Gov. Newsom Proclaims State of Emergency on Wildfires

Building on lessons learned from past catastrophic wildfires, Governor Gavin Newsom on Friday, March 22, proclaimed a state of emergency throughout California ahead of the coming fire season. The Governor is directing his administration to immediately expedite forest management projects that will protect 200 of California’s most wildfire-vulnerable communities. 

This action follows the release of a report earlier this month by the California Department of Forestry and Fire Protection (CAL FIRE), which identified 35 priority fuel-reduction projects that can be implemented immediately to help reduce the public safety risk for wildfire. 

“The increasing wildfire risks we face as a state mean we simply can’t wait until a fire starts in order to start deploying emergency resources,” said Governor Newsom. “California needs sustained focus and immediate action in order to better protect our communities.” 

The state of emergency provides time-saving waivers of administrative and regulatory requirements to protect public safety and allow for action to be taken in the next 12 months, which will begin to systematically address community vulnerability and wildfire fuel buildup through the rapid deployment of forest management resources. 

These 35 priority projects were identified by geographic areas with populations that are particularly at risk during natural disasters. Paired with traditional natural risk factors, this data paints a more accurate assessment of the real human risk and can help guide preventative action to help prevent loss of life -- especially for vulnerable groups.

Bill Claims to Maintain State Baselines for Environmental Standards, Listed as Job Killer

Senate Leader Toni Atkins (D-San Diego) and Senator Henry Stern (D-Canoga Park) presented SB 1 to the Senate Environmental Quality Committee on March 20, where it passed on a 5-2 vote. This bill mirrors the language that was in last year’s SB 49 (de León), which ultimately died in the Assembly. 

In the event the federal government lowers certain environmental standards relating to air quality, water quality, and protections of endangered and threatened species, SB 1 would maintain the federal standards as of January 19, 2017 as the baseline. However, this bill would not restrict the overseeing state agencies from setting more stringent standards as they see fit. That alone can have an unforeseen burden on California businesses. 

Additionally, SB 1 provides for a baseline of certain labor standards as well, based on federal standards as of January 1, 2017. These federal standards include the Federal Fair Labor Standards Act of 1938 (29 U.S.C. Sec. 201 et seq.), the Federal Occupational Safety and Health Act of 1970 (29 U.S.C. Sec. 651 et seq.), the Federal Coal Mine Health and Safety Act of 1969 (30 U.S.C. Sec. 801 et seq.), or regulations established pursuant to those federal statutes. Again, this bill provides for the regulating agency, the Department of Industrial Relations, to establish standards that are more stringent and burdensome to businesses. 

The California Chamber of Commerce (CalChamber) stated in regard to SB 1, that it is a “job killer because the uncertainty created by the bill’s vague, ambiguous, and broad language and lack of due process in the rule-making process would have a negative impact on the growth, employment, and investment decisions of almost every major California business.” They went on to say that “costs and anticipated litigation associated with SB 1, companies doing business in the state would be hard pressed to hire more workers or expand California operations.” 

With this legislation, there would be a new administrative procedure that would circumvent the California Administrative Procedures Act in pushing forward emergency rules to maintain these baseline standards. Any expedited administrative procedure will likely kick off new litigation for parties wanting to compel the state to comply with SB 1, forcing businesses to intervene.

Activist Coalition Seeks Rule-making to Limit Insurers

A coalition of more than 60 consumer, environmental, and social justice organizations petitioned Insurance Commissioner Ricardo Lara to initiate rulemaking proceedings to require insurance companies to disclose which fossil fuel-based projects they insure. The inherent claim in the petition is that by insuring these types of projects, insurers perpetuate the circumstances for concern around climate change, specifically the increased frequency and severity of wildfires. 

In the petition, the coalition asks the Commissioner to enact “emergency regulations to require all insurance companies licensed to conduct business in California to fully disclose: (1) all their investments in fossil fuel-related entities, and (2) all the fossil fuel-related companies and projects that they underwrite or otherwise insure.” 

The Insurance Commission has 30 days to respond to the petition, which you can read here.

Adjustment in Workers’ Compensation Medical Fee Schedule Ordered

The California Department of Industrial Relations, Division of Workers’ Compensation (DWC) posted an order adjusting the Official Medical Fee Schedule (OMFS) to conform to changes in the Medicare payment system as required by Labor Code section 5307.1.

The Physician and Non-Physician Practitioner Fee Schedule update Order adopts the following Medicare changes:

·     CMS Medicare National Physician Fee Schedule Relative Value File RVU19B April 1, 2019 quarterly update 

·     National Correct Coding Initiative Physician/Practitioner Services CCI Edits April 1, 2019 quarterly update

·     National Correct Coding Initiative Medically Unlikely Edits April 1, 2019 quarterly update (excluding MUE “0” value codes) 

The updated regulation text includes the March 15 monthly Medi-Cal Rates file update for physician-administered drugs, biologicals, vaccines or blood products as well as the April 1, 2019 quarterly updates. The order adopting the quarterly OMFS adjustments is effective for services rendered on or after April 1, 2019 and can be found on the DWC website.

