City Council Legislative Committee
October 12, 2026

CITY OF SAN MATEO
Legislative Committee
October 12, 2026
5:30 PM
City Hall – Conference Room C

COMMITTEE MEMBERS
Mayor Adam Loraine
Deputy Mayor Nicole Fernandez
AGENDA
PUBLIC ATTENDANCE IS AVAILABLE IN-PERSON ONLY. PUBLIC COMMENTS MAY BE SUBMITTED IN PERSON OR IN WRITING.

FOR SUBMITTING PUBLIC COMMENT SEE FURTHER DETAILS BELOW

CALL TO ORDER
Roll Call

NEW BUSINESS
The public will have an opportunity to comment during the Council's consideration of these items.

1. November 3, 2026 Statewide Ballot Measures — Discussion Receive a report on selected November 2026 Statewide Ballot Measures presented by the City's legislative consultant, California Public Policy Group (CPPG), and recommend positions for City Council consideration, consistent with the Council-adopted Legislative Advocacy Policy.

CEQA: This item is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)

2. State Legislative Summary — Informational
Receive the State Legislative Summary from California Public Policy Group.

CEQA: This item is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)

ADJOURNMENT
------------------------------------------------------------------------------------------------------------------------------------------ AGENDAS: Agendas and material are posted on the City’s website on the Friday preceding each Commission Meeting and can be viewed on the City's website at www.cityofsanmateo.org. Any supplemental material distributed to the Commission after the posting of the agenda will be made part of the official record.

PUBLIC COMMENTS/REQUEST TO SPEAK
Prior to the meeting in writing: Send comments to: [email protected] until 4 p.m. the day of the meeting.

ACCESSIBILITY: In compliance with the Americans with Disabilities Act, those with disabilities requiring special accommodations to participate in this meeting may contact the City Clerk Patrice Olds at [email protected] or (650) 522-7042. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. 1 of 36

CITY OF SAN MATEO

CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 1 Section Name: NEW BUSINESS Account Number: File ID: 26-12739 TO: City Council Legislative Committee
FROM: Alex Khojikian, City Manager
PREPARED BY: City Manager's Office
MEETING DATE: October 12, 2026
SUBJECT: November 3, 2026 Statewide Ballot Measures — Discussion RECOMMENDATION:

Receive a report on selected November 2026 Statewide Ballot Measures presented by the City's legislative consultant, California Public Policy Group (CPPG), and recommend positions for City Council consideration, consistent with the Council-adopted Legislative Advocacy Policy.

BACKGROUND:

On March 2, 2026, the City Council formally adopted the 2026 Legislative Platform, which establishes the City’s legislative priorities and guides its positions on state legislation and ballot measures.

Staff, in coordination with the City’s legislative consultant, California Public Policy Group (CPPG), reviewed the 14 statewide propositions appearing on the November 3, 2026 General Election ballot (Attachment 1). This report provides an overview of the measures and highlights select propositions for Legislative Committee consideration based on their potential impacts on San Mateo and alignment with the Legislative Platform. CPPG will present an overview of these selected measures at the Legislative Committee meeting (Attachment 2).

Election Timeline
Key dates for the November 3, 2026 General Election include:
• October 5: County elections officials begin mailing vote-by-mail ballots. • October 19: Last day to register to vote (conditional voter registration remains available through Election Day). • November 3: General Election.
• December 11: Deadline for the Secretary of State to certify election results.

Unless a measure provides otherwise, an approved measure takes effect on the fifth day after the Secretary of State certifies the results. Implementation timing varies by measure based on constitutional rules, statutes, and any transitional provisions in the measure text. For example, Proposition 43 applies only to measures placed on local ballots on or after January 1, 2027.

Overview of the November 2026 Ballot
Fourteen (14) statewide measures have qualified for the November 3, 2026 ballot: nine (9) citizen initiatives and five (5) legislative measures. The measures generally fall into the following categories:
• Six (6) of these measures, if approved, have financial and policy impacts on local governments in the following areas: voter-proposed special taxes, voter identification in elections, public campaign financing, permit streamlining for “essential projects,” and two housing bond proposals. 2 of 36

CITY OF SAN MATEO
• Five (5) measures focus on state revenue and budgeting issues, with potentially major policy outcomes, including with Prop. 40, the “Billionaire’s Tax.”
• Three (3) address a spectrum of other policy issues: the process for recalling state officers, an $8.4 billion immunology research bond, and expenditure thresholds for federally qualified health centers.

The ballot numbering skips from Proposition 5 to Proposition 37. AB 182 (Pellerin, 2026), a budget trailer bill, directed the Secretary of State to list Propositions 1 through 5 first so that voters would see them at the top of the ballot.

Ballot Measure Positions: Definitions
Because a ballot measure cannot be amended once it has qualified, the positions available for ballot measure engagement are limited to the following:

Support: A Support position indicates to voters, the Legislature, and other stakeholders that the City is in favor of the ballot measure in question.

Oppose: An Oppose position indicates that the City is against the ballot measure in question.

Watch: A Watch position is an internal designation indicating that the City is closely monitoring and evaluating the measure. Should factors change, the City reserves the right to adopt a formal external position.

State law (Government Code Section 54964 and caselaw) prohibits the use of public funds for communications that expressly advocate for or against a ballot measure. Subject to the foregoing, the City Council may still lawfully take a position on ballot measures.

Statewide Ballot Measures Identified for Consideration
Staff and CPPG identified five propositions for further consideration based on their potential impacts on the City and alignment with the Legislative Platform. The table below summarizes these measures, the recommended positions, and corresponding platform statements. Attachment 1 provides additional information on all 14 statewide propositions.

Following the Legislative Committee’s review and discussion, any recommended positions on statewide ballot measures will be brought forward to the full City Council for consideration at the October 19, 2026 meeting.

Measure Title Placed on Ballot By Recommended
Position
Relevant Legislative Platform
Statement
Prop. 45 Building an Affordable
California Act
Initiative Discuss • Transportation and Public Works
Statement No. 9
• Community Development and
Housing Statement No. 6
Prop. 43 Local Special Taxes: Vote
Threshold
Legislative (ACA
22)
Oppose • Administration and Fiscal
Sustainability Statement No. 4
Prop. 1 Veterans and Affordable
Housing Bond of 2026
Legislative (SB 417) Support • Administration and Fiscal Sustainability Statement No. 5
Prop. 37 California Middle-Class
Homeownership and Family
Home Construction Act of
2026
Initiative Support • Community Development and
Housing Statement No. 4
• Community Development and
Housing Statement No. 8
Prop. 40 The 2026 Billionaire Tax Act Initiative Discuss • Parks, Recreation, and Community Services Statement No. 9
3 of 36

CITY OF SAN MATEO
BUDGET IMPACT:

There is no direct fiscal impact associated with the recommended action beyond existing staff time and resources. No public funds may be used for campaign advocacy for or against a ballot measure.

ENVIRONMENTAL DETERMINATION:

This item is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)

STRATEGIC PLAN ALIGNMENT
This staff report supports the Organizational Health and Good Governance initiative.

NOTICE PROVIDED
All meeting noticing requirements were met.

ATTACHMENTS
Att 1 – November 2026 Propositions: Summaries and Analysis Att 2 – PowerPoint Presentation

STAFF CONTACT
Zachary Reda, Senior Management Analyst
[email protected]
(650) 435-0823
Jennifer Yamaguma, Assistant City Manager
[email protected]
(650) 522-7003
4 of 36
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 1 Date: August 4, 2026
To: Alex Khojikian, City Manager
Jennifer Yamaguma, Assistant City Manager
City of San Mateo
From: Dane Hutchings
Founder + CEO
California Public Policy Group
Re: CPPG Summary of November 2026 Statewide Ballot Measures

OVERVIEW
California voters will make many important decisions on the November 3 ballot. Besides electing a governor, congressional and state representatives, community leadership and reviewing local measures, voters will decide the fate of fourteen (14) statewide propositions:
• Six (6) of these measures, if approved, have financial and policy impacts on local governments in the following areas: voter-proposed special taxes, voter identification in elections, public campaign financing, permit streamlining for “essential projects,” and two housing bond proposals.
• Five (5) measures focus on state revenue and budgeting issues, with potentially major policy outcomes, including with Prop. 40, the “Billionaire’s Tax.” • Three (3) address a spectrum of other policy issues: the process for recalling state officers, a $8.4 billion immunology research bond, and expenditure thresholds for federally qualified health centers.

