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State rent caps, data privacy, major labor bills in limbo as State Legislature reconvenes

SACRAMENTO - State lawmakers will return to the State Capitol on Monday to begin the final session of the year with major legislation pending on a host of topics including data privacy regulations, a statewide cap on rent increases, and significant changes to state labor law.

"This has been a very significant year in Sacramento as lawmakers try to gauge what Governor Newsom will sign and support," said Partnership President and CEO Bill Manis. "After eight years of Governor Brown - who was willing to veto bills he felt were too costly, poorly thought out, or just plain silly - lawmakers have rolled out many bills that push the envelope to see what Governor Newsom will do when presented with similar bills."

Data privacy has been a major issue all year long as last year's deeply flawed bill, the California Consumer Privacy Act (CCPA) is scheduled to go into effect January 1st, 2020. Several common-sense fixes to the CCPA have moved forward in the State Legislature but have yet to cross the finish line. AB 25 (Chau), which clarifies the definition of a consumer in the CCPA is still moving forward as is AB 846 (Burke), which will allow companies to continue customer loyalty programs like frequent flier miles. AB 874 (Irwin) clarifies language in the CCPA on what is personal information under the law, AB 1146 (Berman) clears up language on vehicle recalls and warranty repairs, and AB 1564 (Berman) establishes alternate ways customers can contact companies for customer complaints. Each of these bills will be heard in Senate Appropriations, a committee chair by Senator Anthony Portantino, who represents Glendale, Pasadena, and the foothill cities in the State Senate.

Tenant protections has been championed by Governor Newsom this year and a recently amended bill, AB 1482 (Chiu), will follow newly enacted rent cap legislation in Oregon to cap rent increases across California at 7% per year plus an allowance for inflation (usually 2.5%). This measure, if passed and signed into law, would be in force for the next three years. This bill is also in Senate Appropriations.

Finally, two labor bills will upend established state law regarding employer-employee relations. AB 51 (Gonzalez) prohibits arbitration of labor and employment claims as a condition of employment. This aggressive bill is likely preempted by federal labor law, which clearly allows employers to require agreement to arbitration to settle employee-employer disputes as a condition of employment. AB 51, if passed, will also expose employers to criminal liability and adds another private right of action under the Fair Employment and Housing Act, inviting more litigation at marginal benefit to employees in the state. AB 1066 (Gonzalez) would allow employees who are out on strike during a labor dispute to apply for unemployment insurance after four weeks. Unemployment insurance is intended to assist employees, who, through no fault of their own, are forced to leave their employment. Employers pay for unemployment insurance to assist these employees. Striking workers are still employed and have voluntarily chosen not to work as a negotiating tactic. It is fundamentally unjust for these workers to draw unemployment insurance while they still have employment, thereby depleting these insurance funds for those who truly need assistance. Both of these bills are in Senate Appropriations.

The Partnership will visit Sacramento next week to meet with our lawmakers and will advocate for legislation that will improve the business environment of the state while encouraging the defeat of legislation that harms the economy.

For more information, contact Brad Jensen, Director of Public Policy, at the Partnership or by email bjensen@sgvpartnership.org.

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Governor Newsom signs Partnership-opposed bill adding more environmental reviews to the Cadiz Water Project

IRWINDALE - Today, Governor Gavin Newsom signed SB 307 (Roth), a bill opposed by the Partnership, that sets a terrible precedent of allowing the State Legislature to arbitrarily select infrastructure projects to undergo additional environmental review. This will require the Cadiz Water Project, which has already passed the required environmental review process under the California Environmental Quality Act (CEQA) and defended those clearances 12 times in court, to undergo yet another environmental review.

"The signing of SB 307 is an absolute disaster for the State of California," said Partnership President and CEO Bill Manis. "It will embolden the State Legislature to slap additional environmental reviews on any controversial infrastructure project in the hope of killing them. It is completely unjust and upends the reasonable expectation that there is one set of rules, that if followed, will allow projects to be built and completed."

The Cadiz Water Project is located in the high desert of San Bernardino County. It is estimated the project can produce tens of thousands of acre feet of water each year to be delivered to the urban areas of Southern California. While it has already passed environmental review, and defended those results in court multiple times, it will proceed with the new required review process, assured that it will be cleared again to proceed.

