CSAC Bulletin Article

Tax Penalties, Fee Waivers, and Pension Backfill Bills Face Early Test

March 4, 2021

Despite ongoing complications from COVID-19 restrictions, the Legislature is in full swing, though with some modifications. Typically both chambers adhere to a 30-day in print rule, which prevents bills from being heard by policy committees until 30 days after they have been introduced. As a result of social distancing protocols, the Senate, which has fewer large meeting rooms than the Assembly, has waived this rule in an attempt to squeeze in the required number of hearings before bumping up against legislative deadlines.  As such, several bills in the Government, Finance and Administration policy area are facing their first legislative hurdles.

SB 49 (Umberg) would prohibit state and local agencies from collecting any license fees imposed on businesses that have been closed temporarily due to COVID-19 stay-at-home orders (specifically bars, restaurants, barbershops, and salons). The bill would also establish a state tax credit for eligible businesses equal to the costs incurred for a permit, license, or other mandatory operating expense charged by a state or local agency. CSAC led a coalition letter opposing SB 49 and the author has now pulled the bill from its scheduled hearing next week while his office works on amendments.

SB 219 (McGuire) would codify the county tax collector’s ability to cancel late payment penalties or other charges for taxpayers who have experienced financial hardship due to a shelter-in-place order. CSAC joined a coalition letter in support of SB 219, which is scheduled to be heard by the Senate Governance and Finance Committee next week.

SB 278 (Leyva) would require public agencies to directly pay retirees or their beneficiaries disallowed retirement benefits using general fund dollars. CSAC joined a letter opposing SB 278, as the bill places 100 percent of the total liability for such overpayments on public agencies—abdicating all responsibility of CalPERS to ensure that retirement benefits are calculated and administered correctly. The bill is a reintroduction of last session’s SB 266, which, in a very unusual turn of events, was approved by the Legislature but not sent to the Governor.

SB 539 (Hertzberg) would implement certain provisions of Proposition 19, which was approved by voters last year, and provide clarity and guidance for county assessors, the BOE, and property owners on several parts of the new constitutional language. Of particular importance to counties is the clarification that, when a property is transferred between parents (or grandparents) and children (or grandchildren), the transferee must continue using a property as their principal residence to continue receiving the tax benefit for an inherited family home. CSAC sent a letter in support of SB 539, which passed out of the Senate Governance and Finance Committee this week, and now moves to the Senate Appropriations Committee, which is scheduled to hear it next week.

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