All measure text can be found on the Secretary of State’s website here.

The following measures are covered in this memo:

1. Proposition 45. Building an Affordable California Act.

2. Proposition 43. Local Special Taxes: Vote Threshold.

3. Proposition 39. California Voter ID Initiative.

4. Proposition 4. California Fair Elections Act of 2026.

5. Proposition 1. Veterans and Affordable Housing Bond of 2026.

6. Proposition 37. California Middle-Class Homeownership and Family Home Construction Act of 2026.

7. Proposition 2. Save for California’s Future Act.

8. Proposition 3. California Children’s Education and Health Care Protection Act.

9. Proposition 40. The 2026 Billionaire Tax Act.

10. Proposition 42. Retirement and Personal Savings Protection Act of 2026.

11. Proposition 41. The Improving Transparency, Effectiveness, and Efficiency in California Government Act of 2026.

12. Proposition 5. Recall of State Officers.

13. Proposition 38. California Immunology Research and Cures Initiative. 5 of 36
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 2

14. Proposition 44. The Clinic Funding Accountability and Transparency Act.

Some big news for local governments associated with the November ballot, however, has already occurred. As a result of local government advocacy efforts in partnership with labor organizations, the Legislature negotiated the removal from the ballot of the aggressive Local Taxpayer Protection Act to Save Proposition 13, sponsored by the Howard Jarvis Taxpayers Association (HJTA). That measure would have cost local governments billions in lost revenue by repealing some local voterapproved taxes, including charter city real estate transfer taxes and non-ad valorem parcel taxes.

While the removal of HJTA’s measure was a huge positive, it also came at a cost. In exchange, ACA 22 (Wicks, 2026), now Prop. 43, was placed on the ballot, which requires a two-thirds vote on future local voter initiatives proposing a special tax. More on this issue is contained (below) in the explanation of Proposition 43.

Also note the gap in ballot numbering, which lists Propositions 1-5, followed by Propositions 37-45.

This is due to the Legislature adoption of AB 182 (Pellerin, 2026), a budget trailer bill, which required the Secretary of State to list those first five items (starting with Prop. 1, the Veterans and Affordable Housing Bond) so that the voters would see them first.

Below is a quick guide to the various propositions, organized by policy areas, and arranged so that those of interest to local governments come first. For each, there is a brief summary, links to the text, some background on the politics, and potential implementation issues.

PERMITTING “ESSENTIAL PROJECTS”
Proposition 45. Building an Affordable California Act.

This measure proposes to enact a new stand-alone chapter of the California Environmental Quality Act (CEQA) to expedite permit processing and environmental reviews for a wide spectrum of “essential projects,” defined to include: housing, clean energy, water, transportation, broadband internet, education, public safety and public health facilities. Requires applications submitted by any person, legal entity, public agency, or public utility to be processed by local and state public agencies, along with any related judicial reviews, in accordance with strict timelines, conditions and limitations. Projects must also comply with robust tribal consultation and labor provisions.

Applicants have the option of utilizing none, some, or all of this measure’s provisions.

The Politics: This measure is sponsored by the California Chamber of Commerce and placed on the ballot via the initiative process. Unlike the numerous CEQA “exemptions” approved in conjunction with the 2025 Budget Act, this proposal is focused on reducing delays and uncertainties associated with the permitting, processing and legal reviews associated with a range of defined “essential projects.” Following an initial draft that was released of this measure, the sponsors made numerous amendments in the final version to expand tribal consultation and tighten labor provisions. Also, three controversial projects—High Speed Rail, the Delta Conveyance, and nuclear energy projects— are excluded from its application. Supporters include various construction, clean power, water and hospital organizations. Opponents include over 200 public health, environmental, climate, land trust, environmental justice and other groups.

Implementation: Should this measure be approved by voters, local agencies will need to become familiar with these new project-approval requirements applicable to processing an “essential 6 of 36
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 3 project.” Also note that this Act applies to pending essential projects, including those involved in legal disputes, on the date it takes effect.

LOCAL REVENUE LIMITATIONS
Proposition 43. Local Special Taxes: Vote Threshold.

This measure prohibits prospectively, on or after January 1, 2027, a local government, or its electorate by local initiative, from enacting a special tax unless approved by two-thirds of local voters, or imposing an “ad valorem”(according to value) tax on real property other than as authorized under Article 13 and 13A of the California Constitution.

The Politics: This measure is the result of complex negotiations between the Legislature and the Howard Jarvis Taxpayer’s Association (HJTA). HJTA gathered sufficient signatures to place its “Local Taxpayer Protection Act to Save Proposition 13” on the November ballot, which, if enacted, would have cost local cities billions in revenue due to its retroactive provisions repealing existing taxes. In brief, the HJTA measure proposed to:
• Repeal existing charter city real property documentary transfer taxes, and cap real property documentary transfer taxes at the existing statutory limit applicable to counties and general law cities, and
• Repeal the 2017 CA Supreme Court’s Upland decision and related local enacted taxes.

Upland interpreted the Constitution in a way that lowered the voter threshold (from twothirds to a majority) for enacting or increasing local special taxes placed on ballots via local citizen initiatives.

As a result of the Legislative negotiations, ACA 22 (Wicks, 2026), was placed on the ballot as Proposition 43, and HJTA agreed to pull its measure. Several things about Prop. 43 are important for local governments to understand:
• It operates prospectively, and only affects measures placed on local ballots after January 1, 2027.
• Its primary effect is to reverse the Upland decision, and thereby require a two-thirds vote for local special taxes when placed on the ballot by local initiative. This essentially would reset the law, consistent with legal interpretations held prior to Upland: that local general taxes require a majority vote and local special taxes require a two-thirds vote. • Unlike HJTA’s proposal, ACA 22 places no limitations on the ability of charter cities to enact or increase a local documentary transfer tax. A documentary transfer tax is considered a “excise tax” not an “ad valorem” tax. Given the reversal of the Upland decision, a future local voter initiative in a charter city to enact a documentary transfer tax dedicated to specific purposes would require a two-thirds vote.

In a related move, the Legislature approved ACA 21 (Rivas, 2026), which pulled (ACA 13, 2023) from the ballot. ACA 13 was previously approved as a counterpoint to a prior HJTA’ proposal from 2024, but after the California Supreme Court deemed that proposal ineligible, ACA 13 was moved to the 2026 ballot.

Even though ACA 22 passed with bi-partisan support, a vigorous campaign for and against Proposition 43 is expected. Supporters, so far, are HJTA, and Reform California, an organization headed by Republican Assemblymember Carl De Maio (R-San Diego). Opposition, however, will be 7 of 36
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 4 curiously led by Assemblymember Buffy Wicks (D-Oakland), the author of ACA 22, who argues: “I authored ACA 22 not because I wanted it to become law — but because it was the only path left to get the more dangerous initiative off the ballot before time ran out.” Implementation: If this ballot measure is approved, local voter initiatives proposing special taxes will require a two-thirds vote. Yet, local governments should realize that the HJTA only got a piece of what it was seeking (prospective reversal of Upland) in this measure. They did not achieve their objective of repealing existing taxes enacted with majority votes allowed by Upland, or repealing existing charter city documentary transfer taxes. HJTA could revisit these efforts with future ballot initiatives.

ELECTION-RELATED MEASURES
Proposition 39. California Voter ID Initiative.

This measure requires voters to present government-issued identification at the polls, or the last four digits of a government-issued identification number when voting by mail. In addition, this measure:

1. Defines “government-issued identification” as “documentation that provides conclusive verification of the voter’s identity.”

2. Requires each election official to only count a regular or provisional ballot after verifying the identity of the person voting, and ensure they cast only one ballot in the election.

3. Requires the state to provide, upon the request of an eligible voter, a voter-ID card at no charge to use when casting a ballot.

4. Requires the type of verification a voter will use to be:
a. Indicated on their voter registration record,
b. Noted on the mail ballot envelope provided to them, and c. Available to them, on request, by phone or electronically.

