California Government Relations Update

What’s Happening in Sacramento?

California’s legislative session is ending on August 31, but there are still many key pieces of legislation waiting to go to Governor Gavin Newsom’s desk for his approval or veto. One such bill that would have allowed supervised drug use in Oakland, San Francisco, and Los Angeles – three of California’s biggest cities – was vetoed by the Governor on August 22.

Labor

Fast food workers and labor advocates recently wrapped up two days of marching in Sacramento, a culmination of the years-long campaign for a legislative proposal that would transform California’s fast-food industry. AB 257 would create a state board to set wages, hours, and work conditions for the entire industry, increasing the bargaining power of its low-wage, mostly non-unionized workers. The labor-backed bill would also make the corporations that own fast food chains, including individual franchise owners, legally responsible for wage and hour violations, potentially upending the franchise business model. Similar bills have been passed in California to protect garment and contract construction workers.

AB 257 is among the most contentious proposals that lawmakers still have to face, with its proposed mandate garnering national news attention. The bill is opposed by many franchise owners, who claim it would force them to raise their prices for food. The bill survived the Senate Appropriations Committee suspense file and is set to receive a vote on the Senate floor before the end of the legislative session on August 31.

Climate

The California Air Resources Board (CARB) recently issued a ruling to require that 100 percent of all new cars sold in the state by 2035 must be fossil fuel emission free. The ruling sets interim targets requiring that 35 percent of new passenger vehicles sold in the state by 2026 produce zero emissions and that 68 percent produce zero emissions by 2030. The ruling sets enforcement mechanisms for Newsom’s executive order from September 2020, which first set the targets. Automakers would be fined $20,000 for each car short of the requirement.

As the largest auto market in the United States, this ruling is significant for the auto industry and is expected to influence new policies in Washington and around the world. Most automakers have been outwardly supportive of the program, with many investing in zero-emission vehicles. At least twelve other states could potentially adopt the new California zero-emissions vehicle mandate, reflecting California’s leadership and influence with respect to auto emissions standards.

In other climate news, SB 1391, introduced by Senator Sydney Kamlager (D-Los Angeles), would require CARB to reevaluate and correct the deficiencies in the state’s cap-and-trade program. This bill would require the state board to conduct a review, as provided, of the market-based compliance mechanisms to, among other things, evaluate and address concerns related to allowance overallocation and offset credit eligibility at least once every three years.

A related measure, AB 1395 by Assemblymember Al Muratsuchi (D-Torrance) called the California Climate Crisis Act, would declare the policy of the state both to achieve net zero greenhouse gas emissions as soon as possible, but no later than 2045, and achieve and maintain net negative greenhouse gas emissions thereafter, and to ensure that by 2045, statewide anthropogenic greenhouse gas emissions are reduced to at least 90% below the 1990 levels. This bill originally failed passage in September 2021, but was moved off the inactive file this week, and is being considered as part of the climate change package.

Both bills have uncertain futures at this point.

Energy

A bill to make home solar panel installation simpler for Californians is headed to the governor’s desk. Senator Scott Wiener’s (D-San Francisco) CA SB 379 (21R) would require counties and cities to utilize an online permitting software that would automate approval of residential solar and storage systems to increase the use of home solar panel installation and lower greenhouse gas emissions. After an unanticipated failure in the Assembly Appropriations Committee last year, it has become a closely watched bill by environmentalists.

Even though solar panel costs have declined in the past decade, supporters of the bill argue that “soft costs” – such as a slow permitting process – are a barrier to wider adoption, with some people waiting months for the permitting paperwork to be completed. A few cities and counties already use software to speed approval of rooftop solar applications, including San Jose, which has seen a corresponding increase in solar applications of over 600 percent. Those in opposition argue that the bill’s mandate places too heavy of a burden on cities.

With regard to another source of renewable energy, Newsom introduced draft bill language to extend the life of Diablo Canyon Nuclear Power Plant’s operations past 2025 by giving Pacific Gas & Electric a forgivable loan of up to $1.4 billion. Currently, Diablo Canyon produces nearly ten percent of California’s electricity and the state’s energy agency projects that there may not be enough renewable energy to compensate for the loss of electricity upon its closure. The move has aggravated environmental advocates and split Californian Democrats, with detractors voicing concern about the facility’s use of seawater for cooling and production of radioactive waste.

Assembly Democrats have circulated an alternative plan rejecting Newsom’s proposal to keep Diablo Canyon open, instead proposing $1.4 billion in spending on renewable energy alternatives and transmission lines. The California Senate is also in talks to strike a legislative deal with the Governor. Extending the life of Diablo Canyon would require state, federal and local approval and could require expensive inspections and upgrades. However, support for relicensing could come from a $6 billion federal program as nuclear power is a key part of the Biden administration’s climate strategy.

Education

Senator Susan Rubio’s (D-Baldwin Park) CA SB 70 (21R) was advanced by Assembly Democrats. The measure would require all students to take a year of kindergarten before entering first grade in public schools. The bill must pass the Senate before heading to Newsom’s desk. The mandate, which would start during the 2024-25 school year, would affect around 5 percent of students statewide who skip kindergarten each year. Accounting for parents who would satisfy the requirement by sending their children to private programs, the bill would cause roughly 30,000 more students to enroll in public kindergartens. Supporters argue the mandate will help counteract enrollment declines and better prepare children for first grade, but the bill has faced resistance from Republican lawmakers and the California Homeschool Network who argue that the bill infringes on parental rights.

What’s Happening in Los Angeles?

City Council President Nury Martinez declared her support for Representative Karen Bass’ run for Mayor of Los Angeles, describing the moment as one “we could have only dreamed of as little girls: the first Latina council president endorsing the first woman mayor of the city of Los Angeles.” Bass has been careful to embrace the “first woman mayor” storyline for her campaign but has pivoted in the wake of the U.S. Supreme Court’s decision to overturn Roe vs. Wade.

With regards to upcoming elections, a second effort to force Los Angeles County District Attorney George Gascón into a recall election ended after officials determined that the campaign failed to submit enough valid signatures.