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Legislative Update: May 28, 2019 - Wildfire Prevention Bills Pass Senatecemeal Healthcare Approach Looming



State Senate Passes Wildfire Preparation and Prevention Bills

On Thursday, the California Senate approved a pair of wildfire safety bills by Sen. Bill Dodd (D-Napa) that will help prevent and prepare for future blazes. These bills are designed to encourage people to clear brush around homes and to create an early warning system to tell Californians when conditions are ripe for fires. 

“Getting a handle on the destructive fires we’ve seen across our state over the past few years is an absolute priority,” Sen. Dodd said. “These are much-needed and commonsense proposals that will go a long way to addressing this growing threat. The approach of fire season underscores the need for immediate action. We can’t sit back and watch our state burn.” 

SB 190 would assist in wildfire prevention and response by increasing awareness of and compliance with requirements for vegetation buffer zones. 

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. 

Additionally, the Senate approved another of Senator Dodd’s bills on wildfire vegetation management plan, SB 247. This bill would require Cal Fire to direct utilities on trees and vegetation to be removed and later inspect the work, require utilities correct any issues identified by Cal Fire in a timely manner, and prohibit utilities from diverting maintenance revenue to other purposes and require the utilities to cover the cost of the work performed by Cal Fire. 

Both of these bills now head to the State Assembly for additional hearings for Assembly members to consider the merits of their policy and fiscal impacts to the state.


Senate and Assembly Committees Conduct Oversight of Horse Racing Practices

On the heels of multiple horse deaths at the Santa Anita racetrack, the Senate and Assembly Government Organization Committees held a joint hearing on Wednesday to review equine and human safety policies and procedures within California’s horse racing industry. In a series of six panels, legislators heard from members of the California Horse Racing Board, doctors from the Kenneth L. Maddy Equine Analytical Chemistry Laboratory (Maddy Lab), owners, riders, race organizers, track experts, and others. 

There was general agreement from panelists that the sport is the safest it has ever been. Although 25 horses have died in a three-month period at the Santa Anita track, horse deaths are down 60% overall in recent years. Panelists did state that there are areas for continued improvements. Track conditions and surfaces differ from track to track, ranging from dirt to turf to synthetic surfaces. Specifically, at Santa Anita, there have been drainage and track surface issues after a unique season of rain and unusual weather patterns. 

The hearing and discussions also touched on the safety of the horses and what is being done to address concerns. A widely used medication, called Lasix, is used to prevent exercise-induced pulmonary hemorrhaging in racehorses. There have been increasing concerns with the use of that medication and Belinda Stronach, Chair and President of The Stronach Group, mentioned that they are phasing out the use of Lasix at Santa Anita by 2024. They are also using state of the art Positron Emission Tomography (PET) Scan machine to detect possible injuries in a horse’s fetlock (ankle) earlier and more conveniently prior to racing in order to avoid more unnecessary horse deaths. 

All panelists conveyed their intent to get horse deaths as close to zero as possible. In the public comment portion, animal rights advocates expressed their preference that the entire sport be prohibited.


Insurance Adjuster Bill Clears Senate Hurdle

After the 2017 North Bay wildfires, there was much confusion and delays caused by uninformed, out-of-state or multiple insurance adjusters. Legislation from Sen. Bill Dodd (D-Napa), which seeks to eliminate that confusion, cleared the Senate by unanimous vote and now heads to the Assembly. 

SB 240 requires the California 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. 

“After the devastating 2017 wildfires, we heard numerous complaints about insurance industry practices that delayed the processing of claims, and really, re-victimized the victims,” Sen. Dodd said. “This bill will prevent that from happening again when the next fire or disaster strikes.” 

SB 240, which would become the Insurance Adjuster Act of 2019, is supported by Insurance Commissioner Ricardo Lara as well as state and local consumer advocates.