5. Requires the Secretary of State and county elections officials to use their best efforts to verify citizenship attestations, and annually report on the percentage of county voter rolls that have been citizenship-verified.

6. Requires the Legislature to promptly enact laws to implement this measure, provide for military and overseas voters, and ensure that state and local officials comply and support compliance with this law.

7. Authorizes citizens to seek judicial review of compliance with this law, and requires the State Auditor to audit the state and each county for compliance every odd numbered year.

The Politics: This measure is sponsored primarily by two Republican legislators, Senator Tony Strickland (R-Huntington Beach) and Assemblymember Carl DeMaio. It is supported by the Californians for Voter ID organization, with its stated purpose of promoting public confidence and trust in elections, deterring and detecting voter fraud, and minimizing the risk of voter impersonation by requiring proof of identity to vote. Opponents include: League of Women Voters, Common Cause, the American Civil Liberties Union of Northern and Southern California, Equality California, and other groups. The League of Women Voters representative arguing against the measure states: “This voter ID measure is not about protecting voters; it is about importing the current federal administration’s election lies and intimidation tactics into California. It would expose voters’ sensitive personal information, create new ways to reject eligible ballots, and wrongly target voters through error-prone citizenship checks.”
Implementation: If approved, this measure will place new duties and costs on local election officials to revise voter registration cards, add identification information, check voter identification both at 8 of 36
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 5 the polls and when counting mail-in ballots, and then verify voters have only voted once. In addition, extensive voter-education will be required, since voters will likely have to revise their voter registration cards to indicate the type of identification verification they will use when voting. The Legislature is also required to “promptly enact” implementation laws, which may lead to other implementation duties. With citizens authorized to seek judicial review to determine compliance, and the State Auditor required to audit counties every two years, disputes over compliance will likely remain a high-profile political issue.

Proposition 4. California Fair Elections Act of 2026.

This measure repeals the existing prohibition in the Political Reform Act of 1974 against public funding of campaigns for public office, and instead authorizes state and local entities to allocate public funds (pursuant to enacted state laws and local ordinances) to candidates subject to the following limitations:

1. Prohibits the use of public funds earmarked for education, transportation or public safety.

2. Prohibits a candidate from using public funds to pay legal defense fees, or repay personal loans to their campaign.

3. Prohibits a candidate, after their campaign ends, from using any source of funds to repay personal loans to their campaign.

4. Prohibits public funding programs enacted by the state or local agencies from discrimination based on political party or on the basis of whether a candidate is a challenger or incumbent.

5. Authorizes the state and local agencies to establish “strict criteria” that candidates must meet to be eligible to receive public funds. This criteria shall require candidates to demonstrate broad-based support within their districts, such as requiring candidates to receive small-dollar ($10 or potentially higher) contributions or vouchers from a specified number of voting-age residents. This criteria, however, shall not include requiring a candidate to obtain a specified number of signatures, or raise a specified dollar amount through small-dollar contributions.

6. Authorizes the state and local agencies to establish expenditure limits for voluntarily participating candidates, but such limits shall not exceed the “net supportive funds” received by other candidates forthe same office, plus any independent expenditure amounts against the voluntary participating candidate, minus any dollar amount of independent expenditures in support of the qualified, voluntary participating candidate.

7. Provides that the Fair Political Practices Commission is not responsible for administering or enforcing public campaign funding systems established by local agencies.

8. Increases the allowable fine for violations of the Political Reform Act’s prohibition against contributions to campaigns by foreign governments or foreign nationals from one to three times the amount contributed.

The Politics: This measure was placed on the ballot by SB 42 (Umberg, 2025), with the rationale that allowing for public financing of campaigns will reduce the current disproportionate influence of wealthy donors and special interests and enable a wider variety of candidates to run for public office.

Voter approval of this measure is required, because public financing of state and local campaigns is prohibited under provisions of the state’s Political Reform Act enacted by Proposition 73 of 1988. In 2016, the Legislature attempted to amend the Political Reform Act by statute to allow public financing of campaigns, via SB 1107 (Allen), but the Third District Court of Appeal rejected that effort in Howard Jarvis Taxpayers v Newsom (2019), holding that this authorization must be enacted by the voters.Courts, however, have made one exception to these limitations ruling that charter cities have 9 of 36
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 6 separate authority to enact public campaign financing programs; eight charter cities currently have them. When this measure was pending in the Legislature, lead supporters included the League of Women Voters, Common Cause, and the California Clean Money Campaign. Opposition was led by the California Taxpayer Association making several arguments including: that it will force taxpayers to finance political speech, governments may be able to prohibit certain candidates from obtaining funding, these mechanisms can lead to abuse and corruption, and both the state and local agencies already face fiscal challenges and budgetary pressures.

Implementation: If this measure is approved by voters, the state, and each local agency, can decide for themselves whether to enact a public campaign finance program consistent with the measure’s provisions. If, however, state and local agencies begin to adopt such programs, political pressure could increase on more local agencies to enact such programs.

HOUSING BONDS
Proposition 1. Veterans and Affordable Housing Bond of 2026.

This measure proposes an $11.250 billion general obligation state housing bond. Of that amount, it allocates: $10 billion to various housing programs administered by the Department of Housing and Community Development (HCD) and the California Housing Finance Agency (CHFA), and $1.250 billion to support housing programs administered by the California Department of Veteran’s Affairs (DVA). The estimated total cost to state taxpayers to pay the principal and interest for this measure is $17.39 billion over 30 years.

The Politics: In late June, the Legislature placed this affordable housing bond, via SB 417 (Limón and Rivas, 2026), on the ballot. The measure enjoyed bi-partisan support with votes of 61-7 in the Assembly, and 29-2 in the Senate. In a related move, the Legislature approved a budget trailer bill, AB 182 (Pellerin, 2026), which directed the Secretary of State to list this measure as Proposition 1 on the November ballot. This is the first affordable housing bond the voters will decide since approving a $3 billion housing bond, Prop. 1 of 2018. While the amount of this bond is significantly larger than prior housing bonds, the demand for affordable housing resources is acute. It would take annual state investments of a similar magnitude to really make a dent in the state’s affordable housing needs identified through the Regional Housing Needs Assessment (RHNA) process. Supporters listed in the final Senate Floor analysis for SB 417 include affordable housing organizations, local government agencies, planning groups, and individual business organizations. Habitat for Humanity was listed in opposition, seeking an amendment to require 10 percent of bond funds to be dedicated to the Cal-Home Program.

Implementation: Several of this bond’s allocations require additional implementation legislation to clarify programmatic detail. In addition, the funds dedicated for homeless and foster youth, local housing trusts, and acquiring and converting units to affordable housing are all subject to three-year reversion provisions. Local agencies should closely track legislative and administrative implementation efforts.

Proposition 37. California Middle-Class Homeownership and Family Home Construction Act of 2026.

This measure authorizes the California Housing Finance Agency (CHFA) to issue up to $25 billion in revenue bonds to offer eligible buyers fixed-rate second mortgages for up to 17% of the purchase price of a “qualified new home” with a value capped no more than 125% of the conforming loan limit 10 of 36
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 7 within the applicable county (ranges between $832,750 to $1.249,125). Eligible homes must be new construction or a new residential unit retrofitted from a previous nonresidential property. Borrowers must be California residents earning less than 200% of area median income, pay at least 3% down, and retain a real estate agent or broker to represent them in the transaction. Contractors must agree to comply with labor-related provisions in Sec. 21080.66 PRC applicable to the CEQA exemption for residential construction. Details are also included outlining the process for addressing any construction defect disputes. Provides that the revenue bonds issued are not a debt or liability of the state, and authorizes amendments to further the measure’s purposes, with a 60 percent vote of each house of the Legislature and Governor’s signature.

The Politics: This measure is sponsored by former Assembly Speaker and Senator Bob Hertzberg, who explained his reasons (listed in Ballotpedia) for sponsoring the measure as follows: “I wanted to create something that would support the building of, and therefore supply, more middle-class housing. We need to increase supply. Because these subsidy programs, most of them, just end up increasing the cost of housing. You wind up buying your grandma’s house with bad pipes and a leaky roof, and then you’re stuck with all those expenses. The subsidies raise prices, but they don’t add supply. And lately, everything has been focused on affordable rental housing. This is about ownership. Because, as I always say, home is where the wealth is.” Supporters include the California Association of Realtors, several carpenters unions, and existing and former elected officials. No opposition to the measure is yet listed.

