year hidden tax increase on California consumers who will be forced Ballot Arguments For to pay a minimum 10 cents for every Proponents say this measure will help paper and thick plastic grocery bag they keep discarded plastic bags out of the are given at the checkout. Not one penny mountains, valleys, beaches and commu- goes to the environment. Instead, the nities, and keep them beautiful. The law Legislature gave all $300 million in new also will save the state and local commu- tax revenue to grocers as extra profit. nities tens of millions of dollars in litter clean-up costs. Nearly 150 local cities More Information: No website listed. and counties have banned single-use Special Report: Economic Advisory Council ®
CALIFORNIA CHAMBER OF COMMERCE SEPTEMBER 23, 2016 ● PAGE 14
Economy Pushes Through Global Turbulence; State Still Among Fastest Growing in U.S. National Economy some small degree. Median real wages ongoing low interest rates will lead to a U.S. economic output has slowed to a for a full-time worker have grown 4% faster pace of construction in the second crawl over the last three quarters—aver- over the past two years, still modest but half of the year. aging less than a 1% pace of growth better than the previous eight years when Poor Global Outlook compared to 3% in the previous six real earnings didn’t grow at all. As positive as all these signs are, the quarters. Despite these disappointing Positive Indicators United States is unlikely to return to an results, prognosticators of the economy More importantly, there are a number average pace of growth within the next have, for the most part, not reduced their of indicators that suggest the business year or more. While the nation has mus- growth outlook for the spending pullback is ending and that cled though the turbulence so far, the nation by much. Most are global outlook remains poor. The Chinese economy still looking for rates in the Cali ornia Outpaces S o rowth 2% to 2.5% range. is still weak despite various Year over Year The reason for the rela- i ere ce i cha e e policy measures put into place over the last year. tive optimism is that the a act ri . otal o arm m lo me t Europe is growing again, headwinds which have ther er ice . slowed the U.S. economy in but is dealing with issues recent months have come i a cial cti it e . surrounding deflation and the Brexit. And the com- largely from external ormatio . modity glut—while good sources—the global com- ra e/ ra ortatio / tilitie . for American consumers— modity glut, the slowing of o tr ctio . the Chinese economy, politi- continues to hurt growth cal turmoil in the Middle catio a ealth er ice . prospects for many develop- ing economies. As such, the East and Europe, and wild ro e io al a i e er ice . overall outlook for U.S. gyrations in equity markets ei re a o italit . growth remains much as it driven by fears over all these o er me t . issues. These problems have did last year at this time. stalled U.S. exports and . . . . . . The only major change industrial production, and Sources: Fermanian Business and Economic Institute, Employment Development Department in expectations is in regard led to a decline in business to interest rates and Federal investment—in particular a Reserve policy. Given the big runoff of business inventories. overall investment trends will begin to recent weak U.S. growth data and the In contrast, domestic demand has turn positive again soon. In April, the decline in interest rates driven by nervous remained quite strong. Consumer spend- Institute for Supply Management Pur- investors seeking safety in U.S. markets ing added almost 3% to growth in the chasing Managers Index for Manufactur- following the Brexit, there is a mounting second quarter, more than enough to ing climbed above 50, and in June the realization that low interest rates are offset declines in business investment. Industrial Production Index also started going to be with us for some time. rising again with the best pace of growth Consumers are also increasing their California Outlook spending for the right reason—they are since late 2014. Inventory to sales ratios earning more. are currently the lowest they have been The California economy, like the The U.S. labor markets continue to since 2003—suggesting that businesses nation overall, slowed its pace of growth expand, adding 275,000 jobs per month in will need to start stocking up soon. over the past year. Still, the state remains June and July after a weak spring. The The housing market has also shown one of the fastest growing economies in construction, health care, professional stronger signs of life recently. Sales of the nation. services, and hospitality sectors have all new and existing homes, while still far Payroll employment growth has been been growing at a faster-than-average rate. below long-run sustainable levels, have above 2.5% over the last year—almost a Also helping is weak inflation driven hit post-Great Recession highs in recent full percentage point higher than the by low commodity prices and low unem- months. While tight credit remains a national average. California’s unemploy- ployment rates that have finally shifted major impediment to full recovery, the ment rate in July was 5.4%, still above the economic balance toward labor to improved financial situation of the aver- the national average but by the smallest age American household combined with See Next Page Special Report: Economic Advisory Council ®