In a statement regarding the signing of SB 307, Cadiz, Inc. said:

“We look forward to working closely with the Governor's office, the State Lands Commission and other State Agencies as we complete this fair, public and transparent procedural step and we are confident that we will continue to demonstrate that the Project is environmentally sound and a worthy part of the solution to California’s persistent water supply challenges. 

“California is home to over a million people who lack access to safe, clean, reliable drinking water. Over the long-term we face a statewide supply-demand imbalance that requires a successful water resiliency strategy, especially if we seek to achieve the State's objectives of providing water and housing for all.   We believe a fact-based evaluation of the Project conducted under the Governor’s watchful eye will undoubtedly conclude we can sustainably contribute to this effort.”

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Partnership joins SGV restaurant owners, chefs and local officials from the Chinese community to fight proposed ban on natural gas

ARCADIA - The San Gabriel Valley Economic Partnership joined Californians for Balanced Energy Solutions at a Chinese-language press conference held in Arcadia this week along with local elected officials, restaurant owners, and chefs from the SGV Chinese community to publicly oppose the proposed ban on natural gas in California homes and businesses. This ban is being seriously considered by the Public Utilities Commission.

"What we heard here today is remarkable," said Jon Switalski, Executive Director of Californians for Balanced Energy Solutions, a grassroots organization of natural gas users. "Small business owners, community leaders and concerned citizens have stood here today to say, "Enough!" The State of California is going in the wrong direction in banning the use of natural gas."

Speakers at the press conference, held at the notable Chinese restaurant Meizhou Dongpo at the Santa Anita Mall, emphasized the devastating economic and cultural effects banning natural gas would have on the Chinese communities of the San Gabriel Valley. The region is especially famous for its Chinese cuisine and numerous restaurants, large and small, which are a major economic driver for cities like San Gabriel, Temple City, Rosemead, Monterey Park, Alhambra and Arcadia. In the recently released California Michelin Guide, 62 SoCal restaurants were recognized with honorable mentions - 15 were in the San Gabriel Valley while only 5 were in Orange County. A prestigious Michelin Star was awarded to Bistro Na's in Temple City, which features traditional upscale Chinese cuisine. The elimination of natural gas for cooking purposes would pose an existential threat to the operation of these important Chinese restaurants.

Chef  Tian Yong of the Michelin Star restaurant Bistro Na's discusses the importance of natural gas to Chinese cuisine.

"These proposed regulations will significantly hurt businesses that cannot operate without natural gas," said Brad Jensen, Director of Public Policy for the Partnership. "The San Gabriel Valley's local economy would be devastated by this new rule, as would residents and businesses across the state."

The Partnership's Director of Public Policy answers questions about the proposed regulations.

More than 90 percent of homes in Central and Southern California use natural gas for home space and water heating or cooking. Poll data show consumers favor natural gas for those uses because it is more affordable than electricity. State policymakers at the California Energy Commission and Public Utilities Commission are considering the adoption of new regulations that would eliminate natural gas use in new and existing homes and replace it with more expensive forms of energy.

Key speakers at the event included City Councilmembers Chin Ho Liao, from San Gabriel, and Sam Kang, from Duarte. Lili Kang, Sam Kang's mother, spoke at the event as she has hosted a Chinese cooking program on the radio for many years. Leo Wang of the Chinese Caterers Association spoke about the challenges facing the broader restaurant industry. Charles Lu, Head Chef at the Shanghailander Palace restaurant in Hacienda Heights, detailed how difficult it is to run a successful restaurant, how thin profit margins are and how hard you have to work to keep your business going. Annie Wei, Director of Business Development at the Partnership played a key role as organizer and translator at the event.

Councilmember Chin Ho Liao of the City of San Gabriel addresses the press.

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Partnership applauds House repeal of "Cadillac Tax" on healthcare plans

IRWINDALE - On Wednesday, the House of Representatives voted overwhelmingly 419-6 to repeal the "Cadillac Tax" provision of the Affordable Care Act which placed a tax on high-cost healthcare plans. This tax was designed to keep costs down by discouraging overly generous healthcare plans but a coalition of both labor unions and major employers opposed the tax - one of the few areas both parties found common ground on in healthcare policy.

Every San Gabriel Valley representative in the House voted for repeal.

