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Introduction

Introduction to 2011 Digest of Legislation

FOREWORD

Because of Governor Schwarzenegger’s being term-limited out of office, a new Governor was elected at the November 2012 General Election. Former Governor Edmund G. “Jerry” Brown Jr., who served from 1975-83, was elected, defeating former eBay Chair Meg Whitman. Also, at this election, the Democrats won all statewide offices, except for two, of the four, Board of Equalization Districts. The following are the executive offices with those who were elected:

  • Governor: Edmund G. “Jerry” Brown Jr.
  • Lt. Governor: Gavin Newsom
  • Secretary of State: Debra Bowen (reelected)
  • Attorney General: Kamala Harris
  • State Treasurer: William Lockyer (reelected)
  • State Controller: John Chiang (reelected)
  • Superintendent of Public Instruction: Tom Torlakson

The Board of Equalization members are as follows:

  • Betty T. Yee, First District (reelected)
  • George Runner, Second District (elected in 2010)
  • Michelle Steel, Third District (reelected)
  • Jerome E. Horton, Fourth District (appointed in 2009 and elected in 2010)

The State Senate, after the 2010 November Election, numerically remained the same at 25 Democrats and 15 Republicans, with the following becoming new members:

  • Joel Anderson (R)
  • Tom Berryhill (R)
  • Anthony Cannella (R)
  • Kevin de Leon (D)
  • Noreen Evans (D)
  • Jean Fuller (R)
  • Ed Hernandez (D)
  • Doug La Malfa (R)
  • Michael Rubio (D)
  • Juan Vargas (D)

In the Assembly races, the Democrats picked up one seat, making the Assembly consist of 52 Democrats and 28 Republicans. The new members elected at this election included:

  • Katcho Achadjian (R)
  • Luis Alejo (D)
  • Michael Allen (D)
  • Toni Atkins (D)
  • Susan Bonilla (D)
  • Betsy Butler (D)
  • Nora Campos (D)
  • Gilbert Cedillo (D)
  • Roger Dickerson (D)
  • Tim Donnelly (R)
  • Richard S. Gordon (D)
  • Jeff Gorell (R)
  • Shannon Grove (R)
  • Linda Halderman (R)
  • Roger Hernandez (D)
  • Ben Hueso (D)
  • Brian W. Jones (R)
  • Ricardo Lara (D)
  • Dan Logue (R)
  • Allan Mansoor (R)
  • Holly J. Mitchell (D)
  • Mike Morrell (R)
  • Kristin Olsen (R)
  • Henry T. Perea (D)
  • David G. Valadao (R)
  • Donald P. Wagner (D)
  • Bob Wieckowski (D)
  • Das Williams (D)

State Budget and Special Session

At the November 2012 Election, the voters passed Proposition 25, which changed the Legislature’s vote requirement for passing the state budget and the accompanying bills from a two-thirds vote to a majority vote. However, tax measures still needed a two-thirds vote, which complicated a bipartisan approach to adopting the 2011-12 State Budget.

As one of his last acts as Governor, Arnold Schwarzenegger, on December 6, 2010, declared a fiscal emergency and called a special session of the Legislature to attempt to make up a projected $6.1 billion shortfall to the 2010-11 State Budget. Factors covering this shortfall included (1) the possibility of $3.5 billion in federal funding not becoming available, (2) erosion in 2010-11 budget solutions, and (3) the passage of Proposition 23 and 26 that limited the State’s ability to use transportation funding for debt reserve payments. Also, at this time, the Legislative Analyst projected a $9 billion shortfall in 2011-12 budget year. Thus, the total budgetary problem to be addressed between December 6, 2010, and the passage of the 2011-12 budget was $25 billion. This shortfall came about because many of the solutions adopted in the 2010-11 Budget and prior budgets were one-time in nature and did not provide ongoing solutions. In addition, about $8 billion in temporary tax increases were expiring on June 20, 2011, and $4.5 billion in one-time federal stimulus funds used to reduce General Fund expenses would be exhausted.

