AGUIAR APPOINTED SECRETARY OF STATE AND CONSUMER SERVICES AGENCY

Please join us in welcoming Fred Aguiar as the new Secretary of the State and Consumer Services Agency (SCSA). The agency is responsible for civil rights enforcement, consumer protection and the licensing of 2.4 million Californians in more than 255 different professions, and the management and development of state real estate. The Secretary also serves as the chair of the Building Standards Commission responsible for writing the state’s building codes.

Staff at BOMA California have a long and positive working relationship with Mr. Aguiar dating back to his days in the State Assembly. Since 2007, Aguiar has served as a member of the Unemployment Insurance Appeals Board. Previously, he served as cabinet secretary in the Office of Governor Schwarzenegger from 2005 to 2007. From 2003 to 2005, Aguiar served as secretary of the SCSA. Prior to that, he served on the San Bernardino County Board of Supervisors from 1998 to 2003 and served in the California State Assembly from 1992 to 1998 representing the 61st district. His experience includes 14 years of service in local government, both as a council member and mayor of the city of Chino from 1978 to 1992. Additionally, Aguiar served in the U.S. Army from 1969 to 1970.

The Governor also appointed Scott Reid as Agency Undersecretary. Reid, 36, of Placerville, has served as chief deputy director for the Department of Consumer Affairs since 2007. Previously, he served as chief deputy cabinet secretary for the Office of Governor Schwarzenegger in 2006 and deputy secretary for policy and planning at SCSA from 2005 to 2006. From 2004 to 2005, Reid served as director of the Office of the Insurance Advisor and, from 1998 to 2003, was chief of staff to Fred Aguiar at the San Bernardino County Board of Supervisors and the California State Assembly.

We look forward to working with both Secretary Aguiar and Undersecretary Reid.

CREJ OP/ED: SACRAMENTO ADVOCACY AND SPLIT ROLL

Michael Gottlieb from the California Real Estate Journal has written an op/ed discussing commercial real estate issue advocacy in Sacramento and political dynamics related to Split Roll Property Tax. We appreciate CREJ shedding some light on the sometimes confusing political process.

“[commercial] real estate emerged remarkably unscathed in the plan to close California's $42 billion revenue shortfall. The tax increases and program cuts will indirectly affect the industry and offset some of the benefits of federal stimulus, but the economic stimulus leg of Gov. Arnold Schwarzenegger's ‘four-legged approach to balance the budget’ calls for CEQA exemptions for surplus state property and $1.4 billion in transportation projects through 2010; applying public-private partnerships for transportation projects through 2017; and allowing design-build authority for 30 projects. It was a dream come true for real estate considering what could have been.”

Click here to read the full article.

STATE BUDGET

As reported last week, the Legislative Analyst’s Office has released a report showing that state finances continue to struggle. Absent any corrective action the current $8 billion revenue drop (since the “budge fix” was passed last month) will consume the budget’s $2 billion reserve and generate a new $6 billion shortfall for 2009-10. Even if all assumptions included in the budget package go as planned, the state’s operating shortfalls are projected to grow to $12.6 billion in 2010-11 and to $26.4 billion by 2013-14. Read the full report here.
 

NEW BILLS ON TAXES AND FEES

Since the start of the 2009-2010 session our 120 State Legislators have collectively introduced 2,622 legislative measures. We have identified more than 500 that may have an impact on commercial, industrial, and retail real estate.

Below are quick synopses on a slug of bills that impact taxes and fees. Your input is needed to identify and prioritize those that will have the biggest impact on your company operations. Help us by having your financial officer(s) run through this list and filter up those of most concern.

You can read the full text of any bill by pointing your browser to this site.

THANK YOU!

* AB 11 (De Leon - D) Relates to the Corporation Tax Law, which imposes certain limitations on the use of built-in losses in conjunction with corporate reorganizations. Clarifies that a specified federal administrative notice relating to those limitations does not apply for purposes of state law.

* AB 103 (De Leon - D) Relates to change of ownership for purposes of ad valorem taxes on real property. Provides that a transfer of a co-tenancy interest in real property from one co-tenant to the other that takes effect upon the death of the transferor co-tenant does not constitute a change of ownership.

