Legislature Adjourns for Summer Recess
After a lengthy deadline week for all policy committees to meet and report bills to the fiscal committees, the California State Legislature adjourned on Thursday this week for its annual Summer Recess.
The Legislature will return on August 12. Upon their return, it is a mad dash to the finish line. Fiscal committees will have approximately three weeks, from August 12 to August 30, to hear and pass all fiscal bills to the Floor. The remaining two weeks of session, from September 3 to 13, will be Floor session only. The Legislature adjourns the first year of the two-year session at midnight on September 13.
Read on for updates about happenings this week.
Governor’s Plan for a Wildfire Fund Passes Legislature
Legislation establishing a Wildfire Fund and creating additional safety oversights and processes for utility companies passed the Senate and Assembly this week. Negotiated over months with the Governor’s Office, Assembly Bill 1054, authored by Assemblymember Chris Holden (Pasadena), is the response to growing intensity and frequency of wildfires, as well as the solvency of utility corporations whose infrastructure has been linked to igniting some of those wildfires.
AB 1054 does many things to minimize the impact and recast the recovery of costs from wildfire damages, including establishing the Wildfire Fund to pay eligible claims from a covered wildfire. This Fund will be backed by contributions by the three investor-owned utilities (IOUs) in the initial amount of $7.5 billion and $300 million annually. These contributions will be divvied up, by an allocation metric, among the IOUs, 64.2% contributed by Pacific Gas & Electric, 31.5% by Southern California Edison, and 4.3% by San Diego Gas & Electric.
The bill will also establish the California Wildfire Safety Advisory Board advise and make recommendations related to wildfire safety to the Wildfire Safety Division for each utility on the sufficiency of their wildfire mitigation plans, authorize the Public Utilities Commission (PUC) to assess a penalty up to specified amounts for utility-related violations, and authorize certain processes through the PUC for a utility company to recover costs and expenses related to catastrophic wildfires.
Governor Gavin Newsom had the following to say upon the passage of AB 1054: “I want to thank the Legislature for taking thoughtful and decisive action to move our state toward a safer, affordable and reliable energy future, provide certainty for wildfire victims and continue California’s progress toward meeting our clean energy goals. The rise in catastrophic wildfires fueled by climate change is a direct threat to Californians. Strengthening our state’s wildfire prevention, preparedness and mitigation efforts will continue to be a top priority for my administration and our work with the Legislature.”
The Governor signed AB 1054 Friday morning.
Co-author of AB 1054 Senator Bill Dodd (Napa) echoed this sentiment. “We must stand by victims of California’s unprecedented wildfires, prevent future disasters and protect utility customers from unfair rate hikes,” Sen. Dodd said. “Simply doing nothing and allowing utility rates to skyrocket is not an option. Clearly, this bill is our best hope. Make no mistake – it is not a utility bailout. It’s a ratepayer bailout. I thank the governor as well as my Assembly and Senate colleagues for their hard work.”
Additionally, budget trailer bill AB 111 (Committee on Budget) passed as well, which was contingent on the passage of AB 1054. AB 111 establishes the California Energy Infrastructure Safety Act and provides for $47.6 million in funding to the PUC for the fulfillment of duties to implement that Act. It also establishes the Wildfire Safety Division (WSD) to oversee and enforce compliance by electrical corporations with wildfire safety requirements.
Senator Dodd’s Wildfire Safety Bills Move Ahead
A package of wildfire safety bills from Senator Bill Dodd (Napa) that will help California prevent and respond to the growing wildfire threat cleared the final policy committees this week.
“Getting a handle on the destructive fires we’ve seen across our state over the past few years is an absolute priority,” Senator Dodd said. “We can’t sit back and let our state burn. These bills take an important step toward helping victims, preventing new fires and ensuring our state has the continued resources to respond. I thank my fellow legislators for their support.”
The following bills were voted out of committee and moved a step closer to clearing the Legislature:
SB 167 would require electric utilities to reduce the impact of power line de-energization for Californians who rely on life-support equipment.
SB 209 would establish the California Wildfire Warning Center, a statewide network of automated weather and environmental monitoring stations conducting fire-weather forecasting and threat assessment to aid in wildfire prevention and response.
SB 240 would eliminate the confusion and delays caused by uninformed, out-of-state or multiple insurance adjusters by requiring the state Department of Insurance to produce information on the most significant state insurance laws related to disasters and set training standards for agents handling catastrophic events. It also mandates that insurers provide a single point of contact for customers to make processing claims easier.