Governor Schwarzenegger proposed $9.9 billion in solutions over the two-year period ending June 30, 2012 (a little over a third of what was needed to balance the budget shortfall for 18 months). The majority of what he proposed was continued in the 2010 May Revision Budget, which was ultimately rejected by the Legislature in the fiscal budget act signed in October 2010. These proposals included 1) elimination of state subsidized child care; (2) elimination of full-scope Medi-Cal services for certain legal immigrants; (3) providing a “hard cap” of 10 office visits per year for Medi-Cal enrollees; (4) providing a “hard cap” on Medi-Cal services; (5) requiring mandatory co-payments for low-income Medi-Cal enrollees to access specified health services; (6) elimination of vision benefits from the Healthy Families Program; (7) increasing the monthly Healthy Families program premiums; (8) elimination of community mental health service by shifting funds to administrate food stamps and child welfare services, which would be shifted from the state to counties; (9) reduction of CalWORKs Grants in 2010-11 and elimination of the program in 2011-12; and (10) requiring certain inmates convicted of non-serious, non-violent felonies and sentenced to prison terms of three years or less be punished by imprisonment in jail instead of state prison. However, the Legislature waited until the new Governor was sworn in so he could present his budget for legislative review.

On January 10, 2010, Governor Brown submitted his budget plan, which included $12.5 billion in reductions in General Fund state expenditures and $14 billion in new revenues, which relied on the renewal of existing temporary taxes, and provided borrowing from special funds and other sources. In his gubernatorial campaign, Brown told the public he would not raise taxes without the approval of the voters. Brown wanted a June 2011 special election to be held to extend the temporary taxes for an additional five years, as well as making some constitutional changes to facilitate the Governor’s realignment proposals to shift funding and responsibility to local governments for various services (i.e., criminal justice and health services). In order to achieve the proposed election, the Governor made March the month for which the budget needed to be completed.

Most of the expenditure solutions were to be permanent and, if adopted, would address the current (2010-11) budget and the 2011-12 operating deficits. The proposed revenue solutions were to expire in five years. His major proposal was the realignment of government, which is designed to bring services closer to the people, allowing for more integrated service delivering, and allowing the services to be tailored to local situations and conditions. In total, the realignment proposal would dedicate $5.9 billion in revenue in 2011-12 to be funded by maintaining the vehicle license fees and sales tax at current levels.

The Governor’s budget provided $49.3 billion in ongoing Proposition 98 funding for K-14 education in 2011-12, which provided funding at the minimum guaranteed level. The Governor’s budget also would have (1) not provided a cost-of-living adjustment for any K-12 education programs in 2011-12; (2) reduced the University of California budget by $338.5 million and did not contain further student fee increases in 2011-12; (3) reduced the California State University budget by $326.1 million and did not contain fee increases; (4) reduced the community colleges budget by $394.9 million and increased the student fees from $26 to $36 per unit; (5) eliminated child care services for 11- and 12-year olds; (6) increased the premiums paid by families for their children’s health care coverage; (7) required mandatory co-payments of Medi-Cal enrollees; (8) reduced Medi-Cal payment rates by 10% for specified programs (9) eliminated adult day health care; (10) redirected Proposition 63 Mental Health Services Act Funds and realignment of specified programs; (11) eliminated the CalWORKS program starting in the 2011-12 fiscal year; (12) reduced by $486.1 million the In-Home Supportive Services Program; (13) reduced funding by $11 million for state parks; (14) eliminated redevelopment agencies; and (15) suspended funding for the Williamson Act open space subventions. The Governor was hoping that a bipartisan solution could be reached because he needed a two-thirds vote to place any tax proposal on the ballot.

Between January and March 1, the Governor and five Republican Senators (Tom Berryhill, Sam Blakeslee, Anthony Cannella, Bill Emmerson, and Tom Harman) were in discussions to come up with a bipartisan budget plan in order that a two-thirds vote could be reached; however, on March 7th, these Senators sent the Governor a letter indicating that they were at an impasse because reforms which they were trying to obtain were either rejected or so watered-down that they could not accept them. The reforms that these members proposed were (1) the establishment of a hard spending cap; (2) reform of the public employee pension system consistent with the recommendations of the Little Hoover Commission; (3) regulatory reforms in order to enhance economic growth and job creation – making California more business friendly; (4) structured tax reform; (5) enhancement of the ability of the private sector to compete in the providing of government services; and (6) reforming redevelopment agencies and the enterprise zone programs.

