Tuesday, May 28, 2019

BOMA California Advocacy Update: Lactation Rooms, Wayfair Bill/Online Sales Tax, Possible Increase in Property Taxes

Please take a moment to review this advocacy update from BOMA California.


Once again, we are dealing with a bill in the legislature that mandates expanded access to Lactation Rooms in commercial buildings. The bill, AB 142 by Senator Weiner from San Francisco, is very similar to a bill he carried last year that was vetoed by Governor Brown. The new version passed another major hurdle this week when the Senate voted 26-9 in favor of the measure.

As an industry our main concerns with the bill is that it brings building owners and managers into the middle of an employer-employee relationship in which we do not belong.

In terms of building code issues, the bill is very owner-occupied-centric. The issues we have mainly occur with multi-tenant situations where responsibility for tenant improvements may be 100% on the owner, 100% on the tenant, or some combination thereof, but as the bill is written it ignores how leases are written and agreed upon.

Also, this bill assumes that all real estate markets across the state are the same – akin to those in coastal cities – and will be much more difficult to comply with in areas where tenants have less capital to work with.

Over the past two months we have been working with our legislative committee, the author, and his staff to identify our specific issues and try to resolve them. Here they are, and you are encouraged to share this information with local legislators:

ISSUE 1. The entity responsible for making modifications should be who is responsible for providing the space (it is common for tenants to control their own space). This is how it is in S.F.’s ordinance.

SOLUTION: Clarify the entity triggering the law is the responsible party for the accommodation (that may be a building owner, manager, or tenant).

ISSUE 2. Currently the bill triggers a Tenant Improvements in spaces thats not part of the qualifying event. An improvement in one tenant’s Premises should not trigger requirements in other Premises in building/center. Shifts cost and/or requires use of common space that may not exist.

SOLUTION: Clarify this only applies to the space triggering the law.

ISSUE 3. If no reasonable space within Premises and no need to provide space elsewhere in building/center if no room in Premises. This commonly occurs in an industrial campus setting where each company has its individual space. SOLUTION: Provide an exemption for properties that do not have common space/office space.

ISSUE 4. Number of employees at one location instead of companywide. Bill currently could trigger based on company employees not the actual number on site.

SOLUTION: Clarify occupancy load pertains to the onsite employees only.

ISSUE 5. Technical issue. “Daily occupancy” language is not a common term used in law. There are fire marshal standards for max occupancy but there are not statewide standards for occupancy load.

SOLUTION: Work with the Local Building Officials Association to determine now local building officials would determine how many employees will be on premises daily.

ISSUE 6. Technical/Governance issue. We think the building code references are unneeded. The provision of lactation accommodation is a “service” as opposed to a physical occupancy. Meaning that the “service accommodation” will be triggered at some point post-initial construction and will be dependent on the staffing needs of individual tenants in the building. So, the appropriate response to this will be the provision of lactation accommodation by the employer (as opposed to the building owner).

SOLUTION: Strike the building code references and provide direction through the Labor Code and or to local government inspectors.

We are suggesting a simpler way to write the bill would be to take the Labor Code provisions in current law and just require as part of that accommodation the table, chair, refrigerator, etc. be available. We will keep you posted.


Last year the United States Supreme Court handed down a decision in a case we have been closely following and, in California, have helped drive much of the discussion. The South Dakota v. Wayfair decision overturns the outdated Quill decision from 1992 and clears the way for states to collect sales taxes from retailers that do not have a physical presence in their state.

This was a massive win for companies that own buildings that provide shopping services to the public and corrects a decades-long loophole that allowed online retailers to avoid charging sales tax just like physical retailers, which created a perverse incentive to not build in certain states.

At the national level we congratulate both International Council of Shopping Centers and the Retail Industry Leaders Association (RILA) for their years of dogged work on this issue.

However, in California we had to write implementing legislation. That bill, AB 147 (Burke; D-Los Angeles) was recently signed into law, in another victory for the commercial real estate industry. AB 147 establishes a comprehensive and more equitable set of post-Wayfair tax collection rules that make sense for consumers, small businesses, and the state.

This bill is designed to modernize California law consistent with the holding in Wayfair, which allows California to impose a use tax collection duty on retailers with specified levels of economic activity in California, even though they do not have a physical presence here.

This bill also seeks to ensure that small businesses are not unduly burdened by the default expansion of the duty to collect use tax resulting from Wayfair's interaction with California's long-arm statute. Finally, this bill recognizes the realities of today's e-commerce economy by requiring marketplace facilitators (e.g., Amazon and eBay) to collect sales and use tax (SUT) on behalf of their third-party retailers. For those remote retailers that sell to California consumers exclusively through these platforms, this provision will alleviate the need to collect and remit SUT on their facilitated sales.


A bill that will gut the Proposition 13 protections property owners have in this state was has moved through two policy committees on party line votes and just passed off the Senate Suspense File.

We strongly Oppose SCA 5, a bill which would allow school districts to increase property taxes with a 55 percent approval of the voters participating in the election – instead of a two-thirds vote of the district’s electorate as currently required under the State Constitution – if the proposition is approved by the school governing board and includes certain requirements, as specified. The measure also would facilitate various local tax increases by lowering the minimum voter approval to a percentage of the voters participating in the election instead of the district’s qualified voting electorate.

This bill would gut Prop 13 by removing the longstanding protections of that landmark measure that requires a 2/3 vote to increase property taxes for certain activities.

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