CALIFORNIA CHAMBER OF COMMERCE SEPTEMBER 23, 2016 ● PAGE 15
Economy Pushes Through Global Turbulence; State Among Fastest Growing
From Previous Page year saw solid growth in these positions. rate in the state. Job growth has outpaced margin since before the Great Recession Logistics, information and construction labor force growth by a factor of two over began. employment also slowed sharply. Recent the last four years. With labor markets Output growth also has been higher data on industrial production, and the reaching full employment, high job than the national average. According to rebound in equity prices, suggest the growth rates can be sustained only by data from the U.S. Bureau of Economic second half of the year will look much bringing workers into the state from other Analysis, California’s gross state product better. places. (GSP) grew 3.1% from the first quarter of Regional Impacts Unfortunately, California is unlikely 2015 to the first quarter of 2016, com- Regionally, the slowing of business to attract such workers given the rapidly pared to 2.1% in the nation overall. This investment and the cooling of the tech growing cost of housing. Median home is the fourth straight year that California sector has affected San Francisco and San prices in the state recently crossed the has outgrown the United States as a Jose. Still, both locations hold some of $400,000 mark while in the red hot Bay whole. the top spots for overall job growth with Area, median prices can reach well over Moreover, the gains in $1 million (in San Fran- the state are not being State Housing State residential permits cisco). Inventories are very driven by one industry or by tight, with most major one region. The tech sector i le amil economies having between lti amil is hot, but so too are the two and three months’ tourism, logistics, entertain- supply of homes on the ment, and more traditional market—on par with the professional services sec- peak of the housing market tors. Better incomes are bubble. driving demand for local But this is not like the services—and the health it last cycle because high care, retail and construction demand has not been met sectors have all seen large with new supply. Single- jumps. The expansion is family building permits are also largely statewide, with roughly one-quarter of what many regions seeing high they were a decade ago. rates of job growth. The only bright part of California’s share of new housing supply— mul- national employment Source: Beacon Economics tifamily units—is also recently returned to 12%, below that pace. And the tied for the best ever with a pushback against even record set back in 1990 before the onset year-over-year growth rates of 3% and modest development, particularly in the of the early 1990s downturn. The state’s higher. dense coastal regions, is heating up. share of personal income is also currently Other rapidly growing economies The problem is being widely dis- at a record high level. Overall, California were mainly in the central portions of the cussed, but there is little consensus has clearly been an economic success state—including Stockton, Fresno, and among political leaders as to how to deal story in otherwise difficult times. the Inland Empire. Bakersfield and Ven- with the mounting problem. Hurdles tura both saw increases in the pace of Staff Contact: Dave Kilby This isn’t to say that the state’s com- employment growth after a weak previ- plex regulatory system and high tax rates ous year. The California Chamber haven’t been issues—California would of Commerce Economic likely be doing even better in the absence Housing Situation Advisory Council, made of those hurdles. But the state’s other As good as the employment and up of leading economists advantages in location, industry, and income numbers have been (until from the private and climate have, so far, persevered. recently), the CalChamber Economic public sectors, presents a Taking a closer look at the numbers Advisory Council almost universally report each quarter to the indicates that, much like the United agrees that the state will likely lose some CalChamber Board of States overall, the slowing of job growth of its steam in the next two years. Directors. This report was in California is related to trade and The high pace of job growth has been prepared by council chair Christopher Thornberg, Ph.D., founding partner of Beacon investment. The state lost manufacturing fed mainly by a supply of excess labor— Economics, LLC. jobs over the last year—after the previous in other words, the high unemployment Periodicals Postage PAID Sacramento, CA CALIFORNIA CHAMBER OF COMMERCE
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LIVE WEBINAR | THURSDAY, OCTOBER 20, 2016 | 10:00 - 11:30 AM PT Complying with New Federal, State and Local Overtime and Minimum Wage Rules
Until recently, most California employers only needed to adjust their payroll systems and overtime rates when California’s minimum wage rates increased.
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