To: City of Cupertino
Legislative Review Committee
From: Townsend Public Affairs, Inc.
Casey Elliott, Vice President
Carly Shelby, Legislative Associate
Date: January 21, 2022
Subject: Legislative Update
State Legislative Update
On January 3rd, legislators returned to Sacramento to begin a busy legislative and budget year.
In addition to the normal policy and political dynamics, this year legislators will need to navigate a couple of issues that do not typically impact a legislative session, including the Legislature’s relocation as the State Capitol building undergoes renovations and new Assembly and Senate district boundaries that will require many members to appeal to new voters outside of their current district. Moreover, the onset of the Omicron variant, at the start of what was expected to be a year of transitioning back into in-person meetings and committee hearings, has the Legislature reassessing the procedures they anticipated operating under this year.
As of last week, the Legislature has introduced a total of 88 new bills and has been conducting policy committee hearings in advance of the January 31st statutory deadline for two-year bills to advance from their House of Origin. Bill introductions will continue over the coming weeks, with the majority of bills being introduced leading up to the bill introduction deadline on February 18th.
Among the newly introduced bills, there has been a focus on Proposition 47 reform and retail theft crimes, modifications to the K-12 education funding formula to accommodate for lower student attendance due to the pandemic, and a handful of bills that have gained media traction – such as the single-payer health care bill AB 1400 (Kalra), and the “civil suits against illegal gun manufacturers” bill AB 1594 (Ting).
On the state budget front, the Governor unveiled his budget framework proposal on January 10th.
The proposal includes over $280 billion in total spending to address what he views as California’s biggest challenges, including: COVID-19, homelessness, climate change, the rising cost of living, and public safety. The topline budget spending amount reflects the state’s historic revenue growth and growing reserve funds. Over the coming weeks, the Legislature will conduct Budget Committee hearings to receive a broad overview of the spending proposals contained in the Governor’s January budget. These hearings will take place over the course of the coming months and will provide the Legislature an opportunity to work with the Administration to incorporate legislative priorities into the budget. Additionally, the Administration will continue to develop trailer bill language, which will contain specific details on how the various budget proposals would be implemented, which will be released over the coming weeks.
State Budget Framework Overview
As noted above, on January 10th, Governor Newsom released his budget proposal for the 2022- 2023 fiscal year, which he refers to as the California Blueprint. Overall spending in the proposed budget reflects a more “down to earth” budget framework compared to the 2021-22 FY budget, which included a larger surplus with federal COVID relief funds. Additionally, the majority of the proposed expenditures within the January Budget proposal – 86% in total – are proposed to be made available through one-time spending.
The January Budget proposal contains $286 billion in total spending, reflecting a 9.1% increase from the current budget year, of which $213.1 billion is General Fund spending, which represents a 1.5% increase. The budget framework also proposes to increase the state’s reserve level to $34.6 billion, which includes approximately $20 billion in the rainy-day fund and $9.7 billion in the school stabilization reserve.
The Governor also announced that the January Budget proposal assumes a $45.7 billion operating surplus for FY 2022-23, of which $20.6 billion will be available for discretionary use.
Governor Newsom iterated that the state revenue figures are likely to change over the next few months, pending revenue information that will materialize during tax return season before the June 15th budget deadline. The breakdown of the surplus funds and earmarked expenditures are as follows:
• Total surplus: $45.7 billion
o $16.1 billion in Proposition 98 obligations
o $3.9 billion to pay down unfunded retirement liabilities o $5.1 billion for reserves
o $20.6 billion for discretionary uses
The proposed budget is largely focused on addressing what Governor Newsom referred to as “California’s five existential threats,” the COVID-19 crisis, climate resiliency, the rising cost of living, homelessness, and public safety. Several of the Governor’s specific proposals are targeted for “early action,” which mean the Governor’s goal is to get certain portions of funding out in the coming weeks, well before the final budget is adopted. The early action portions of the budget include $1.4 billion in emergency appropriations to address the ongoing COVID-19 crisis through bolstering testing access, vaccine distribution, and supporting frontline healthcare workers.