Implementation: If CHFA effectively implements this program, and developers of new homes and lenders participate, California homebuyers will have an additional option to assist them obtain lower-cost downpayment assistance for purchasing new homes. Having more qualified buyers can incentivize construction of more homes. One wrinkle, however, is that buyers of a newly-constructed home through this program are required to retain a real estate agent or broker, which could offset some savings.

STATE BUDGET RESERVE AND TAX PROPOSALS
Proposition 2. Save for California’s Future Act.

This measure makes several revisions to existing Constitutional formulas which require contributions into the Budget Stabilization Account (BSA) also refeed to as the state’s “Rainy Day Fund.” In brief, the measure:
• Increases the total cap of the BSA from 10 to 20 percent of state General Fund revenues. • Increases the maximum revenues attributed from excess capital gains that may be contributed into the BSA from 8-10 percent, with a proviso to include 150 % of any amounts in excess of 10 percent. Prohibits contributions into the BSA from being counted as “appropriations subject to limitation” under the state’s annual appropriations limit (Gann limit)
• Authorizes, in addition to the BSA, that contributions may also be made into a “Projected Surplus Temporary Houlding Account” provided they do not exceed 10 percent of General Fund proceeds of taxes for the fiscal year in which the transfer is made. Prohibits contributions into this “Projected Surplus” account from being counted as “appropriations subject to limitation” under the state’s annual appropriations limit (Gann limit).

Provides, however, that that when revenues are withdrawn or transferred from the BSA or the Projected Surplus accounts they are subject to the Gann Limit. 11 of 36
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 8 The Politics: This measure was placed on the ballot by the Legislature via ACA 20 (Gabriel) of 2026.

Legislators supporting the measure were all Democrats, except for one Republican in the Assembly.

The official rationale for this measure is that—given the state’s volatile revenues—it is prudent budgeting to allow legislators to place more into reserves in surplus years, so that they can better cushion impacts on education, social services, health care and other important state programs during downturns. But there are other aspects of this proposal that must also be noted:
• The measure exempts contributions into the state’s reserves from the Gann limit. This totals up to 30% of General Fund revenues, when contributions (20% to the BSA and 10% to the new “Projected Surplus” account) are combined. The motivation for these Gann limit exemptions also reflects the reality that the state exceeded this limit during the post-COVID boom in 2022, where $17 billion was returned to taxpayers, and could soon exceed it again as state revenues increase.
• The existing BSA requires 50 percent of surplus revenues to be placed into reserves, and the remaining 50 percent to be appropriated by the Legislature for a narrow range of activities:
repayment of budgetary loans to the General Fund, repayment of state mandates, and paying down unfunded retirement liabilities, health and other benefits. This measure gives more options to the Legislature including repayment of the Medical Providers Interim Payment Fund, earlier recognition of costs under a specified school local control funding formula, repayment of federal loans to the Unemployment Fund. Offering more spending options of these excess funds could make it less likely the Legislature pays down state unfunded retirement liabilities.
• The measure also reduces the political optics associated with a Governor declaring a fiscal emergency to access the state’s reserve funds. Instead of requiring a separate declaration by the Governor, this measure allows it to be folded into the release of the May Revise.

Implementation: From a local government perspective, having the state maintain healthy budgetary reserves is positive for the state’s economic underpinnings and can avoid chaotic “boom and bust” cycles. Yet, it remains to be seen whether this measure will impose greater fiscal discipline, or improved preparation for an economic recession, since—even in the existing strong economy—the state has been dipping into reserves to fund an ongoing structural deficit.

Proposition 3. California Children’s Education and Health Care Protection Act.

This measure extends and makes permanent the existing income tax tables applicable to highincome earners subject to the state’s 10.3, 11.3, and 12.3 percent tax tables, which are scheduled to sunset in 2031. The funds collected pursuant to these tax tables are dedicated to education and community colleges.

The Politics: This tax on higher-income households was originally approved as “temporary” by voters in 2012, then extended again in 2016. The taxes collected from these tax tables produce approximately $10 billion annually, which are dedicated to schools and community colleges. The state General Fund, however, also benefits because these revenues offset what the state is otherwise required to spend on education (under Proposition 98), and thus it “frees up” an equivalent amount of revenue to be spent on other state priorities. While this measure was qualified as an initiative, it is of obvious importance to Legislators. The Legislature required it to be listed by the Secretary of State as Proposition 3—where it will be seen earlier on the ballot by voters—instead of leaving it with the mix of other tax-related ballot measures (such as Prop. 40, the Billionaire Tax). 12 of 36
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 9 Implementation: No local implementation necessary. If this measure is approved by voters, state revenues from these taxes will not sunset in 2031.

Proposition 40. The 2026 Billionaire Tax Act.

This measure imposes a new five percent (5%) tax on California residents who have over $1 billion in personal wealth. The measure directs the revenues collected from this tax into a separate “2026 Billionaire Tax Reserve Fund,” which the Legislature can allocate as provided “by law,” except that these tax proceeds cannot be used to supplant existing state funds for health care, education orfood assistance programs. More specifically, this measure:
• Declares that the purpose of this measure is to protect access to high-quality, equitable health care, and support funding for K-14 (kindergarten-community college) public education and food assistance programs, by raising revenue from a one-time tax on billionaire wealth. In addition, the measure is intended to: “respond to urgent, existing health care, education and nutritional needs that are being worsened by reductions in federal and state funding and the broader fiscal uncertainty facing the state.” • Authorizes the Legislature to amend the provisions of this measure with a two-thirds vote, “if the statute is consistent with and furthers the purposes of the 2026 Billionaire Tax Act.” • Prohibits allocations of revenue from the 2026 Billionaire Tax Reserve Fund from being counted as “appropriations subject to limitation” under the state’s annual appropriations limit (Gann limit).

The Politics: This measure will be one of the most heavily-contested measures on the November ballot. If approved, it will yield a temporary influx of billions into the state treasury, and also raise uncertainties over its longer-term impact on the state’s economy. The measure is sponsored by the Service Employees International Union-United Healthcare Worker’s West (SEIU-UHW West), and supported by the Teamsters California, California Democratic Socialists of America, U.S. Senator Bernie Sanders and others. Arguments on the supporter’s website state: “We’re calling on California’s billionaires to step up and pay a one-time, emergency 5% tax to prevent the collapse of California healthcare and help fund California public K-14 education and state food assistance programs.” Opposition to the measure includes Governor Gavin Newsom, and prominent organizations including the State Building and Construction Trades Council of California, the California Teachers Association, and Planned Parenthood. Governor Newsom, arguing against the measure, states: “It’s really damaging to the state. ... The evidence is in. The impacts are very real — not just substantive economic impacts in terms of the revenue, but start-ups, the indirect impacts of … people questioning long term-commitments, medium-term. That’s not what we need right now, at a time of so much uncertainty. Quite the contrary.”
Implementation: The measure contains an expedited process to resolve disputes over its validity.

Challenges must be filed within 60 days of its passage in Sacramento Superior Court, and that Court is encouraged to resolve claims by April 1, 2027. Appeals must be referred directly to the California Supreme Court and be resolved by November 1, 2027. Individual taxpayers can also be expected to challenge the state’s efforts to determine their residency, level of wealth and collect taxes. Lastly, there is room for future disputes over whether the Legislature could adopt a statute that extends or expands this wealth tax.

