An Overview of the Legislative Landscape, How Much Remains

The Senate and Assembly Appropriations Committees this week took up remaining measures that have a fiscal impact. The Senate Appropriations Committee had 434 Assembly Bills on the Suspense File, while the Assembly Appropriations Committee had 229 Senate Bills to consider. Bills that move on from the Appropriations Committees now have two calendar weeks left to be acted on in the 2019 Session.

The Senate Budget Committee amended and has 11 measures on their agenda, many of which are related to agreements between the State of California and select Bargaining Units. The hearing has been postponed and is expected to be rescheduled for next week.

In addition to the bills on the Suspense File and in Budget Committee, pending measures on the Senate Floor totaled 203, including a half-dozen concurrence items, 10 bills on consent, and 192 measures on 3rd Reading.

Looking to the other house of the Legislature, the Assembly Floor has a total of 173 measures pending, including 49 concurrence items, 21 bills on consent, and 103 measures on 3rd Reading.

There were 1,043 total measures pending in the Senate and Assembly prior to the Appropriations Committees acting on their Suspense Files.

California Supreme Court Hires Retired Appellate Justice to Lead Bar Exam Investigation

The Supreme Court of California on Wednesday announced it has hired retired Presiding Justice Arthur G. Scotland and his law firm of Nielsen Merksamer to spearhead an independent investigation into the partial disclosure related to the July bar exam.

Last month, the Supreme Court announced it would conduct a “thorough and independent” investigation into the disclosure of general subjects on the essay and performance test portions of the July California Bar exam, and of the State Bar of California’s subsequent decision to share that information with all test takers.

“Exercising its oversight responsibilities over matters relating to bar admissions, the court will ensure that there is a thorough and independent investigation into the circumstances surrounding the disclosure, and that appropriate steps are taken to protect the integrity of the bar examination and identify and address any consequences,” the statement read in part.

Justice Scotland is a former administrative presiding justice of the Third District Court of Appeal in Sacramento. He joined the Sacramento law firm Nielsen Merksamer in 2012 with a specialty in government law. His judicial career spanned more than 21 years on the appellate bench and almost two years as a Sacramento County Superior Court judge.

After retiring from the Court of Appeal in 2010, he reactivated his license to practice law and represented the President pro Tempore of the Senate and the Speaker of the Assembly in a successful lawsuit against the State Controller regarding the constitutional requirements for passage of a balanced budget bill.

Governor and Labor at Odds on Worker Classification Bill

A measure, AB 5, resulting from the 2018 Supreme Court ruling on Dynamex Operations West v. Superior Court to codify the “ABC Test” for worker classification continues to be front and center as we head into the final weeks of session. Naturally, there has been head-butting and details have emerged that Governor Gavin Newsom may want considerations for some of the gig economy companies.

In a statement from Ann O’Leary, Governor Newsom’s Chief of Staff, it was specified the Governor’s office “strongly supports allowing ride-share drivers to unionize” and “fighting for the right of workers to organize and earn higher wages…has been a key goal.” The Governor was not available for comment directly.

This comes after recent news that the Governor’s office revoked the appointment of Robbie Hunter, President of the State Building and Construction Trades Council of California, to the newly created Future of Work Commission. That appointment was revoked over disagreements of how and if any concessions can be made on how to identify workers in the gig economy, as employees or independent contractors.

As negotiations on AB 5 continue, additional exemptions are being amended into the bill. Word around the Capitol is that the next professions to receive exemptions are clinical psychologists, deep-sea fishermen, and possibly newspaper carriers. The bill already includes exemptions for licensed insurance agents, certain licensed health care professionals, registered securities broker-dealers or investment advisers, direct salespersons, real estate licensees, workers providing hairstyling or barbering services, electrologists, estheticians, workers providing natural hair braiding, specified licensed repossession agencies, and those performing work under a contract for professional services, with another business entity, or pursuant to a subcontract in the construction industry.

AB 5 will likely pass with support from high-profile Democrats in the Legislature. However, negotiations are still ongoing between stakeholders and the Governor’s office to find a formula that will appease the Governor.