"We are delighted to see our local lawmakers in Washington respond to the concerns of our businesses and residents and vote for repeal of the Cadillac Tax," said Partnership President & CEO Bill Manis. "Our thanks to Reps. Grace Napolitano, Norma Torres, Judy Chu, Adam Schiff, Linda Sanchez and Gil Cisneros for rescinding this tax."

The "Cadillac Tax" has actually never been enforced, having been long postponed as part of the implementation of the Affordable Care Act. The repeal legislation will now move to the Senate. The Partnership strongly encourages the Senate leadership to take up the repeal legislation in a timely manner.

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Partnership supports SR-71 freeway federal grant application

IRWINDALE - The SR-71 freeway that runs through Pomona down to Corona remains incomplete, but the Partnership was pleased to support a new federal grant application this week, to be submitted by CalTrans and LA County Metro, that may obtain $25 million in additional funding to finish the project. 

"Finishing the 71 freeway is a top transportation priority for the Partnership," said President & CEO Bill Manis. "The 71 is a key freight corridor connecting the 10 freeway to Riverside County. It's high time that we expand and finish that freeway through Pomona."

CalTrans and Metro will soon submit an application to the Department of Transportation's Better Utilizing Investments to Leverage Development (BUILD) Grant Program. A BUILD grant award would complete the funding for the entire SR-71 project and expedite its construction to close the last remaining freeway gap in Los Angeles County.

Nearly 85 percent of the total construction costs to complete the SR-71 freeway come from local sources.

For additional information, contact Brad Jensen, Director of Public Policy at (626) 856-3400 or bjensen@sgvpartnership.org.

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Partnership opposes tariffs on Mexico, backs more funding for Customs and Border Protection

Irwindale – This past week, the San Gabriel Valley Economic Partnership has weighed in on two significant federal issues that would have a major impact on our local economy. The Partnership joined the U.S. Chamber of Commerce and 140 other business groups from around the country to oppose the Trump Administration’s proposal to impose a five percent tariff on all goods imported from Mexico.

The proposed tariffs put at risk an upcoming vote in Congress to pass the United States-Mexico-Canada Agreement (USMCA), a new trade pact that works to eliminate barriers to international commerce, promote conditions of fair competition, and to further trilateral and regional cooperation between the major nations of North America.

“Tariffs on Mexican imports would not only harm the American economy as a whole, but greatly harm our own economy here in the San Gabriel Valley,” said Bill Manis, Partnership President and CEO. “The tariffs would have increased the cost of goods our residents buy – from avocados to automobiles – as well as hurt our local businesses that trade extensively with Mexico.”

The Partnership also joined the U.S. Chamber to support additional funding for Customs and Border Protection (CBP) operations for the remainder of this fiscal year. This funding would support more CBP staffing, overtime, and travel costs for the ongoing redeployment of officers to address the influx of immigrants along the Mexican border. The lack of available officers at key ports of entry has dramatically increased wait times and slowed the flow of goods and people. In April of this year, it took seven hours for a freight truck to cross the Bridge of the Americas in El Paso, Texas; a year ago it took less than an hour to clear inspection and enter the U.S. Additional funding will provide Customs and Border Protection with greater flexibility on staffing and will hopefully provide better service for the flow of goods between the two countries.

For more information about these two positions, contact Brad Jensen, Director of Public Policy at (626) 856-3400 or bjensen@sgvpartnership.org.

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Partnership supports key community development bill, financial capability for utilities' disaster liability

Irwindale - The San Gabriel Valley Economic Partnership's Legislative Action Committee voted to support two important bills, one on community redevelopment and the other on the financial capability of utlities' disaster liability as well as opposing a cannabis licensing bill that would have placed strict mandates on local governments.

The Partnership supports SB 5 (Beall), a bill that would allow local governments to collaborate on state-approved redevelopment plans, which would be funded by reduced contributions to the local Education Revenue Augmentations Funds (ERAFs), awarded to state-approved projects. This funding could be used for 1) affordably housing; 2) transit-oriented development; 3) infill development; 4) revitalizing and restoring neighborhoods, and 5) planning for sea-level rise. It is estimated that if passed, SB 5 will make $1-2 billion available for local governments to use for these purposes. SB 5 passed the Senate and is now in the Assembly awaiting assignment to a policy committee.

"The dissolution of redevelopment left cities with virtually no resources to address revitalization and development problems," said Partnership President & CEO Bill Manis. "By restoring some funding and making it available to local governments, these issues of housing and community development can now be better addressed."

