Southwest California Legislative Council agenda - 5/2017

MEETING AGENDA

Monday, May 22, 2017

Realtor House, 26529 Jefferson Ave, Murrieta

Presiding: Don Murray, Chair

2017 Strategic Initiatives

Budget & Tax Reform / Job Creation and Retention / Healthcare / Infrastructure & The Environment/ Public Safety

Call to Order, Roll Call & Introductions: 12:00 p.m.

Chair Report - Conflict of Interest Statement

Approval of Minutes Action

Legislative Report #5 Action

1. AB 1576 (Levine) Gender discrimination: pricing: goods.

2. SB 567 (Lara) Taxation.

3. AB 841 (Weber) Pupil nutrition: food and beverages: advertising: corporate incentive programs.

4. AB 245 (Gomez) Hazardous waste: facilities.

5. AB 1005 (Calderon) Professions and vocations: fines: relief.

6. SB 167 (Skinner) Housing Accountability Act.

7. SB 540 (Roth) Workforce Housing Opportunity Zone.

8. AB 1565 (Thurmond) Work hours: overtime compensation: executive, administrative, or

professional employees.

Guest Speaker/Presentation Cherise Manning, Chair, Temecula Valley Convention & Visitors Bureau

Speaker and Chamber Announcements Information

Our lunch sponsor IE Commerce Business to Business Thank You

Adjourn – Next Meeting June 19, 2017

Follow us on :

The Southwest California Legislative Council Thanks Our Partners:

Southwest Riverside Country

Association of Realtors

Metropolitan Water District of Southern

California

Elsinore Valley Municipal Water District

CR&R Waste Services

Abbott Vascular

Temecula Valley Chamber of Commerce

Murrieta Chamber of Commerce

Lake Elsinore Valley Chamber of

Commerce

Wildomar Chamber of Commerce

Menifee Valley Chamber of Commerce

Perris Valley Chamber of Commerce

Commerce Bank of Temecula Valley

California Apartment Association

Southwest Healthcare Systems

Temecula Valley Hospital

EDC of Southwest California

Paradise Chevrolet Cadillac

The Murrieta Temecula Group

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180AB1576

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB567








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http://www.abbottvascular.com/us/index.html

http://temecula.org/

http://www.murrietachamber.org/

http://www.lakeelsinorechamber.com/

http://www.lakeelsinorechamber.com/

http://wildomarchamber.org/

http://www.menifeevalleychamber.com/

http://perrischamber.org/

https://www.commercebanktv.com/

http://caanet.org/

http://www.swhealthcaresystem.com/

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https://www.facebook.com/SWCLC

https://twitter.com/SWCalAdvocacy

http://www.iecommerceb2b.com./

Southwest California Legislative Council

Southwest California Legislative Council Lake Elsinore Chamber of Commerce

Menifee Valley Chamber of Commerce


Perris Valley Chamber of Commerce

Temecula Valley Chamber of Commerce

Wildomar Chamber of Commerce

Meeting Minutes

Monday, April 17, 2017

2017 Chair: Don Murray

Legislative Consultant: Gene Wunderlich

Directors Attendance: Adam Ruiz

Alex Braicovich

Ali Mazarei

Andy Morris

Ben Benoit

Brad Neet

Carl Johnson

Darci Castillejos

Denee Burns

Dennis Frank

Don Murray

Eric Cross

Gene Wunderlich

Greg Morrison

Joan Sparkman

John Kelliher

Judy Guglielmana

Kassen Klein

Chamber Executives/Guest Attendance Alice Sullivan

Andy Abeles

Darrell Connerton

Debbie Herrera

Deni Horne

Glenn Miller

Heather Perry

Izzy Murguia

Jeff Bott

John Hunneman

Kayla Charters

Kimberly Niebla

Laura Turnbow

Meggan Valencia

Meggan Valencia

Myke Munroe

Myke Munroe

Patrick Ellis

Robert Middleton

Tom Stinson

Walter Wilson

Approval of Minutes Action Motion to approve minutes seconded and carried.

Legislative Report #2 2017 Action 1. AB 100 (Chen) Taxation: Homeowners Exemption and Renters Credit This bill increases the homeowner’s

property tax exemption and the renters credit amounts. This bill would provide that no appropriation is made and

the state shall not reimburse local agencies under the provisions for property tax revenues lost by them pursuant

to the bill. Motion to SUPPORT seconded and carried.


2. AB 890 (Medina) Local Land use Initiatives: Environmental Review Would virtually outlaw local initiatives

and shift political power from the citizens to local/elected officials by requiring all local initiatives to undergo a

CEQA review, and prohibiting any initiative from going to the ballot if it has the potential to directly or

indirectly impact the environment. This bill would require a proponent of a proposed initiative ordinance, at the

time he or she files a copy of the proposed initiative ordinance for preparation of a ballot title and summary with

the appropriate elections official, to also request that an environmental review of the proposed initiative

ordinance be conducted by the appropriate planning department, as specified. The bill would require the

elections official to notify the proponent of the result of the environmental review. The bill would require the

county board of supervisors, legislative body of a city, or governing board of a district, if the initiative ordinance

proposes an activity that would result in a direct or indirect physical change in the environment, to order that an

environmental impact report or mitigated negative declaration of the proposed ordinance be prepared. Once the

environmental impact report or mitigated negative declaration has been prepared, the bill would require the

governing body to hold a public hearing and either approve or deny the proposed ordinance, instead of allowing

the proposed ordinance to be submitted to the voters. Motion to OPPOSE seconded and carried.

3. AB 182 (Waldron) Heroin and Opioid Public Education (HOPE) Act. This bill requires the Department of

Health Care Services to develop, coordinate, implement, and oversee a comprehensive, multicultural public

awareness campaign designed to combat opioid abuse, and requires an annual program report. No legislative

analysis; Tom Stinson to bring a report on the fiscal impact. Motion to SUPPORT seconded and carried.

4. AB 42 (Bonta) Bail Reform. Bail: Pretrial Release.

5. SB 10 (Hertzberg) Bail: Pretrial Release. This bill would state the intent of the Legislature to enact legislation

to safely reduce the number of people detained pretrial, while addressing racial and economic disparities in the

pretrial system, to ensure that people are not held in pretrial detention simply because of their inability to afford

money bail. This bill would implement a revised pretrial release procedure. The bill would require, except when

a person is arrested for certain felonies, that a pretrial services agency conduct a pretrial risk assessment on an

arrested person and prepare a pretrial services report that includes the results of the pretrial risk assessment and

recommendations on conditions of release for the person immediately upon booking. The bill would require the

pretrial services agency to transmit the report to a magistrate, judge, or court commissioner and the magistrate,

judge, or court commissioner, within an unspecified number of hours, to issue an oral or written order to release

the person, with or without release conditions, subject to the person signing a specified release agreement.

Motion to OPPOSE AB 42 and SB 10 seconded and carried.

