A flurry of activity will mark the last two weeks of the session of the California State Legislature. When they convene on Tuesday, Sept. 5, the Assembly will have eight session days scheduled with the Senate having seven session days before the Sept. 14 adjournment. The two houses will have a total of 948 active measures: 651 in the Senate and 297 in the Assembly. Below highlights major battles in the state house that will likely draw attention nationwide in the final days.
UNEMPLOYMENT INSURANCE FOR STRIKING WORKERS
A major push for the California Labor Federation and labor-aligned allies, state lawmakers are resurrecting a proposal that would allow workers on strike to collect unemployment benefits. SB 799 by Sen. Anthony Portantino (D-Burbank) would make striking workers eligible to collect unemployment insurance benefits after a two-week waiting period. The measure also codifies a California Supreme Court Decision (Coast Packing Co. v. California Unemployment Insurance Appeals Board (1966) 64 Cal. 2d 76) that found individuals subject to a lockout eligible for unemployment benefits. New York and New Jersey are currently the only two states that allow individuals on strike to collect unemployment benefits.
Previous iterations of this proposal have failed in California. AB 1066 (Gonzalez), from 2019, would have permitted individuals in a trade dispute to collect unemployment compensation after a three-week waiting period. AB 1066 failed on the Senate floor and was later amended, but that subsequent version was then vetoed by Gov. Gavin Newsom. The current measure moved out of the Assembly Insurance Committee last week on an 11-2 vote with massive opposition from the business community and a variety of other stakeholders. The bill will certainly be a major floor fight.
WILDFIRE INSURANCE
As recent reporting has suggested, Gov. Newsom and legislators are nearing a legislative deal that could let insurance rates rise in an attempt to bring insurers back to the state and prevent more from leaving. A draft bill framework put together by a small group of Assembly Democrats in late August would allow insurers to write the predicted costs of climate change-fueled disasters into their rates as long as insurers committed to increasing their presence in disaster-prone areas to at least 85% of their market share elsewhere in the state. This proposal has not been publicly put into print but will be a major topic of discussion and action in the final days.
The proposal has already been the target of controversy. POLITICO recently published an article detailing an industry lobbyist’s conversation about the proposal on a public plane ride to Sacramento, which was recorded on a cell phone by a consumer advocate. The reporting has raised the political stakes should this now very publicly discussed proposal fail.
GOV. NEWSOM’S ENERGY PACKAGE
On Aug. 31, Gov. Newsom and several Democratic legislators announced a last-minute agreement on legislation aimed at building more clean energy projects, improving grid reliability and making it easier to meet California’s 100% clean electricity goal. These proposals now take shape in the form of AB 1373, with Assemblymembers Eduardo Garcia (D-Coachella) and Phil Ting (D-San Francisco) along with Sen. Josh Becker(D-Menlo Park) leading this effort.
Notable elements include fast-tracking provisions for electric transmission infrastructure and creating a central buyer to procure clean electricity for the grid. The bill is specifically aimed at helping California do the following:
- Procure Clean Electricity: California is creating a central buyer to procure clean electricity for the grid, focusing on sources like offshore wind and long-duration storage to diversify our energy portfolio—creating a market for diverse sources of clean electricity that will spur more projects to break ground.
- Fast-Track Electric Infrastructure Projects: Accelerate permitting for electric transmission projects—like power lines and transformers—to deliver more clean electricity throughout the state, cutting permitting timelines by months.
- Strengthen Strategic Reliability Reserve: New measures to help prevent the misuse of the new Strategic Reliability Reserve, which is designed to maintain grid reliability during extreme weather events, like heatwaves.
- Modernize Clean Energy Procurement: Aligns the state’s primary clean energy planning and procurement programs—Renewables Portfolio Standard, Resource Adequacy, and Integrated Resource Planning—with the state’s goal of 100% clean electricity by 2045 in an effort to chart a clear path to our clean energy future.
- Notable in the procurement provisions is that the electricity purchased by the Department of Water Resources as proposed under this new procurement structure specifically excludes any electricity created as a result of combustion. This includes hydrogen, biofuels and natural gas plants outfitted with carbon capture and sequestration technology.
BALLOT MEASURES TO RAISE AND LOWER THE TAX THRESHOLD
A trio of proposed constitutional amendments jockeying for position on the March and November 2024 ballots has major implications for local governments, businesses and housing developers. Each of these measures seeks to, in its own way, impact the ability of local jurisdictions to go to the voters for additional taxing authority.
ACA 1 (Aguiar-Curry, 2023) would authorize local governments to increase taxes to fund construction of public infrastructure, affordable housing or permanent supportive housing by a 55% majority vote instead of the two-thirds vote currently required. The bill would extend the same provisions to voter approval of general obligation bonds and would create an exception to the 1% cap on property taxes to service the bonds. Established by Proposition 13 of 1978, the two-thirds vote threshold has long been a thorn in the side of local government finances, with proponents claiming that many past revenue measures have failed despite majority support because of the high bar.
The Taxpayer Protection and Government Accountability Act is a ballot initiative already qualified for the November 2024 election, which will not only reaffirm the two-thirds vote requirement for local special taxes but will additionally require that all new taxes passed by the legislature be approved by voters. Characterized as “Prop. 13 Part 2” (or perhaps Prop. 13 on steroids), this business-sponsored measure seeks to directly confront the desire of Sacramento leaders to ease the passage of new taxes (as proposed in ACA 1) and to characterize revenue measures as “fees” to avoid the two-thirds vote requirement. Of note, a similar initiative was circulated in 2018 by the same proponents but was pulled at the last minute as part of a negotiated deal to prohibit local bans on sugary beverages. This time around, sponsors have indicated that there will be no negotiations, and we expect to see this initiative head to a big-money showdown in the November 2024 election.
ACA 13 by Assemblymember Chris Ward (D-San Diego) is where things get interesting. If passed in the final days of the session and approved by voters, ACA 13 would amend the California Constitution to make it easier to raise taxes by making it harder to pass citizens’ initiatives that seek to enforce Proposition 13’s two-thirds vote requirement for local special tax increases. Because the Taxpayer Protection Act increases the vote threshold on certain measures from a simple majority to a two-thirds supermajority, under ACA 13, the Taxpayer Protection Act would fail passage unless the initiative receives at least that same two-thirds supermajority voter approval.
In a clear attempt to undercut the Taxpayer Protection Act, proponents of ACA 13 argue that the measure will protect local control by preserving the majority vote and preventing a smaller percentage of statewide voters from overruling the actions of local voters in certain circumstances related to essential local services and infrastructure. Opponents of the Taxpayer Protection Act argue that passage of the initiative would result in the loss of billions of dollars annually in critical state and local funding, restricting the ability of local agencies and the state to fund services and infrastructure.
Brownstein’s California State Government Relations team is tracking updates on all of these measures. Reach out with any questions about the status of bills as the legislative session comes to a close and the practical impacts of the ones that ultimately become law.
This document is intended to provide you with general information regarding bills vying for attention in the last days of the California legislative session. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.