Uber, Lyft, and DoorDash Prepare for Ballot Fight

With negotiations over AB 5 in question, tech companies are putting money where their mouth is. Uber, Lyft, and DoorDash have each committed $30 million to pursue a potential ballot initiative.

To reach a deal on pending legislation, Uber and Lyft proposed details which would pay their drivers higher wages and better bargaining rights. The proposal would offer a $21-per-hour wage floor guarantee while setting up a process for tech industry workers to organize. Additionally, the proposal would establish a collective bargaining mechanism that would be unique to California and apply broadly to the tech sector in total, rather than company-by-company negotiations. This mechanism would be overseen by a new state entity.

Essentially, if the proposal by tech companies does not make it into the deal as AB 5 moves forward to the Governor, tech companies will pursue a ballot initiative, known as a referendum which if sufficient signatures are gathered to place it on the next statewide ballot, will have the effect of putting the law on hold until after the election. It is unknown as to what the ballot initiative language looks like, but the potential campaign will have at least $90 million to work with.

Earlier in the year, both Lyft and Uber have engaged the Service Employees International Union (SEIU) on an avenue for employees to unionize. However, those discussions have not been successful. Labor groups are livid about the development by tech companies and the bill’s author, Assemblywoman Lorena Gonzalez (D-San Diego), conveyed disgust by the move.

As consideration of AB 5 gets down to the wire, we’ll keep you informed of any more significant developments.

Legislative Update

With today as the Legislature’s deadline to report fiscal bills to the floor, this week was all about the Appropriations Committees. As was mentioned above, the Senate Appropriations Committee had 434 Assembly Bills on their Suspense File, while the Assembly Appropriations Committee had 229 Senate Bills to consider. Here is what happened with notable bills that were on the Suspense Files.

Environment-related

AB 719 (Rubio) Makes it a misdemeanor, on or after March 30, 2022, to sell the dead body, or any part or product thereof, of a crocodile or alligator unless manufacturers develop a technology or process to "track and trace" these products in order to verify they are coming from sustainable sources. Status: Held on Suspense File in Senate Appropriations.

AB 1080 (Gonzalez) Enacts the California Circular Economy and Plastic Pollution Reduction Act to achieve a 75% reduction in single-use packaging and priority single-use plastic products, as defined, by 2030. Status: Passed Senate Appropriations Suspense File, to Floor.

SB 1 (Atkins) Enacts the California Environmental, Public Health, and Workers Defense Act of 2019 to establish minimum federal environmental, public health, worker safety and labor standards as state baselines in the event Congress or the Trump administration weaken or repeal federal law or regulations; and provides it is unlawful for a person in this state to transport, sell, receive, acquire or purchase any fish, wildlife or plant (except for cannabis or hemp allowed under state law) taken, possessed, transported or sold in violation of any law, treaty, policy, regulation, or finding of the United States law in effect on January 19, 2017. Status: Passed Assembly Appropriations Suspense File, to Floor. 

SB 54 (Allen) Enacts the California Circular Economy and Plastic Pollution Reduction Act to achieve a 75% reduction in single-use packaging and priority single-use plastic products, as defined, by 2030. Status: Passed Assembly Appropriations Suspense File, to Floor.

SB 205 (Hertzberg) Requires specified businesses, when applying to a city or a county for an initial business license or business license renewal, to demonstrate enrollment with the National Pollutant Discharge Elimination System permit program. Status: Passed Assembly Appropriations Suspense File, to Floor.

SB 515 (Caballero) Requires the California Public Utilities Commission to submit a report to the appropriate policy committees of the Legislature on or before January 6, 2020, that contains all of the following: (a) the amount of high hazard zone vegetation eligible for removal; (b) an assessment of the overall market potential for high hazard zone fuel in California; and (c) an assessment of the potential high hazard zone fuel supply for each current Biofuel Renewable Auction Mechanism (BioRAM) contract. Status: 2-year bill.

SB 667 (Hueso) Enacts the Organic Waste Diversion Infrastructure Investment Act to create incentives and financing mechanisms for the development of organic waste infrastructure. Status: 2-year bill.