Below is a high-level overview of proposed expenditures, organized by issue area:
• COVID-19 Relief ($2.7 billion total, appropriated over 2 years) o $1.2 billion: bolster testing
o $583 million: expand vaccine distribution
o $614 million: support frontline healthcare workers
o $200 million support state response operations
o $110 million: support vulnerable populations and expand contact tracing • Housing ($2 billion total)
o Sustainable Housing Developments
▪ $500 million: Infill Infrastructure Grant Program ($225 million in 2022-23, and $275 million in 2023-24)
▪ $300 million: Affordable Housing and Sustainable Communities ($75 million in 2022-23, and $225 million in 2023-24)
▪ $100 million: state excess sites development
▪ $100 million: adaptive reuse incentive grants
o Affordable housing
▪ $200 million ($50 million in 2022-23, and $150 million in 2023-24): Mixedincome housing development loans ▪ $200 million: portfolio reinvestment program
▪ $100 million : mobile home park rehabilitation
• Homelessness ($2 billion total)
o $1.5 billion: solutions to get people off the streets and into shelters/treatment o $500 million: encampments
o $10 million: Returning Home Well
• Combatting the Climate Crisis
o Forest Health: $1.2 billion
▪ $582 million: forest maintenance
▪ $382 million: fuel breaks
▪ $110 million: regional investments
o Wildfires: $648 million
▪ $400 million: CAL FIRE firefighter support
▪ $248 million: new firefighter equipment
o Drought: $750 million
▪ $500 million: immediate drought support
▪ $250 million: drought contingency support
o Nature Based solutions: $2.1 billion
▪ $400 million: Coastal and ocean protection
▪ $325 community resiliency (catalytic projects, regional collaboration) ▪ $175 million: extreme heat (urban greening)
• Public Safety
o Crime prevention
▪ $255 million: competitive grants for local law enforcement agencies over the next three years to help advance the prosecution of retail crime rings. ▪ $30 million: grants to District Attorney offices to fight theft crimes ▪ $25 million: statewide gun-buyback program
o Emergency response
▪ $17 million: early earthquake warning system
▪ $12 million: new Southern California Emergency response center • Transportation
o Zero Emissions Vehicles: $6.1 billion (appropriated over 5 years) o Transportation projects: $9.1 billion ($4.9 billion General Fund and $4.2 billion Proposition 1A bond funds)
▪ $4.9 billion:
• $2 billion: transit and rail projects
• $1.25 billion: local projects
• $750 million: Bicycle/pedestrian safety/connecting communities projects
• $500 million: grade crossings
• $400 million: climate adaptation
▪ $4.2 billion: High Speed Rail
• Small Business Investments
o $3 billion: Paying down Unemployment Insurance debt
o $1 billion: Loan guarantees
o $500 million: Small business tax relief: venues and restaurants o $150 million: Small business COVID-19 grant program
Anticipated Legislation
2022 marks the second of the two-year session, meaning legislation introduced in 2021 that has not yet moved to the second house must move forward in January or will be dead for the legislative session. At the start of Session, there are a total of 83 measures in the Senate and 140 measures in the Assembly that are eligible to be considered as 2-year bills. January 10th is the last day for the Governor to release the proposed budget. Below is a summary of recent developments that may materialize into legislation in 2022.
COVID-19 Legislation
The 2021 session produced a number of bills aimed at reducing the economic impacts of COVID on California’s most vulnerable residents and ensuring that essential functions of government could be held remotely. Of note was the passage of AB 361 (R. Rivas), which created criteria for state and local governing bodies to hold remote meetings under modified Brown Act standards.
In addition, the Governor vetoed AB 339 (Lee), Which would have required local jurisdictions with a specific population to produce call-in and internet-based participation options in addition to in person options for members of the public during any public meeting.
While the passage of Brown Act modification legislation was beneficial as local governments grappled with the need to social distance, its implementation was quick and is likely to need reform if applied to future emergencies. Despite this, there appears to be little appetite to modify AB 361 in 2022, which some say needs more time to understand its strengths and weaknesses.