* AB 139 (Brownley - D) Authorizes the Los Angeles County Flood Control District to impose a fee or charge to pay the costs and expenses of the district. Requires that any fees imposed be levied and collected, and the revenues paid into the county treasury to the credit of the district. Limits district financing to bonds, taxes and fees.

* AB 143 (Jeffries - R) Authorizes an owner of record to instruct a property tax collector, by written request, to refund a replicated payment on a current assessment to the tendering party who is not an owner of record, if that tendering party is known at the time the request is made by the owner of record.

* AB 150 (Smyth - R) Exempts from the Sales and Use Tax Law, during a qualified period, energy efficient products that meet or exceed Energy Star efficiency requirements including specified layaway agreements.

* AB 157 (Anderson - R) Amends existing property tax law to provide, for disasters occurring on or after a specified date and the Cedar Fires of 2003, that the property tax base year value of real property that is substantially damaged or destroyed by a disaster may be transferred to a comparable property located within the same county that is acquired or newly constructed within 7 years after the disaster as a replacement property.

* AB 277 (Ammiano - D) Amends the Bay Area County Traffic and Transportation Funding Act which establishes a process for each county in the San Francisco Bay Area to impose a retail transaction and use tax for purposes subject to voter approval. Deletes the option of specifying the membership of the authority in the retail and use tax ordinance.

* AB 321 (Niello - R) Relates to property tax law which authorizes taxpayers to transfer the base year value of property to replacement property, if certain conditions are met. Provides that a spouse of a claimant who is a record owner of the replacement dwelling shall not be considered a claimant for purposes of determining whether, in any future claim filed by the spouse, the condition of eligibility has been met.

* AB 326 (Garrick - R) Allows personal income tax deductions in connection with health savings accounts in conformity with federal law. Provides related conformity to that federal law with respect to treatment of the account as a tax-exempt trust, the allowance of rollovers from Archer Medical Savings Accounts, health flexible spending arrangements, or health reimbursement accounts to a health savings account and penalties in connection therewith.

* AB 697 (Calderon C - D) Makes technical changes to existing law that requires the Franchise Tax Board to include specified questions on the income tax returns of specified entities regarding changes in ownership of the real property owned by the entity.

* AB 824 (Harkey - R) Extends provisions of existing law related to an application for property tax equalization filed by a member or alternated member of an assessment appeals board to applications for equalization fled by any current employee of the county counsel who either advises the assessment appeals board or represents the assessor before the assessment appeals board.

* AB 829 (Caballero - D) Declares the intent of the Legislature to exempt from sales taxes the sale of, and the storage, use, or other consumption of, manufacturing equipment used in the manufacturing process.

* AB 847 (Calderon C - D) Amends the Sales and Use Tax Law which provides various exemptions for those taxes, including an exemption from sales tax for a sale of tangible personal property in the state, when the contract of sale requires that the property be shipped, and it is shipped, in a specified manner, to a point outside the state. Repeals that exemption. Provides that the retail sale of tangible personal property in the state would be subject to tax, regardless of that contract provision.

* AB 852 (Fong - D) Authorizes the county assessor to refuse to accept any property tax statement that is not in the requested format and to require the filing of a property tax statement by means of the Assessor' Standard Data Record. Requires the State board of Equalization to adopt equipment category codes. Requires taxpayers' filing a property tax statement to use the equipment category codes.

* AB 876 (Harkey - R) Makes a technical change to existing income tax law which provides for the specified treatment of capital gains and losses.

* AB 978 (Perez V - D) Authorizes the board of supervisors of a county to impose a transactions and use tax at a rate of 0.125% by the adoption of an ordinance, if certain conditions are met. Provides that revenues from the tax could be used only for funding economic development within the county, including the construction and acquisition of facilities within the county.

* AB 992 (Lieu - D) Relates to assessment appeal services. Includes in the definition of a property tax assessment appeal application filing service those services performed by a person who actively advocates, in person or by written and oral communications, on the behalf of the person to whom a solication is made before the appeals board or the assessor's office. Prohibits such service from charging, demanding, or collecting money until the appeal application is filed with the assessor's office or appeals board clerk.

* AB 1084 (Adams - R) Amends the Mitigation Fee Act that authorizes a local agency to charge a variety of fees, dedications, reservations or other exactions in connection with the approval of a development project.