SB 290 would authorize the Governor, Insurance Commissioner, and Treasurer to enter into an insurance policy that pays out when California has unexpected disaster costs.
Senate Republicans Offered a Solution to Assist Independent Contractors
Republican Senator Mike Morrell (Rancho Cucamonga) who is the Vice Chair of the Senate Labor, Public Employment and Retirement Committee voiced his opposition and voted against Assembly Bill 5 (Gonzalez), which seeks to codify a workforce decision that was handed down by the California Supreme Court in 2018. AB 5 was heard in the Senate Labor Committee and passed on a partisan vote by 4-to-1.
Last year, the state's highest court ruled on the Dynamex case and created a new test to determine whether a worker is an employee or an independent contractor. The new test does not account for the diverse workforce in California and will take away the flexibility many workers currently enjoy as independent contractors.
Senate Republican Leader Shannon Grove (Bakersfield) introduced Senate Bill 238 which would have kept California's workforce supportive of independent contractors. Co-authored by all Senate Republicans, SB 238 also received support from numerous business organizations, but Senate Democrats killed the legislation in the Senate Labor Committee in April.
"Single mothers and student Uber drivers will be greatly affected once the Dynamex Decision is codified into law. My legislation, SB 238, is a common-sense solution that would have helped the 2 million independent contractors who call California home. Unfortunately, partisan politics intervened which leaves the livelihood of millions at risk," said Senate Republican Leader Grove.
Senator Morrell stated SB 238 would have assisted all independent contractors, not just specific industries.
"In making laws, we should do so with a mindset of opportunity for all and favoritism toward none. Whereas SB 238 would have treated every industry equally, AB 5 chooses winners and losers and is an egregious example of crony capitalism. I do not fault those who pursued and got carve-outs in AB 5. They had little choice but to look out for their own. The process, however, is a telling commentary on both the terrible ruling in Dynamex and the misguided approach legislative Democrats have taken to the issue. We cannot lose sight that we are not just talking about jobs, but livelihoods. This will be another serious blow to our economy," said Senator Morrell, during the hearing on AB 5.
The hearing and events leading up to it was quite a show. Opponents of the measure –I’m Independent Coalition – organized a demonstration at the Capitol on Tuesday with several hundred people. Not to be outdone, organized labor brought close to 500 members to the hearing on Wednesday. The hearing itself lasted over two hours. Supporters of the bill also included many groups who had negotiated carve-outs. Other groups, such as truckers, Uber and Lyft drivers, physical therapists, estheticians, and other professionals, showed up to request their own exemptions.
AB 5 passed the committee but not before the Chairman, Senator Jerry Hill, outlined several areas where he directed the author to work toward compromise. These included independent truckers, the construction industry, B2B arrangements, Uber/Lyft compromise, retroactivity and prospective application to workers’ compensation insurance. Several legislators indicated they would vote for the bill in committee but reserved the right to reconsider unless the issues outlined by the Chairman were resolved by the time the bill reached the Senate floor, likely in September.
Governor Newsom Signs More Legislation
This week, Governor Gavin Newsom signed the following bills:
AB 127 (Lackey) – Driving under the influence: research.
AB 188 (Daly) – Fire insurance: valuation of loss.
AB 205 (Daly) – Alcoholic beverages: beer.
AB 514 (Medina) – Trustees of the California State University: student members.
AB 530 (Aguiar-Curry) – The Fairfield-Suisun Sewer District.
AB 632 (Aguiar-Curry) – Counties: offices: consolidation.
AB 679 (Gonzalez) – Voter qualifications: residence and domicile.
AB 781 (Maienschein) – Medi-Cal: family respite care.
AB 1062 (Limón) – Pupil instruction: community emergency response training.
AB 1220 (C. Garcia) – Metropolitan water districts.
AB 1289 (Chen) – Alarm Company Act: local use permit.
AB 1429 (Chen) – Hazardous materials: business plans.
SB 104 (Committee on Budget and Fiscal Review) – Health.
SB 322 (Bradford) – Health facilities: inspections: employee reporting.
SB 324 (Rubio) – Street lighting systems: City of Temple City.
SB 379 (Committee on Governance and Finance) – Validations.
SB 380 (Committee on Governance and Finance) – Validations.
SB 381 (Committee on Governance and Finance) – Validations.
SB 383 (Committee on Education) – Postsecondary education: omnibus bill.