6. SCA 6 (Wiener) Local Transportation Measures: Special Taxes: Voter Approval Lowers the vote threshold

for cities, counties, or special districts to levy a special tax for transportation infrastructure projects from 2/3 to

55%. This measure would provide that the amendments of the constitution in this measure shall take effect on the

date of the election (1) Except as otherwise provided in paragraph (2), a local government shall not impose,

extend, or increase any special tax unless and until that tax is submitted to the electorate and approved by two-

thirds of the voters voting on the proposition. A special tax is not deemed to have been increased if it is imposed

at a rate not higher than the maximum rate so approved. (2) The imposition, extension, or increase of a special

tax, as may otherwise be authorized by law, by a local government for the purpose of providing funding for

transportation purposes requires the submittal of the tax to the electorate and approval of 55 percent of the voters

voting on the proposition. A tax provides funding for transportation purposes if 100 percent of the net revenues

from the tax, after collection and administrative expenses, is dedicated to transportation programs and projects.

Motion to OPPOSE seconded and carried.

7. AB 1316 (Quirk) Public Health Childhood Lead Poisoning: Prevention. Health Care Mandate. Drives up

health care premiums and costs by mandating health care plans and insurers to cover blood lead poisoning

screening for all children even those not at risk for lead poisoning. This bill would instead require the standard of

care to be that all children be screened for blood lead levels and would clarify that the lead screening would not

be paid for by funds from the Childhood Lead Poisoning Prevention Fund. Motion to OPPOSE seconded and

carried.


8. AB 421 (Santiago) Hazardous Substances: Liability: Responsible Parties. Extends Superfund Liability to

Emissions into the Air. Imposes statutory liability on businesses and individuals for clean-up recovery costs

associated with deposits or redeposits of certain substances that were emitted into the air under a statutory

scheme that places the burden of proof on the defendant. Provides that for a cause of action under the Carpenter-

Presley-Tanner Hazardous Substance Account Act, the term "disposal" also includes emissions into the air.

Motion to OPPOSE seconded and carried.

9. AB 1716 Sales and Use Taxes: Exemption: Manufacturing Income Taxes. Motion to SUPPORT seconded

and carried.

Guest Speaker/Presentation Information

Rick Bishop, WRCOG: There have been proposals to increase Transportation Uniform Mitigation Fee or

TUMF. Fees are applied to new development to offset transportation growth. It is recommended to freeze fess

over the next two years for the next phase. The goal is to improve traffic flow within Riverside County. Over 90

projects have been completed, including over 50 bridges and interchanges, averaging to $680 million in

improvements.

Speaker and Chamber Announcements

Senator Jeff Stone

Reported by Glenn Miller: Legislative Update

Assemblymember Melissa Melendez

Reported by Deni Horne: Legislative Update

Assemblymember Marie Waldron

Reported Tom Stinson: Legislative Update

Temecula Chamber of Commerce

Reported by Alice Sullivan: Upcoming Events


Reported by Patrick Ellis: Upcoming Events

Menifee Chamber of Commerce

Upcoming Events

Adjournment: 1:33 pm

Next meeting Monday, May 22, 2017


Legislative Item #1 Job Creation & Retention Action

AB 1576, as amended, Levine. Gender discrimination: pricing: goods.

Recommended action: OPPOSE

Presentation: Gene Wunderlich

Summary:

Gender Pricing Mandate. Unfairly exposes companies to costly, frivolous litigation with an automatic $4,000 in

statutory damages for alleged gender pricing discrimination based upon different consumer prices for female versus

male products that businesses will be forced to settle to avoid costs or spend significant legal fees demonstrating those

differences are based upon objective, non-gender related specific factors. This bill has been labeled as a JOB

KILLER by the CalChamber.

Description:

Existing law: Existing law, the Gender Tax Repeal Act of 1995, prohibits a business establishment from

discriminating on the basis of gender with respect to the price charged for services of similar or like kind. Existing law

excepts from this prohibition price differences based specifically upon the amount of time, difficulty, or cost of

providing the services.

This bill, This bill would enact the Gender Price Discrimination Act. The bill would amend the Gender Tax Repeal

Act of 1995 to additionally prohibit a business from discriminating with respect to the price charged for the same, or

substantially similar, goods because of the gender of the targeted user of the good. The bill would

authorize specifically the Attorney General, a district attorney, or a city attorney to prosecute a civil action for

preventive relief for a violation of this prohibition. the Gender Tax Repeal Act of 1995.

Arguments in support:

According to the author, while the Unruh Civil Rights Act prohibits discrimination in business establishments,

generally, and the Gender Repeal Tax Act of 1995 prohibits gender discrimination in the pricing of "services," there is

no statute that clearly prohibits gender discrimination in the pricing of "goods." Therefore, the author states, "this bill

creates the Gender Price Discrimination Act, which would prohibit discrimination for consumer goods."

As an example of the need for this bill, the author cites a 2015 report conducted by the New York City Department of

Consumer Affairs which "looked at nearly 800 products that were marketed toward men and women and found that

women’s products cost more 42% of the time and on average cost 7% more. Many times the only difference between

these products was the color. This bill would prohibit price differences for like or substantially similar products based

on the targeted user of the good if those price differences are based on the gender of the targeted user of the good."

Supporters contend that gender-based price discrimination is a civil rights issue that primarily harms women, who, on

average, face the double burden of lower wages and higher prices for consumer goods.

Arguments in opposition:

Retail and other business groups oppose this bill for a variety of reasons. First, opponents stress that prices are

determined by a complex set of market factors that this bill does not account for; prices are not determined merely by

the labor, materials, or even the overall quality of the product. Second, opponents contend that this bill will require

businesses, especially retailers, to survey all of their inventory to determine if: 1) a good is targeted to a person of a

particular gender; 2) if so, if the goods are "substantially similar or of like kind"; and 3) if any price differences reflect

"gender-neutral" factors. Third, in light of the ambiguities in making such determinations, opponents contend that the

bill will lead to costly and time-consuming litigation as litigants and courts try to sort out the meaning of the bill's

terms. Finally, opponents note that retailers will have to make these initial determinations on their own. In doing so,

they will need to consider whether certain colors or other features are considered "male" or "female." The coalition

believes that this requirement to "gender-identify" all products "seems like a step backward, especially as our society

works to eliminate gender bias."

The coalition is also concerned about the likelihood of litigation, especially given that the bill "imposes pricing

requirements on a highly a complex supply chain that constantly changes." Under this bill, the coalition claims,



"thousands of products would be subject to the scrutiny of the legal system, even products with price differences

ranging from a penny to several dollars."

In short, the coalition believes that "AB 1576 is extremely subjective and consequently invites enforcement by the

Attorney General, district attorney, or city attorney." Finally, the coalition notes that this bill offers no guidance as to

what goods are considered gender-specific and thus subject to the law. In order to know if a product was "targeted" to

a particular gender, businesses would have to be aware of all of the advertising and marketing associated with all their

goods. Some products, the coalition believes, may be clearly labeled for a specific gender and placed in a section of the

store labeled for a specific gender. But many more products will not "fall neatly" into those categories. "For example,"

the coalition wonders, "is toothpaste considered a gender-specific product if a female was featured in an advertisement

and a competitor's advertisement featured a male?" Finally, the coalition notes that retailers will have to make these

determinations on their own and in doing so they will need to consider whether certain colors or other features are

considered "male" or "female."

Support: (Verified 5/16/17)

California National Organization of Women

Planned Parenthood Affiliates of California

United Domestic Workers of America,

AFSCME Local 3930 U.S.

