1 DATE: August 19, 2024
TO: Mayor and Members of the City Council
.
VIA: Stefan Chatwin, City Manager
FROM: Marlene Subashini, Assistant City Manager
Dane Hutchings, Managing Director, Renne Public Policy Group DEPARTMENT: City Manager
SUBJECT: 2024 STATE LEGISLATIVE UPDATE
RECOMMENDATION
It is recommended that the City Council, by Minute Order, receive and accept an informational report on the 2024 State Legislative Update.
EXECUTIVE SUMMARY
State legislation has the potential to have direct and significant impacts on a city’s legal authority; fiscal, operational, and environmental stability. Active legislative engagement protects and enhances the interests of Foster City’s residents and businesses. Ensuring that Council, city staff and the community are aware of policies impacting our community is an important step when conducting City business.
In an effort to advance the City’s public policy advocacy efforts, the City’s legislative consultant, Renne Public Policy Group (RPPG) has been tracking priority legislation on behalf of the City. On December 18, 2023, the City Council adopted its first comprehensive state legislative platform. Upon adopting the Legislative Platform, Council requested that City staff along with our legislative consultant provide at least three (3) formal legislative updates to Council during a regularly scheduled meeting. The first update was provided to Council on April 1, 2024. This would be the second update.
Should Council have any questions regarding any of the bills and/or ballot measures
2 included in this report, Dane Hutchings, Managing Director of RPPG will be available during the meeting to answer specific questions.
BACKGROUND
The City entered into an Agreement with RPPG on January 15, 2021 for State Legislative Advocacy Services for an initial one-year term. The Agreement was subsequently amended on March 1, 2022 and included grant writing services. On February 20, 2024, the Council approved a second amendment to the Agreement. The scope of work was amended to eliminate grant writing activities from the monthly flat retainer but include an optional grant writing services on a per-grant services. RPPG continues to provide assistance on federal community project funding requests as needed.
May was a month of fiscal and legislative deadlines for the Administration and the Legislature. The May Revision to the January Budget proposal for fiscal year 2024-25 was released by Governor Newsom on May 10. Total state budget spending for 2024-25 was projected by the Administration to be $288.1 billion, a $3.4 billion decrease over the January Proposal, with a deficit of $27.6 billion, a $10.3 billion decrease over the January Proposal. The deadline for fiscal committees to hear and send bills introduced in their house to the Floor was also May 17. The week of May 20 was reserved for Floor sessions, where legislators met for long hours and deliberated on hundreds of bills before the house of origin deadline on May 24. Committee meetings resumed on May 28.
On May 14, in San Mateo County, Governor Gavin Newsom held a press conference to provide an update on the availability of funding from Proposition 1. The two-part initiative, known as the Mental Health Services Act, includes a bond to build treatment facilities and permanent supportive housing for people with mental health and addiction challenges.
The initiative also makes changes to a longstanding tax on personal incomes over $1 million. Joined by Senator Susan Eggman, Senator Josh Becker, Business, Consumer Services, and Housing (BCSH) Secretary Moss, and Department of Health and Human Services (DHHS) Secretary Dr. Ghaly, Governor Newsom announced the first installment of $3.1 billion that would be made available by the summer, with applications due in the fall. Originally it was expected that the Notice Of Funding Availability (NOFA) would not be released until 2025, which would delay when the funding would be available to communities. Additionally, a bond guidance for supportive housing ($2 billion overall, with $1 billion for veterans) is expected by the end of 2024 from HCD.
June closed out a busy month for the Legislature, including the June 15 deadline to pass a Budget Act and the bulk of committee hearings leading up to the July 3 deadline by which all policy committees must meet to send bills to their fiscal committees. Governor Newsom signed the 2024 Budget Act, AB 107, on June 26 as passed by the Legislature on June 13. However, as RPPG had detailed in a memo to the City, and as expected, this bill did not reflect an agreement between the Legislature and Administration. It was announced on June 22 that the Governor and the Legislature had reached an agreement on the Budget. The Governor signed the primary bills of the agreement, Budget Bills SB 108 and SB 109, on June 29. The 17 Budget Trailer Bills that represent additional 3 provisions of this agreement have also been passed by the Legislature and sent to the Governor for signature. The final Budget agreement represents a $297.9 billion state Budget, slightly lower than what the May Revision had projected. The deal included an agreement to increase the size of the Rainy Day Fund from 10% of the state Budget to 20%, exclude deposits into the Rainy Day Fund from the Gann Limit, and create a “Projected Surplus Temporary Holding Account,” where a portion of any projected surplus will be deposited and held under a future year once it is clear whether the projected surplus actually materializes.
