Government Relations
CCTA Spotlight
State Legislative - Week of May 7, 2010
Telephone Corporations: Call Centers. As amended late last week, Assembly Bill 2690 (De La Torre) would require “telephone corporations” to annually post on their websites the location of their call centers that receive calls from California customers, and the number of calls received by each call center from the telephone corporation's California customers. This bill is sponsored and supported by the Communications Workers of America (CWA). This bill was heard on Monday, May 3, 2010, in the Assembly Utilities and Commerce Committee and failed passage (4-9). The proposal was granted reconsideration but given the significant defeat, it will most likely not move before the end of this Legislative session.
Cable Television Industry Procurement Practices. Assembly Bill 2758 (Bradford) would impose requirements that currently apply to regulated public utilities related to Women, Minority, and Disabled Veterans Business Enterprise contracting to competitive cable television and broadband providers. Cable operators have national procurement processes that promote diversity procurement on a national level and, as competitive businesses, should not be subject to state specific requirements. AB 2758 will be heard in the Assembly Appropriations Committee on Wednesday, May 12, 2010.
Split Roll Property Tax. Assembly Bill 2492 (Ammiano) relating to split roll tax assessment has been amended. As amended, this bill would allow commercial or business property to be reassessed when 100% of ownership interests in a legal entity is sold or transferred in a single transaction, the property is deemed to have changed ownership or regardless of whether any one entity/individual has acquired more than 50 percent of the ownership interests. The bill also now includes intent language specifying that mergers and acquisitions by banks and financial institutions is the target of the bills. This bill is scheduled to be heard in Assembly Revenue & Taxation Committee on Monday, May 10, 2010.
Mandatory Single Sales Factor (SSF) Apportionment. AB 1935 (De Leon) would require all businesses in California to apportion their income pursuant to a single sales factor. The bill is effective immediately but would be operative for taxable years beginning on or after January 1, 2011. The Franchise Tax Board has estimated that the adoption of this proposal would result in an annual General Fund gain of:
• $135 million in fiscal year (FY) 2010-11;
• $450 million in FY 2011-12;
• $600 million in FY 2012-13; and,
• $500 million in FY 2013-14.
• $450 million in FY 2011-12;
• $600 million in FY 2012-13; and,
• $500 million in FY 2013-14.
AB 1935 was heard in the Assembly Revenue and Taxation Committee this week. It was has been placed in the Committee “Suspense File” until it can be heard with competing proposal at some later date. Because it will result in a tax increase for businesses, this bill would require a two-thirds vote of both the Senate and Assembly for ultimate passage.
Another Mandatory SSF Apportionment Proposal. SBX6 18 (Steinberg), like AB 1935 (De Leon), would require all businesses in California to apportion their income pursuant to a single sales factor. However, in an attempt to make this proposal revenue neutral, SBX6 18 would also provide certain industries with a manufacturers’ investment tax credit. By making the proposal revenue neutral, the bill would only require a simple majority vote, as opposed to the two-thirds vote required for new tax increases.
SBX6 18 is scheduled to be heard next week, Wednesday, May 12th in the Senate Revenue & Taxation Committee. CCTA continues to meet with key legislators to educate them on the negative impacts a mandatory single sales factor would have on the cable industry without the restoration of the cost of performance apportionment methodology.