Representative Jackie Speier Women's Foundation of

California

YWCA San Francisco and Marin

Opposition: (Verified 5/16/17) American Apparel Footwear Association

California Chamber of Commerce

California New Car Dealers Association

California Retailers Association

Consumer Specialty Products Association

Grocery Manufacturers of America

National Federation of Independent Businesses

The Toy Association

Valley Industry and Commerce Association

Status: Assembly floor.

Senate Floor votes:

Assembly floor votes:

Legislative Items #2 Budget & Taxation Action

SB 567, as amended, Lara. Taxation. Recommended action: OPPOSE


Summary:

Decouples state law from federal law in three areas: basis step-up on inherited property, deductibility of executive pay,

and charitable remainder trusts.

Proposes multiple tax increases on California employers, including requiring payment of capital gains on the

inheritance of a family business as well as eliminating a deduction for corporations with regard to CEO compensation,

when California already has the highest personal income tax and sales tax rates in the country, as well as one of the

highest corporate tax rates, which will discourage job growth in California.

Description:

California law does not automatically conform to changes to federal tax law, except for specific retirement provisions.

Instead, the Legislature must affirmatively conform to federal changes. Conformity legislation is introduced either as

individual bills to conform to specific federal tax changes, like the Regulated Investment Company Modernization Act



(AB 1423, Perea, 2011), or as one omnibus bill that provides that state law conforms to federal law as of a specified

date, currently January 1, 2015 (AB 154, Ting, 2015).

Senate Bill 567 decouples state law from federal law to make three changes:

Repeals basis step-up on inherited property for taxpayers with more than $2 million (joint)/$1 million (single) in

income in the taxable year in which property is inherited. The change applies to property acquired or inherited on or

after January 1, 2018. The measure applies the change to both the Personal Income and Corporation Tax. SB 567

additionally precludes the taxpayer from adding any estate tax paid to the basis of any inherited assets they receive.

Provides that state law does not conform to federal law’s exceptions from the general rule precluding firms from

deducting remuneration paid above $1 million to CEOs and other covered employees, beginning in the current taxable

year. As a result, taxpayers could not deduct performance-based or commission compensation above $1 million. The

change applies commencing in the 2018 taxable year.

Increase the charitable remainder requirement from 10% to 40% for taxable years, for charitable remainder trusts

formed on or after January 1, 2018. This bill would take effect immediately as a tax levy.

For the 5/3/17 version of SB 567, according to the Franchise Tax Board (FTB), eliminating basis step-up on inherited

property results in revenue gains of $1 million in 2017-18, $3.9 million in 2018-19, and $7.9 million in 2019-20, while

decoupling state law from federal law regarding executive compensation results in gains of $110 million in 2017-18,

$100 million in 2018-19, and $100 million in 2019-20. FTB states that it lacks the data necessary to calculate the

revenue effect of the increase in the charitable remainder, but states that it is probable that it would result in revenue

losses due to increased charitable deductions because of the bill’s increased remainder requirement. FTB’s revenue

estimate of the 5/15/17 version of the bill is pending.


According to the author, “SB 567 will eliminate California’s largest tax loopholes used by the highest income earners.

Federal tax law, which California conforms to, provides many opportunities for the wealthiest of our state to avoid

paying their fair share in taxes. Millionaires have mastered our tax code to take advantage of popular loopholes like the

‘Basis step-up’ option on inherited property, performance based compensation deductions, and charitable remainder

trusts. As a result, the super-rich and the largest corporations in California do not pay their fair share in taxes. Wealthy

Californians have financed a sophisticated and astonishingly effective apparatus for shielding their fortunes.

Millionaires and billionaires pay a lower federal tax rate than an average worker. Closing these loopholes will provide

a fair tax system for all Californians.”


SB 567 seeks to impose significant tax increases on California employers, both family owned businesses as well as

corporations. Specifically, SB 567 targets family owned businesses that transfer the business upon death to other

family members. Under SB 567, the family members who inherit the business/property, would be forced to pay capital

gains on the property that has appreciated in value, if the family member(s) have an adjusted gross income of

$1,000,000 or more. This change would take California out of conformity with federal law, and place another layer of

taxes on a small group of Californians paying the highest personal income tax, at 13.3%. Recent data from the

Legislative Analyst’s Office indicates that the top one percent of income earners in California paid half of all income

taxes received. These top income earners upon which the General Fund is so reliant, are also the same individuals who

would be exposed to this tax increase under SB 567, and who have the most resources to change their residences to

another state to avoid even higher taxes. California should not continue to target these high-earners with additional

taxes, when they already contribute such a significant amount of revenue into the General Fund.

California already has the highest personal income tax and sales tax rates in the country, and one of the highest

corporate tax rates as well. Californians just approved various tax increases and extensions on the November 2016

ballot. Additionally, state appropriations may exceed the Proposition 4 (Gann) limit, which over the next two years

may trigger significant tax reductions. Substantially increasing California’s revenue again by targeting high-earners

and businesses, as proposed by SB 567, is punitive and will ultimately harm California’s economy and General Fund.


Support: (Verified 5/16/17) State Building and Construction Trades Council,

California Reinvestment Coalition,

California Tax Reform Association,

Service Employees International Union

Opposition: (5/16/17) Advanced Medical Technology Association,

AdvaMed;

Air Logistics Corporation;

Association of California Life and Health Insurance

Companies (ACLHIC);

Biocom;

Biotechnology Innovation Organization;

California Bankers Association;

California Business Properties Association;

California Chamber of Commerce;

California Life Sciences Association;

California Manufacturers & Technology Association;

California Tank Lines, Inc.;

California Taxpayers Association;

Chemical Transfer, Co.;

CompTIA;

Contra Costa Taxpayers’ Association;

Council on State Taxation;

Distilled Spirits Council;

Family Business Association of California;

Kern County Taxpayers Association;

National Federation of Independent Business;

Orange County Business Council;

Orange County Taxpayers Association;

Organization for International Investment;

San Gabriel Valley Economic Partnership;

Solano County Taxpayers Association (SCTA);

Superior Tank Wash, Inc.;

West Coast Leasing;

Western States Petroleum Association

Status: Senate Committee on Governance & Finance

Senate Floor votes:


Legislative Item #3 Job Creation & Retention & Healthcare Action

AB 841, as amended, Weber. Pupil nutrition: food and beverages: advertising: corporate incentive

programs. Recommended action: OPPOSE


Summary:

Limits businesses ability to partner with schools on projects and programs that are mutually beneficial.

Description:

Existing law requires, as a condition of receipt of funds to reimburse a school for free and reduced-price meals sold or

served to pupils, a school or school district to comply with specified requirements and prohibitions, including not

selling or serving a food item that contains artificial trans fat.

Existing law provides that the only competitive snack foods that may be sold to pupils are fruit, vegetable, dairy,

protein, or whole grain-rich food items, in an elementary, middle, or high school, as provided.

This bill would prohibit a school or school district from advertising food or beverages or the corporate brand of the

food or beverages, as provided.

The bill would prohibit a school or school district from participating in a corporate incentive program that rewards

pupils with free or discounted foods or beverages when the pupils reach certain academic goals or that provides funds

to schools in exchange for consumer purchases of foods and beverages, as provided.




