(June 9, 2008) A number of California Chamber of Commerce-opposed “job killer” bills are likely dead for the year, having missed the legislative deadline to pass the house in which they were introduced.

Rejected on a vote of 18-37 in the Assembly was an Internet tax bill, AB 1840 (C. Calderon; D-Montebello). The bill would have encouraged companies that provide services via the Internet and which operate and provide jobs in California to move their operations out of California.

AB 1840 is scheduled to be reconsidered, but it seems unlikely to gain more support.

A CalChamber-led coalition of companies emphasized in a letter to members of the Assembly that AB 1840 would have undermined the ability of revenue-producing California web service companies to succeed and could have resulted in significant revenue-draining litigation against the state.

AB 1840 clouded the definition of “nexus” — the standard used to determine which companies must collect California sales or use taxes. In particular, AB 1840 eliminated the safe harbor rule that the use of a California web server in and of itself would not trigger the collection obligation.

Missed Deadline

The following “job killer” bills also failed to pass their house of origin:

• AB 2030 (Lieu; D-Torrance) Construction Costs Increases. Substantially increases the cost of commercial development, interferes with the utilities’ ability to meet the AB 32 carbon cap mandates and drives up the cost of AB 32 compliance, ultimately leading to increased utility bills, by mandating on-site energy generation and efficiency standards for all new commercial development.
• AB 2153 (Krekorian; D-Burbank) Construction Jobs Loss. Imposes an unconstitutional developer fee on new residential and commercial development that will be used to finance water conservation strategies in existing communities by requiring that all new development be water-demand neutral.
• AB 2690 (Krekorian; D-Burbank) Increased Health Care Costs. Expands liability of manufacturers of prescription pharmaceutical products by eliminating a well-established and common-sense legal defense which recognizes that a patient’s doctor should warn them of the risks and side effects of drugs.
• AB 2847 (Krekorian; D-Burbank) Increased Health Care Costs. Raises health care costs due to increased litigation by shifting the burden of proof from providers to insurers in legal disputes about the appropriateness of care regardless of whether the medical care is based on any sound clinical foundation or is evidence-based.
• SB 1165 (Kuehl; D-Santa Monica) Infrastructure and Construction Jobs Loss. Jeopardizes economic growth by restricting environmental impact statements to a five-year lifetime which will delay permitting of the project and open the door for frivolous lawsuits in an attempt to block the project.

Amended

AB 2359 (Jones; D-Sacramento) Originally limited investment by capital markets by imposing legal liability on the secondary market for flaws in home loans written by other lenders and brokers. Amended to remove problematic “assignee liability” provisions that would have limited such investments and reduced liquidity, so no longer considered a “job killer.” The CalChamber still opposes, however, due to language limiting arbitration and some unresolved mortgage loan concerns.

For updates on the remaining “job killer” bills, visit www.calchamber.com/jobkillers.

Staff Contact: Marc Burgat