California Apartment Association

In the 2015 legislative session, plenty of harmful rental housing bills failed to pass the Legislature. Unfortunately, several positive bills died, too – and some right on the governor’s desk.

Below, we offer summaries of rental housing related bills vetoed by Gov. Jerry Brown.

While most would have been good for multifamily, the first one in our list certainly deserved Brown’s rejection.

Bill to Ban Arbitration Agreements – Vetoed

AB 465 (D-Hernandez) – Arbitration Agreements –AB 465, among other things, would have prohibited arbitration agreements in employment contracts. The bill was strongly opposed by the business community, including CAA. In his veto statement, Governor Brown wrote “. . . a blanket ban on mandatory arbitration agreements is a far-reaching approach that has been consistently struck down in other states as violating the Federal Arbitration Act (“FAA”).  Recent decisions by both the California and United States Supreme Courts have found that state policies which unduly impede arbitration are invalid.  Indeed, the U.S. Supreme Court is currently considering two more cases arising out of California courts involving preemption of state arbitration policies under the FAA.  Before enacting a law as broad as this, and one that will surely result in years of costly litigation and legal uncertainty, I would prefer to see the outcome of those cases.”

Tax Credit Bills – Vetoed

The governor vetoed all tax credit bills, making a blanket statement that despite strong revenue performance over the past few years, he believed California would need to make cuts to its budget in the coming year in order to remain balanced.  He vetoed four tax credit bills supported by CAA.

AB 35 (D-Chiu) – Affordable Housing Tax Credits –  AB 35 would have increased California’s Low Income Housing Tax Credit by $300 million for the construction and rehabilitation of affordable housing units across the state.

AB 88 (D-Gomez) – Taxes: Energy Efficient Appliances – AB 88 would have provided a sales and use tax exemption for a narrow category of energy efficient appliances purchased by a public utility and provided free of cost to eligible low-income utility consumers through the investor-owned utilities’ Energy Savings Assistance Program (ESAP).

AB 428 (D-Nazarian) – Seismic Retrofit: Tax Credits –AB 428 would have allowed a tax credit in an amount equal to 30 percent of the qualified costs paid or incurred by a qualified taxpayer for any seismic retrofit construction on a qualified building

SB 251 (D-Roth) – Disability Access: Lawsuits –  SB 251, among other things, provided for tax credits for property owners who made their property accessible to individuals with disabilities.