On February 22nd, a legislative Conference Committee was appointed, consisting of Senators Leno (D), Lowenthal (D), Negrete McLeod (D), Huff (R), and Emmerson (R) and Assemblymembers Blumenfield (D), Fuentes (D), Harley (R), Nielsen (R), and Skinner (D), to work on deliberating the Governor’s proposed budget. On February 23rd, Senator Tony Strickland and Assemblymember Donald Wagner announced that 30 Republicans had formed the “Taxpayers Caucus.” The Caucus indicated they would support a state budget that was balanced without gimmicks, oppose and vote against any budget that increased taxes, oppose and vote against placing tax increases on the ballot, uphold Proposition 13, and support tax cuts that would bring jobs and stimulate the economy. Senate Minority Floor Leader Robert Dutton and Assembly Republican Leader Connie Conway were not part of the Caucus. On March 7th, the Conference Committee adopted a budget plan by a vote of 6-4, with all the Democrats voting aye and the Republicans voting no.

On March 16 and 17, the Legislature passed $14 billion in budget solutions ($11 billion in expenditures reductions and $335 million in enhanced revenue tax enforcement). The following bills were passed by the Legislature and signed by the Governor:

  • SB 70 Education Finance
  • SB 72 Human Services Programs
  • SB 74 Development Disabilities
  • SB 78 Administration of Justice
  • SB 80 General Government
  • SB 82 Cash Management
  • SB 84 Budget Act of 2010: Special Fund Loans
  • SB 86 Tax Administration Enforcement
  • AB 95 Resources
  • AB 97 Health Programs
  • AB 99 California Children and Families Act: Use of Funds
  • AB 100 Mental Health Services Act: Use of Funds
  • AB 105 Transportation
  • AB 109 Criminal Justice Realignment
  • AB 111 Criminal Justice Realignment

The major provisions of the above March 2011 budget package were as follows:

  1. Protecting K-12 funding by adopting the Governor’s Proposition 98 funding framework.
  2. Eliminating the office of the Secretary of Education in the Governor’s Office, per the Governor’s request.
  3. Rejecting the Governor’s 35% subsidy reduction for child care providers and finding other solutions to achieve the Governor’s saving level of $716 million. Deprioritizing child care for 11- and 12-year olds.
  4. Increasing the community college student fee from $26 per unit to $36 per unit.
  5. Adopting the Governor’s Higher Education budget proposals, including a $500 million reduction to the University of California, a $500 million reduction to the California State University, and a $400 million reduction to the California Community Colleges.
  6. Cutting CalWORKs to 48 months and slashing grant levels rather than eliminating the program.
  7. Achieving over $1.6 billion in General Fund expenditure cuts in the Medi-Cal program. Reinstating the previously enacted 10% provider payment reduction. Approving many of the Governor’s “co-pays” and “hard caps” on Medi-Cal services, but rejecting the hard-cap on physician and clinic visits, medical supplies, equipment and prescriptions.
  8. Rejecting the Governor’s proposal to eliminate the Adult Day Health Care program permanently, but instead eliminating the Medi-Cal benefit, and providing $85 million to provide a “bridge” to a new optional benefit that will serve a higher acuity patient.
  9. Rejecting the full elimination of the Multipurpose Senior Service Program and instead reducing the funding by $2.5 million or 13%.
  10. Approving the 2011-12 shift of $1 billion of Proposition 10 California Children and Families Funds from state and local services to Medi-Cal.
  11. Approving the shift of about $860 million in Proposition 63 mental health funds from counties on a one-time basis to backfill for General Fund support for three mental health programs the Governor proposed to realign to counties.
  12. Cutting the Healthy Families program by $22 million by increasing monthly premiums paid by families enrolled in the program, decreasing the co-payments paid by families for hospital services. Cutting Healthy Families by $3 million for support and vision coverage, without eliminating the benefit.
  13. Achieving over $500 million in expenditure savings in Developmental Services. Approving implementation of statewide purchase of service standards at a reduction level of $174 million, in lieu of the Governor’s $424 million reduction.
  14. Approving the Governor’s proposal to reduce Supplemental Security Income/State Supplementary Payment to the minimum allowed by a federal maintenance of effort requirement for a savings of $192 million.
  15. Achieving the Governor’s saving number of $486 million in the In-Home Supportive Services Program, but reducing the proposed across-the-board service cut and the proposed domestic and related cut. Finding other savings not proposed by the Governor, such as the Community First Choice Option to obtain $121 million in additional federal funds.
  16. Achieving expenditure reductions of about $1 billion in Corrections that are scored outside the realignment proposal. Among the cuts are $245 million to the receiver’s medical services budget and $391 million related to shifting lower-level adult offenders to local jurisdictions and reductions to rehabilitation programs.
  17. Approving the Governor’s proposal to reduce county funding by $200 million.
  18. Adopting the Governor’s proposal to alter the Williamson Act program and eliminating the state subventions in the current year and on-going, which allows for the continuation of a locally supported program.
  19. Cutting the Department of Parks and Recreations General Fund Budget by $11 million and cutting $10 million from the Department of Parks and Recreation Off-Highway Vehicle Trust Funds.
  20. Raising and expanding various State Water Resource Control Board fees.
  21. Approving a cut of $155 million in energy efficiency programs funded by the Consumption Surcharge Tax.
  22. Swapping revenues from truck weight fees for excise tax revenues to maintain funding for transportation and transit, as well as preserving $1.6 billion in General Fund to new revenues.
  23. Eliminating support for statewide fairs and agricultural districts.
  24. Approving expenditure cuts of about $700 million in areas such as employee compensation ($308 million), employee healthcare ($80 million), and other state operations-related governmental efficiencies ($250 million).
  25. Making budgetary loans and transfers in the 2010-11 fiscal year.
  26. Making permanent one of the Board of Equalization’s successful tax compliance activities that ensures that all retailers are registered with the state and collect and remit the sales tax.
  27. Approving permanent funding for additional audit activities associated with workload growth relative to the Franchise Tax Board and approved the Financial Institutions Records Match, a tax compliance activity that matches records of taxpayers with overdue liabilities with financial resources at financial institution.
  28. Approving the transfer of $362.3 million from the Unemployment Compensation Disability Fund to the General Fund to make interest payments on a federal loan.
  29. Approving the statutory change for the “three year look back,” which allows California to remain eligible for FedED extended unemployment benefits.
  30. Achieving $390.6 million in state savings by implementing a change in mission for the state’s prison system, which includes local jurisdiction for specified low level offenders. Realigning responsibility for the state’s juvenile offenders to local jurisdictions. However, allowing locals to contract with the state to house this population.

