TO: CITY OF CUPERTINO
LEGISLATIVE REVIEW COMMITTEE
FROM: JOE A. GONSALVES & SON
SUBJECT: LEGISLATIVE UPDATE
DATE: FEBRUARY 17, 2022
STATE LEGISLATIVE UPDATE
On January 3, 2022, the Legislature returned to Sacramento for the start of the second year of the 2021-22 Legislative session. All 2-year bills had a deadline of January 31, 2022, to pass out of their house of origin. This year, roughly 220 two-year bills were still active from last year and moving through the process. In addition to the active two-year bills, the Legislature has until February 18, 2022, to introduce new legislation. As of February 15th, the Legislature has introduced 781 bills and we expect this number to more than double by the February 18th deadline.
Upcoming 2022 Legislative Session
The start to this upcoming year comes with many changes, including a projected 5-year remodel of the Capitol Annex building. The Legislature, Governor, Committees, and Administration are all temporarily housed in a recently constructed office building called the “Swing Space”, located on 10th and O street. All Committee hearings, meetings and day-to-day operations of the legislature will take place in the “Swing Space”, except for Legislative Floor Sessions, which will continue to take place in the Senate and Assembly Chambers located in the historic section of the Capitol.
The rapid spread of the Omicron Variant continues to limit in-person communication and a vast majority of Legislative staff are continuing to work remotely. Legislative meetings and committee hearings have largely been limited to virtual participation only, with a few exceptions. This year we expect to see a number of bills that focus on; reducing the impacts of Covid-19, possible creation of a vaccine mandate for those at work and in schools and expanded protections for workers who have suffered from the virus.
COVID EMERGENCY RESPONSE PACKAGE (ERP)
At the beginning of January, Governor Newsom unveiled a proposed $2.7 billion COVID-19 Emergency Response Package, including a $1.9 billion emergency appropriation request to the Legislature, that will provide:
• $806 million to bolster testing
• $400 million to get more Californian’s vaccinated and boosted and to combat misinformation.
• $486 million to support frontline workers and health care systems. • $141 million to support state response operations.
• $100 million to support Mutual Aid, Bolster Contact Tracing Efforts, Procure Personal Protective Equipment
• Extended Covid-19 supplemental paid sick leave for workers and $6.1 billion in tax relief to small businesses hit hard by the pandemic.
Please note the Governor’s ERP measures were amended into budget trailer bills (SB113, SB114, SB115, SB116 and SB117) that were fast tracked through the Legislature and signed by Governor Newsom on February 9th.
GOVERNOR’S JANUARY BUDGET
On January 10, 2022, Governor Newsom released his $286.4 billion January budget proposal that focuses on the COVID-19 pandemic, homelessness, the environment, cost of living, and public safety (keeping our communities safe).
The Governor’s proposed budget projects a $45.7 billion surplus, about $14 billion more than what the Legislative Analyst Office projected. Of the $45.7 billion, $16.1 billion is dedicated to Proposition 98/K-12 education and $3.9 billion is dedicated to Proposition 2 requirements to pay down public employee retirement liabilities. This leaves $25.2 billion in reserves, which includes a $15.8 billion Rainy-Day Fund (Proposition 2 Budget Stabilization Account) for fiscal emergencies, $900 million in the Safety Net Reserve, $4.5 billion in the Public School System Stabilization Account, and an estimated $4 billion in the State’s operating reserve.
Additionally, the Governor’s proposed budget contains more than $2 billion in new funding to address the housing crisis. This includes:
• $500 million over two-years for the Infill Infrastructure Grant Program. • $300 million over two-years for the Affordable Housing and Sustainable Communities Program.
• $100 million over two-years to expand affordable housing development on state excess land sites.
• $100 million over two-years for Adaptive Reuse Incentive Grants. • $500 million for the Low-Income Housing Tax Credit Program. • $200 million over two-years for the California Housing Finance Agency to provide loans to developers for mixed income rental housing. • $200 million over two-years for the Portfolio Reimbursement Program targeted at preserving downtown oriented areas.
• $100 million over two-years for the Department of Housing and Community Development’s Mobile Home Park Rehab and Residential Ownership Program.
The Governor’s January budget also proposes $2 billion over the next two-years to house vulnerable populations with complex behavioral health conditions and people living in encampments. This includes:
• $1.5 billion to the Department of Health Care Services Behavioral Health Continuum Infrastructure Program to purchase and install tiny homes. • $500 million for jurisdictions to invest in re-housing strategies for people experiencing homelessness and encampments around the state. • $10.6 million annually for three-years to continue the Returning Home Well Program to provide transitional housing to parolees.
In addition to housing and homelessness, the Governor’s budget proposes to pause the annual gas tax inflation adjustment, which takes place on July 1 annually, with the intention of providing relief to consumers from the high cost of gasoline. The estimated rate of inflation is 5.6%, which would equate to a 3-cent increase. If enacted this will equate to a decrease in fuel tax revenues by $523 million. The state budget proposal does indicate the Administration is exploring options for backfilling the lost revenue to cities and counties, including using funds from the State Highway Account.
To offset the loss from the gas tax inflation, the Governor’s budget proposes $9.1 billion in general fund and bond funds over two years for transportation programs, which includes the following:
• $4.2 billion for High-Speed Rail
• $2 billion for High Priority Transit and Rail Infrastructure projects that improve connectivity between local and regional services. • $1.25 billion for Southern California Transit and Rail Projects that focus on mobility and GHG reduction.
• $750 million for Active Transportation Networks.
• $500 million for high priority grade separation projects. • $400 million for state and local Climate Adaptation projects. • $100 million for the Highway Safety Improvement Program for bicycle and pedestrian safety projects.