VLF FUNDING INCLUDED IN FINAL BUDGET DEAL
Both in the Governor’s January and May Revise budget proposals, the Administration did not include its obligation to backfill the Vehicle Licensing Fee (VLF) shortfall to San Mateo County and its taxing agencies. Specifically, the impact to Foster City would have been $1,398,472 in lost VLF revenue used to fund critical public services. RPPG worked with San Mateo County advocates, stakeholders, and legislative delegation to retain the full VLF backfill payment in the budget, and testified in budget committees on behalf of the City to request VLF be included in the budget. RPPG worked closely with Assemblymember Diane Papan and Senator Josh Becker on pushing for the inclusion of San Mateo County Cities VLF shortfall to be included—outlining all of the potential service reductions on the table. The language specific to the VLF reimbursement was included in AB 107, which was the primary budget bill. This budget was passed by both houses on Thursday June 13 and signed into law by the Governor on June 30. The budget included $73 million to reimburse local jurisdictions for VLF revenue shortfalls in Mono, Alpine, and San Mateo Counties. This is viewed as a major win for San Mateo County and its taxing agencies given the growing state budget deficit forcing considerable reductions to several other key statewide programs.
FAILED LEGISLATIVE ATTEMPT TO MODIFY PUBLIC SAFTEY BALLOT MEASURE The Legislature had wanted to supersede the proposed Homelessness, Drug Addiction, and Theft Reduction Act, supported by law enforcement and business groups, with the introduction early this year of their own package of public safety and mental health care bills with similar, but not identical, provisions. However, having not reached any agreement with the Theft Reduction Act proponents, legislative leadership announced on June 11 their plan to amend several bills in the package to become inoperable should the initiative pass the ballot. The inoperability clause was added to those bills in late June.
However, the inoperability clause, which had been pushed by Assembly Speaker Robert Rivas (D, Hollister) and Senator McGuire (D, Geyserville) caused division in the ranks and was removed from the bills on July 1.
On June 30, three days after the official June 27 initiative deadline, SB 1381 was introduced. The bill had been an agreement that Governor Newsom and legislators had come to over the weekend in an attempt to add a last-minute alternative ballot measure to the November 2024 ballot to compete with the Theft Reduction Act and would have been less stringent than the Theft Reduction Act. Authored by Democratic legislators 4 Senators Aisha Wahab (Silicon Valley) and Angelique Ashby (Sacramento) and Assemblymember Rick Zbur (Los Angeles), this bill would have amended the Safe Neighborhoods and Schools Act (Proposition 47). The bill would have placed the alternative ballot measure before voters at the November 2024 election as Proposition 2, while the Theft Reduction Act would have been lower on the ballot. The bill included a provision that would have invalidated competing measure(s) on the same ballot, should it have received a higher number of affirmative votes.
On July 1, the Governor and lawmakers announced more details of the alternative initiative in a press release. The bill passed the Assembly Public Safety Committee on July 2 along party lines, and it was scheduled to be voted on by the Legislature on July 3 to be sent to the Governor for signature. However, late in the evening on July 2, CalMatters reported that the Governor was withdrawing the measure from legislative consideration and that lawmakers would not be putting any competing measures to the Theft Reduction Act on the November 2024 ballot. However, Governor Newsom said in his statement that he plans to sign a “a robust public safety package that expands criminal penalties, bolsters police & prosecutor tools, and cracks down on retail theft—the most significant reform in decades.”
On July 3, the Legislature adjourned for Summer Recess until August 5. During the first two weeks of August, with a few exceptions, only appropriations committees will meet to determine the fate of fiscal measures. Then, the last two weeks of session leading up to the final day of the 2023-2024 legislative session on August 31 will be reserved for Floor deliberations only.
ANALYSIS
Below is a list of bills that the City has positioned on according to the Council adopted Legislative Platform and Policy. For a more comprehensive list of tracked priority measures, please see Attachment 1.
POSITIONED BILLS*
AB 460 (Bauer-Kahan) State Water Resources Control Board: water rights and usage: civil penalties
Under current law, the diversion or use of water other than as authorized by specified provisions of law is a trespass, subject to specified civil liability. This bill would require the State Water Resources Control Board to adjust for inflation, by January 1 of each year, beginning in 2025, the amounts of civil and administrative liabilities or penalties imposed by the board in water right actions, as specified.