* AB 1087 (Ma - D) Relates to a provision of law requiring and assessor to assess all property subject to general property taxation on the lien date. Makes a technical change.

* AB 1088 (Fletcher - R) Allows taxpayers to designate on their tax returns that a specified amount in excess of their tax liability to be transferred to a specified fund, which would be created by this bill.

* AB 1178 (Block - D) Relates to the corporation tax regarding tax havens for the water's edge election. Expands the list of affiliated entities for taxable years beginning on or after a specified date, to include a corporation that is incorporated, headquartered, or located in a country that is a tax haven. Requires the Legislative Analyst, in consultation with the Franchise Tax Board, to conduct a study regarding the jurisdiction identified as tax havens and to report whether the definition of tax haven should be revised.

* AB 1291 (Niello - R) Amends existing law, the Unclaimed Property Law, governs the disposition of unclaimed property, including the escheat of certain property to the state. Requires the holder of certain property, including certain property held by a banking or financial organization, certain sums held or owing by a business association to shareholders or other specified persons, and tangible property that is held in the ordinary course of the holder's business, to notify the owner.

* AB 1299 (Coto - D) Clarifies the meaning of state taxes for purposes of the constitutional vote requirement.

* AB 1304 (Saldana - D) Amends existing law which authorizes counties and cities to impose a documentary transfer tax at a specified rate upon deeds, instruments, or other writings by which specified property is transferred.

* AB 1339 (Perez V - D) Relates to property tax revenue allocations regarding the Imperial County Free Library.

* AB 1344 (Fletcher - R) Relates to the property taxation for military housing.

* AB 1387 (Tran - R) Provides that the State Board of Equalization and the Franchise Tax Board shall have the burden of proof in a court or administrative tax proceeding with respect to any factual issue relevant to ascertaining the tax liability of a taxpayer who has established that it is a cooperating taxpayer.

* AB 1454 (Buchanan - D) Amends existing law which requires property taxes to be refunded if, among other circumstances, the taxes were paid more than once, the taxes were illegally assessed or levied, or paid on an assessment that was in excess of the value of the property.

* AB 27X3 (Calderon C - D) Relates to sales and use taxes. Includes a retailer having a representative, agent, salesperson, canvasser, contractor, or solicitor operating in the state under the authority of the retailer or its subsidiary for the purpose of servicing or repairing any tangible personal property, and a retailer entering into an agreement with a resident of the state under which the resident, refers potential customers.

* SB 10 (Leno - D) Authorizes counties and the City and County of San Francisco to impose a voter-approved local assessment for specified vehicles under specified conditions. Requires the county of city and county to contract with the Department of Transportation to collect and administer the assessment. Requires the Franchise Tax Board to notify the department of estimated revenue losses from deducting such assessment under the Personal Income and Corporation Tax laws. Requires tax losses to be paid from the assessments.

* SB 27 (Hancock - D) Prohibits a local agency from entering into any agreement with a retailer, or any other person that would involve the payment, transfer, diversion or rebate of any amount of local tax proceeds if the agreement results in a reduction in the amount of revenue received by another agency from a retailer located within the jurisdiction of that other agency, and the retailer continues to maintain a physical presence within the territorial jurisdiction of the other local agency. Provides exceptions.

* SB 274 (Dutton - R) Relates to existing law which provides that a person who is severely disabled or over the age of 55 years may transfer the base year value of property that is eligible for the homeowners' property tax exemption to a replacement dwelling. Provides that the base year value of an original property may be transferred to a replacement dwelling that is of greater value.

* SB 354 (Wright - D) Requires the State Board of Equalization to study the impact of new video and voice alternatives on local tax and fee revenues and report to the Legislature.

* SB 445 (Ashburn - R) Allows a credit against taxes imposed by the Personal Income Tax Law and the Corporation Tax Law in an amount equal to a specified percentage of the amount paid or incurred by a taxpayer during the taxable year for qualified property that is placed in service in the State.

* SB 463 (Strickland T - R) Amends the Personal Income Tax Law and the Corporation Tax Law. Allows a credit for costs paid or incurred for the purchase and installation of renewable energy resources or renewable energy resources conversion technology projects.