The bill would define “advertising,” “brand,” and “food or beverage” for these purposes. The bill would provide that it

is the intent of the Legislature that the governing board of a school district annually review its compliance with these

provisions.

Arguments in favor:

According to the author, “AB 841 seeks to prevent the growing obesity, diabetes, and tooth decay crisis that we see in

younger adults, adolescents, and children. These youth and children begin developing their eating habits at a very

young age. Children spend most of their time at school; the products that are provided and advertised to them there are

the products that they are most likely to crave and consume. By eliminating the advertising of these unhealthy

products, our hope is that we can start to build healthier eating habits amongst our youth and stem the growing chronic

disease epidemic in our state. AB 841 simply codifies the federal regulation relating to local school wellness policy

requirements preventing schools from marketing unhealthy foods and beverages on participating school campuses

during school hours pursuant to the Healthy, Hunger-Free Kids Act. We believe it is essential to codify this federal

regulation into state law as the regulation may not continue to exist under the current federal administration.”

The bill prohibits school from participating in corporate incentive programs that reward pupils with free or discounted

foods or beverages when they reach certain academic goals. Federal wellness policy marketing standards do not

restrict such incentive programs. The bill also includes a prohibition on participation in a corporate-sponsored program

that provides funds to schools in exchange for consumer purchases of foods or beverages. This could include label

redemption programs (e.g. Box Tops for Education, cookie dough or candy sales, or restaurant promotions where a

portion of proceeds are donated to a school in return for school community members’ patronage).


Opponents state that this bill would impose costly and confusing restrictions on foods and beverages in schools that

already meet school nutrition standards. The bill would needlessly and senselessly prohibit schools from participating

in programs that provide funding to schools in exchange for consumer purchases of foods and beverages, including

common fundraisers like door-to-door food sales to support a school sports team, as well as incentive programs such as

label redemption programs and nights at restaurants where proceeds are donated to local schools. One of the leading

school philanthropic incentive programs has provided over $50 million to over 9,000 California schools. Schools

frequently use these donations to support healthy lifestyles in children through purchases of fitness and playground

equipment.

This measure would restrict foods and beverages sold in schools by prohibiting certain purported “advertising”

including logos and company names. In addition, the measure would prohibit schools from participating in a programs

that provide funding to schools in exchange for consumer purchases of foods and beverages, including common

fundraisers like door-to-door food sales to support a school sports team, and widely-used incentive programs such as

label redemption programs and nights at restaurants where proceeds are donated to local schools.

AB 841 is opposed by manufacturers, retailers, grocers, restaurants, and farmers – together representing the largest

sectors of the California economy – because it would impose without any scientific justification costly and confusing

restrictions on schools for foods and beverages that already meet California’s nation-leading school nutrition

standards, and would needlessly and senselessly prohibit schools from receiving needed and widely-used donations

that support basic school functions.

AB 841 is built on the faulty premise that methods of selling or promoting products leads to harmful results to

nutritional habits. Simply put, there is no such correlation.

Support: (Verified 5/16/17) American Heart Association/American Stroke Association

(Sponsor)

Public Health Advocates (Sponsor)

American Academy of Pediatrics

California Food Policy Advocates

California Pan-Ethnic Health Network

California School Nurses Organization

California Teachers Association

Latino Coalition for a Healthy California


Opposition: (Verified 5/16/17) Agricultural Council of California

American Beverage Association

Association of Food, Beverage and Consumer Products

Companies


California League of Food Processors

California Manufacturers & Technology Association

California Restaurant Association


Dairy Institute of California

Grocery Manufacturers Association

National Federation of Independent Business

School Employers Association of California

Small School Districts Association

Status: Assembly Committee on Education

Senate Floor votes:



AB 245, as introduced, Gomez. Hazardous waste: facilities. Recommended action: OPPOSE


Summary:

Part of a suite of bills aimed at stifling waste processing functions in the state like AB 246, AB 248 & AB 249

previously opposed by the SWCLC.

Imposes unnecessary and substantial new costs on hazardous waste permit applicants by requiring hazardous waste

permit applicants to pay for a public hearing within 90 days of the submittal of a hazardous waste renewal application,

notwithstanding the fact that current regulations and the California Environmental Quality Act already provide for

multiple opportunities for public hearings.

Description:

Existing law, as part of the hazardous waste control law, requires a facility handling hazardous waste to obtain a

hazardous waste facilities permit from the Department of Toxic Substances Control. Existing law requires the

department to impose certain conditions on each hazardous waste facilities permit and authorizes the department to

impose other conditions on a hazardous waste facilities permit, as specified. A violation of the hazardous waste control

law is a crime.

This bill would require the department, within 90 days of receiving a renewal application for a hazardous waste

facilities permit, to hold a public meeting for specified purposes relating to the renewal in or near the community in

which the hazardous waste facility is located.

Existing law prohibits the department from issuing or renewing a permit to operate a hazardous waste facility unless

the owner or operator of the facility establishes and maintains financial assurances.

This bill would require the department to review the financial assurances required to operate a hazardous waste facility

at least once every 5 years. If the department’s review finds the financial assurances for a facility to be inadequate, the

bill would require the department to notify the owner or operator of the facility and would require the owner or

operator to update and adopt adequate financial assurances within 90 days.

Existing law requires the department, in the case of a release of hazardous waste or constituents into the environment

from a hazardous waste facility that is required to obtain a permit, to pursue available remedies, including the issuance

of an order for corrective action, before using available legal remedies, except in specified circumstances.



This bill would require the department, under specified circumstances, to request an owner or operator of a hazardous

waste facility to submit to the department for review and approval a written cost estimate to cover activities associated

with a corrective action based on available data, history of releases, and site activities, as specified. The bill would

require the owner or operator to submit the corrective action cost estimate within 60 days of the department’s request.

The bill would require the owner or operator, within 90 days of the approval or the imposition of a corrective action

cost estimate, as specified, to fund the cost estimate or enter into a schedule of compliance for assurances of financial

responsibility for completing the corrective action.

Because a violation of the bill’s requirements would be a crime, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs

mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Arguments in favor:

This bill requires the Department of Toxic Substance Control (DTSC) to review and approve corrective action cost

estimates and financial assurances as a condition for hazardous waste facility operation.

According to the author, DTSC has admitted to failing to update its cost estimates for closure and corrective action for

years, thereby increasing taxpayer exposure for unfunded liabilities. This bill requires DTSC to review financial

assurances (FA) at least every five years and obtain updated FA from the owner/ operator if it finds existing FA to be

inadequate.

California Environmental Justice Alliance and Center on Race, Poverty, & the Environment support AB 245 in

concept, stating it is part of a package of bills that is "an important first step in better protecting human health and

safety, as well as the environmental from exposure to toxic substances."


An industry coalition lead by the California Chamber of Commerce argues that the public hearing component of AB

245 is redundant with current law because public processes are included in the California Environmental Quality Act,

and the cost of the added public hearing would be shouldered by the permit applicant. The coalition also argues that

AB 245's requirements for financial assurance review every five years are vague. Concerns are expressed over the

subjective term "adequate" and complying with what DTSC considers "adequate" within 90-days.