Governance-related

AB 1486 (Ting) Expands the requirements of the Surplus Land Act, imposing new duties on local agencies when disposing of surplus lands and specifying penalties for compliance failures; requires each local agency to compile a central inventory of surplus lands it owns that are located in urban areas within its jurisdiction, as specified, and annually forward the inventory to the Department of Housing and Community Development; and requires HCD to use that information to create a searchable and downloadable inventory of publicly-owned surplus lands, and their present uses, by September 30, 2021. Status: Passed Senate Appropriations Suspense File, to Floor.

SB 13 (Wieckowski) Places additional restrictions on the conditions local governments may impose on accessory dwelling units (ADUs), including (a) limiting the ability to charge developer fees, impose specified parking standards and establish minimum square footage requirements; (b) prohibiting, for five years, the imposition of owner-occupancy requirements; and (c) reducing the timeframe for ministerial approval of ADU permits. Status: Passed Assembly Appropriations Suspense File, to Floor.

SB 468 (Jackson) Creates the California Tax Expenditure Review Board to provide recommendations to the Legislature to the extent of which major tax expenditure is cost-effective, its effect on the General Fund, its effect on employment, wages, and the state’s economy, and whether opportunities exist to improve the effectiveness, following their evaluation by the University of California. Status: Passed Assembly Appropriations Suspense File, to Floor.

Health-Related

AB 290 (Wood) Establishes specified requirements on financially interested providers and entities that make third-party premium payments on behalf of health plan enrollees and insureds. Status: Passed Senate Appropriations Suspense File, to Floor.

AB 384 (Chau) Makes a business a provider of health care, and subject “personal health record information,” as defined, to the Confidentiality of Medical Information Act. Status: Held on Suspense File in Senate Appropriations.

AB 824 (Wood) Provides an agreement to be presumed to have anticompetitive effects if a nonreference drug filer receives anything of value, as defined, from another company asserting patent infringement and if the nonreference drug filer agrees to limit or forego research, development, manufacturing, marketing, or sales of the nonreference drug filer’s product for any period of time. Status: Passed Senate Appropriations Suspense File, to Floor.

AB 1088 (Wood) Requires individuals who would otherwise be eligible for Medi-Cal benefits but for the state buy-in of their Medicare Part B premiums, to be eligible for Medi-Cal without a share of the cost if their income and resources otherwise meet all eligibility requirements; and prohibits this bill applying to an individual whose eligibility is determined using the modified gross income-based financial methods. Status: Passed Senate Appropriations Suspense File, to Floor.

AB 1116 (Grayson) Establishes, until January 1, 2025, the Firefighter Peer Support and Crisis Referral Services Pilot Program, which would establish standards and requirements for the provision of peer support and crisis referral services for emergency service personnel. Status: Passed Senate Appropriations Suspense File, to Floor.

SB 29 (Durazo) Expands Medi-Cal eligibility to any individual 65 years of age or older regardless of immigration status, provided the individual meets other eligibility criteria and conditions implementation on an appropriation for the purpose. Status: Passed Assembly Appropriations Suspense File, to Floor.

SB 276 (Pan) Increases state oversight of medical exemptions to mandatory vaccinations required for school entry and standardizes reporting of such exemptions. Status: Passed Assembly Appropriations Suspense File, to Floor.

SB 382 (Nielsen) Requires Medi-Cal managed care plans to reimburse a hospital at a specified minimum rate on behalf of enrollees who remain in a hospital and continue to receive medically necessary post-acute care services at the hospital during a declared state of emergency and if other conditions are met, including that a Medi-Cal managed care health plan is unsuccessful in securing a transfer to a post-acute facility. Status: Passed Assembly Appropriations Suspense File, to Floor.

SB 537 (Hill) Requires a number of provisions enhancing transparency and oversight of medical provider networks. Status: Passed Assembly Appropriations Suspense File, to Floor.

SB 583 (Jackson) Prohibits, for enrollees undergoing treatment of cancer or another life-threatening disease or condition, health plans and insurers from denying an enrollee’s participation in an approved clinical trial or imposing additional conditions on coverage for routine patient care costs; and specifies payment rates and cost-sharing for out-of-network providers shall be the same as would apply for in-network providers if the clinical trial is not available through an in-network provider. Status: Passed Assembly Appropriations Suspense File, to Floor.