Proposition 42. Retirement and Personal Savings Protection Act of 2026. 13 of 36
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 10 This measure prohibits any new state tax that either (1) taxes the ownership or control of personal property (including retirement accounts, financial assets, investment accounts, business interests, and intellectual property), or (2) applies retroactively based on the taxpayer’s conduct, activities, or a status (including residency) that occurred before the new tax’s effective date. The measure applies to taxes that are enacted or take effect on or after January 1, 2026, including taxes that appear on the same ballot as this measure. States that if this measure receives more affirmative votes than a conflicting ballot measure (that seeks to impose such taxes) appearing on the same ballot, that “the provisions of this measure shall prevail in their entirety, and all the other provisions of the other measure shall be null and void.”
The Politics: Aside from its stated purpose to “protect the ability of California’s to save for their futures,” this measure is clearly designed as a “poison pill” against Proposition 40, the 2026 Billionaire Tax Act. Supporters for the measure include the California Small Business Association, California Taxpayers Association, California Black Chamber of Commerce with major financial backing from leaders of major California technology companies. Formal opposition is not currently listed for the measure on Ballotpedia.

Implementation: Both this measure and Prop. 40, have language stating that if either receives a greater number of affirmative votes than a conflicting measure it shall prevail. An effort to recount the votes could arise if the margins are narrow. In addition, litigation could be filed to decide the applicability of the conflict clauses. For example, Prop. 40 deals with taxing billionaires, while the protections in this measure apply also to all other taxpayers.

Proposition 41. The Improving Transparency, Effectiveness, and Efficiency in California Government Act of 2026.

This measure prohibits any new state taxes, enacted after January 1, 2026, that exclude their revenues from existing voter-approved state spending limit, including any new taxes that appear on the same ballot as this measure. Requires pre-election audits of programs that would receive funding from a special tax (a tax proposed to fund specific purposes) proposed by voter initiative, and requires recurring audits every four years of programs funded by all special taxes enacted after January 1, 2026.

The Politics: This initiative was drafted by the same proponent who drafted Proposition 42. Aside from imposing various requirements related to state audits, the measure contains a “poison pill” designed to frustrate the enactment of Proposition 40, the 2026 Billionaire Tax Act. The measure provides that “in the event that the other initiative contains a state tax that is exempted or excluded from the Government Spending Limitation (defined by cross-reference to the Gann limit) … and in the event this measure receives a greater number of affirmative votes,the provisions of this measure shall prevail in their entirety, and all provisions of the other measure shall be null and void.” Supporters include CalTax, the New California Coalition, Reform California and a list of leadership from major California technology companies. Formal opposition is not currently listed for the measure on Ballotpedia.

Implementation: An effort to recount the votes could arise if the margins are narrow between this measure and Prop. 40. Should both this measure and Prop. 40 pass, a Court will have to sort through the legal issues associated with the conflict clauses.
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OTHER MEASURES
Proposition 5. Recall of State Officers.

This measure makes several changes associated with the removal of state officers by recall:

1. Eliminates the process whereby a recall of the Governor or other state officer is accompanied by an election of a successor who receives a plurality of the vote.

2. Declares that if a state officer is recalled the office is vacant, it shall be filled in accordance with the Constitution and statute.

3. Allows a recalled state officer to be a candidate to fill the seat they were recalled from, but prohibits their appointment to the office they were recalled from.

4. Removes the existing prohibition that a recalled state officer cannot be appointed by a Governor as a judge.

5. Changes the state recall process for the Governor by requiring:
a. If a Governor is recalled, that the Lieutenant Governor to serve as Governor for the remainder of the unexpired term.

6. Provides that if a Governor is recalled during the first two years of the term, that a special election be called and (depending on timing) either consolidated with upcoming statewide primary or general election. If a candidate receives a majority vote in a statewide primary election, they shall serve for the remainder of the Governor’s term. If no candidate receives a majority at the statewide primary election, then the top-two will advance to the general election, where the candidate receiving a majority of votes shall complete the remainder of the Governor’s term.

The Politics: This measure was placed on the ballot by the Legislature with the passage SCA 1 (Newman, 2024), and addresses California’s existing process for voter recall of state officers.

Several prominent recall efforts helped shape legislative discussions of this measure. Former Democratic Senator Josh Newman, the author of this measure, was recalled from his seat in 2018, and replaced at that same election by former Republican Senator Ling LingChang. In 2020, however, Senator Newman ran again and regained his office. (However, he lost his seat again in 2024.) In 2003, Democratic Governor Gray Davis was recalled in a special election, and then replaced as Governor by Republican Arnold Schwarzenegger. More recently, in 2021, a recall effort was made on Governor Gavin Newsom, but that effort was defeated with 61% of the vote. While presenting this measure in the Legislature, Senator Newman argued that it “will ensure that statewide and legislative recalls in California are democratic, fair and not subject to political gamesmanship.” Supporters in the Legislature included the League of Women Voters and Common Cause. Opponents were led by Election Integrity ProjectCalifornia who argued in rejecting the concept that the Lieutenant Governor serve as a replacement for a recalled Governor, noting that they are usually of the same political party, and that “it is the people’s right to not only to vote to oust the person in question, but to choose a replacement.”
Implementation: This measure focuses on recall issues associated with state officers.

Proposition 38. California Immunology Research and Cures Initiative.

This measure proposes a $8.4 billion state general obligation bond for immunology and immunotherapy research (technologies that use body’s immune system to treat disease) was placed on the ballot via the initiative process. Its purpose is to fund research to advance the prevention and treatment of various illnesses including: cancer, heart disease, diabetes, Alzheimer’s, Parkinson’s, high blood pressure, and high cholesterol. Much of this funding is required 15 of 36
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 12 to be directed through the State Department of Public Health to fund “a world-class and innovative immunology immunotherapy research institute affiliated with the University of California.” In addition, other provisions of this measure:

1. Requires 50 percent of the bond directed to this institute, along with a $100 million state start-up fund from the General Fund which will be repaid once bonds are issued.

2. Requires grant made to a recipient to offer the institute and the University of California Los Angeles (UCLA) the opportunity to substantially participate and collaborate on funded research and clinical trials.

3. Requires recipients of grant funds to pay 10 percent of all revenues the state derived from the sale, licensing, commercialization, or monetization of intellectual property rights that arise from funded research. Also, requires that any developed technology or drug be made available to California patients, hospitals and insurance companies at a 20 percent discount to the average national price.

The Politics: The primary recipient of these funds appears to be the recently-formed California institute of Immunology and Immunotherapy affiliated with UCLA (based on various descriptions in the measure). UCLA recently acquired control for the former Westside Pavilion mall, which is being converted into the UCLA Research Park. The state previously contributed $200 million to assist with acquiring this property. Major philanthropic contributors to this project include a $120 million donation from surgeon and inventor Dr. Gary Michelson and his wife, Alya. A quote attributed to UCLA Health CEO John Mazziota states: “The goal is to build the immunology equivalent to Silicon Valley in Los Angeles.” The measure is supported by a wide range of health and medical research related organizations. No opposition has been identified on Ballotpedia.

Implementation: This measure includes extensive detail governing the allocation of the funds and accountability provisions. A research council is also established with a seven-member executive committee consisting of the chancellors of the following UC campuses: Berkeley, Davis, Irvine, Los Angeles, Riverside, San Diego, and San Francisco.

Proposition 44. The Clinic Funding Accountability and Transparency Act.

This measure requires nonprofit federally qualified health centers (community clinics that provide primary care to medically underserved areas and populations) to spend at least 90% of their revenue on program services advancing their charitable purpose, including but not limited to patient services, rather than management and overhead. This measure requires affected clinics to file specified data on their annual revenues and expenses with the Attorney General’s (AG) Registry of Charities and Fundraisers, and for the AG to calculate a “mission spend ratio” for each entity.Clinics that fail to submit reports can be fined up to $10,000 per month. Any clinic that fails to meet its mission spend ratio shall be subject to an administrative penalty equal to the difference between what the clinic spent on “mission” activities compared to 90 percent of the clinic’s revenue. The funds collected from administrative penalties shall be held in a special account for up to five years, after which they may be appropriated by the Legislature for clinical worker training, recruitment and retention.