AB 245’s language provides neither DTSC nor the regulated community with any guidance or context as to what

exactly the bill’s wording of “adequate” or “inadequate” would mean in terms of a permitted facility’s FA. Likewise,

the bill institutes a 90-day clock whereby the facility operator must somehow rectify an “inadequate” determination

made by DTSC within that time-frame or else face some undisclosed consequence and apparently without any

opportunity to appeal DTSC’s determination that rendered the facility’s FA as “inadequate.”

The cumulative effect of this bill, combined with other proposed legislation, will make the hazardous waste permitting

process unworkable and excessively expensive, and thus would result in hazardous waste being sent out of state, where

the waste would be treated as garbage and thus subject to few if any environmental protections. Such unintended

consequences would not further California’s goals.

Support: (Verified 5/16/17) American Veterans Apostolic Faith Center

Breast Cancer Prevention Partners

California Environmental Justice Alliance (in concept)

California Communities Against Toxics

California Kids IAQ

California Safe Schools

Center on Race, Poverty, & the Environment (in concept)

Coalition for a Safe Environment

Community Dreams

Del Amo Action Committee

EMERGE

Mothers for East Los Angeles

NAACP #1069

Natural Resources Defense Council

Resurrection Church

San Pedro Peninsula Homeowners Coalition

Sierra Club California

St. Philomena Social Justice Ministry

Wilmington Improvement Center


Opposition: (Verified 2/20/17) Alhambra Chamber of Commerce

California Business Properties Association

California Cement Manufacturers Environmental Coalition


California Metals Coalition

California Small Business Alliance

Camarillo Chamber of Commerce

Chemical Industry Council of California

Clean Harbors Environmental Services, Inc.

Fontana Chamber of Commerce

El Dorado County Chamber of Commerce

Greater Fresno Area Chamber of Commerce

Industrial Environmental Association

Metal Finishing Association of Northern California

Metal Finishing Association of Southern California

National Federation of Independent Business

Norco Area Chamber of Commerce

North Orange County Chamber

Oxnard Chamber of Commerce

Palm Desert Area Chamber of Commerce

Rancho Cordova Chamber of Commerce

Redondo Beach Chamber of Commerce & Visitors Bureau

Safety-Kleen, Inc.

San Diego Regional Chamber of Commerce

Simi Valley Chamber of Commerce

South Bay Association of Chambers of Commerce

Torrance Chamber of Commerce

West Coast Lumber & Building Material Association

Western Plant Health Association

Western States Petroleum Association

Status: Senate Committee on Environmental Quality

Senate Floor votes:

Assembly floor votes: Melendez, Mayes NO, Waldron, Cervantes, Steinorth NVR, Medina YES

Legislative Item #5 Tax Reform & Job Retention Action

AB 1005, as amended, Calderon. Professions and vocations: fines: relief.

Recommended action: SUPPORT


Summary:

Business Penalty Relief. Recognizes challenges businesses face in implementing myriad business regulations by

allowing a business to fix the violation before an administrative penalty is imposed.

Description:

Under existing law, the Department of Consumer Affairs is under the control of the Director of Consumer Affairs and

is comprised of various boards, bureaus, commissions, committees, and similarly constituted agencies boards that

license and regulate the practice of various professions and vocations. A violation of a regulatory act by a licensee can

subject a licensee to discipline, including administrative penalties or citations, suspension, or revocation of the license.

Existing law specifies that whenever any provision of law governing businesses and professions grants authority to

issue a citation for a violation of a code provision, that authority also includes the authority to issue a citation for the

violation of any regulation adopted pursuant to code.



This bill would authorize boards, bureaus, commissions, committees, and similarly constituted agencies that license

and regulate professions and vocations, when granted the authority to issue a citation, to instead issue a fix-it ticket in

lieu of a fine. The bill would specify that any person who is issued a fix-it ticket in lieu of a citation would have 30

days in which to correct the violation before being issued the fine.

Under existing law, any board within the Department of Consumer Affairs, the board created by the Chiropractic

Initiative Act, and the Osteopathic Medical Board of California, is authorized to establish, by regulation, a system for

the issuance to a licensee of a citation which may contain an order of abatement or an order to pay an administrative

fine assessed by the board where the licensee is in violation of the applicable law. Existing law requires the system,

whenever appropriate, to include a provision requiring the citation to contain an order of abatement fixing a

reasonable time for abatement of the violation.

This bill, except with regard to healing arts licensees, would instead require a citation containing an order to pay an

administrative fine to contain an order of abatement fixing a period of no less than 30 days for abatement of the

violation before the administrative fine becomes effective, as provided.

This bill requires non-healing arts entities within the Department of Consumer Affairs (DCA) to issue a fix-it ticket,

with a 30-day cure period, before an administrative fine becomes effective for a Business and Professions Code

violation. It also specifies if the licensee successfully abates the violation within the 30-day period, the licensee is not

responsible for payment of the administrative fine.


The author cites challenges small businesses face when meeting the multitude of state regulations. According to the

author, the intent of this bill is to give business owners, especially small businesses, a chance to correct their non-

serious violations before being fined excessive amounts that can impact business operations

California is the most heavily regulated state in which to do business, and it is especially daunting for small

business owners who are oftentimes their own compliance officer, human resources director, bookkeeper, and

manager. With hundreds of new laws created every year, accompanied by hundreds of new regulations

implemented by state agencies, it is very difficult for a typical small business to be aware of changes with which

they must comply. This often results in devastating fines and penalties, in addition to the potential for lawsuits.

We have also been present in meetings where enforcement officers have stated that it is not their job to help a

business comply with their complex rules - it is only their job to ensure that they do comply. This "gotcha"

mentality has led to California's low ranking as a place in which to do business.

AB 1005 is a very reasonable approach that simply authorizes an enforcement agency to issue a 30-day "fix-it

ticket" in lieu of a fine if the circumstances warrant it. The measure is not a mandate, but it does create much-

needed flexibility for state agencies to work with businesses to ensure compliance without forcing them to close

or lay off employees.


Concerns included the following: a) Fine assessments may lose their deterrent effect and lead to bad behavior.

Enforcement entities may have incentive to pursue more aggressive discipline. b) The removal of discretion to

determine a reasonable period for correction undermines the entities' authority; 30 days may be inappropriate for some

violations. c) Existing law already authorizes licensees to appeal a citation they believe may be unfair or improperly

issued. Due process concerns, as well as enforcement actions that are perceived as overly harsh or punitive, are

carefully considered during the sunset review process every four years. d) Healing arts licensees are excluded from this

bill; it is unclear that one group merits the categorical application of this policy over the other.

Significant penalty revenue loss. DCA has identified at least $4.2 million in projected revenue losses (various special

funds). Because citations are used to help pay the cost of enforcement programs, in order to compensate for revenue

losses, DCA entities may have to raise fees or curtail enforcement as a result of revenue loss. 2) Increased enforcement

costs for various entities under DCA, in the range of hundreds of thousands of dollars at a minimum, across the

department (various special funds).


