January 20, 2026
Legislative Guidelines &
Advocacy Updates
PaloAlto.gov
Christine Prior, Assistant City Clerk
Chantal Cotton Gaines, Deputy City Manager
Lisa Bilir, Utilities Assistant Director of Resource Management Lena Perkins, PhD, Utilities Acting Deputy Director of Legislative & Regulatory Riley Yaylian, Utilities Legislative & Regulatory Analyst Carlin Shelby, Deputy Director, Townsend Public Affairs 1 Staff recommends that the City Council:
• Adopt the 2026 State and Federal Legislative Guidelines and 2026 Utility Legislative Policy Guidelines
• Receive an update and provide feedback on recent and upcoming federal and state legislative and regulatory activities
Recommendation
2 • Framework used by staff and the City's legislative advocates, in consultation with the Mayor and Policy & Services Chair, to respond to legislative issues • Allow for flexible and quick responses to emerging issues • Annual review and update conducted by the Policy & Services in the fall and City Council in January
• Attachment A (packet pages 450-454) – State and Federal Legislative Guidelines recommended updates
• Attachment B (packet page 455) – Utilities Legislative and Policy Guidelines Background
3 Additional issues identified by staff after Policy & Services Committee’s review:
• Raising the cap for local sales tax increments
• Preserving publicly owned utilities’ investments in hydropower beyond 2030 • Regulating the use of e-bikes and e-motos
• Streamlining the process for developing affordable housing on City-owned land • Preserving local permitting and zoning requirements for telecommunications infrastructure
Additional Legislative Topics
Legislative and Funding Updates
January 20, 2026 4
PRESENTATION OVERVIEW
Slide 5
Overview of Grant Funding Efforts
Key State Legislative Items for 2026
State Budget Update
Federal Appropriations Update
KEY STATE LEGISLATIVE ITEMS FOR 2026
Slide 6
E-bike Safety
Reforms
Affordable Housing
Delivery
Sales Tax Cap
Exemption
SB 79 (Wiener,
2025) Clean Up
Statewide Bond
Proposals
New Leadership
and Administration
Changes
STATE BUDGET UPDATE
Slide 7
Governor’s Budget
Expects $2.9B Deficit
(Smaller than $18B
Projected by LAO
No New Funding for
Housing/Homelessness
(Anticipated in January
Processes)
Proposition 4 Climate
Bond Roll Out
Local Exposure to
Federal Cost Shifts
Early Action Budget
Items Anticipated –
Including Bay Area
Transit Operations Loan
Negotiations and Budget
Committees to Follow –
Next Milestone during
May Revision
FEDERAL APPROPRIATIONS UPDATE
Slide 8
Congress is finalizing FY 2026 funding through bipartisan “minibus” packages to avoid a government shutdown
Most remaining discretionary funding and earmarks are in the Transportation and Housing and Labor and Health bills
Transportation and Housing is expected to receive floor consideration due to its size and funding volume
Palo Alto’s Fire Station No. 4 Replacement Project is included in the House Transportation and Housing bill at $850,000 and is awaiting final House and Senate approval
GRANT FUNDING UPDATE
Slide 9
Program Request Status Description
Federal Emergency
Management Agency –
Assistance to Firefighters
Grant (AFG)
$139,688 Not Awarded Replacement of chest compression
equipment to support emergency
medical response capabilities.
Metropolitan Transportation
Commission – Transit
Oriented Communities
Implementation Grant
$2,885,000 Awarded Palo Alto EV Charging
Infrastructure Project to expand
publicly accessible electric vehicle
charging stations near transit and
activity centers.
Federal Emergency
Management Agency –
Staffing for Adequate Fire and
Emergency Response
(SAFER)
$4,011,929 Pending Personnel funding to support fire
and emergency response staffing
levels and service capacity.
CalFire – Wildfire Prevention
Grant Program
$850,000 Not Awarded Fuels management and ecosystem
protection activities to reduce
wildfire risk and improve community
resilience.
Board of State and
Community Corrections –
Organized Retail Theft Grant
$5,176,812 Awarded Funding to strengthen regional
coordination and public safety
strategies to combat organized
retail theft.
QUESTIONS?
Slide 10
California Advocacy | Federal Advocacy | Grant Writing
www.TownsendPA.com | (949) 399-9050
Carlin Shelby,
Deputy Director
[email protected]
Niccolo De Luca,
Vice President/
Chief Advocacy
Officer
[email protected]
Alex Gibbs,
Grants Director
[email protected]
Joseph Melo,
Federal Advocacy
Manager
[email protected]
11 2026 Utilities Legislative and Regulatory Look Ahead State
Legislative Regulatory
• Support AB 34 (Patterson)
Preserving value of
Publicly-owned
Hydropower 1/5/2026
• Coauthored by Sen.
Becker and Asm.
Berman
• Watching several bills
related to energy, water,
wildfire mitigation
• CEQA streamlining bill
expected
• Affordability focus
• California Air Resources
Board released draft Cap &
Invest Language 1/13/2026
• Preserves funds for local
decarbonization
• Electric vehicle rebates put
forth by Gov. budget
• Electric Transmission
Planning advocacy
• Updates to Model Water
Efficiency Ordinance
Federal
Legislative Regulatory
• Support the Low-Income
Home Energy Assistance
Program for Fiscal Year
2027
• Support Fix our Forests Act
(HR 471) to protect
affordable and reliable
water and power supplies
• Work to protect California
and local control for energy
and water issues
• Affordability focus
• Advocate to fill
operationally critical
Federal hydropower
roles protect reliability
• Intervene in Federal Energy
Regulatory Commission
(FERC) cases related to
transmission charges
alongside the CPUC Public
Advocates Office
• Watch large load
interconnection FERC
rulemaking (datacenters)
12 Utilities Staff Advocacy and Collaborating Agencies
Electric Advocacy
• Hydropower: staff and lawmakers at State and Federal level for Federal hydropower legislative and regulatory also with US Bureau of Reclamation (USBR), Western Area Power Association (WAPA), Northern California Power Agency (NCPA), Northwest Power Producers Association (NWPPA), American Public Power Association (APPA), California Municipal Utilities Association (CMUA), California Independent System Operator (CAISO) • Transmission: legislation and regulatory engagement with Bay Area Municipal Transmission Group (BAMx), NCPA Transmission Rate Case group,CAISO, Transmission Agency of Northern California (TANC) • Cap & Invest Program: advocacy with California Energy Commission (CEC), with California Air Resources Board (CARB), CMUA, NCPA
Water Advocacy
• Engagement on legislation and regulations with supply, water quality, and conservation with CMUA, Bay Area Water Supply & Conservation Agency (BAWSCA), State Water Resources Control Board (SWRCB), Valley Water Natural Gas Advocacy
• CARB, CMUA, Bay Area Air District, California Gas Utilities Group, California Joint Utilities Group 13 Staff recommends that the City Council:
• Adopt the 2026 State and Federal Legislative Guidelines and 2026 Utility Legislative Policy Guidelines
• Receive an update and provide feedback on recent and upcoming federal and state legislative and regulatory activities
Recommendation