While the above provisions were adopted, the main Budget Bill, SB 69, stayed in enrollment in order that remaining issues could be negotiated between the parties. On April 12th, Speaker Perez sent a letter to Assemblymember Connie Conway requesting the Republican Caucus put forward a comprehensive objective plan to close the remainder of the budget deficit.

During the time between the passage of the March budgetary items, the Governor took his cause to various legislative districts to try and secure his plan to extend the 2009 temporary taxes. He warned that, if negotiations become stalled, there would be the possibility of an all cuts budget impacting more governmental services. Legislators held town hall meetings in their districts concerning the budget.

On May 12th, Assembly Republican Leader Connie Conway sent a letter, with an attached document, to the Assembly Speaker, which outlined a no-tax increase budget proposal. These proposals included budget items which had been proposed in the past by the Legislative Analyst’s office, Bureau of State Audits, key budget stakeholders, and Governor Jerry Brown. The proposals provided for (1) the rejection of the Governor’s realignment system plan; (2) the rejection of any K-12 education cuts; (3) no additional higher education cuts; (4) extension of the industry supported fee on Medi-Cal Managed Care plans for an additional three years; (5) reduction of redevelopment agencies funding rather than elimination of redevelopment; (6) reduction of state employee costs; (7) reduction of Medi-Cal errors and resolving of the drug rebate backlog; (8) providing a two-day-a-month furlough for court employees; (9) contracting out of the correctional medical system; (10) providing for electronic court reporting; (11) contracting out maintenance and administrative functions for state hospitals, child support collections and developmentally disabled centers; and (12) shifting of $115 million of proposition funds to offset health care services costs relative to smoking. (Refer to the Assembly Republican Caucus Internet Web site for details of the no-tax increase budget plan.)