In addition to updates related to remote meetings legislation, there will likely be a number of bills introduced related to the ongoing pandemic. These could include legislation allowing or restricting personal belief exemptions, mandating vaccinations for unvaccinated individuals, and expanding the definition of “fully vaccinated” to include booster shots. Near the end of the 2021 Legislative Session, gut and amend language circulated that would have required employees and patrons of certain industries to be vaccinated. Specifically, the bill would have required employees and patrons of restaurants, bars, cafeterias, gyms, hotels, indoor sports arenas, and movie theaters either be fully vaccinated or submit to weekly testing and show proof of a negative COVID-19 test before entering the workplace/establishment as a condition of employment. While language ultimately failed to be inserted into legislation, it may signal a desire from the Legislature to use similar language in the current session.
Public Safety
Following the death of George Floyd and the civil unrest that ensued, it became apparent early on that 2021 would be the year for the Legislature to prioritize public safety reform legislation. The session produced a reform package that included changes to police immunity standards and a de-certification process, the release of records related to officers engaging in unreasonable or excessive force and creating a robust curriculum for young officers entering the police force.
Despite these massive reforms, there is still an appetite for a continued focus on public safety heading into 2022. In recent months, organized retail theft has dominated conversations related to public safety reform. In response to this, the Governor and the Attorney General unveiled a comprehensive public safety package that addresses organized retail theft, gun reform, and transnational drug trafficking.
With regard to upcoming gun safety measures, the Governor officially announced that he will be working with the Legislature in 2022 to limit the sale of assault weapons and “ghost guns” in the state. The measure will be modeled almost identical to Texas’ Senate Bill 8, which enacts an enforcement scheme by allowing private citizens to sue an abortion provider or someone suspected of aiding an abortion performed after the six-week window of time the state established as permissible to receive an abortion. The legality of the Texas law was adjudicated in the courts and was recently upheld by the Supreme Court. Governor Newsom’s idea for similarly structured legislation would allow Californians to sue anyone who manufactures, distributes, or sells an assault weapon or ghost gun kit or parts for damages. This materialized into AB 1594 (Ting), which is currently in spot form. Formal language is expected in the coming weeks.
Housing and Land Use
Similar to public safety legislation, the Legislature in 2021 was dedicated to implementing topdown housing and land-use reform, with the passage of bills like SB 9 and SB 10 which may lead to increased development throughout the state. In addition, the Legislature passed bills like AB 215 (Chiu) which increases the enforcement authority within the Housing and Community Development Department (HCD) when it comes to pursuing legal action against local governments deemed noncompliant with their housing production goals.
This year, the Administration and Legislature will focus on the relationship between climate action and housing policy, meaning housing production and density that is both sustainable and reduces sprawl that could overlap with areas of the state susceptible to natural disaster. This could materialize into bills that increase density, particularly around transit corridors.
In addition, bills similar to AB 1401 (Friedman), which did not survive the legislative process in 2021, are likely to reemerge under new bill numbers. AB 1401 would have prohibited public agencies from imposing or enforcing minimum parking requirements on developments near public transit.
Supply Chain Resilience
Supply chain disruptions became a major issue in 2021 as a result of the pandemic. While major legislation addressing the issue did not come to fruition during the last session, it is anticipated in 2022. During the Legislature’s interim recess period, the Assembly and Senate held a joint select committee hearing on California’s ports and the goods movement. During the hearing, industry and port leaders discussed the need for collaboration at all agency and government levels to address the crisis and discussed their needs, which included investments in zero emissions infrastructure, workforce and training incentives, and data interconnectivity and visibility. In addition to the massive investments in port infrastructure included in the budget framework, in 2022 there is an anticipated focus on supporting the state’s ports through legislative action that may include properties designated for temporary container storage, reassessing overweight corridor designations, and establishing a single individual leader as the point person responsible for leading the state on the sustainability of ports and the goods movement.