RPPG worked with the Association of California Water agencies (ACWA) in providing City-specific impacts this measure would have to the City. Fortunately, RPPG was able to secure amendments to this bill which moved the City to a Neutral position. 5 Amended: 06/12/2024
Status: Senate Appropriation Suspense File
City Position: Neutral
AB 817 (Pacheco) Open meetings: teleconferencing: subsidiary body The Ralph M. Brown Act, requires, with specified exceptions, each legislative body of a local agency to provide notice of the time and place for its regular meetings and an agenda containing a brief general description of each item of business to be transacted.
Current law authorizes the legislative body of a local agency to use alternate teleconferencing provisions during a proclaimed state of emergency (emergency provisions) and, until January 1, 2026, in certain circumstances related to the particular member if at least a quorum of its members participates from a singular physical location that is open to the public and situated within the agency’s jurisdiction and other requirements are met (non-emergency provisions). Current law imposes different requirements for notice, agenda, and public participation, as prescribed, when a legislative body is using alternate teleconferencing provisions. The non-emergency provisions impose restrictions on remote participation by a member of the legislative body and require the legislative body to provide specific means by which the public may remotely hear and visually observe the meeting.
This bill, until January 1, 2026, would authorize a subsidiary body, as defined, to use similar alternative teleconferencing provisions and would impose requirements for notice, agenda, and public participation, as prescribed. The bill would require at least one staff member of the local agency to be present at a designated primary physical meeting location during the meeting. The bill would require the local agency to post the agenda at the primary physical meeting location. The bill would require the members of the subsidiary body to visibly appear on camera during the open portion of a meeting that is publicly accessible via the internet or other online platform, as specified. The bill would also require the subsidiary body to list a member of the subsidiary body who participates in a teleconference meeting from a remote location in the minutes of the meeting. In order to use teleconferencing pursuant to this act, the bill would require the legislative body that established the subsidiary body by charter, ordinance, resolution, or other formal action to make specified findings by majority vote, before the subsidiary body uses teleconferencing for the first time and every 12 months thereafter.
Amended: 05/29/2024
Status: Held in Senate Local Government
City Position: Support
AB 1337 (Wicks) State Water Resources Control Board: water diversion curtailment Under existing law, the diversion or use of water other than as authorized by specified provisions of law is a trespass, subject to specified civil liability. This bill would expand the instances when the diversion or use of water is considered a trespass. This bill contains other related provisions and other existing laws. 6 Amended: 05/18/2023
Status: Held in Senate Natural Resources and Water
City Position: Oppose
AB 2427 (McCarty) Electric vehicle charging stations: permitting: curbside charging
Current law continues into existence the zero-emission vehicle (ZEV) division within GO- Biz as the Zero-Emission Vehicle Market Development Office. Current law references GO-Biz’s Electric Vehicle Charging Station Permitting Guidebook, which recommends best practices for electric vehicle supply equipment permitting. This bill would require the office to develop a model permitting checklist, model zoning ordinances, and best practices for permit costs and permit review timelines to help local governments permit curbside charging stations as part of the office’s development of the Electric Vehicle Charging Station Permitting Guidebook or any subsequent updates. The bill would also require the office to consult with local governments, electric vehicle service providers, and utilities while developing the above-described materials.
Amended: 06/17/2024
Status: Senate Appropriations Suspense File
City Position: Support
AB 2489 (Ward) Local agencies: contracts for special services and temporary help Current law relating to the government of counties authorizes a county board of supervisors to contract for certain types of special services on behalf of the county, any county officer or department, or any district or court in the county. Current law requires those special services contracts to be with persons who are specially trained, experienced, expert, and competent to perform those services. This bill would require the board or a representative, at least 10 months before beginning a procurement process to contract with persons for special services that are currently, or were in the previous 10 years, performed by employees of the county represented by an employee organization, to notify, in writing, the exclusive employee representative of the workforce affected by the contract of its determination to begin that process.
The bill would provide that this 10-month notice requirement does not apply in the event of an emergency, as defined. The bill would require persons with whom the board of supervisors enter into a contract for special services to perform functions that are currently, or were in the previous 10 years, performed by employees of the county, any county officer or department, or any district or court in the county represented by an employee organization to use employees who meet or exceed the minimum qualifications and standards required of bargaining unit civil service employees who perform or performed the same job functions, as specified.
7 This along with AB 2557 (see below) would have posed considerable operational challenges for the City. Fortunately, RPPG was successful working alongside a broad coalition of stakeholders including individual local governments, private sector companies and non-profit organizations to stop AB 2489 from moving this year.