May Revise

On May 16th, the Governor presented the May revise budget. After accounting for the solutions in March and updated spending, the state’s $26.6 billion shortfall had been reduced to $9.6 billion. The remaining $9.6 billion shortfall was composed of a carry-in deficit of $4.8 billion in 2010-11 and an operating budget shortfall of $4.8 billion in 2011-12. The May revision proposal included $10.8 billion in solutions, which was consistent with the Governor’s Budget’s framework as introduced in January. Major changes to the May revision included (1) elimination of 43 state boards, task forces, offices, and departments; (2) providing a $1.6 billion increase to the General Fund pursuant to Proposition 98 to account for higher revenues, (3) a reduction in the level of proposed budgetary borrowing by reducing special fund loans to the General Fund, (4) selling nonessential or under used state properties, (5) merging the Healthy Families Program into Medi-Cal to reduce costs, (6) reforming the enterprise zone hiring tax credits to make them available to firms that actually increase their level of employment, and only be allowed if claimed on the taxpayer’s original tax return, rather than eliminating the credit all together; (7) reforming the 2009 jobs tax credit to stimulate job creation by small businesses; and (8) extending temporary taxes, by six months, which were to expire on July 1, 2012.

On June 8th, members of the Senate Budget and Fiscal Review Committee and the Assembly Budget Committee completed their work on the Governor’s May Revise budget. AB 98 become the vehicle for the revisions to the main budget bill, SB 69, which had been adopted in March, but had not been sent to the Governor because all the trailer bills were not finalized so that it could be implemented. AB 98 took into account most of the Governor’s May Revise proposals. The major changes to the May Revise by the Legislature were (1) replacing the Governor’s proposal to repay special fund debt with repayment of $745 million in Proposition 98 K-12 settle-up debt owed schools and community colleges; (2) restoring approximately $200 million in child care cuts and approximately $140 million within Proposition 98 in CalWORKs; (3) eliminating 21 state boards and commissions; and (4) taking out the Governor’s proposal to reform the enterprise zone hiring credit and the implementation of a single sales factor for apportioning corporate income to California and replacing them with other revenue solutions.

On June 15th, the Legislature passed AB 98 by a vote of 21-19 in the Senate and 51-28 in the Assembly (without any Republicans voting for passage). Before the vote was taken, the Governor had, once again, attempted to negotiate with Senate Republican members Bill Berryhill, Anthony Cannella, Tom Harman, and Bill Emmerson to vote in favor of his budget plan, but, without providing for a spending cap, making reforms in the public pension systems, and providing for regulatory reform, they were unable to support the budget. On June 16th, the Governor vetoed both SB 69 and AB 98.

The Governor, in his veto message, commended the Democrats for making valiant efforts to address the budget problem in the absence of Republican cooperation. The Governor stated that the budget he received was not a balanced solution. He called on the Republicans to allow the people to vote on a tax extension for a balanced budget and significant reforms and to join the Democrats in supporting job creation and ending tax breaks for out-of-state companies. Because of the veto by the Governor, State Controller John Chiang withheld legislator’s pay until the Legislature passed a balanced budget. The State Controller also urged both parties to come together and find a solution to the crisis.

After the veto, the Democratic leadership and the Governor reached a compromise by removing some of the items from the vetoed budget, such as the sale of state buildings, the taking of $1 billion from the First 5 Commission (known as the California Children and Families Commission created by Proposition 10 in 1988) and a quarter-cent local sales tax increase, and replaced them with a $4 billion revenue projection backed by a $2.5 billion in cuts that would “trigger” if the revenues did not materialize.

On June 28th, the Legislature adopted a final majority vote budget, SB 87, by a vote of 22-17 in the Senate, and 51-27 in the Assembly (without any Republican favorable votes). The Governor signed SB 87 on June 30th, making it an on-time budget. In total, the final 2011-12 Budget assumes $85.9 billion in General Fund expenditures, including vetoes. The overall Budget was $129.5 billion, which included General Fund, special fund, and select bond funds. The Budget contained a $500 million reserve. The Governor item-vetoed $244 million. The $27.1 billion solution by category, based on the January Budget problem and including March legislation, were as follows (Department of Finance scoring as of June 28):

  • Expenditure Reductions $15.0 billion
  • Other, including delayed loan repayments $2.9 billion
  • Revenues $0.7 billion
  • Special Fund Revenues $0.2 billion
  • Natural Revenues Growth/Misc. Changes $8.3 billion
  • TOTAL $27.1 billion
     