• $4.5 billion increase of base federal funding from the Federal Infrastructure Investments and Jobs Act for highways roads, transit, safety, research, and other transportation activities.
Lastly, the Governor’s budget highlights public safety as one of his five budget pillars. In an effort to combat organized retail theft, the Governor’s budget proposes over $130 million for the following:
• $6 million for the California Highway Patrol Organized Retail Theft Task Force.
• $85 million in competitive grants annually through 2024–25 for local lawenforcement to combat organized retail crime. • $10 million annually through 2024-25 for competitive grants to local District Attorney’s to create retail theft prosecution teams. • $6 million annually through 2024-25 to the California Department of Justice to support regional task forces combating organized retail theft and to prosecute retail theft cases spanning multiple jurisdictions. • $5 million to the Department of Justice to continue leading anti-crime task forces around the state.
• $20 million in one-time grants for small businesses impact by retail theft to assist with repairing or replacing of structures.
All of this is just the kickoff to budget negotiations between Governor Newsom and the Legislature. The Legislature will spend the next 5 months reviewing the proposed budget, proposing changes to it, and negotiating with the Governor to reach a final agreement. The first set of changes we will see to the budget document will be proposed as part of the Governor’s “May Revise”, with the final budget being adopted by June 15th, 2022.
2022 LEGISLATIVE DEADLINES
January 1: Statutes took effect.
January 3: Legislature reconvened.
January 10: Budget submitted by Governor.
January 14: Last day for policy committees to hear and report to fiscal committees’ fiscal bills introduced in their house in the odd-numbered year.
January 21: Last day for any committee to hear and report to the floor bills introduced in that house in the odd-numbered year. Last day to submit bill requests to the Office of Legislative Counsel.
January 31: Last day for each house to pass bills introduced in that house in the odd- numbered year.
February 18: Last day for bills to be introduced.
EARLY INTRODUCTIONS:
The bulk of the 2022 legislative bills are being introduced as “spot bills” meaning they merely state the intent of the bill without the actual substantive language.
Our firm will continue to read all legislation as it is introduced, amended, and referred to Committees and keep the City apprised of any/all bills that may impact the community.
AB 2181
One bill that has been introduced for the City’s consideration is AB 2181 by Assemblymember Berman. AB 2181 was introduced on February 15th, and it proposes to increase the Santa Clara Valley Transportation Authority’s Board of Directors terms of office from 2 years to 4 years beginning on and after July 1, 2023.
The LRC may want to consider a position on this bill. Please note AB 2181 is not eligible to be heard until March 15th.
2022 California Plastic Waste Reduction Regulations Initiative The California Plastic Waste Reduction Regulations Initiative has qualified for the November 8, 2022, ballot. The official ballot title states: Requires State Regulations to Reduce Plastic Waste, Tax Producers of Single-use Plastics, and Fund Recycling and Environmental Programs. Initiative Statute. The ballot initiative proposes to require the California Department of Resources, Recycling, and Recovery (CalRecycle), in consultation with other agencies, to adopt regulations that reduce the use of single-use plastic packaging and foodware. including:
• requiring producers to ensure that single-use plastic packaging and foodware is recyclable, reusable, refillable, or compostable by 2030.
• requiring producers to reduce or eliminate single-use plastic packaging or foodware that CalRecycle determines is unnecessary for product or food item delivery.
• requiring producers to reduce the amount of single-use plastic packaging and foodware sold in California by at least 25 percent by 2030.
• requiring producers to use recycled content and renewable materials in the production of single-use plastic packaging and foodware.
• establishing "mechanisms for convenient consumer access to recycling," including take-back programs and deposits.
• establishing and enforcing labeling standards to support the sorting of discarded single-use plastic packaging and foodware; and • prohibiting food vendors from distributing expanded polystyrene food service containers.
The ballot initiative would also enact a fee, called the California Plastic Pollution Reduction Fee, on single-use plastic packaging and foodware.
CalRecycle would determine the fee amount with a maximum amount of 1 cent per item of packaging or foodware. Beginning in 2030, the fee would be adjusted based on changes in the California Consumer Price Index.
Revenue from the fee would be distributed to CalRecycle, the California Natural Resources Agency, and local governments as follows:
• 50% to CalRecycle for implementing and enforcing the measure and providing funds for statewide recycling, reduction, and composting efforts.
• 30% to the California Natural Resources Agency for state and local grants to address the environmental impacts of plastic pollution, such as habitat restoration; and
• 20% to local governments for recycling and composting programs and plastic pollution mitigation.
The Legislative Analyst's Office estimated that the measure would result in increased state revenue, but that the magnitude of the revenue generated is uncertain, but possibly in the range of a few billion dollars annually in the near term.
Supporters of the ballot initiative, which raised over $4.26 million, includes:
• Assemblymember Luz Rivas
• Recology Inc.
• Corn Refiners Association
• Natural Resources Defense Council
• Save The Bay
• Surfrider Foundation
• The Nature Conservancy
The only opposition, which hasn’t raised any money, comes from the American Chemistry Council. They believe that “Plastics are indispensable to the modern way of life, and are critical to achieving sustainability goals, like light-weighting vehicles, making buildings and homes more energyefficient and reducing food waste — all of which help reduce greenhouse gas emissions.”
A "yes" vote supports this ballot initiative to:
• require CalRecycle to adopt regulations that reduce the use of single-use plastic packaging and
• enact a maximum one-cent per item fee on single-use plastic packaging and foodware, with revenue from the fee distributed to CalRecycle, the California Natural Resources Agency, and local governments.
A "no" vote opposes this ballot initiative, thus not requiring CalRecycle to adopt regulations that reduce the use of single-use plastic packaging nor enacting a fee on single-use plastic packaging and foodware.