ACEC California-Sponsored Legislation Signed into Law, End of Session Preview

2018 is proving to be another successful year in ACEC California’s legislative undertakings. Governor Jerry Brown signed SB 920 (Cannella) last week, which extends the permission for engineering, land surveying, and architectural firms to organize as limited liability partnerships (LLP) in California. Without this legislation, these professions’ ability to form LLPs would have expired on January 1, 2019; instead, the permission is extended for an additional seven years. ACEC California enjoyed the opportunity to collaborate with Senator Anthony Cannella (R-Ceres)—the organization’s 2017 legislator of the year—and co-sponsors, the American Institute of Architects California Council.

ACEC California members and the design professional community at large have prioritized preserving this form of partnership option because LLPs provide flexible management, operation, and taxation structures. LLPs are a hybrid of a corporation and a general partnership.  Like a general partnership, all partners have equal rights in the management of an LLP. Simply, SB 920 ensures one more tool that California businesses can employ that allows them to be nimble in a 21st Century economy. ACEC California is confident that after several more years of design professionals demonstrating successful and responsible use of LLPs, the Legislature will eliminate the sunset altogether.

Although ACEC California achieved early success by having its sponsored legislation signed in July, it is anticipated that the remainder of the session will be fast-paced and demanding. Before the two-year legislative session adjourns at midnight on August 31, legislators will make decisions on the hundreds of remaining bills. ACEC California leadership, Legislative Committee and advocates continue to be actively engaged in monitoring bills, lending support to policies that promote the design professions, and negotiating to remove language from bills that would hinder California’s business climate.

This year, ACEC California has already been effective in staving off an attempt to require the use public employees for certain public works projects in Orange County, neutralizing an unreasonable CEQA expansion, and working in coalition to sideline a bill that would excise design and construction companies from statutes of repose for water contamination lawsuits. In the coming weeks, ACEC California will continue to participate in, among other things, the Legislature’s ongoing discussions related to restructuring California’s tax-scheme. One proposal, Senator Bob Hertzberg’s (D-Van Nuys) SB 993, includes a new tax on services, which would include engineering and land surveying services. While SB 993 is not expected to progress this year, it is imperative that ACEC California and other professional associations educate lawmakers about the chilling economic impact such a tax would effect. Stay tuned for a complete legislative wrap-up in September!

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