State Legislative - Week of February 12, 2010

Independent Contractor Withholding.  The Senate Budget and Fiscal Review Committee considered a proposal this week that would require all companies, public agencies and nonprofits to withhold 3% from any payments they make to independent contractors for California services rendered, and remit that 3% to the Franchise Tax Board.  The intent of this proposal is to ensure compliance with tax law and accelerate state revenues ($1.4 billion for 2010-11). Although the budget proposal failed passage, it is expected to reappear in either a future budget or legislation proposal.

The California Chamber of Commerce is aggressively opposing to the 3% independent contractor withholding. They have circulated an opposition Fact Sheet with over 800 California businesses signing on. The Governor vetoed a similar proposal last year. CCTA has joined the Chamber’s opposition coalition.

Lieutenant Governor Confirmation.  The Governor and the State Assembly are dueling over the appointment of Republican Senator Abel Maldonado to the vacant Lieutenant Governor position. While Senator Maldonado’s confirmation moved easily through the Senate earlier this week, he was unable to secure a majority vote in the Assembly.

Governor Schwarzenegger plans to swear in Senator Maldonado any way. The Governor’s interpretation of the state constitution is that the Assembly’s failure to achieve a majority vote in support of Senator Maldonado’s confirmation does not mean the Assembly “refused confirmation” but constitutes a “failure to act.” And, pursuant to the state constitution, if the Assembly fails to act, the appointment is considered approved. The Governor is daring the Assembly to challenge him in court. 

 

Alternatively, the Governor has threatened to withdraw the nomination of Maldonado and reappoint him.  This would allow the 90 days that the Senate and Assembly have to confirm the appointment to begin again.

 

On Tuesday, February 16, 2010, the Senate Energy, Utilities & Communications Committee, Chaired by Senator Alex Padilla (D-Pacoima) will hold an informational hearing titled “Broadband in California and the Digital Infrastructure Video Competition Act of 2006”.  CCTA President Carolyn McIntyre will sit on two of the four issue panel’s discussions.

 

The first panel is titled “Investment – The Funding of Broadband Build-Out” and the second titled simply “DIVCA” but is expected to deal with progress related to DIVCA and workforce.  CCTA will discuss the cable industries commitment in providing high quality video and broadband services.

 

Municipal Utility Pole Attachments. CCTA has been meeting with legislators from both the Senate and Assembly utilities committee to educate them on rising costs of attaching cable industry infrastructure to municipal utility poles. Legislators have been surprised at the significant difference in costs between attaching to an investor-owned utility pole and a municipal utility pole. We noted that at least eight other states have adopted legislation to require municipal utility pole rates be just and reasonable. As suggested by a couple of legislators, CCTA will be meeting with the two municipal utility associations before considering legislation.