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Legislative Update: June 14, 2019 - $213 Billion Budget Passed By Legislature

Budget Bill Passes Legislature, Sent to Governor’s Desk

The California Legislature passed the 2019-20 General Fund budget on Thursday, two days ahead of the Constitutional deadline. The budget for the upcoming year totals over $213 billion, benefitting from one of the longest periods of economic growth in our history. It now heads to the Governor’s desk for his consideration and is likely to be approved.

In the 2019-20 budget, the state makes new commitments to address some of the key needs facing the state’s 40 million residents. Working with Governor Newsom, the Assembly and Senate approved significant investments in the state’s future, beginning with greater budget resiliency. The state’s reserves will increase to an estimated $19.4 billion, including $16.5 billion in Proposition 2 rainy day funding. Additionally, the budget makes one-time payments to decrease debt obligations and pension liabilities to lessen their impact when California experiences future economic downturns.

Senate leadership noted this is “the strongest budget package in perhaps decades” which provides $460 million in small business tax cuts, the highest levels of school funding in state history, and lower health care costs.

The budget also includes money for addressing the growing housing crisis throughout the state. Legislators approved various one-time funding provisions that include $500 million for housing-related infrastructure to spur construction, $500 million for a mixed-income loan program through the California Housing Finance Agency, and $500 million to expand the Low-Income Housing Tax Credit.


Fixes to Privacy Law Move Forward with Coalition Support

So far, the hard work to draft and advocate for reasonable legislative fixes to the California Consumer Privacy Act (CCPA) has largely paid off. Friday, May 31, marked the house of origin deadline, and all but one of the privacy-related bills (the fix for targeted online ads) made it out of the first house. Bill summaries below were written by the CalChamber.

These important bills are still alive:

AB 25 (Chau) - Clarifies the definition of consumer to exclude employees or job applicants. Without clarifying legislation, a “consumer” under the CCPA would include employees of or job applicants to a business. Not only will this create huge additional compliance costs for businesses for something never intended by this law designed for “consumers” — it could lead to serious unintended consequences. For example, an employee accused of sexual harassment could ask a business to delete complaints about them.

AB 846 (Burke, Low, Mullin) - Clarifies access to customer loyalty and rewards programs. Under the CCPA, frequent flier miles, hotel points, and other rewards programs could be in jeopardy. AB 846 would ensure loyalty and rewards programs can continue by fixing language in the CCPA that could make them unlawful.

AB 873 (Irwin) - Clarifies the definition of personal information. The CCPA defines personal information too broadly—as any information that is “capable of being associated” with a consumer or household. The breadth of this definition creates an unreasonable burden on businesses. For example, if a customer makes a purchase in a store and later asks the store for access to the customer’s personal information, the store could be required to search security camera footage from the day the customer made a purchase to find where the customer appears on the film and to provide that data to the customer because the business is technically capable of doing so. AB 873 fixes this problem by making the definition of personal information more reasonable — without eroding privacy rights.

AB 874 (Irwin) - Clarifies the definition of “publicly available” information. The CCPA limits the use of publicly available government records in a way that is unconstitutional and that creates practical problems for businesses that rely on the free flow of public records information, including those involved with real estate, journalism, credit reporting, and many more. AB 874 fixes this problematic language in the CCPA.

AB 1146 (Berman) - Protects consumers’ access to vehicle safety information. Under the CCPA, consumers could exercise their privacy rights to delete data or their right to opt out of the “sale” of their personal information and unknowingly find themselves unable to receive information regarding necessary vehicle repairs relating to warranty work or a safety recall. This is a dangerous, unintended consequence of the CCPA’s hasty drafting, and AB 1146 will fix it.

AB 1416 (Cooley) - Ensure businesses can continue to prevent identity theft and other crimes. The CCPA unintentionally undermines businesses’ efforts to protect consumers from identity theft and to prevent other crimes, like money laundering or human trafficking. Additionally, the CCPA unintentionally places restrictions on the sale of data to governmental entities that will have a profoundly negative impact on many crucial government services, including reuniting foster youth with relatives, as well as fraud prevention in governmental benefits programs. AB 1416 fixes these problems.

AB 1564 (Berman) - Removes an unreasonable burden on small businesses. AB 1564 would remove the requirement that all businesses must staff a 1-800 number for consumers to call and exercise their CCPA rights. This fix is crucial for small businesses who do not have the resources to staff a 1-800 number.