The healing arts entities are as follows: 1) Acupuncture Board

2) Board of Behavioral Sciences

3) Board of Chiropractic Examiners

4) Dental Board of California

5) Dental Hygiene Committee of California

6) Medical Board of California

7) Naturopathic Medicine Committee

8) California Board of Occupational Therapy

9) Board of Optometry

10) Osteopathic Medical Board of California

11) Board of Pharmacy

12) Physical Therapy Board of California

13) Physician Assistant Board

14) Board of Podiatric Medicine

15) Board of Psychology

16) Board of Registered Nursing

17) Respiratory Care Board

18) Speech-Language Pathology and Audiology and Hearing Aid Dispensers Board

19) Veterinary Medical Board

20) Board of Vocational Nursing and Psychiatric Technicians

The non-healing arts entities are as follows:

1) Board of Accountancy

2) Arbitration Certification Program

3) California Architects Board

4) Athletic Commission of California

5) Bureau of Automotive Repair

6) Board of Barbering and Cosmetology

7) Cemetery and Funeral Bureau

8) Contractors State License Board

9) Court Reporters Board

10) Bureau of Electronic and Appliance Repair, Home Furnishings and Thermal Insulation

11) Board for Professional Engineers, Land Surveyors, and Geologists

12) Board of Guide Dogs for the Blind

13) Landscape Architects Technical Committee

14) Bureau of Medical Cannabis Regulation

15) Bureau for Private Postsecondary Education

16) Professional Fiduciaries Bureau

17) Bureau of Real Estate

18) Bureau of Real Estate Appraisers

19) Bureau of Security and Investigative Services

20) Structural Pest Control Board

Support: (Verified 5/16/17) None on file

Opposition: (Verified 5/16/17) None on file

Status: Assembly Committee on Appropriations

Senate Floor votes:



Legislative Item #6 Infrastructure & The Environment Action

SB 167, as amended, Skinner. Housing Accountability Act.



Summary:

Accountability of Local Agencies For Housing Development Project Decisions. Promotes accountability for decisions

and approval of affordable housing developments by imposing additional requirements and penalties on local agencies

when disapproving or conditionally approving in a manner that renders infeasible an affordable housing development

project. The Anti-NIMBY bill.

Description:

In its existing form, the Housing Accountability Act is designed to facilitate housing development, and the

development of affordable housing projects in particular, by limiting the grounds upon which a local agency can refuse

to approve such projects or render them infeasible through the imposition of burdensome conditions. It is sometimes

referred to as the “Anti-NIMBY Act.” This bill would amend the Housing Accountability Act by: broadening its scope

to include market rate housing projects in some instances not currently covered; subjecting the justifications used by a

local agency to disapprove a housing development project to the possibility of heightened judicial scrutiny; and

imposing additional financial consequences on local agencies found to have disapproved a housing project without

adequate justification under the law.

(1) The Housing Accountability Act, among other things, prohibits a local agency from disapproving, or conditioning

approval in a manner that renders infeasible, a housing development project for very low, low-, or moderate-income

households or an emergency shelter unless the local agency makes specified written findings based upon substantial

evidence in the record.

This bill would require the findings of the local agency to instead be based on clear and convincing a preponderance

of the evidence in the record.

The act authorizes a local agency to disapprove or condition approval of a housing development or emergency shelter,

as described above, if, among other reasons, the housing development project or emergency shelter is inconsistent with

both the jurisdiction’s zoning ordinance and general plan land use designation as specified in any element of the

general plan as it existed on the date the application was deemed complete, and the jurisdiction has adopted a revised

housing element in accordance with specified law.

This bill would specify that a change to the zoning ordinance or general plan land use designation subsequent to the

date the application was deemed complete does not constitute a valid basis to disapprove or condition approval of the

housing development project or emergency shelter.

The act authorizes the project applicant, a person who would be eligible to apply for residency in the development or

emergency shelter, or a housing organization, as defined, to bring an action to enforce its provisions.


As California faces a growing housing supply shortage, it is important that development is not rejected or denied by

local governments. By making the existing HAA clear and convincing, we close the gap between the approval and

development process. Proposed projects will have a greater probability of development that was originally specified by

a jurisdiction’s General Plan, Housing Element, and Regional Housing Needs Assessment (RHNA).

The California Apartment Association writes: … California is in the midst of an unprecedented housing crisis caused

by a severe lack of new housing construction at all levels of affordability. Passed in 1982, the HAA has served for

more than 30 years as a tool to ensure that municipalities do not unfairly hinder the development of new housing

projects, and to ensure new housing construction during crises like the one California faces today. Under the HAA,

local governments must follow certain legal mandates before denying a housing development application that complies

with their general plan and zoning rules... Unfortunately, the current enforcement mechanisms of the HAA are



inadequate to achieve compliance in many cases. One of the most significant barriers to the construction of new

housing is unjustified local resistance from NIMBY (not in my backyard) groups. Using unreasonable arguments, “no

growth advocates” and NIMBYs have significantly curtailed housing construction, which has worsened the jobs-

housing imbalance in our communities. This imbalance causes hardship for many people, especially low-income

families in need of housing close to their jobs.

In further support, the San Francisco Housing Action Coalition writes: Originally passed in 1982, the Housing

Accountability Act (HAA) has been a tool used to ensure local jurisdictions build the housing our state desperately

needs. Unfortunately, the status quo for many California cities is to provide jobs with no housing, or simply to say

“no” to all growth. Under the HAA, local jurisdictions must follow a clear set of mandates before denying housing

development applications that are code compliant and we appreciate how your bill strengthens and clarifies those

mandates.


This bill would make local agencies work harder to justify disapproving a housing development project. They would

have to have “clear and convincing evidence” supporting the basis for their decision. “Clear and convincing” means

the evidence is highly and substantially more likely to be true than untrue; the trier of fact must have an abiding

conviction that the truth of the factual contention is highly probable. (Colorado v. New Mexico (1984) 467 U.S. 310.)

The clear and convincing standard is higher than the preponderance of the evidence standard. Expressed in

mathematical terms, it means substantially more than 50 percent, perhaps something closer to 75 percent. Opponents

of the bill criticize its imposition of the “clear and convincing” standard. Some say it is “almost impossible for local

governments to meet.” Several point out that presenting “clear and convincing” evidence is especially challenging in

the context of development approvals, which require future projections about construction costs and sales prices,

among other things. In the amended version 'clear and convincing' has been replaced by 'preponderance'.

In the League of Cities’ argument in opposition to the bill, anything greater than a “substantial evidence” standard

raises constitutional separation of powers concerns. Specifically: [W]e are concerned that SB 167 would upend

longstanding separation of power principles enshrined in the Constitution, rather than address any potential

shortcomings in the Housing Accountability Act. SB 167 (Skinner) Page 10 of 17 The Constitution separates the

government into three branches and prohibits one branch from interfering with the powers granted to another. Pursuant

to this constitutional separation of powers, judicial review of city council actions and decisions has traditionally been

limited…

Decisions on housing projects have long been considered “quasi-judicial” because they involve the application of the

law to a set of facts. [Code of Civil Procedure] Section 1094.5 directs the trial court to determine whether the city

council’s decision – i.e., how it decided to apply the law to the facts – is supported by substantial evidence. In other

words, the trial court is not making a decision on the facts; instead, it is making a decision on whether substantial

evidence supports the way in which the city council applied the law to those facts. SB 167’s application of the clear

and convincing evidence standard turns this entire system on its head by asking not whether the city council has an

evidentiary basis for how it applied the law to the facts, but whether the facts are as the city council says they are…

Under the existing Housing Accountability Act, local jurisdictions do not incur fines for violations unless they are

found to have acted in bad faith. In its current form, this bill changes that dynamic by imposing a very substantial fine

on local agencies that are unable to justify their disapproval of a housing development project, regardless of whether or

not the local agency acted in bad faith. The fine would be, at a minimum, $100,000 per housing unit in the complex

and could go up from there, depending on a series of factors. The risk of a fine is intended to dissuade and the higher

the fine, the greater the disincentive will ordinarily be. In the case of this bill, the intention is to make local agencies

think very carefully before they disapprove a housing development project.