Cannabis-related

AB 228 (Aguiar-Curry) Creates a regulatory framework for industrial hemp products, as defined, in food, beverage, or cosmetic products. Status: Held on Suspense File in Senate Appropriations.

AB 1417 (Rubio) Establishes civil penalties for violating specified cannabis marketing or advertising requirements and would specify disbursement procedures for civil penalties. Status: Held on Suspense File in Senate Appropriations.

SB 34 (Wiener) Allows cannabis licensees to donate medicinal cannabis under certain conditions and until January 1, 2025, exempts cannabis designated for donation from excise, sales and use, and cultivation taxes; and specifies how licensed cannabis retailers and cultivators must designate cannabis for donation purposes to allow state-level tracking and requires the Legislative Analyst’s Office (LAO) to collect data on donations and associated tax revenue loss and report to the Legislature in 2023. Status: Passed Assembly Appropriations Suspense File, to Floor.

SB 51 (Hertzberg) Enacts the Cannabis Limited Charter Banking and Credit Union Law to allow for the licensure and supervision of cannabis limited charter banks and credit unions authorized to offer limited depository services to cannabis businesses. Status: Passed Assembly Appropriations Suspense File, to Floor.

Labor-related

AB 5 (Gonzalez) Codifies the recent Dynamex decision, requiring employers to prove that their workers can meet a three-part (ABC) test in order to be lawfully classified as independent contractors, and expands the scope of Dynamex to include unemployment insurance and other labor law protections. Status: Passed Senate Appropriations, to Floor.

AB 9 (Reyes) Extends from one to three years the statute of limitations in which a person may file a verified complaint with the Department of Fair Employment and Housing (DFEH) related to unlawful employment practices. Status: Passed Senate Appropriations Suspense File, to Floor.

AB 51 (Gonzalez) Prohibits requiring applicants for employment or employees to waive their right to a judicial forum as a condition of employment or continued employment. Status: Passed Senate Appropriations Suspense File, to Floor.

AB 171 (Gonzalez) Prohibits an employer from discharging or in any manner discriminating or retaliating against an employee because the employee is a victim of sexual harassment; current law that prohibits an employer from discharging or taking other adverse actions against an employee because of the employee’s status as a victim of domestic violence, stalking, and sexual assault would be extended to include victims of sexual harassment; creates a rebuttable presumption of unlawful retaliation if an employer discharges or in any manner discriminates or retaliates against an employee who is a victim of domestic violence, sexual assault, sexual harassment, or stalking within 90 days of learning of the employee’s status as a victim. Status: Passed Senate Appropriations Suspense File, to Floor.

AB 403 (Kalra) Extends the time a victim of workplace retaliation has to file a claim with the Labor Commissioner from six months to two years and authorizes an attorney’s fee award to a worker who prevails on a whistleblower claim. Status: Passed Senate Appropriations Suspense File, to Floor.

AB 673 (Carrillo) Allows a worker to pursue a statutory penalty owed to them for late wage payment via an administrative process known as a Berman Hearing. Status: Passed Senate Appropriations Suspense File, to Floor.

AB 1296 (Gonzalez) Establishes the Tax Recovery in the Underground Economy Criminal Enforcement Program (TRUE program) within the Department of Justice to combat underground economic activities through a multiagency collaboration. Status: Passed Senate Appropriations Suspense File, to Floor.

AB 1677 (Weber) Provides that any large customer service call center employer which intends to relocate from California to a foreign country must (1) notify the Labor Commissioner, and (2) forgo access to state grants, guaranteed-loans, and tax credits for five years; and would require California state agencies to contract only with call centers operating entirely within the State by December 31, 2021. Status: Passed Senate Appropriations Suspense File, to Floor

SB 142 (Wiener) Requires the California Building Standards Commission to develop and propose for adoption building standards for the installation of lactation space for employees, utilizing the San Francisco’s Lactation in the Workplace Ordinance as a reference point; and imposes new requirements on employers related to access to adequate lactation space and time. Status: Passed Assembly Appropriations Suspense File, to Floor.