The Politics: This measure is sponsored by Service Employees International Union-United Healthcare Workers (SEIU-UHW and SEIU 721), who are engaged in a broader effort to organize community clinic workers to have a larger say in decisions that impact in patient care, and have the opportunity to bargain for better pay and benefits. They argue this measure is necessary because 16 of 36
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 13 “Clinic CEOs are… misusing our tax dollars, and spending millions on executive pay and other nonessentials….As massive cuts to federal healthcare funding hit California, it is time to ensure community clinics are spending our tax dollars where it is needed most: on patient care.” Opposition to the measure is led by theCalifornia Hospital Association,CaliforniaMedical Association, Planned Parenthood, the California Teachers Association and a wide range of other groups. The President and CEO of the California Primary Care Association argues: “We will not allow California’s most vulnerable patients to be used as political pawns. Our broad coalition will mount an aggressive campaign to educate voters, defeat this reckless initiative, and protect care for millions of patients.” Implementation: The California Attorney General’s office is the lead state entity charged with implementing this measure.
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CALIFORNIA PUBLIC POLICY GROUP • PUBLICPOLICYGROUP.COM
City of San Mateo Ballot Propositions
Dane Hutchings, CEO + Founder
Claire Sullivan, Associate Lobbyist
Updated as of 09/18/26
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Ballot Propositions 2026
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Ballot Measures in Review
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Legislative Engagement
Available Positions for Ballot Measure Engagement
• Support
• Oppose
• Watch (Internal)
Position recommendations are based on the Council approved legislative platform. Any legislative position that falls outside of the Platform must be taken to Council for consideration.
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General Overview
14 Measures Qualified
• Six (6) of these measures, if approved, have financial and policy impacts on local governments in the following areas: voter-proposed special taxes, voter identification in elections, public campaign financing, permit streamlining for “essential projects,” and two housing bond proposals.
• Five (5) measures focus on state revenue and budgeting issues, with potentially major policy outcomes, including with Prop. 40, the “Billionaire’s Tax.” • Three (3) address a spectrum of other policy issues: the process for recalling state officers, a $8.4 billion immunology research bond, and expenditure thresholds for federally qualified health centers.

Implementation timing varies depending on constitutional rules, statute, measure text, and any urgency or transitional provisions written into a measure. 22 of 36
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Prop 45
Proposition 45 (Environmental review / CEQA).

Sets binding CEQA timelines (for example, 365 business days for an EIR), limits the scope of review to laws in effect when an application is submitted, reduces the alternatives analysis, and caps public comment periods, for an optional streamlined track covering housing, transportation, water infrastructure, energy, and healthcare projects. San Mateo acts as a CEQA lead agency, so this touches your land use, water, transportation, and housing work all at once. The LAO flags significant upfront local costs to develop new guidelines and meet the tighter deadlines. Note this measure is subject to court-ordered changes.

Supported by California Chamber of Commerce (the sponsor), California Building Industry Association, California Council for Affordable Housing, California Hydrogen Coalition and California Wind Energy Association; opposed by Sierra Club California, Communities for a Better Environment, Western Center on Law and Poverty, and the democratic Party.

Platform Statement: Oppose legislation that restricts local authority over transportation permitting, utility relocation, or dispute resolution by imposing rigid state timelines or bypassing local planning, environmental review, or decision-making.

Review and evaluate legislation that would increase housing production ministerially, ensuring adequate opportunities for community engagement and City Council oversight.

Recommendation: Discuss
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Prop 43
Proposition 43 (Local special tax threshold).

Prop 43 would raise the approval threshold for citizen-initiated local special taxes from a simple majority to two-thirds, eliminating the lower threshold that recent court decisions had allowed for voter-proposed measures. For a city like San Mateo, this makes it substantially harder to pass parcel taxes or other dedicated local revenue measures put forward by voters, and the LAO notes it could reduce future local government tax revenues.

Supported by the Howard Jarvis Taxpayers Association, Reform California, and the Southern California News Group editorial board; opposed by the California Democratic Party and SEIU Local 1000.

Platform Statement: Oppose legislation and ballot measures that threaten the City’s financial stability, responsibilities, legal authority, or operations; conflict with existing City policies, prior actions, or current City Council strategic priorities; or diminish programs, services, or infrastructure serving the San Mateo community.

Recommendation: Oppose
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Prop 1
Proposition 1 (Housing bond).

Authorizes $11.25 billion in general obligation bonds, including $10 billion for housing programs. Cities, nonprofits, and developers apply for the grants and low-cost loans, so it is a direct funding pipeline for San Mateo's affordable housing goals. Components include $7.2 billion for multifamily rental housing, $1.1 billion for homeownership assistance, $500 million for housing-supportive infrastructure, and $200 million for local pilot projects.

Supported by Governor Newsom, the California Democratic Party, California Apartment Association, the California Labor Federation (AFL-CIO), and a coalition of big-city mayors; opposed by some Republican legislators and fiscalconservative groups.

Platform Statement: Support legislation and ballot measures that provide additional or enhanced funding mechanisms to construct, reconstruct, rehabilitate, or replace public infrastructure; develop affordable and permanent supportive housing; or acquire or lease property for those purposes.

Recommendation: Support
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Prop 37
Proposition 37 (Middle-income homebuyer loans).

Proposition 37 authorizes up to $25 billion in CalHFA revenue bonds to provide down payment assistance, up to 17 percent of the purchase price, for middle-income buyers of newly constructed homes, repaid by the buyers themselves at no direct cost to cities. By expanding the pool of qualified buyers for new for-sale homes, the measure targets the missing middle of households that earn too much for subsidized affordable housing but cannot afford market prices in high-cost areas like San Mateo. It channels demand specifically toward new construction, which can improve the feasibility of ownership projects and support the kind of entry-level, missing-middle housing the region most needs to add.

Sponsored by former state senator Bob Hertzberg; backed by the California Association of Realtors, San Jose Mayor Matt Mahan, former LA Mayor Antonio Villaraigosa, and Democratic figures including Xavier Becerra; no formal opposition, though California Budget and Policy Center have raised questions about whether it will improve affordability.

Platform Statement: Support legislation that expands affordable homeownership opportunities to foster economic mobility.

Support incentives for housing production across all income levels— market rate, middle, low, very low, and extremely low— while maintaining local land use authority.

Recommendation: Support
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Prop 40
Proposition 40 (Billionaire Tax).

Prop 40 would impose a one-time 5% tax on the net worth of Californians who were billionaires as of January 1, 2026 (roughly 200 taxpayers); payable in 2027, with an option to spread payments over five years. Revenue is large but uncertain, estimated in the tens of billions; 90% is directed to public health care (including Medi-Cal), with the remainder to food assistance and education.

Prop 40 was placed on the ballot by SEIU-United Healthcare Workers West; drafted with tax-law and economics scholars. Key wrinkle: if Prop 41 or Prop 42 receives more yes votes, Prop 40 is nullified even if it passes. Prop 40 funds would not flow to city budgets, but the health care earmark is significant for county safety-net and public health systems.

Supported by SEIU-United Healthcare Workers West (sponsor), California Democratic Party, California Labor Federation, California Nurses Association, Teamsters California, AFSCME California, U.S. Senator Bernie Sanders; Reps. Ro Khanna, Judy Chu, Maxine Waters; State Superintendent Tony Thurmond; Opposed by Governor Gavin Newsom (called it "really damaging to the state"), California Chamber of Commerce, California Business Roundtable, California Medical Association, Notably, several usually-progressive groups: California Teachers Association, Planned Parenthood affiliates, California Professional Firefighters, and the State Building and Construction Trades, Platform Statement: Support programs and funding initiatives that expand access to mental health services for all residents, particularly children, youth, and seniors.

Recommendation: Discuss
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Questions / Thank You!
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CITY OF SAN MATEO

CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 2 Section Name: NEW BUSINESS Account Number: File ID: 26-12745 TO: City Council Legislative Committee
FROM: Alex Khojikian, City Manager
PREPARED BY: City Manager's Office
MEETING DATE: October 12, 2026
SUBJECT:

State Legislative Summary — Informational
RECOMMENDATION:

Receive the State Legislative Summary from California Public Policy Group.

BACKGROUND:

The City’s legislative consultant, California Public Policy Group (CPPG), provides regular updates on state legislative activities and developments that may impact the City of San Mateo (Attachment 1). These updates include the status of legislation of interest to the City, significant policy developments, and legislative matters relevant to local government operations.

The Legislative Committee will receive a summary of the 2025–2026 State Legislative Session, including an overview of legislation signed into law or vetoed by the Governor, the final disposition of bills on which the City established positions, and upcoming legislative milestones. The summary also provides an update on grant opportunities and funding applications being pursued on behalf of the City.