Governor Joins with California Mayors to Increase Funding to Address Homelessness

On Wednesday, March 20, Governor Gavin Newsom joined with the mayors from the 13 largest California cities to expand the proportion of the state budget to address homelessness. In the January budget, the Governor matched what the previous years’ budget allocated to cities for homeless programs, totaling $500 million. 

Following the announcement, the mayors made clear they are asking for an increase to $1.5 billion with greater flexibility for locals to spend it. Their request also includes a bypass of the counties so all money would go to city-provided services. 

“We haven’t been doing enough to support cities,” said Governor Newsom. “We need to invest more resources — and we need to provide the resourcefulness that is the spirit of innovation that drives this state.” The Governor went on to say, “The budget just changed.” 

There were no specific details on the funding increase, although the Governor is open to the proposals by the mayors.

Legislative Update

Policy committees in the Legislature heard many bills this week. Here are updates to specific bills of interest to Norwood Associates, LLC clients by category. 

Labor-related

AB 51 (Gonzalez) – prohibits agreements between employers and employees to pursue arbitration and settlement processes when a dispute arises. The bill as written could require an employee to exhaust administrative remedies under the Fair Employment and Housing Act, placing greater cost and burden on the state and exposing the employers to increased litigation. Passed Assembly Judiciary Committee this week.

AB 170 (Gonzalez) - requires a client employer to share with a labor contractor all civil legal responsibility and civil liability for harassment for all workers supplied by the labor contractor. Set for hearing in Assembly Labor & Employment Committee March 26.

AB 171 (Gonzalez) - prohibits an employer from discharging, discriminating or retaliating against an employee who is a victim of sexual harassment and establishes a rebuttable presumption of retaliation based on the employee’s status if the employer takes certain action within 90 days of obtaining knowledge of the victim’s status. Set for hearing in Assembly Labor & Employment Committee March 26.

AB 403 (Kalra) - extends the period to file a complaint for violations under the jurisdiction of the Labor Commissioner to within 3 years after the occurrence of the violation. The bill also allows a Court to award attorney’s fees in an action where the employee has claimed retaliation for various actions by the employer. Set for hearing in Assembly Labor & Employment Committee on April 3.

AB 589 (Gonzalez) – would make it unlawful for an employer to knowingly destroy, conceal, remove, confiscate, or possess any actual or purported passport or immigration document of an employee. This passed Assembly Labor and Employment Committee on Wednesday, and heads to Assembly Judiciary Committee for another policy hearing.

Natural Disaster-related

SB 45 (Allen) – enacts the Wildfire, Drought, and Flood Protection Bond Act of 2020, which, if approved by the voters, would authorize the issuance of bonds in an unspecified amount of $4.3 billion to finance projects to restore fire-damaged areas, reduce wildfire risk, create healthy forest and watersheds, reduce climate impacts on urban areas and vulnerable populations, protect water supply and water quality, protect rivers, lakes, and streams, reduce flood risk, protect fish and wildlife from climate impacts, improve climate resilience of agricultural lands, and protect coastal lands and resources. Set for hearing in Senate Natural Resources and Water Committee on March 26.

Insurance-related

AB 188 (Daly) - requires that the actual cash value of a claim under a fire insurance policy, for either a total or partial loss to the structure or its contents, be the amount it would cost the insured to repair, rebuild, or replace the thing lost or injured less a fair and reasonable deduction for physical depreciation based upon its condition at the time of the injury or the policy limit, whichever is less. Set for Assembly Insurance Committee hearing on April 3.

AB 207 (Daly) - increases the maximum fine for transacting insurance without a valid license to $70,000. Set for Assembly Insurance Committee hearing on April 3.

AB 1538 (Weber) – changes existing law requiring an insurer issuing an automobile collision policy or a policy for comprehensive coverage for a motor vehicle to make the payment in a specified manner if the covered automobile is damaged and the insurer elects to have the automobile repaired and instead would make that requirement apply to a policy for automobile physical damage coverage, and prohibits limiting the right of an insured to select the auto body repair shop or other repair facility to repair the damaged vehicle, or to decide not to have the vehicle repaired. The bill would prohibit an insurer from withholding the payment of reasonable repair cost benefits that are payable under the policy if the insured decides not to have the vehicle repaired. Set for Assembly Insurance Committee hearing on April 3.

SB 290 (Dodd) – authorizes the Governor to purchase insurance, reinsurance, insurance-linked securities, or other related alternative risk-transfer products for the State of California to help mitigate against costs incurred by the state in response to a natural disaster. The bill would require the Office of Emergency Services, or another agency designated by the Governor, to work with the Treasurer and the Insurance Commissioner to determine the appropriate product to be purchased by the state pursuant to these provisions. Set for Senate Governmental Organization Committee hearing on March 26.