Although the language in almost every single one of these bills has been significantly narrowed through negotiations with privacy advocates and committees, we still face some opposition to all but one of them (AB 874). That will present a challenge for us as we approach what may be our highest hurdle—the Senate Judiciary Committee. The committee chair, Senator Hannah-Beth Jackson, has indicated she may not be open to any of the business community’s proposed fixes to the CCPA. Adding to this challenge are recent changes to the makeup of the Senate Judiciary Committee membership as Senators Anna Caballero and Ben Allen were replaced with first-term Senators Maria Elena Durazo and Lena Gonzalez.


Senate Announces Changes to Committee Membership

Following the swearing-in of two newly-elected Senators and the passage of the 2019-20 budget, Senate pro Tem Toni Atkins announced changes to the Senate’s committee membership assignments for the 2019-20 Legislative Session.

The following changes are to be adopted by the Senate Rules Committee on Monday, June 17, 2019: 

·     Senate Agriculture Committee: Senator Brian Dahle (R-Bieber) fills a vacant seat.

·     Senate Appropriations Committee: Senator Maria Elena Durazo (D-Los Angeles) fills a vacant seat.

·     Senate Banking and Financial Institutions Committee: Senator Brian Dahle (R-Bieber) to replace Senator Jeff Stone, Pharm.D. (R-Temecula).

·     Senate Health Committee: Senator Lena Gonzalez (D-Long Beach) to replace Senator Maria Elena Durazo (D-Los Angeles).

·     Senate Judiciary Committee: Senator Maria Elena Durazo (D-Los Angeles) to replace Senator Anna M. Caballero (D-Salinas); Senator Lena A. Gonzalez (D-Long Beach) to replace Senator Ben Allen (D-Santa Monica).

·     Senate Transportation Committee: Senator Brian Dahle (R-Bieber) fills a vacant seat.

·     Joint Legislative Audit Committee: Lena A. Gonzalez (D-Long Beach) to replace Senator Maria Elena Durazo (D-Los Angeles). 

The following appointments will become effective after July 1, 2019: 

·     Senate Budget and Fiscal Review Committee: Senator Brian Dahle (R-Bieber) to replace Senator Mike Morrell (R-Inland Empire); Senator Anna M. Caballero (D-Salinas) to replace Senator Maria Elena Durazo (D-Los Angeles).

·     Senate Budget Subcommittee #1 on Education: Brian Dahle (R-Bieber) to replace Senator Mike Morrell (R-Inland Empire).

·     Senate Budget Subcommittee #4 on State Administration and General Government: Senator Anna M. Caballero as Chair to replace Senator Maria Elena Durazo (D-Los Angeles).


Governor Gavin Newsom Calls for Creation of a Master Plan for Aging

Recognizing California’s over-65 population is projected to grow to 8.6 million by 2030, Governor Gavin Newsom issued an executive order on June 10 calling for the creation of Master Plan for Aging to be developed by October 1, 2020. The Master Plan will serve as a blueprint that can be used by the state government, local communities, private organizations and philanthropy to build environments that promote healthy aging.

The Governor’s action directs the Secretary of the California Health and Human Services Agency (HHS) to convene a cabinet-level Workgroup for Aging to advise the Secretary in developing the Master Plan. HHS will also convene a Master Plan for Aging Stakeholder Advisory Committee, which will include a Research Subcommittee and a Long-Term Care Subcommittee, tasked with building an age-friendly California. These subcommittees are expected to include older Californians, adults with disabilities, local government representatives, health care providers, health plans, employers, community-based organizations, foundations, academic researchers and organized labor. The Long-Term Care Subcommittee is tasked with issuing a report to the Governor by March 2020 on stabilizing state long-term care programs and infrastructure, including In-Home Supportive Services, with the full Master Plan completed by October 2020.

The Workgroup’s focus will go beyond just the health and human services area to address underlying social factors, such as transportation and housing, which have a significant impact on an individual’s health outcomes and well-being. This effort is intended to look at how older Californians can best utilize or have access to public and private programs and services for their changing needs.

In the coming weeks and months, the administration will engage with stakeholders, local and county government partners and the Legislature to begin meaningful progress in establishing the Master Plan for Aging.


Legislative Update

Labor-related

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 that labor contractor. Recent action: Passed Senate Labor, Public Employment & Retirement Committee, 4-1. Referred to Senate Judiciary Committee. 

AB 346 (Cooper) - Adds police officers employed by a school district, county office of education, or community college district to the list of public employees entitled to a leave of absence without loss of salary, in lieu of temporary disability payments, while disabled by injury or illness arising out of and in the course of employment. Recent action: Passed Senate Labor, Public Employment & Retirement Committee, 5-0. Referred to Senate Appropriations Committee.