BUDGET IMPACT:

There is no direct fiscal impact associated with this informational report beyond existing staff time and resources.

ENVIRONMENTAL DETERMINATION:

This item is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)

STRATEGIC PLAN ALIGNMENT
This staff report supports the Organizational Health and Good Governance initiative.

NOTICE PROVIDED
All meeting noticing requirements were met.

ATTACHMENTS
Att 1 – California Public Policy Group Legislative Summary

STAFF CONTACT
Zachary Reda, Senior Management Analyst
[email protected]
(650) 435-0823
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1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 1 Date: October 6, 2026
To: Alex Khojikian, City Manager
Jennifer Yamaguma, Assistant City Manager
City of San Mateo
From: Dane Hutchings
Founder + CEO
California Public Policy Group
Re: CPPG Legislative Summary: September 2026

LEGISLATIVE UPDATE
Governor’s Final Legislative Actions
September 30 marked the deadline for Governor Gavin Newsom to act on all pending legislation. Of the 2,230 bills introduced in 2026, together with several hundred two-year bills carried over from 2025, 1,160 reached the Governor’s desk. The Governor signed 1,040 of those bills into law and vetoed 120, reflecting a signature rate of approximately 90 percent and a veto rate of approximately 10 percent—considerably lower than his average veto rate of 13.5 percent over the course of his tenure. Notably, the Legislature has not overridden a gubernatorial veto since 1980. All chaptered bills go into effect on January 1, 2027, unless stated otherwise.

On September 30, the Governor signed the final bill of his tenure atop the Golden Gate Bridge and issued an accompanying press release. The bill, SB 895 (Wiener), enacts the California Science and Health Research Bond Act, which, if approved by the voters at the March 7, 2028, election, would authorize the issuance of $7.5 billion in bonds to finance grants and loans for research into a wide range of topics, including wildfire prevention, climate, water, behavioral health, and disease prevention, among others.

Over the course of his eight years in office, the Governor acted on a total of 7,803 bills, exercising his constitutional authority to sign or veto every measure presented to him. In each instance, the bill received a formal decision; none was left without action. Of the 7,803 bills, he signed 6,752 into law, representing 86.5 percent of the total, and vetoed 1,051, representing the remaining 13.5 percent.

The Legislature remains on Final Recess and will next convene on December 7 for a single-day Organizational Session, during which newly elected members will be sworn into office, before recessing until January 4, 2027. With the business of the 2025-26 session effectively concluded, the attention of most legislators has now officially shifted to the November 3 General Election.

Press Release on Artificial Intelligence (AI) Oversight On September 18, Governor Gavin Newsom signed an executive order directing the Government Operations Agency, in consultation with the Governor’s Office of Emergency Services (Cal OES), to deliver recommendations by November 16, 2026, on strengthening the state’s AI safety laws. The recommendations are to address onsite independent verification at frontier AI laboratories, independent review of company safety frameworks and risk assessments, an emergency “kill switch” for frontier models, and expanded definitions of the critical safety incidents that companies 30 of 36
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 2 must report. The order also accelerates implementation of two bills the Governor signed in September: SB 813 (McNerney), which creates a framework for independent verification organizations to assess AI systems’ compliance with state law, and AB 1405 (Bauer-Kahan), which establishes a state registry of AI auditors. Both measures build upon SB 53 (Wiener, 2025), the Transparency in Frontier Artificial Intelligence Act. In the accompanying press release, the Governor stated: “We’re not waiting to act. We’re going to speed up our work on substantial and responsible AI oversight before it’s too late.”
On September 23, the Governor named four national experts to advise on the recommendations:

Jason Goldman, the first White House Chief Digital Officer; Gillian Hadfield of Johns Hopkins University; Alondra Nelson, former Acting Director of the White House Office of Science and Technology Policy; and Rob Reich of Stanford University. Speaking at the United Nations General Assembly in New York the same day, the Governor criticized the Trump Administration for allowing AI to “rip” without guardrails and urged Congress to adopt California’s framework as a national minimum standard (KPBS/AP). Separately, on September 16, the Governor signed SB 1050 (Ashby), which requires advertisements to disclose the use of AI-generated performers.

Additional legislation addressing artificial intelligence is highly likely to be introduced during the next legislative session, continuing the Legislature’s focus on establishing oversight mechanisms and guardrails for the technology.

Data Center Bills
The Legislature closed the session by passing a seven-bill package aimed at California’s fastgrowing data center industry, sending all seven measures to the Governor. Three bills address utility rates and cost allocation: SB 886 (Padilla) and AB 2383 (Zbur), both substantially amended in a latesession compromise, requires the CPUC and investor-owned utilities to establish new tariffs so data centers cover the grid, transmission, and related costs they trigger rather than shifting them to other ratepayers, and SB 1168 (McNerney) directs the CPUC to study those cost shifts and map where facilities can interconnect without costly upgrades.

The remaining four add environmental review and disclosure: SB 887 (Padilla) eliminates categorical CEQA exemptions for data centers while offering a fast-track for projects that meet clean energy and water standards, AB 1577 (Bauer-Kahan) requires monthly energy and water reporting to the Energy Commission, and AB 2469 and AB 2619 (both Papan) add water use disclosures, with AB 2469 conditioning local permit approvals on that information. All seven bills were signed into law by the Governor in September.

Bills of Interest Signed into Law (Chaptered) or Vetoed by the Governor • AB 1383 (McKinnor) Public employees’ retirement benefits. o This bill makes prospective changes to the Public Employees’ Pension Reform Act (PEPRA) of 2013. Specifically, the bill:
▪ Increases the pensionable compensation cap for all PEPRA employees; ▪ Reduces the retirement age for public safety (fire and police) from 57 to 55; ▪ Adds a 4th safety tier that is 3% @ 55, subject to bargaining; ▪ Allows local agencies to adjust their local formula.
o Status: Vetoed
• AB 2346 (Wilson) Vehicles: electric bicycles and speed limits. 31 of 36
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 3 o This bill sets speed limits for e-bikes and bicycle paths, requires certain disclosures when selling an e-bike, and requires some e-bikes to have a speedometer and lights. o Status: Chaptered
• SB 1167 (Blakespear) Vehicles: electric bicycles.
o This bill updates the labeling and disclosure requirements for manufacturers and sellers of these devices, and prohibits noncompliant vehicles from being advertised as e-bikes. The bill also establishes new operational and safety requirements and imposes additional reporting requirements on law enforcement. The bill also extends the definition of “off-highway motor vehicle subject to identification” to include mopeds and off-highway electric motorcycles.
o Status: Chaptered
• AB 1821 (Pacheco) California Public Records Act: agency response time. o This bill extends the deadlines for public agencies to provide an initial response to a California Public Records Act request by converting the current “calendar day” deadlines to a “business day” standard.
o Status: Chaptered
• SB 1159 (Cabaldon) Artificial intelligence: transparency and governance. o This bill clarifies that for the California Public Records Act, the Ralph M. Brown Act, and the California Environmental Quality Act, that the terms “person,” “interested person,” “participant,” and “member of the public” do not include artificial intelligence systems, autonomous agents, robots, or other nonhuman entities, whether physical or digital.
o Status: Chaptered
• SB 1187 (Durazo) Open meetings.
o This bill repeals the language access provisions in SB 707 (Durazo, 2025). o Status: Chaptered
• SB 1164 (Cervantes) Elections.
o This bill prohibits a political subdivision or state agency from implementing, imposing, or enforcing any election policy or practice that results, or is likely to result, in voter suppression. A violation is established when an election policy or practice disproportionately makes it harder for protected classes to vote or participate politically, unless the government can show the policy is necessary and that a less discriminatory alternative is not reasonably available. o Status: Chaptered
• SB 1360 (Cervantes) Elections: translation of election materials. o This bill requires the Secretary of State, on or before December 15, 2031, and on or before December 15 in every year ending in 1 or 7 thereafter, to identify the counties where at least 10,000 voting age citizens, or 5% of voting age citizens, are limited English proficient and either members of a single language minority group or speak a shared language. The bill requires the elections official in an identified political subdivision to provide translated election materials in any language that meets those criteria.
o Status: Chaptered
• SB 922 (Laird) Vehicles: local agency charges: use of streets or highways. o This bill authorizes an existing fee, charge, or surcharge imposed by or for a local agency upon the provider of, or ratepayer for, public services in order to recover the 32 of 36
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 4 costs associated with the use of the agency’s streets, roads, or highways in the provision of those public services.
o Status: Chaptered
• AB 1621 (Wilson) Planning and Zoning Law: postentitlement phase permits: Housing Accountability Act.
o This bill prohibits a local agency or state agency from requiring or requesting more than two plan check and specification reviews in connection with an application for a building permit. The bill authorizes a local agency or state agency to deny an application that is not compliant with the permit standards following two plan check and specification reviews.
o Status: Chaptered
• AB 956 (Quirk-Silva) Accessory dwelling units and junior accessory dwelling units. o This bill requires local agencies to ministerially approve two detached, new construction Accessory Dwelling Units (ADUs) on a lot with an existing or proposed single-family dwelling.
o Status: Chaptered
• SB 1117 (Cervantes) Accessory dwelling units and junior accessory dwelling units. o This bill requires impact fees for ADUs to be calculated only on the portion of the unit exceeding 750 square feet, rather than on its total square footage, for up to two ADUs on a single lot.
o Status: Chaptered
• SB 1014 (Grayson) Development projects: preliminary estimate of required improvements:
onsite and offsite improvements.
o This bill allows development proponents to request and receive additional information on offsite and onsite improvements at the preliminary application phase, and when processing post-entitlement permits.
o Status: Chaptered
• SB 1005 (Caballero) Local agency: payment: rounding amount. o This bill allows local agencies to round payments or refunds made wholly or partly in cash to the nearest five cents if that agency passes a resolution by majority vote. o Status: Chaptered