Redistricting Update
The decennial process of re-drawing state district lines to ensure districts have equal population size, maintain minority voting power, and are contiguous has officially concluded. The final maps are deemed to have been “enacted” on the date of their certification to the Secretary of State (December 27, 2021). However, the final maps and the new district boundaries don’t actually become “operative” until the 2022 primary and general elections; the new boundaries are used for those elections and the new districts don’t actually “exist” until after the 2022 general election is completed.
On the state level, the new maps will have impacts on the City of Cupertino, specifically:
State Senate District – Currently, Cupertino is in the 15th Senate District represented by Senator Cortese. Under the new maps, Cupertino will be part of the 13th Senate District. Currently, Cupertino is on the western edge of Senate District 15 which spans south past Los Gatos, and northeast through San Jose to the Stanislaus County line. In the new 13th Senate District, Cupertino will be on the eastern edge of the district, which will include Cupertino, Los Gatos, Saratoga, Los Altos and then extend west to the coast and north to include Burlingame, San Bruno and Brisbane.
The new 13th Senate District has significant overlap with the current 13th Senate District which is represented by Senator Josh Becker. Senator Becker’s current district includes Sunnyvale, Mountain View, Palo Alto, extends west to the coast and goes north to include South San Francisco. Senator Becker was first elected in 2020 to represent Senate District 13 and will likely seek re-election to the 13th Senate District in 2024. Senator Becker currently serves on the Senate Business, Professions, and Economic Development Committee, the Senate Energy, Utilities and Communications Committee, the Senate Transportation Committee, and the Joint Legislative Audit Committee.
State Assembly District – Currently, nearly all of Cupertino is located in the 28th Assembly District, represented by Assemblymember Evan Low, with a small portion located in the 24th Assembly District, represented by Assemblymember Marc Berman. Under the new district maps, Cupertino will be located in the 26th Assembly District which includes Sunnyvale and Santa Clara.
While the City’s new Assembly District contains portions of Assemblymember Low’s current district, both Assemblymember Low and Assemblymember Berman currently reside in the new 23rd Assembly District, which includes southern San Mateo County, northwest Santa Clara county, and parts of the peninsula. The new Assembly District 23 has more overlap with Berman’s current district, than it does with Low’s. The inclusion of Campbell on the eastern tip of District 23 raised the prospect of a competitive Peninsula race between Berman and Assemblymember Evan Low, a Campbell resident. However, both Members announced that they would be running in separate districts, with Assemblymember Low running for the new Assembly District 26 seat and Assemblymember Berman running to represent the new Assembly District 23 seat. This means that, if his campaign is successful, the City will continue to be represented by Assemblymember Low.
Initiative Update: The Taxpayer Protection and Government Accountability Act Last week, the proponents of the Taxpayer Protection and Government Accountability Act amended the initiative’s language following its 30-day comment period. While the amended language removes numerous provisions related to timing, public official liability standards, and uniformity requirements for local and state tax increases, it does not change certain provisions that would still hinder local revenue generation mechanisms. Below is a summary of new amendments:
• Prior language required all tax increases proposed by the local legislative body to receive no less than two-thirds approval before it could be placed before the voters. Updated language deletes this provision.
• Prior language required that local exempt charges (fees, fines, etc) be passed by no less than two-thirds of the governing body. Additionally, all new exempt charges would have been subject to referendum pursuant to the same signature requirement applicable to statewide referendum measures. Updated language deletes this raised threshold and only requires a majority vote. Updated language also deletes the referendum provision for exempt charges.
• Prior language provided that any proposed tax to be submitted to the electorate be consolidated with a regularly scheduled general election. Updated language deletes this provision.
• Prior language required that new taxes or exempt charges adopted after October 1, 2021 would be void for 12 months pending reenactment under the new provisions, thus enacting a retroactive exclusion for new taxes passed during that time. Updated language moves the October 1, 2021 threshold date up to January 1, 2022.
• Prior language allowed any member of the public to sue a public official who was thought to expend public funds or use public communication to pass a new tax increase measure and would have held the public official personally liable for damages. Updated language removes this provision.