SB 171 (Jackson) Requires certain employers to submit a report each year to the Department of Fair Employment and Housing with pay data for specified job categories broken down by race, ethnicity, and sex. Status: Held on Suspense File in Assembly Appropriations.

SB 730 (Stern) Creates the Commission on Tech Equity to develop recommendations on a policy framework to manage the development, deployment, regulation, taxation and fair distribution of innovation and technology. Status: Held on Suspense File in Assembly Appropriations.

Wildfire-related

AB 38 (Wood) Requires the California Natural Resources Agency to review the regional capacity of each county that contains a very high fire hazard severity zone to improve forest health, fire resilience, and safety; establishes the Fire Hardened Homes Revolving Loan and Rebate Fund to provide financial assistance and rebates to owners of eligible buildings to pay for 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. Status: Passed Senate Appropriations Suspense File, to Floor.

AB 1516 (Friedman) Makes various changes to improve defensible space requirements, vegetation clearance requirements of electrical transmission and distribution lines, and the technical assistance requirements of the Department of Forestry and Fire Protection to help local governments improve the fires safety of communities. Status: Passed Senate Appropriations Suspense File, to Floor.

SB 190 (Dodd) Requires the State Fire Marshal (SFM) to develop a model defensible space program and a Wildland-Urban Interface Fire Safety Building Standards Compliance training manual for local government officials. Status: Passed Assembly Appropriations Suspense File, to Floor.

SB 209 (Dodd) Establishes the California Wildfire Center to monitor fire-weather and threat conditions, enhance coordination and improve fire-weather forecasting models, comprised of representatives from the California Public Utilities Commission, Governors’ Office of Emergency Services, Department of Forestry and Fire Protection, an electrical corporation and a local publicly owned electrical utility. Status: Passed Assembly Appropriations Suspense File, to Floor.

SB 247 (Dodd) Requires the Department of Forestry and Fire Protection to audit the work of each electrical corporation to implement its vegetation management plan as approved by the California Public Utilities Commission in the electrical corporation’s wildfire mitigation plan and to specify any failure to comply with the plan. Status: Passed Assembly Appropriations Suspense File, to Floor.

Insurance-related

AB 708 (Frazier) Imposes specified restrictions and requirements on traffic violator schools (TVSs) as conditions of licensure, revise requirements regarding the listing of licensed TVS programs on the Department of Motor Vehicles (DMV) website, and require DMV to adopt regulations to ensure a TVS protects the confidentiality and security of program participant personal information. Status: Passed Senate Appropriations Suspense File, to Floor.

AB 1066 (Gonzalez) Permits workers involved in a trade dispute to collect unemployment insurance (UI) benefits. Status: Passed Senate Appropriations Suspense File, to Floor.

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 mudslide, wildfire or flood. Status: Held on Suspense File in Assembly Appropriations.

Social Service-related

AB 175 (Gipson) Updates the Foster Youth Bill of Rights to reflect the recommendations of a working group convened by the California Department of Social Services. Status: Passed Senate Appropriations Suspense File, to Floor.

Civil-related

AB 218 (Gonzalez) Extends the timeframe within which to file civil childhood sexual assault actions, as specified, and expand the actionable conduct; allow enhanced damages for a cover-up, as defined; and revive expired claims for a three-year period. Status: Passed Senate Appropriations Suspense File, to Floor.

AB 1510 (Reyes) Allows individuals to bring specific time-barred civil claims related to adult sexual assault and similar activities by a physician occurring at a student health center. Status: Passed Senate Appropriations Suspense File, to Floor.

Privacy-related

AB 1130 (Levine) Revises the definition of “personal information” in specified consumer protection statutes to include certain government identification numbers and biometric data. Status: Passed Senate Appropriations Suspense File, to Floor.

AB 1202 (Chau) Requires data brokers, as defined, to register with, and pay a registration fee to, the Attorney General on an annual basis. It also would require the Attorney General to make this information available online. Status: Passed Senate Appropriations Suspense File, to Floor.

AB 1281 (Chau) Requires businesses to disclose, as specified, when they are using facial recognition technology and would allow public prosecutors to seek penalties for violations of this requirement. Status: Passed Senate Appropriations Suspense File, to Floor.

Education-related