The Partnership's Legislative Action Committee also voted to oppose AB 1356 (Ting), a bill that would have placed a mandate on cities that supported recreational cannabis legalization to issue a required number of cannabis business permits. Local permitting delays are widely viewed as one of the main reasons legal cannabis businesses are struggling to establish themselves. AB 1356 did not pass the Assembly and will not move forward this year.

Finally, the Partnership's Committee also voted to support AB 235 (Mayes), which requires the Public Utilities Commission to use a financial "stress test" to determine how much a utility can afford to pay out in liability claims without affecting ratepayers and its own ability to provide power. The bill provides that authority to the Commission for wildfires that occur in 2019 or in coming years.

For more information on these key bills, contact Brad Jensen, Director of Public Policy at the Partnership - (626) 856-3400 or bjensen@sgvpartnership.org

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Caps on rent increases, Dynamex independent contractor bills passed by State Assembly, SGV Housing Trust Fund passes State Senate

Irwindale - In a whirlwind of activity, each chamber of the State Legislature went through a full slate of bills these past two weeks as the deadline for legislation to clear their original house arrived today, May 31st. Major bills on the environment, energy, taxation, labor issues, regulations and housing came before lawmakers in Sacramento. While many passed to the opposite chamber, some bills stall and died on the floor. 

Among the key bills the Partnership was watching was AB 5 (Gonzalez), a key bill that addresses the incredibly important Dynamex decision, which upended established state employment law and would require virtually all independent contractors to be reclassified as full employees. AB 5 has been substantially amended to carve out exemptions for particular occupations and industries but remains deeply flawed. Our thanks to Assemblymembers Blanca Rubio, Jim Frazier, Brian Dahle, Jim Cooper, Jay Obernolte, Susan Eggman, Bill Quirk, and Sydney Kamlager-Dove who spoke on the Assembly floor and called for additional amendments to address the deeply problematic elements of AB 5. 

A significant housing bill that places caps on rent increases passed the Assembly on Wednesday. AB 1482 (Chiu) passed the Assembly 43-31 with 6 members not voting. The bill was amended to appease realtor groups, with the rent cap was raised to 7% a year plus inflation (which is typically 2.5% in California) until 2023, when the caps expire. The bill also does not apply to owners with less than ten single-family homes. AB 1481, a companion bill to AB 1482, would have made it illegal for landlords to evict tenants without just cause. AB 1481 did not come up for a floor vote in the Assembly - it is now dead for the year.

The Partnership opposed AB 1482. While spikes in rent are deeply troubling for the state's housing crisis, and additional protections for tenants are needed, placing caps on rent increases - even at a higher rate of percentage - may end up hurting more tenants statewide than it protects. By capping rent increases, this now incentivizes landlords across the state to raise rents each year until the sunset date.

How our SGV Assemblymembers voted on AB 1482:

Yes - Calderon, Chau, Friedman, Holden, Rodriguez

No - Chen, Rubio

Not Voting - C. Garcia

Another significant bill opposed by the Partnership was AB 764 (Bonta), which would have prohibited retailers from offering coupons for sugary beverages. This would have a detrimental effect on small businesses who would be competing with online retailers who would not be prohibited from offering coupons or discounts on sugary beverage purchases. Although this bill was expected to be voted on, it did not come up for a floor vote and is done for the year.

For additional information about these and other bills, contact Brad Jensen, Director of Public Policy bjensen@sgvpartnership.org or (626_ 856-3400.

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SGV Lawmakers Cast Major Votes in Sacramento

IRWINDALE - Major pieces of legislation are moving in Sacramento as bills move out of the Appropriations Committees and on to the floor for a full vote of the Assembly or Senate. SGV lawmakers have cast significant votes on key business bills ranging from biomethane incentives to sugary beverage warning labels and additional environmental reviews for infrastructure projects.

"We are very appreciative of our SGV lawmakers who have been responsive to the Partnership and the local business community, especially Senators Susan Rubio, Bob Archuleta, and Ling Ling Chang, and Assemblymemembers Blanca Rubio, Freddie Rodriguez and Philip Chen," said Partnership President and CEO Bill Manis. "They're listening to their constituents here in the San Gabriel Valley and voting accordingly."