Provisions still included in the updated language:
Current law provides that local governments must obtain the approval of local voters to raise taxes. The only exception to this rule is for property tax rate increases to pay debt approved by voters before 1978 and other “charges” exempt from voter approval. Charges that meet this definition include a charge for a specific benefit conferred or privilege granted directly to the payer that is not provided to those not charged, a charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, and fines and penalties imposed as a result of a violation of law, among other things. This initiative seeks to unilaterally define and separate “taxes” from “charges” and defines those charges not subject to voter approval as “exempt charges.”
The Initiative’s language still states:
“The local government bears the burden of proving by clear and convincing evidence that a levy, charge or exaction is an exempt charge and not a tax. The local government bears the burden of proving by clear and convincing evidence that the amount of the exempt charge is reasonable and that the amount charged does not exceed the actual cost of providing the service or product to the payor.”
The “clear and convincing” legal standard means that the evidence presented must be “highly” and substantially more probable to be true rather than untrue. This proof standard is harder to satisfy than the “preponderance of evidence” standard, which serves as the common evidentiary standards of proof for civil claims, and essentially means that the evidence presented is “likely more true than untrue.” The “clear and convincing” proof standard is generally reserved for civil offenses or claims where the risk of loss is relatively high (fraud, claims to property, cases involving fundamental liberty rights, etc).
By imposing this higher proof standard, local governments would almost certainly face legal challenges when imposing new taxes or exempt changes to fund essential goods and services, by having to prove by a stringent proof standard that an exempt charge is both not a tax and is reasonable. This means that the imposition of exempt charges like parking meter fees, regulatory fees, and judicial fines are likely to be fought by any member of the public that views them as “unreasonable.”
Ultimately, this measure is attempting to reassert the two-thirds voter threshold requirements for tax increases proposed via initiative special taxes. This special tax voter threshold was disputed by the California Supreme Court in cases like California Cannabis Coalition v. City of Upland and subsequent Court of Appeals decisions which have upheld that special taxes proposed by initiative require only simple majority voter approval.
Initiative Proponents: The California Business Roundtable (CBRT) is the confirmed sponsor of the initiative. The CBRT website lists the following individuals as Chair and Vice-Chair:
• Chair, Brett Bittel (Enterprise Rental Car)
• Vice-Chair, Maryam Brown (SoCal Gas)
Initiative Opponents: So far, the League of California Cities is the only organization in confirmed written opposition to the initiative. California Special Districts Association confirmed in a board meeting last Friday that they will also join Cal Cities in opposing it. Cal Cities, CSDA, ACWA, and CSAC have formed an association coalition and are working with a firm to devise a campaign strategy to help beat the measure before it qualifies.
Priority Legislation
The legislative deadlines to introduce legislation in the new session is February 18th. It is anticipated that the Assembly and Senate will combine to introduce over two thousand bills over the course of the next month.
Below are the upcoming relevant dates for the Legislature:
January 31
st – Last day for two-year bills to pass their house of origin February 18th – Last day to introduce new bills
April 29th – Last day for policy committees to consider house of origin bills with a fiscal impact May 6th – Last day for policy committees to consider house of origin non-fiscal bills Below are bills that have been introduced that may be of interest to the City:
AB 672 (Garcia) - Publicly owned golf courses: conversion: affordable housing.
Would require HCD to administer a program to provide incentives in the form of grants to local agencies that enter into a development agreement to convert a golf course owned by the local agency into housing and publicly accessible open space. Eligible applicants would need to ensure that at least 25 percent of new units developed be affordable and that at least 15 percent of the development is publicly accessible space, among other requirements. AB 672 was referred to the Assembly committees on Housing and Community Development and Local Government. It passed both committees and will be considered by the Assembly Committee on Appropriations.
AB 1603 (Salas) - Theft: shoplifting: amount.
Current law established by Proposition 47 provides that petty theft is punishable by misdemeanor whenever the value of property taken does not exceed $950. This bill would amend Proposition 47 by reducing the threshold amount for petty theft and shoplifting from $950 to $400. This bill was introduced on January 3 and may be heard in committee February 3, pending referral from Rules Committee.