AB 457 (Quirk) - Requires Cal/OSHA, in conjunction with the Standards Board, complete rulemaking and adopt an updated lead standard for the general industry safety and construction safety orders by February 1, 2020, and authorizes the Standards Board to adopt emergency regulations as necessary to meet the required deadline. Recent action: Passed Senate Labor, Public Employment & Retirement Committee, 4-1. Referred to Senate Appropriations Committee.

AB 547 (Gonzalez) - Prohibits the Division of Labor Standards Enforcement from approving a janitorial employer registration if the employer does not include in their written application certain information regarding affiliated subcontractors or franchise agreements and their covered employees. Recent action: Passed Senate Labor, Public Employment & Retirement Committee, 4-0. Referred to Senate Appropriations Committee.

AB 1124 (Maienschein) - Requires, by July 18, 2019, the Occupational Safety and Health Standards Board to adopt emergency regulations that require employers to make respirators available to outdoor workers on any day the outdoor worker could reasonably be expected to be exposed to harmful levels of smoke from wildfires, or burning structures due to a wildfire, while working. Recent action: Passed Senate Labor, Public Employment & Retirement Committee, 5-0. Referred to Senate Appropriations Committee for hearing on June 24.

Insurance-related

AB 188 (Daly) - Redefines the measure of recovery under an actual cash value policy for a total loss to be the cost to repair, rebuild, or replace to property, less depreciation subject to the limits of the policy (applies the same standard for both types of losses). Recent action: Passed Senate Insurance Committee, 13-0. Referred to Senate Floor for a consent vote.

AB 567 (Calderon) - Establish the Long-Term Care Insurance Task Force in the Department of Insurance, chaired by the Insurance Commissioner or the commissioner’s designee, and composed of specified stakeholders and representatives of government agencies to examine the components necessary to design and implement a statewide long-term care insurance program. Recent action: Passed Senate Insurance Committee, 9-2. Referred to Senate Insurance Committee.

AB 1104 (Calderon) - Adds two public members to the board of the California Life and Health Insurance Guarantee Association and creates an assessment to fund financial surveillance of long-term care insurance carriers. Recent action: Passed Senate Insurance Committee, 13-0. Referred to Senate Appropriations Committee.

Governance-related

AB 211 (Calderon) - Allows an above the line deduction for contributions made to a California qualified tuition program (QTP) for taxable years 2020 through 2024. The deduction is equal to the monetary contribution amount made by a qualified taxpayer to a California QTP but is limited to $10,000 in the case of a qualified taxpayer who is a head of household, a surviving spouse, or a married couple filing a joint return; or $5,000 in the case of all other qualified taxpayers filing a return. Recent action: Passed Senate Governance & Finance Committee, 5-0. Referred to Senate Appropriations Committee.

Business-related

AB 545 (Low) - Subjects the Bureau of Cannabis Control and Cannabis Control Appeals Panel to review by the appropriate policy committees of the Legislature as if the enabling statutory authority for these entities were scheduled to be repealed as of January 1, 2021, and removes the exemption for the Bureau from Joint Sunset Review Committee Oversight. Recent action: Passed Senate Business, Professions & Economic Development Committee, 9-0. Referred to Senate Appropriations Committee.

SB 469 (Dodd) - Provides the California Horse Racing Board may, at any time, immediately suspend a license to conduct a horse racing meeting when necessary to protect the health and safety of horses or riders present at the horse racing meeting. Recent Action: Passed Assembly Governmental Operations Committee, 20-0. Referred to Assembly Appropriations Committee for hearing on June 19.

Health-related

AB 922 (Burke) - Repeals, until January 1, 2024, the prohibition on any payment in excess of the amount of reimbursement of direct expenses incurred as a result of an assisted oocyte production procedure to be made to any subject to encourage her to produce human eggs for purposes of medical research. Recent action: Passed Senate Health Committee, 6-1. Referred to Senate Floor.

AB 1723 (Wood) - Updates pharmacy code relating to the purchase of drugs at wholesale to reflect that clinics operated by a primary care community or free clinic may be open up to 40 hours per week. Recent action: Passed Senate Business, Professions & Economic Development Committee, 9-0. Referred to Senate Appropriations Committee for hearing on June 24.

Utilities-related

SB 547 (Hueso) - Extends two sunset dates of an existing biomethane incentive program administered by the CPUC from 1) December 31, 2021 to December 31, 2026 for the incentive projects; and 2) January 1, 2022 to January 1, 2027 for the overall provisions of the program. Recent action: Passed Assembly Utilities & Energy Committee, 12-0. Referred to Assembly Appropriations Committee.