Legislative Analyst Releases Multiyear Budget Outlook After May Revision

Each year, the Legislative Analyst’s Office (LAO) releases a series of analyses on the Governor’s May Revision proposals. In their 2019-20 May Revision Multiyear Budget Outlook report, the LAO assess how the Governor’s May Revision proposals affect the multi-year condition of the state budget. 

The report presents an independent assessment of the condition of the state General Fund budget through 202223 assuming the economy continues to grow and all of the Governor’s May Revision spending proposals are adopted. Under the LAO’s multiyear outlook assumptions, the state budget has the capacity to pay for the Governor’s May Revision proposals and still has an operating surplus—which could be available to respond to unanticipated cost increases, build additional reserves, or make additional commitments. 

The LAO also notes that the Governor’s revenue estimates indicate the state has a much larger available surplus to allocate compared to recent years. In both dollar and percentage terms, the Governor allocates much less of this surplus to building more discretionary reserves. The Governor proposes allocating more available funding to new ongoing spending commitments, to the tune of $3.4 billion (growing to $4.4 billion upon full implementation), compared to recent levels of $300 million and $1.3 billion in 201617 and 201819. The Governor also proposes allocating $9.5 billion of available discretionary resources to repaying state debts, including paying down pension liabilities, repaying outstanding loans to state special funds, undoing two budgetary deferrals, and paying obligations to schools and community colleges. 

In short, the LAO concludes that the state’s plan for responding to a recession should focus on building budget reserves. They claim that building reserves is the most reliable and effective method for preparing the budget for a downturn and recommend the Legislature dedicate a larger portion of the surplus to discretionary reserves.


California Secures FEMA Support for Communities Impacted by Floods

To kick off last week, Governor Gavin Newsom announced that FEMA approved California’s request for Presidential Major Disaster declarations it submitted in April. This will help bolster ongoing state and local recovery efforts following severe winter storms that caused widespread flooding, mudslides, and damage to critical infrastructure across California. 

“I want to thank the President and FEMA for moving quickly to approve our requests,” said Governor Newsom. “This federal aid will get money and resources where they are needed and help communities recover.” 

The Presidential Major Disaster declarations will help state, tribal and local governments with recovery projects including the repair and replacement of disaster-damaged facilities and infrastructure, such as roads, bridges, and utilities. The declarations include hazard mitigation, which helps state and local governments reduce the risks and impacts of future disasters. 

Earlier in the year, the Governor had declared a state of emergency for 33 counties across the state due to ongoing atmospheric rivers and other storms impacting California.


Legislative Update

Last week was heavily scheduled for floor session, as the Legislature pressed forward to next week’s house of origin deadline. Next week will be exclusively for floor session, as committees are prohibited from meeting. These are many of the key bills that were acted on this week. 

Labor-related

AB 5 (Gonzalez) – Codifies the decision of the California Supreme Court in Dynamex Operations West, Inc. v. Superior Court of Los Angeles (Dynamex) 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. Recent action: Amended on Assembly Floor. Ordered to third reading in Assembly. 

AB 9 (Reyes) – Extends the filing period with the Department of Fair Employment and Housing (DFEH) for complaints of unlawful employment practices to three years but prohibits the revival of lapsed claims. Recent action: Passed Assembly (Ayes 53. Noes 5.). Ordered to the Senate. 

AB 51 (Gonzalez) – Prohibits a person from requiring any applicant for employment or any employee to waive any right, forum, or procedure for a violation of any provision of the California Fair Employment and Housing Act (FEHA) or other specific statutes governing employment as a condition of employment, continued employment, or the receipt of any employment-related benefit. Recent action: Passed Assembly (Ayes 47. Noes 2.). Ordered to Senate Rules Committee for assignment. 

AB 170 (Gonzalez) – Provides that a client employer and a labor contractor shall share civil legal responsibility and civil liability for harassment of workers supplied by the labor contractor. Recent action: Passed Assembly (Ayes 49. Noes 17.). Ordered to Senate, referred to Senate Labor, Public Employment & Retirement. 

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 receiving notice or obtaining knowledge of the victim's status. Recent action: Passed Assembly (Ayes 57. Noes 5.). Ordered to the Senate. 