POSITIONED BILLS
• AB 1383 (McKinnor) Public employees’ retirement benefits. o Location: Assembly Vetoed
o Position: Watch
• AB 1614 (Dixon) Vehicles: bicycles.
o Location: Assembly Chaptered
o Position: Support
• AB 1761 (Rogers) Electricity: calculation methodology: nonbypassable charges: data disclosure.
o Location: Assembly Vetoed
o Position: Support
• AB 1820 (Schiavo) Electric vehicle charging stations: permit fees. o Location: Assembly Chaptered
o Position: Oppose
33 of 36
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 5 • AB 2111 (Papan) Electricity: transmission planning and transmission facilities. o Location: Assembly Chaptered
o Position: Support
• AB 2134 (Addis) City council members: absences without permission. o Location: Assembly Chaptered
o Position: Support
• AB 2346 (Wilson) Vehicles: electric bicycles and speed limits. o Location: Assembly Chaptered
o Position: Support
• AB 2433 (Alvarez) Housing development: density bonus. o Location: Assembly Chaptered
o Position: Watch
• AB 2576 (Harabedian) Transit-oriented development: exclusions: historic sites. o Location: Assembly Chaptered
o Position: Support
• AB 2595 (Papan) San Mateo Electric Bicycle Safety Pilot Program. o Location: Assembly Chaptered
o Position: Support
• SB 922 (Laird) Vehicles: local agency charges: use of streets or highways. o Location: Senate Chaptered
o Position: Support
• SB 968 (Becker) Community colleges: San Mateo County Community College District. o Location: Senate Chaptered
o Position: Support
• SB 1014 (Grayson) Development projects: preliminary estimate of required improvements:
onsite and offsite improvements.
o Location: Senate Chaptered
o Position: Oppose Unless Amended
• SB 1117 (Cervantes) Accessory dwelling units and junior accessory dwelling units. o Location: Senate Chaptered
o Position: Watch
• SB 1159 (Cabaldon) Artificial intelligence: transparency and governance. o Location: Senate Chaptered
o Position: Support
• SB 1167 (Blakespear) Vehicles: electric bicycles.
o Location: Senate Chaptered
o Position: Support

LOOKING FORWARD
• December 7, 2026: Legislature convenes for Organizational Session. • January 1, 2027: All bills signed into law in 2026, unless otherwise stated, go into effect. • January 4, 2027: Legislature convenes for the first year of the 2027-28 legislative session.

GRANT WRITING
CPPG continues to monitor new regional, state, and federal grant opportunities on behalf of the City of San Mateo. On September 8th, Grants Analyst Remi Beck met with Andrea Chow, Sarah Chin, and 34 of 36
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 6 Tina Lee to check-in on the City’s SB1 Sea Level Rise Adaptation Program application. On September 10th, Director of Grant Services Jake Whitaker and CPPG Consultant Rachelle Wilson met with Staff and CalOES to discuss the City’s Hazard Mitigation Grant application. J. Whitaker met with Bincy Koshy on September 15th to discuss the Sustainable Transportation Planning Grant. On September 17th, J. Whitaker and B. Koshy met with Caltrans to discuss the City’s Sustainable Transportation Planning Grant application and project. A follow-up meeting on the Sustainable Transportation Planning Grant was held on September 18th and attended by J. Whitaker, B. Koshy, and Jay Yu. The Monthly Grants Meeting was held on September 28
th. Also on September 28th, Grant Services
Assistant Kylie Sheridan met with Ella Phillips and Mike Kato to discuss the Transportation Demand Management (TDM) Program. On September 29th, J. Whitaker, R. Beck, and K. Sheridan attended a pre-submittal meeting with Staff and SMCTA to discuss the City’s TDM and Bike/Pedestrian applications. J. Whitaker also met with Staff for a check-in meeting regarding the City’s RM3 SR2TBT application on September 29th. Opportunities are being tracked for many of the City’s high priority project areas, including transportation, parks and recreation, police, housing, fire response and wildfire mitigation, flooding and sea level rise, sustainability and electrification, economic development, and library services.

Grant applications in-progress include: Transportation Demand Management Grant, Bike and Pedestrian Program, RM3 SR2TBT Program, and Sustainable Transportation Planning Grant.

Pending applications include:
• Community Impact Grant submitted on March 12, 2025 for $74,700. Funding will be used for the San Mateo Library ESL Program. Application reviews have been paused due to federal action.
• Gary Sinise Foundation First Responders Grant submitted on August 6, 2025 for $30,000.

Funding will be used to acquire 2 jet skis for the SMCFD Water Rescue Team. • Hazard Mitigation Grant Program submitted on September 15, 2025 for $1,121,053.50.

Funding will be used for backup generators at critical city facilities. • Community Project Funding FY27 submitted to Rep. Mullin on March 10, 2026 for $3,500,000. Funding will be used for the 42nd Avenue Pump Station Project. Earmark request has been forwarded for appropriation.
• Congressionally Directed Spending FY27 submitted to Sen. Padilla on March 13, 2026 for $1,050,000. Funding will be used for a Comprehensive Flood Study Project. Earmark request has been forwarded for appropriation.
• Helen Putnam Award submitted on April 9, 2026. An application was submitted for the City’s Age-Friendly Business Certification Program.
• Consolidated Rail Infrastructure & Safety Improvements Grant submitted on June 22, 2026 for $6,720,000. Funding will be used to complete final design and construction of fourquadrant gate systems at two at-grade rail crossings in the downtown area. • Law Enforcement Mental Health and Wellness Act submitted on August 5, 2026 for $249,992. Funding will be used for the SMPD Layered Wellness Program to hire a in-house contractor, implement a post-trauma retreat program, and integrate Sharp Performance’s coaching platform.
• Continuum of Care submitted on September 25, 2026 for $69,245. Funds will be used to provide supportive services through the SMPD’s HOPE Outreach and Access Initiative. 35 of 36
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 7 • SB1 Sea Level Rise Adaptation Grant submitted on September 10, 2026 for $395,548.

Funds will be used for the Subregional Shoreline Adaptation Plan (SSAP).

Additionally, CPPG sent grant alerts on the following upcoming funding opportunities: Promoting Resilient Operations for Transformative, Efficient, and Cost-Saving Transportation (PROTECT), TireDerived Aggregate (TDA) Grant Program, and Youth Community Access (YCA) Grant Program. 36 of 36