The new 2021-22 California State Legislature is back in session. A week later than planned, due to COVID. But it is back.
The November Election was good to the Democratic Party. They maintained their supermajority in both the State Assembly and State Senate. This allows the Democrats to control every decision made in the Legislature so long as they stay united. A unified Democratic Caucus will control the outcome of any bill before it, essentially making the GOP bystanders.
They are fortunate to return to a $20+ Billion budget surplus. It is always easier deciding how to spend extra money than it is deciding how to cut back spending. This good fortune may not last long; large budget deficits are expected the next few years. It is important to note that these are being called structural deficits, which means they will be normal unless permanent spending reductions, or tax increases, are enacted.
COVID will continue to impact the performance of the Legislature, though not to the same degree as in 2020. Last year the Legislature heard and voted on only 25 percent of the bills it normally would consider. This year it will hear and vote on around 50 percent of the bills it normally would consider.
Even with the reduced capacity to move legislation, we expect there will be no shortage of housing bills. Many significant housing bills did not pass the Legislature last year, for a variety of reasons, and the effort to change laws to make it easier to develop housing will continue. We also expect to see several bills proposing the enactment of policies addressing climate change. Legislators must introduce their bills by February 19, and we will know more then on what the Legislature will focus its attention.
AIA California (AIA CA) still is working on having legislation introduced at our suggestion. We have more ideas than what can be introduced and heard this year, especially with the reduced capacity of the Legislature, but there are ideas we are pursuing.
The big one is to prepare California architects to be leaders in the design Net Zero Carbon buildings. This will be accomplished through continuing education courses that must be completed to renew the license. The AIA California proposal is for architects to take 5 hours of coursework in Net Zero Carbon design each renewal cycle, beginning with the 2023 renewal. AIA California will make these courses available in 2023 without cost to all California architects.
We are also working with the Secretary of State’s office and key legislative staff to allow newly formed architectural general stock corporations the freedom to name themselves as they were allowed to just 18 months ago. The Secretary of State’s (SOS) office in late 2019 began rejecting the formation of architectural general stock corporations that included a last name and the word architect in the firm name. The SOS argues existing law does not allow for this type of name. We hope to reach an agreement with the SOS on language to return the rights of newly formed architectural general stock corporations to include last names and the word architect in the firm name.
Our long shot effort is to bring greater clarity on when an architectural firm has to register with the Department of Industrial Relations as a public works contractor. We believe the law is confusing due to its lack of clarity, and that it defies common sense to require architects providing services to a government entity to help fund the oversight of prevailing wage laws even though architects are not covered by prevailing wage laws. We were able to get legislation introduced last year, but our bill was never heard due to the impact COVID had on the ability of the Legislature to conduct its business.
Finally, the sales tax on services. We cannot discuss what the Legislature might do in 2021 without discussing a sales tax on services. The good news: there is a large budget surplus this year and the legislature will not desperately look for new revenue. The bad news: we expect large budget deficits to follow, and for legislators to look for new revenue. Additionally, the lead proponent of a sales tax on services still is a Member of the State Senate and, we hear, is quietly talking to other legislators pushing this tax. AIA CA is an active member of a coalition of service providers and business groups opposing any effort to expand the sales tax to services. The coalition is organizing meetings between constituents and key legislators to express opposition to this tax. AIA CA members have participated in several of these meetings, and more are being planned and scheduled.
While we certainly hope there will be no legislation to extend the sales tax to services, AIA California and our coalition partners will be ready if it is introduced this year.