  • Reserve $0.5 billion

Specifics of the Final Budget

I. Revenue Solutions

The Legislature removed the Governor’s proposals concerning maintaining the 2010 tax rates for five years and replaced them with the following: (1) required financial institutions to participate in a record match process between a financial institution’s customer records and the Franchise Tax Board (FTB) debtor records in order for the FTB to match information to collect delinquent state income tax debts; (2) allowed FTB to provide amnesty for taxpayers who used an abusive tax avoidance transaction; (3) required FTB to revise the income tax instructions to include a use-tax table that allows taxpayers to estimate the amount of use tax they owe on their adjusted gross income; (4) repealed the refundable portion of the child and dependent care tax credit; (5) clarified the obligations under existing out-of-state retailers to collect and remit use tax on sales of tangible personal property to California residents (AB 155 amended this provision to delay its effect for a year); (6) redirected revenue attributed to 1.0625 cents of the sales and use tax rate to the local revenue fund realignment purposes; (7) adopted a state responsibility area fee to cover some costs of state fire suppression on privately-owned lands; (8) increased the vehicle registration fee from $31 to $43 starting July 1, 2011; and (9) extended the existing Medi-Cal hospital fee.

Based on preliminary scoring, the 2011-12 Budget includes GF expenditures of $86 billion, down from revised 2010-11 expenditures of $91.5 billion.

However, in the case that revenues are not achieved in the budget year, the budget package contains an additional $2.5 billion in additional “trigger” cuts. These cuts will be triggered only if revenues to the state do not achieve levels assumed in the budget package. If revenues are $1 billion below assumptions, $600 million in additional reductions will be made on January 1, 2012, to a variety of programs, excluding K-12 education. If revenues are $2 billion below assumptions, an additional $1.9 billion in cuts will be made to K-12 education on February 1, 2012.

II. Major Expenditure Reductions

Overall, the final version of the budget prioritized K-12 education. Significant reductions were made in the Health and Human Services areas, but in many cases, alternative cuts were found that mitigate the harshest of these reductions. Most areas of the budget saw significant expenditure reductions.

A. K-12 Education. The final version of the budget included funding for Proposition 98 that is at about the same level as the current fiscal year. The lower spending on Proposition 98 is a result of not including the Governor’s proposed taxes requiring a two-thirds vote in the final budget package. Overall, Proposition 98 expenditures will be approximately $48.3 billion in the budget year, excluding child care. Major proposals included in the final budget were as follows:

  • Deferrals. Continued approximately $3 billion in inter-year K-12 payment deferrals, consistent with the Governor’s January proposal.
  • Realignment Revenues. Approved $2.1 billion rebench of the Proposition 98 minimum guarantee to reflect the dedication of 1.06% of the state sales tax to a local revenue fund to support public safety realignment in 2011.
  • Child Care. Approved $1.5 billion rebench of the Proposition 98 minimum guarantee to reflect removing all child care programs except preschool out of Proposition 98.
  • Student Mental Health Services. Approved the Governor’s budget proposal to rebench the Proposition 98 guarantee by $222 million to fund mental health related services for students with disabilities (previously provided by counties per the AB 3632 mandate). Also augmented 2010-11 funding by $80 million to partially backfill for a funding shortfall created when Governor Schwarzenegger vetoed funding for the AB 3632 [(W. Brown), Chapter 1747, Statutes of 1984] mandate.
  • Class Size Reduction. Approved a one-year extension of the continuous appropriation for the class size reduction categorical program.
  • Categorical Flexibility. Approved the Governor’s proposal to extend various flexibility options to school districts for an additional two years.
  • Secretary of Education Elimination. Approved the Governor’s proposal to eliminate the Office of the Secretary of Education.

B. Childcare. Approved $300 million in ongoing savings to childcare programs. This is approximately $200 million less than was previously eliminated in March due to the following actions.

  • Standard Reimbursement Rate Reduction. Restored 10% rate cut to the Title V contracts.
  • Contract Reduction. Reduced contracts, or slots, including preschool, by 11% instead of 15%.
  • 11- and 12-Year Olds. Continued funding childcare services for 11- and 12-year olds.
  • Family Fees. Rejected earlier proposal to increase sharply the family fees paid by low-income individuals for childcare services.

    In addition, as referenced above, all non-preschool child care programs were removed from within the Proposition 98 guarantee, and funded in the regular General Fund budget.