* SB 464 (Strickland T - R) Amends the Personal Income Tax Law and the Bank and Corporation Tax Law. Allows a credit for the amount paid or incurred or qualified property, that is used to meet diesel particulate matter reduction requirements.

* SB 472 (Dutton - R) Amends the Personal Income Tax Law and Corporation Tax Law. Provides that gross income does not include a specified percent of any gain from the sale or exchange of a capital asset.

* SB 530 (Dutton - R) Relates to Redevelopment agency payment of property tax increment funds. Revises the calculation by which specified payments of property tax increment funds in specified fiscal years to taxing entities are allocated among those entities.

* SB 534 (Strickland T - R) Relates to ad valorem taxes on real property. Provides that the classification as newly constructed does not include the construction or addition on or of a small wind turbine or geothermal heat pump system.

* SB 568 (Hollingsworth - R) Amends the Personal Income Tax law and the Corporation Tax Law. Allows a taxpayer to elect to pay a tax on the sale or disposition of any capital asset that results in a net capital gain in an amount equal to a specified percentage of the total net capital gain.

* SB 671 (Runner G - R) Amends existing law that requires the county assessor to assess current fair market valuations to determine the cancellation fee for removing land from a Williamson Act contract. Requires the Department of Conservation to obtain a fee appraisal to determine the current fair market value of the land. Authorizes the county assessor to provide information to the department to assist in the determination of value.

* SB 684 (Cogdill - R) Relates to property tax revenue allocations. Requires the county auditor for any count for which a negative sum was calculated pursuant to a specified former statute, reducing the amount of property tax revenue otherwise allocated to the county by an amount attributable to that negative sum, to apply a reduction amount equal to the reduction amount determined for the 2010-11 fiscal year.

* SB 699 (Alquist - D) Declares the intent of the Legislature to enact legislation that would exempt from sales and use taxes, the sale and purchase of manufacturing equipment that reduces energy and water use, and increases energy efficiency and water recycling.

* SB 816 (Ducheny - D) Expands the list of state and local agencies the assessor is required to disclose certain appraisal information to include the county recorder when conducting an investigation to determine whether a documentary transfer tax is due.

* SCA 3 (Wyland - R) Proposes an amendment to the State Constitution. Deletes current provisions authorizing the transfer of revenues to the Transportation Investment Fund to be suspended during a fiscal emergency. Prohibits a loan of fund revenues under any circumstances. Prohibits any statute that would reduce the extent to which these tax revenues are deposited into the General Fund for transfer to the fund for transportation purposes.

* SCA 6 (Simitian - D) Proposes a Constitutional amendment that conditions the imposition, extension, or increase of a parcel tax by a school district, community college district, or county office of education upon the approval of 55% of its voters upon the proposition.

* SCA 11 (Dutton - R) Proposes an amendment to the Constitution to extend the period of time during which a severely disabled person or a person over 55 years of age has to purchase or construct a replacement dwelling from 2 years to 3 years of the sale of the original property. Authorizes the Legislature to provide for the transfer of base year value to a replacement dwelling that is of greater value.

* SJR 1 (Ducheny - D) Urges the members of the congressional delegation to join as cosponsors of the federal Sales Tax Fairness and Simplification act, or similar legislation.

BOMA CALIFORNIA 2009 CALENDAR

MARCH 2009

March 23-24—
BOMA INTERNATIONAL, NATIONAL ISSUES CONFERENCE
Washington D.C.

 

APRIL 2009

April 3—
BOMA CA BOARD MEETING/LEGISLATIVE REVIEW
Waxie Headquarters
9353 Waxie Way
San Diego
10:00 a.m. - 2:00 p.m.
RSVP for more details

April 8 —
BOMA/INDUSTRYWIDE LEGISLATIVE COMMITTEE MEETING
Century City
10:00 a.m. - 2:00 p.m.
RSVP for more details

 

JUNE 2009

June 9-10—
CALIFORNIA COMMERCIAL REAL ESTATE SUMMIT
Sacramento

June 10—
BOMA CALIFORNIA BOARD MEETING
Hyatt Regency, Sacramento
2:00 p.m. - 5:00 p.m.

June 28-30—
BOMA INTERNATIONAL ANNUAL CONFERENCE
Philadelphia, PA