SB 646 (Morrell) – Local agency utility services: extension of utility services.
Legislative Update
Labor-related
AB 5 (Gonzalez) Codifies the decision of the California Supreme Court in Dynamex Operations West, Inc. v. Superior Court of Los Angeles that presumes a worker is an employee unless a hiring entity satisfies a three-factor test (ABC test), applies the ABC test to the Labor Code and Unemployment Insurance Code for instances when a definition of employee is not otherwise provided. Senators Jerry Hill and Hannah-Beth Jackson talked about issues that needed to be worked on before it reaches the Senate Floor. Recent action: Passed Senate Labor, Public Employment and Retirement Committee, 4-1. Referred to Senate Appropriations Committee.
AB 51 (Gonzalez) Prohibits California employers from forcing employees to waive, as a condition of employment, continued employment, or the receipt of any employment-related benefit, their right to have future legal disputes over incidents of harassment, discrimination, civil rights-related retaliation, or Labor Code violations heard in the dispute resolution forum of their choice. Recent action: Passed Senate Judiciary Committee, 7-1. Referred to Senate Appropriations Committee to be heard on August 12.
Insurance-related
AB 38 (Wood) Establishes the Fire Hardened Homes Revolving Loan and Rebate Fund to provide financial assistance and rebates to owners of eligible buildings to pay for eligible costs of fire hardening, and requires the seller of any real property located in a high fire hazard severity zone to provide prescribed disclosure notice to the buyer of information relating to fire hardening improvements on the property. Recent action: Passed Senate Governmental Organization Committee, 13-1. Referred to Senate Appropriations Committee to be heard on August 12.
AB 740 (Burke) Significantly expands the areas of the state in which insurers that voluntarily write basic property insurance may receive a credit against participation in the FAIR Plan by including areas that are designated high and very high hazard severity zones, as determined by Department of Forestry and Fire Protection. Recent action: Passed Senate Insurance Committee, 11-0. Referred to Senate Appropriations Committee.
AB 1099 (Calderon) Extends the sunset date on the California Organized Investment Network (COIN) program within the California Department of Insurance and expands the categories of qualified investments to include “underserved communities.” Recent action: Passed Senate Insurance Committee, 11-0. Referred to Senate Appropriations Committee.
SB 182 (Jackson) Imposes certain fire hazard planning responsibilities on local governments and requires counties and cities to make specified findings on fire standards before permitting development in very high fire risk areas. Recent action: Passed Assembly Local Government Committee, 6-1. Referred to Assembly Appropriations Committee.
SB 190 (Dodd) Requires the Office of the State Fire Marshal to develop a model defensible space program and various manuals, guidance documents and handbooks related to fire safety building standards, and defensible space. Recent action: Passed Assembly Natural Resources Committee, 11-0. Referred to Assembly Floor.
SB 240 (Dodd) Establishes new requirements for insurance adjusters handling homeowners’ insurance claims following a disaster, including requiring the Department of Insurance to distribute this informational bulletin to all insurers, adjusters, and claimants suffering losses in a declared emergency and ensuring that unlicensed individuals adjusting disaster claims for the firm have read and understand the bulletin and handbook; prohibits the department from inactivating an independent insurance adjuster license if it expires while the licensee is on active military duty. Recent action: Passed Assembly Insurance Committee, 14-0. Referred to Assembly Appropriations Committee.
SB 534 (Bradford) Requires, in every even-numbered year beginning in 2020, an insurer to report to the DOI its minority, women, LGBT, veteran, and disabled veteran-owned business procurement efforts during the previous two years. Recent action: Passed Assembly Insurance Committee, 12-0. Referred to Assembly Appropriations Committee.
SB 537 (Hill) Requires third-party networks that arrange physician and ancillary medical services for employers, but that do not qualify as “Medical Provider Networks” (MPNs), to disclose to employers “rate sheets” that show the discounted prices paid to providers. Recent action: Passed Assembly Insurance Committee, 14-0. Referred to Assembly Appropriations Committee.
SB 740 (Mitchell) Requires life insurers to use the United States Social Security Administration’s Death Master File (DMF) to identify deceased policyholders; exempts from performing a DMF search life insurance policies provided by an ERISA covered plan, life insurance offered through a federal employee benefit program, funeral insurance, credit life insurance, disability insurance, and group life insurance when the insurer does not provide recordkeeping services. Recent action: Passed Assembly Insurance Committee, 14-0. Referred to Assembly Appropriations Committee.