AB 403 (Kalra) – Extends the statute of limitations for complaints alleging workplace retaliation from six months to two years and authorizes the payment of attorney's fees to employees who successfully sue for retaliation based on whistleblowing. Recent action: Passed Assembly (Ayes 42. Noes 27.). Ordered to the Senate. 

AB 1066 (Gonzalez) – Permits workers involved in a trade dispute to collect unemployment insurance after a four-week waiting period. Recent action: Passed Assembly (Ayes 51. Noes 19.). Ordered to the Senate. 

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. Recent action: Passed Senate. (Ayes 25. Noes 9.) Ordered to the Assembly. 

SB 688 (Monning) – Authorizes the Labor Commissioner to issue a citation to an employer to recover restitution of amounts owed, if, upon inspection or investigation, it is determined that the employer has paid or caused to be paid a wage less than the wage set by contract in excess of the applicable minimum wage. Recent action: Read third time. Passed. (Ayes 32. Noes 6.) Ordered to the Assembly. 

Insurance-related

AB 41 (Gallagher) – Provides that, under the California Disaster Assistance Act, the state share is up to 100% of total state eligible costs connected with the Camp Fire that started on November 8, 2018, in the County of Butte. Recent action: Urgency clause adopted. Passed Assembly (Ayes 78. Noes 0.). Ordered to the Senate. 

AB 1516 (Friedman) – Makes various changes to improve defensible space requirements, electrical transmission or distribution lines' vegetation clearance requirements, and the Department of Forestry and Fire Protection (CAL FIRE) local government technical assistance requirements with the intent to improve the fire safety of California communities. Recent action: Passed Assembly (Ayes 74. Noes 1.). Ordered to the Senate. 

SB 545 (Hill) Require a person, upon the person’s first criminal conviction for driving under the influence, to install and maintain an ignition interlock device (IID) for a specified period of time, and would delete those provisions authorizing a restricted license in lieu of an IID for first offenders. Recent action: Passed Senate (Ayes 35. Noes 1.). Ordered to Assembly. 

Utilities-related

AB 235 (Mayes) – Authorizes the California Public Utilities Commission (CPUC), when determining recovery by an electrical corporation (IOU) for costs and expenses arising from a catastrophic wildfire, occurring on or after January 1, 2019, to consider the IOU's financial status and determine the maximum amount the IOU can pay without harming ratepayers or materially impacting the IOU's ability to provide adequate and safe service. Recent action: Passed Assembly (Ayes 59. Noes 2.). Ordered to the Senate. 

SB 200 (Monning) – Establishes the Safe and Affordable Drinking Water Fund to help water systems provide an adequate and affordable supply of safe drinking water; requires the State Water Resources Control Board (SWRCB) to adopt a fund implementation plan and requires expenditures of the fund to be consistent with the plan. Recent action: Passed Senate (Ayes 37. Noes 1.). Ordered to Assembly. 

Privacy-related

AB 873 (Irwin) – Redefines “deidentified” for purposes of the California Consumer Privacy Act to mean information that does not identify, or is not reasonably linkable to a particular consumer, provided the business makes no attempt to re-identify the information and takes reasonable measures to ensure the data is not re-identified. Recent action: Passed Assembly (Ayes 73. Noes 0.). Ordered to the Senate. 

AB 981 (Daly) – Places a number of concepts contained within the California Consumer Privacy Act of 2018 (CCPA) into the Insurance Information and Privacy Protection Act (IIPPA), and eliminates a consumer’s right to request a business to delete or not sell the consumer’s personal information under the CCPA if it is necessary to retain or share the consumer’s personal information to complete an insurance transaction requested by the consumer. Recent action: Passed Assembly (Ayes 77. Noes 0.). Ordered to the Senate. 

AB 1146 (Berman) – Exempts from the privacy requirements of the California Consumer Privacy Act of 2018 vehicle information shared between a new vehicle dealer and the vehicle’s manufacturer if the information is retained or shared for the purpose of, or in anticipation of, a vehicle repair relating to warranty work or a recall. Recent action: Passed Assembly (Ayes 77. Noes 0.). Ordered to the Senate. 