Arguably, however, beyond dissuading local agencies from disapproving housing development projects for pretextual

reasons, the size of the proposed fine would be so high that it would intimidate local agencies into approving housing

development projects even when they have perfectly valid reasons not to do so. The proposed fines also do not take

into account the size of the local agency making the decision. Even a small municipality is subject to at least $100,000

in fines, a sum which may represent a significant fraction of a small municipality’s budget. Not surprisingly, critics of

this bill are “strongly opposed to this section of the bill.” According to the League of Cities: “[t]his is an enormous fine

that would be levied on a city that may have inadvertently violated the Housing Accountability Act (i.e., with no bad

faith), which could have significant impacts on local government operations.” The American Planning Association’s


California Chapter puts it more starkly: “This provision has the potential to bankrupt cities.” This bill’s purpose is to

add teeth to the Housing Accountability Act and the imposition of fines for violations arguably serves that ends.

However, the bill can be criticized for the potentially enormous size of the fine and the fact that it is not calibrated to

reflect the size of the local agency that made the decision nor how guilty the local agency is of violating the purpose

behind the law: providing more affordable housing.

Support: (Verified 5/16/17) Abundant Housing LA

Bay Area Council

California Apartment Association

California Association of Realtors

California Building Industry Association

California Renters Legal Advocacy and Education Fund

East Bay Forward

North Bay Leadership Council

San Francisco Housing Action Coalition

Terner Center for Housing Innovation

YIMBY Action

Opposition: (Verified 5/16/17) American Planning Association – California Chapter

California League of Cities

California State Association of Counties

Rural County Representatives of California

Urban Counties of California

Status: Senate Appropriations

Senate Floor votes:


Legislative Item #7 Infrastructure & The Environment Action

SB 540, as amended, Roth. Workforce Housing Opportunity Zone.



Summary:

SB 540 would authorize a city or county to establish a Workforce Housing Opportunity Zone (WHOZ) by preparing an

environmental impact report (EIR) to identify and mitigate impacts from establishing a WHOZ and adopting a specific

plan. A local government must approve a housing development within the WHOZ that meets specified criteria, and no

project-level EIR or a negative environmental declaration would be required on a development within a WHOZ that

meets specified criteria.

Description:

The Planning and Zoning Law requires a city or county to adopt a general plan for land use development within its

boundaries that includes, among other things, a housing element. Existing law provides for various reforms and

incentives intended to facilitate and expedite the construction of affordable housing.

The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be

prepared and certify the completion of, an environmental impact report (EIR) on a project that it proposes to carry out

or approve that may have a significant effect on the environment or to adopt a negative declaration if it finds that the

project will not have that effect. CEQA also requires a lead agency to prepare a mitigated negative declaration for a

project that may have a significant effect on the environment if revisions in the project would avoid or mitigate that

effect and there is no substantial evidence that the project, as revised, would have a significant effect on the

environment.



This bill would authorize a local government, as defined, to establish a Workforce Housing Opportunity Zone by

preparing an EIR pursuant to CEQA and adopting a specific plan that is required to include text and a diagram or

diagrams containing specified information. The bill would require a local government that proposes to adopt a

Workforce Housing Opportunity Zone to hold public hearings on the specific plan. The bill would authorize a local

government, after a specific plan is adopted and the zone is formed, to impose a specific plan fee upon all persons

seeking governmental approvals within the zone. The bill would require a local government to comply with certain

requirements when amending the specific plan for the zone, including seeking a new EIR. The bill would authorize a

local government to apply for a no-interest loan from the Department of Housing and Community Development to

support its efforts to develop a specific plan and accompanying EIR within the zone. The bill would require the

Department of Housing and Community Development, by July 1, 2018, to develop a process whereby a local

government may apply for a loan of that nature. The bill, upon appropriation by the Legislature, would authorize a

transfer from the Controller to the Department of Housing and Community Development for purposes of establishing

this loan program. issuing loans pursuant to these provisions.

The bill would prohibit require a local government, for a period of 5 years after the plan is adopted, from denying any

development that is proposed within the area of the zone if that to approve a development that satisfies certain criteria,

unless the local government makes certain finding, and subject to extension under certain circumstances. findings

regarding the site. The bill would provide that, after the zone is adopted, a lead agency is not required to prepare an

EIR or negative declaration for a housing development that occurs within the zone if specified criteria are met. The bill

would require a local government to approve a housing development located within the zone that is consistent with the

plan and meets specific criteria within 60 days after the application for that development is deemed complete.

The Planning and Zoning Law requires a planning agency, after a legislative body has adopted all or part of a

general plan, to provide an annual report to the legislative body, the Office of Planning and Research, and the

Department of Housing and Community Development on the status of the general plan and progress in meeting the

community’s share of regional housing needs.

This bill would require a local government that has formed a Workforce Housing Opportunity Zone to include within

this report the number of housing units approved within a zone that complies with specified criteria.

The bill would declare that ensuring access to affordable housing is a matter of statewide concern and not a municipal

affair.


The purpose of this bill is to streamline housing, which could mean a city streamlines all of its affordable housing. This

bill allows for multiple zones within a city, therefore it is likely that streamlined units will be in several locations.

Also, this bill doesn’t alter how a city identifies where to locate affordable housing. According to the author, as the

State and local governments have fought to recover from the Great Recession, we are now to some extent victims of

our own success; with growing economic stability, California’s already tight housing market has become increasingly

competitive.

There are a number of factors that have contributed to the housing shortage. Local governments, either through

insufficient planning, or facing forces out of their control like the free-market which largely dictates housing location

and cost, have failed to ensure there is enough new affordable housing stock. Furthermore, the CEQA has reportedly

been used as a barrier to housing projects even after they have been subject to lengthy public discussion and scrutiny,

and been approved by local governments. That is why this bill is critical to improving the quality of life of all

Californians. This bill streamlines the approval process to spur housing construction by having cities identify where

housing needs to be built and adopting a specific, up-front plan; and, conducting all important and necessary

environmental reviews and public engagement.

This bill ensures that a full and robust CEQA process is undertaken, with local governments holding open and

transparent meetings where the public can engage and voice their opinions and concerns. This bill also ensures that

local governments aren’t able to alter a housing plan after it has been approved. Upon completion of this rigorous

process, developers will have a five year window to deliver affordable housing that is consistent with the approved

plan. Under this bill, because the local government has fully conducted the necessary environmental reviews, no

project-specific additional environmental reviews would be needed, allowing for housing developments within these

planned areas to proceed in an expedited manner. A project must be approved or rejected within 90 days of a submitted

application.


