CA Assembly Overwhelmingly Rejects SB 848
October 12, 2010 - In a major coalition effort, a tax exemption bill for online travel companies (OTC's) was defeated early this morning.
Senate Bill 848 was an 11th hour, end-of-session legislative effort aimed at exempting online travel companies (OTC's) from remitting taxes on the retail amount of the hotel room rate and instead, permitting tax payments only on the contracted or wholesale room rate. It is estimated that this differential in taxation is approximately $100 million annually in California.
Draft legislation was proposed in a budget trailer bill (SB 848 - Hollingsworth) that appeared only yesterday morning in the form of a memo from the Senate President Darrell Steinberg's office. After a furious 18 hours of lobbying by the California Hotel & Lodging Association, the California League of Cities, and a coalition that included the “Big Ten Cities”, counties, and public safety groups, the bill was voted down for the final time at 6:30 a.m. today in the Assembly with only 12 Aye votes, 33 Noes, and 33 members not voting.
Once CH&LA became aware of the legislation, a meeting of the CH&LA Executive Committee was convened at 12:30 p.m. at the Northern California Hotel & Lodging Conference. In this meeting, a motion was passed unanimously that “CHLA opposes the introduction of SB 848 without the benefit of discussion and/or analysis of the potential impact on the hotel and lodging industry and the municipalities in which the lodging industry operates.”
Following this action, we conveyed our position to Ralph Heim, CH&LA's contract lobbyist of Public Policy Advocates (who was at the Capitol), the League of Cities, and Senator Steinberg's office via his Chief of Staff. Subsequently, Randi Knott, CH&LA's Vice President of Gov't & Legal Relations left the conference and joined Ralph in Sacramento and personally met with the Senate leader's staff (among others) to convey our position and advocate for the lodging industry.
Ultimately, the firefighters and police contingencies joined in the opposition, as well as the trail lawyers. As a result of these combined efforts, the OTC's could only muster a dozen aye votes in favor of their legislation, far short of the required 54 Assembly votes.
Special thanks go to Ralph Heim and representatives from the Dolphin Group (Marriott's lobbying firm) who stayed all night at the capitol and were still standing when the final vote occurred this morning. Additionally, Jim Abrams provided legal guidance on the draft version of the legislation that was very helpful in forming our position.
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