Amended: 04/29/2024
Status: Held in Senate Appropriations
City Position: Oppose
AB 2557 (Ortega) Local agencies: contracts for special services and temporary help: performance reports
Would require, as of July 1, 2025, each county board of supervisors that solicits for and enters into a specified contract for special services, except as specified, to post that contract and any related documents, as specified, on its internet website. The bill would require, as of July 1, 2026, each contract, as described above, to include, among other things, the objectives, desirables, and goals of the contract. The bill would require, before beginning a procurement process to contract for functions, duties, responsibilities, or services, as specified, the board of supervisors, or its representative, to give reasonable written notice to the exclusive employee representative of the workforce affected by the contract of its determination to begin that process. The bill would also require, at least 30 days before the modification or renewal of the above-described contract, the board of supervisors, or its representative, to notify, as specified, the exclusive employee representative of the workforce affected by the contract of the intent to modify or renew the contract.
Despite the fact that this bill has been considerably amended from its introduced version, the bill is still very problematic. A number of local agencies, private businesses and over 100 non-profit organizations remain opposed to this measure. RPPG continues to advocate for the City’s position in an effort to stop this bill from advancing.
Amended: 07/03/2024
Status: Senate Appropriations Suspense File
City Position: Oppose
SB 366 (Caballero) The California Water Plan: long-term supply targets Would revise and recast certain provisions regarding The California Water Plan to, among other things, require the Department of Water Resources to instead establish a stakeholder advisory committee and to expand the membership of the committee to include tribes, labor, and environmental justice interests. The bill would require the department to coordinate with the California Water Commission, the State Water Resources Control Board, other state and federal agencies as appropriate, and the stakeholder advisory committee to develop a comprehensive plan for addressing the State’s water needs and meeting specified long-term water supply targets established by the bill for purposes of The California Water Plan.
8 The bill would require the plan to provide recommendations and strategies to ensure enough water supply for all designated beneficial uses. The bill would require the plan to include specified components, including a discussion of various strategies that may be pursued in order to meet the water supply targets, a discussion of agricultural water needs, and an analysis of the costs and benefits of achieving the water supply targets.
The bill would require the department to submit to the Legislature an annual report between updates to the plan that includes progress made toward meeting the water supply targets once established, as specified. The bill would also require the department to conduct public workshops to give interested parties an opportunity to comment on the plan and to post the preliminary draft of the plan on the department’s internet website.
Amended: 06/26/2024
Status: Assembly Appropriations Suspense File
City Position: Watch
* Note that bills positions are based on August 9, 2024.
FULL BILL TEXT TO ANY MEASURE CAN BE FOUND BY GOING TO THE STATE’S LEGISLATIVE INFORMATION WEBSITE: THAT CAN BE ACCESSED BY CLICKING HERE
PENDING BALLOT MEASURES
•Proposition 5 – No title yet
oReduces the local vote threshold requirement from two-thirds (2/3rds) to fifty-five (55) percent for local public infrastructure and affordable housing financing proposals using general obligation bonds paid for with increases in ad valorem property taxes.
•Proposition 36 – The Homelessness, Drug Addiction, and Theft Reduction Act
oIncreases criminal penalties for drug dealers who distribute fentanyl and other hard drugs; increases penalties for repeated theft and shoplifting; allows individuals convicted for possession of fentanyl and other “hard drugs” with two prior felony convictions to complete mandatory court- supervised drug and mental health treatment in lieu of further incarceration. •Proposition 33 – Justice for Renters Act
oProhibits the Legislature from limiting the right of any city or county, to maintain, enact or expand residential rent control.
•Proposition 32 – Living Wage Act of 2022
oIncreases the state minimum wage from $16 to $18 per hour. •Proposition 4 – Safe Drinking Water, Wildfire Prevention, Drought Preparedness, and Clean Air Bond Act of 2024
oProposes a $10 billion “climate bond”.
9 •Proposition 2 – The Kindergarten Through Grade 12 Schools and Local Community College Public Education Facilities Modernization, Repair and Safety Bond Act of 2024
oProposes a $10 billion school facilities bond, assisting both K-12 schools and community colleges.
For a more detailed explanation of these ballot measures please see Attachment 2.
California Environmental Quality Act
Not applicable
FISCAL IMPACT
There is no fiscal impact associated with receiving this report.
CITY COUNCIL VALUE/PRIORITY AREA
Smart Planning, Development, and the Local Economy
ATTACHMENTS:
Attachment 1 – Priority Bill List (as of 8/6/24)
Attachment 2 – Summary of Six Ballot Measures