While I am proud to have co-authored the 2016 No Place Like Home Initiative to prevent homelessness among our

neediest residents, that was simply a first step to a much larger problem. This housing problem will not be solved by

any one piece of legislation; rather, it will take a combination of other proposals pending in the Legislature, including

affordable housing funding measures.


Opposition states, “We are concerned about the potential for SB 540 to be used to encourage sprawl. The bill

only requires that housing zones be placed in areas identified as suitable under a Sustainable Communities

Strategy or alternative, which focus on Vehicle Miles Traveled. This does not preclude that these zones may

be in outlying areas that are not urban or infill, where environmental impacts can be greatest. Development

should be focused on dense urban areas that are transit-oriented, which already receives streamlining and

some exemptions under SB 375. We believe SB 740 will minimize potential impacts if it contains provisions

that limit the areas where these housing zones could be placed to existing urban areas, with minimum density

of people per square mile.”

Support: (Verified 5/16/17) League of California Cities (sponsor)

City of Adelanto

City of Alameda

City of Chino Hills

City of Cloverdale

City of Dublin

City of Eureka

City of Fremont

City of Goleta

City of Hesperia

City of Hillsborough

City of Indian Wells

City of Laguna Hills

City of Lake Elsinore

City of Lakeport

City of Lodi

City of Montclair

City of Pismo Beach

City of Thousand Oaks

City of Walnut Creek

Marin County Council of Mayors and Council Members

Mayor’s and Councilmembers’ Association of Sonoma

County

Riverside County Division of the League of California

Cities

Opposition: (Verified 5/16/17) None on file

Status: Senate Appropriation (suspense)

Senate Floor votes:



AB 1565, as amended, Thurmond. Employment: work hours. Work hours: overtime compensation:

executive, administrative, or professional employees.

Recommended action: OPPOSE





Summary:

Significant Cost Increase on Employers and Costly Litigation. Unnecessarily accelerates the minimum salary threshold

for exempt employees, which will significantly increase costs especially on small employers who currently have a

delayed increase under the current minimum wage scheduled increases.

Description:

Existing law, with certain exceptions, establishes 8 hours as a day’s work and a 40-hour workweek, and requires

payment of prescribed overtime compensation for additional hours worked.

Existing law authorizes the Industrial Welfare Commission to establish exemptions from overtime pay requirements

for certain executive, administrative, and professional employees, as prescribed. Existing law establishes the Division

of Labor Standards Enforcement in the Department of Industrial Relations for the enforcement of labor laws, including

orders of the commission.

This bill would exempt from overtime compensation an executive, administrative, or professional employee, as

defined, if the employee earns a monthly salary equivalent to either $3,956 or an amount no less than twice the state

minimum wage for full-time employment, as defined, whichever amount is higher.


The author argues that, with the Trump Administration failing to defend stronger federal overtime protections, this

legislation creates an important protection for middle class workers who fall into the gap between the state's overtime

pay protections and what would have been the higher overtime protections afforded by federal regulation. The

sponsors, the California Labor Federation, argue that the enjoined USDOL salary threshold of $47,476 per year is quite

reasonable. This standard is set to reflect 40% of the median wage in southern states. The Labor Federation notes that

had the standard been 40% of the median wage for western states the threshold would have been $59,000. They argue

that this highlights the fact that "even $47,476 would have left many workers behind, especially in our part of the

country."

Arguments in Opposition:

The Chamber of Commerce and others argue that the bill, "unnecessarily accelerates salary increases for salaried,

exempt employees in California by creating a $3,700 increase per salaried employee for small businesses with 25 or

fewer employees in 2018." They continue, "AB 1565 does not distinguish between employer with 25 or few employees

and employers with 26 or more employees, as SB 3 did when enacting the scheduled minimum wage increases. Rather,

this significant increase is applicable to all employers."

The Chamber of Commerce and others also argue that the bill, "alters the 'duties test' for exempt employees in

California by not incorporating all language from the Industrial Welfare Commission Wage Orders (Wage Orders)

with regards to the analysis of such duties. The wage Orders were crafted to take into consideration industry specific

issues and provide listed occupations, duties and licenses that qualify for exempt status. The Wage Orders also include

references to various sections of state and federal law for purposes of interpretation. "

AB 1565 Imposes a $3,700 Increase Per Exempt, Salaried Employee on Small Businesses with 25 or fewer employees

in 2018, who are already struggling with other recent labor and employment mandates.

Currently, all exempt, salaried employees in California must earn no less than two times the existing minimum wage,

plus satisfy the “duties test” in order to be exempt from various wage and hour mandates such as overtime, meal

periods and rest breaks. Due to the recent minimum wage increase as enacted by SB 3 (Leno) (2015), all salaried

employees in California also got an increase. The following is a list of the minimum salaries for exempt employees in

California under the current schedule of minimum wage increases:

January 1, 2017: (Employers with 25 employees or fewer) $41,600

(Employers with more than 25 employees) $43,680

January 1, 2018 (Employers with 25 employees or fewer) $43,680











AB 1565 proposes to accelerate the salary increases by requiring all employers to pay an exempt employee a minimum

of $47,472 on January 1, 2018. AB 1565 does not distinguish between employers with 25 or fewer employees and

employers with 26 or more employees, as SB 3 did when enacting the scheduled minimum wage increases. Rather,

this significant increase is applicable to all employers. As set forth above, small employers would not reach this

threshold until 2020. Under AB 1565, small business will face a $3,792 increase per salaried employee in 2018 and

employers with 26 or more employees will face an increase of $1,723 per employee. There is no justification to

increase costs on small and large employers by altering this schedule of increases for salaried employees already

provided in SB 3.

This proposed increase in exempt employee salaries, as well as completely changing the duties test for exempt

employees, is on top of other significant mandates with which California-only employers are struggling, including (1)

ongoing minimum wage increases; (2) agricultural overtime costs; (3) paid sick leave; (4) extended tax increases, and

more. The cumulative impact of these mandates has already overwhelmed some businesses. Imposing such a

significant cost increase as proposed on AB 1565 will limit growth in California.

Support: (5/16/17) American Federation of State, County and Municipal Employees

California Labor Federation,

AFL-CIO (sponsor)

SEIU California

Opposition: (Verified 5/16/17) American Insurance Association

Association of California Insurance Companies

California Ambulance Association


California Citrus Mutual

California Cotton Ginners & Growers Association

California Forestry Association

California Framing Contractors Association

California Fresh Fruit Association

California Hotel and Lodging Association

California League of Food Processors

California Manufacturers and Technology Association

California Professional Association of Specialty

Contractors

California Restaurant Association


California State Association of Counties

California Strawberries Commission

California Taxpayers Association

Camarillo Chamber of Commerce

Cerritos Regional Chamber of Commerce

Far West Equipment Dealers Association

Fresno Chamber of Commerce

Gateway Chambers Alliance

North Orange County Chamber of Commerce

Oceanside Chamber of Commerce

Official Police Garages of Los Angeles

Orange County Business Council

Oxnard Chamber of Commerce

Rancho Cordova Chamber of Commerce

San Diego Regional Chamber of Commerce

Santa Maria Valley Chamber of Commerce

Tulare Chamber of Commerce

Western Agriculture Processors Association

Western Growers Association

Western Plant Health Association

Status: Assembly floor

Senate Floor votes:


News & Politics

Southwest California Legislative Council agenda - 5/2017