Tax-related

AB 37 (Jones-Sawyer) – Specifies, under the Personal Income Tax (PIT) Law, that the federal disallowance of tax expenditures related to the illegal sale of drugs shall not apply to licensees engaged in commercial cannabis activities in California. Recent action: Passed Assembly (Ayes 69. Noes 1.). Ordered to the Senate. 

SB 162 (Galgiani) – Extends the California Alternative Energy and Advanced Transportation Financing Authority’s Sales and Use Tax Exclusion Program until January 1, 2030. Recent action: Passed Senate. (Ayes 38. Noes 0.) Ordered to the Assembly. 

Health-related

SB 202 (Wilk) – Defines a commercial blood bank for animals to include “community-sourced” animals that are brought by their guardians to the commercial blood bank to have their blood collected; requires the production of blood and blood products to be overseen by a licensed veterinarian; and removes the exemption for commercial blood banks from the California Public Records Act. Recent action: Passed Senate. (Ayes 38. Noes 0.) Ordered to the Assembly. 

SB 347 (Monning) – Establishes the Sugar-Sweetened Beverages Safety Warning Act, to be administered by the Department of Public Health, and requires a safety warning, in a place that is easily visible at the point-of-purchase, on all sealed sugar-sweetened beverage containers. Recent action: Passed Senate. (Ayes 21. Noes 11.) Ordered to the Assembly. 

SB 382 (Nielsen) – Prohibits a health plan contract or health insurance policy from denying payment of a claim for care provided to enrollees or insureds who remain in acute care hospitals due to a lack of access to post-acute care services during a state of emergency if the enrollee or insured is displaced because of the emergency. Recent action: Read third time. Passed. (Ayes 38. Noes 0.) Ordered to the Assembly. 

SB 424 (Jackson) – Prohibits a person or entity from selling, giving, or in any way furnishing to another person of any age in the state any single-use filters, plastic devices, electronic cigarettes, and vaporizer devices; requires the manufacturer of these components to use materials eligible for recycling under state or local recycling programs to make any multiuse, reusable component, and to offer methods for recycling those components. Recent action: Passed Senate. (Ayes 25. Noes 10.) Ordered to the Assembly. 

SB 583 (Jackson) – Conforms California law with respect to health plan and insurer coverage requirements for participants in clinical trials to incorporate federal requirements enacted as part of the Affordable Care Act, which includes expanding the type of clinical trials to include life-threatening diseases or conditions. Recent action: Read third time. Passed. (Ayes 38. Noes 0.) Ordered to the Assembly. 

Cannabis-related

SB 51 (Hertzberg) – Authorizes the creation of cannabis limited charter banks and credit unions and authorizes the use of special purpose checks issued by those institutions for specified purposes. Creates costs to the Department of Business Oversight (DBO) for the chartering of new banks and credit unions, costing approximately $2 million per year. Recent action: Passed Senate. (Ayes 36. Noes 1.) Ordered to the Assembly. 

SB 595 (Bradford) – Requires a cannabis licensing authority to develop and implement a program by July 1, 2020, that provides a fee deferral or fee waiver to obtain or renew a license for a local equity applicant or local equity licensee, contingent upon an appropriation in the annual Budget Act or another statute. Recent action: Read third time. Passed. (Ayes 28. Noes 8.) Ordered to the Assembly. 

SB 627 (Galgiani) – Authorizes a qualified veterinarian, as defined, to recommend the use of medicinal cannabis on an animal patient upon the Veterinarian Medical Board’s (VMB) development of guidelines on the appropriate administration and use of medicinal cannabis for an animal patient; prohibits a veterinarian from being punished for recommending cannabis for an animal patient; and, includes cannabis for use on animals under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA). Recent action: Read third time. Passed. (Ayes 33. Noes 0.) Ordered to the Assembly.