Here's a rundown of key bills the Partnership has been engaged on in the past week along with the votes of our SGV state legislators:

SB 307 (Roth): This bill adds another round of environmental review for the Cadiz Water Project, which has already completed the full environmental review process including litigating the results in several court cases. The Partnership opposes this bill which sets a terrible precedent of adding more environmental reviews for major or controversial infrastructure projects at the whim of the legislature rather than accepting the results of the established review process.

SB 307 passed the Senate with 21 ayes, 11 noes, and 6 abstentions/not voting. It will now move to the Assembly.

How our SGV Senators voted:

Yes - Portantino, Leyva, Archuleta; No - Chang; Abstention - Rubio

SB 347 (Monning): This bill would require businesses that sell beverages with added sugar to place warning labels about the health effects of too much sugar on their packaging or on the beverage dispensaries at a restaurant. Businesses in California offer thousands of beverages for sale from across the globe, imported from small and large companies alike. Placing the burden on business owners to affix warning labels on their products before the point of sale, as well as hang signs and label menus would be an expensive and onerous mandate. This exposes beverage manufacturers and food retailers to lawsuits, fines and penalties based on state-only labeling requirements for drinks with added sugar.

SB 347 passed the Senate after a difficult vote with 21 ayes, 11 noes, and 6 abstentions/not voting. It will now move to the Assembly.

How our SGV Senators voted:

Yes - Portantino, Leyva; No - Archuleta, Chang; Abstention - Rubio

AB 161 (Ting): This bill mandates that businesses in California switch to offering electronic receipts as the default transaction record between a consumer and a business. This mandate comes with high financial costs as well as major privacy concerns. Businesses, small and large, throughout the state use “point of sale” (POS) systems to manage a wide variety of financial information and document transactions by generating traditional receipts. Many of these POS systems are not currently equipped to generate electronic receipts. In order to comply with the requirements in AB 161, many businesses would have to replace their POS systems, disproportionately impacting smaller businesses and, depending on the number of registers, could impose massive costs on these businesses. By requiring electronic receipts, this bill requires businesses to collect more information from customers, such as email addresses or cell phone numbers, making these businesses liable if their data systems are hacked and this contact information is stolen.

AB 161 passed the Assembly with 43 ayes, 24 noes, and 13 not voting/abstentions.

How our SGV Assemblymembers voted:

Yes - Calderon, Chau, Friedman, C. Garcia, Holden; No - Chen; Abstentions - Rodriguez, Rubio

For more information, contact Brad Jensen, Director of Public Policy at the Partnership - bjensen@sgvpartnership.org or (626) 856-3400.

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Partnership opposes AQMD sales tax bill, supports new state Commission on the Future of Work

IRWINDALE - As thousands of bills in the California State Legislature now await the decision of the Appropriations Committees to see if they will move forward, this week the Partnership decided to oppose a key tax bill, SB 732 by Senator Ben Allen, which authorizes the South Coast Air Quality Management District (SCAQMD) to place a transition and use tax measure on the ballot in the four major urban counties of Southern California.

The Partnership also supported if amended SB 730 (Stern), which creates a new state commission on the future of work as well as supporting SB 714 (Umberg), a bill which allows the continued development of innovative, low-risk value-based arrangements between large employers and healthcare systems, hospitals and providers.

"Air quality is a critically important factor in the conditions of public health and the South Coast Air Quality Management District deserves credit for their ongoing efforts to improve our air," said Partnership President & CEO Bill Manis. "However, SB 732, if passed, would place a 0.25 percent transition and use tax on all sales in the four major SoCal counties.That tax, if approved by voters, would generate nearly half a billion dollars - three times the District's current operating budget - with no sunset on the tax and an option to incrementally increase it to 1 percent. That's a lot of cash - some $2 billion dollars at the full 1 percent tax - when the District has issued no spending plan, no list of projects, no analysis of the most effective technology incentive programs to pursue, and no clear administrative process for how the District will hold itself accountable for spending this immense pot of money let alone whether these funds will substantially improve our air quality in the region."

The Partnership has joined with key allies like the California Business Roundtable, California Taxpayers Association, California Business Properties Association, California Food Producers, the California Building and Owners Association, and the California Manufacturing and Technology Association to oppose SB 732. The bill is scheduled to be heard in Senate Appropriations Committee on Monday, May 13th.

For more information, contact Partnership Director of Public Policy, Brad Jensen at bjensen@sgvpartnership.org or (626) 856-3400.

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