Health-related
AB 1639 (Gray) Prohibits the sale of flavored electronic cigarettes until January 1, 2022, and requires a person engaged in the retail sale of tobacco products to use age verification software or an age verification device to establish the age of a tobacco purchaser if the purchaser reasonably appears to be under 27 years of age. Recent action: Passed Assembly Governmental Organization Committee, 16-0. Referred to Assembly Health Committee.
SB 29 (Durazo) Extends eligibility for full-scope Medi-Cal benefits for individuals 65 years of age or older who do not have satisfactory immigration status, effective January 1, 2020. Recent action: Passed Assembly Health Committee, 10-3. Referred to Assembly Appropriations Committee.
SB 39 (Hill) Requires a tobacco product to be delivered only in a container that is conspicuously labeled as being a tobacco product that requires the signature of a person 21 years of age or older, and requires a specified entity to obtain the signature of a person 21 years of age or older upon delivering the product to the recipient’s or purchaser’s address. Recent action: Passed Assembly Governmental Organization Committee, 21-0. Referred to Assembly Appropriations Committee.
SB 538 (Rubio) Requires a manufacturer of electronic cigarettes to submit specified information to the California Department of Public Health (CDPH) about electronic cigarettes sold in the state. Recent action: Passed Assembly Governmental Organization Committee, 20-0. Referred to Assembly Health Committee.
Privacy-related
AB 25 (Chau) Authorizes a business to require authentication of consumers in connection with requests made pursuant to the California Consumer Privacy Act (CCPA) and allows a business to require requests to be made through an existing account. Recent action: Passed Senate Judiciary Committee, 8-0. Referred to Senate Appropriations Committee.
AB 873 (Irwin) Amends the definition of personal information to replace information that “is capable of being associated with a particular consumer or household” with “is reasonably capable of being associated with a particular consumer or household,” and redefines “deidentified” to mean information that does not identify and is not reasonably linkable, directly or indirectly, to a particular consumer, provided that the business makes no attempt to reidentify the information. Recent action: Failed passage in Senate Judiciary Committee, 3-3. Granted reconsideration as a 2-year bill.
AB 874 (Irwin) Reworks the exclusions from the definition of personal information by redefining what is considered publicly available, making it clear that “personal information” does not include consumer information that is deidentified or aggregate consumer information. Recent action: Passed Senate Judiciary Committee, 8-0. Referred to Senate Appropriations Committee to be heard on August 12.
AB 1146 (Berman) Narrowly limits the California Consumer Privacy Act’s opt-out and deletion rights in order to facilitate prompt and effective recalls and warranty work, specifically that a business or a service provider shall not be required to comply with a consumer’s request to delete the consumer’s personal information if it is necessary for the business or service provider to maintain the information in order to fulfill the terms of a written warranty or product recall conducted in accordance with federal law. Recent action: Passed Senate Judiciary Committee, 8-0. Referred to Senate Appropriations Committee to be heard on August 12.
Business-related
AB 1417 (Rubio) Requires any advertising and marketing by a cannabis licensee to include a license number and requires an operator of an online service that presents advertising or marketing for cannabis goods to present disclosure statements about the dangers of unlicensed cannabis goods. Recent action: Passed Senate Judiciary Committee, 7-1. Referred to Senate Appropriations Committee.
Environment-related
AB 719 (Rubio) Extends for five years, until January 1, 2025, the existing provision that permits the commercial importation, possession with intent to sell, and sale in California of the dead body, or parts and products from the dead body, of an alligator and crocodile. Recent action: Passed Senate Natural Resources and Water Committee, 5-3. Referred to Senate Appropriations Committee.
AB 1788 (Bloom) Bans second-generation anticoagulants rodenticides statewide, except for use by a governmental agency employee for public health activities, agricultural activities, and eradication of nonnative invasive species inhabiting or found to be present on offshore islands; and prohibit the use of first-generation anticoagulant rodenticides on state-owned lands, except for agricultural activities. Recent action: Passed Senate Natural Resources and Water Committee, 7-1. Referred to Senate Appropriations Committee to be heard on August 12.
SB 54 (Allen) Declares that it is the policy goal of the state that by 2030 manufacturers and retailers of single-use packaging and products achieve a 75% reduction in the amount of waste generated. Recent action: Passed Assembly Natural Resources Committee, 7-3. Referred to Assembly Appropriations Committee.