C. Higher Education. Adopted a $650 million reduction to the University of California, a $650 million reduction to the California State University, and a $400 million reduction to the California Community Colleges. Some of these cuts in each segment will be offset with student fees.

D. Health and Human Services. Achieved total expenditure cuts of approximately $5.0 billion in the Health and Human Services area as follows:

  • Medi-Cal. Achieved over $1.6 billion in GF expenditure cuts in the Medi-Cal program. Reinstates the previously enacted 10% provider payment reductions for a savings of $547 million. Approved many of the Governor’s “co-pays” and “hard caps” on services, but rejected the hard-cap on physician and clinic visits, medical supplies, equipment, and prescriptions. Found other savings not identified by the Governor.
  • Adult Day Health Care (ADHC). Rejected the Governor’s proposal to eliminate this activity permanently, and instead eliminated the benefit and provided $85 million to provide a “bridge” to a new optional benefit that will serve a higher acuity patient.
  • Multipurpose Senior Service Program (MSSP). Rejected the full elimination of this program and instead reduced funding by $2.5 million, or 13%.
  • Proposition 63. Approved the shift of approximately $860 million in Proposition 63 funds from counties on a one-time basis to backfill for GF support for three mental health programs the Governor proposes to realign to counties.
  • Developmental Services. Achieved over $500 million in expenditure savings in Developmental Services. Approved implementation of statewide purchase of service standards at a reduction level of $174 million, in lieu of the Governor’s $424 million reduction.
  • SSI/SSP. Approved the Governor’s proposal to reduce Supplemental Security Income/State Supplementary Payment (SSI/SSP) to the minimum allowed by a federal maintenance of effort requirement for a savings of $192 million.
  • CalWORKs. Achieved approximately $1 billion in expenditure cuts in the CalWORKs program. Approved an 8% grant cut to save $300 million. Approved the Governor’s proposal to reduce the time-limit for adults to receive assistance from 60 months to 48 months, but rejected the Governor’s proposal to apply a 48-month time limit to safety net and child-only cases. Approved the Governor’s cut to the county single allocation of approximately $377 million. Added savings of $100 million from adjusting the earned-income disregard.
  • In-Home Supportive Services (IHSS). Achieved the Governor’s savings number of $486 million in the IHSS program, but reduced the proposed across-the-board service cut and the proposed domestic and related cut. Found other savings not proposed by the Governor, such as the Community First Choice Option to obtain $121 million in additional federal funds.

E. Corrections. Approved expenditure reductions of approximately $1 billion in Corrections, mainly due to the realignment proposal. However, the Legislature has also approved the Governor’s workforce cap proposal for an additional $195 million and significant reductions to the Board of Parole Hearings operations. Furthermore, the Legislature restored nearly $50 million in community-based rehabilitation contracts that will be needed as the State implements realignment.

F. Courts. Approved the Governor’s proposal to reduce the courts funding by $200 million. Also approved an additional $150 million reduction to the courts and a $310 million in one-time savings from delaying court construction projects.

G. Transportation. Approved the Governor’s proposal to use truck weight fees to pay approximately $1 billion in transportation-related general obligation bond debt. Approved re-enactment of the 2010 Tax Fuel Swap to conform to the requirements of Proposition 26.

H. Redevelopment. The final version of the budget included a solution for redevelopment agencies (RDAs) that provides a $1.7 billion GF benefit in 2011-12, and creates a voluntary alternative redevelopment program that allows RDAs to continue with reform.

I. Local Government. Approved the Governor’s proposal to suspend the Williamson Act/Open Space Subvention for a two-year savings of $20 million.

J. Natural Resources and Energy. Approved a cut of $155 million in energy efficiency programs funded by the Gas Consumption Surcharge Tax. Approved cuts of $11 million to State Parks and $10 million to Off-Highway Vehicle Parks. Also approved $50 million reduction to CAL FIRE, to be backfilled with new revenues from a State Responsibility Area (SRA) Fee to be paid by homeowners within the SRA. Also assumes $11 million in savings from new water quality fees, and $12.8 million in savings to CAL FIRE’s Fire Protection Program resulting from the department’s risk-reduction strategy reviews.

K. Government Efficiency and Employee Compensation. Approved expenditure cuts of approximately $700 million in areas such as employee compensation ($308 million), employee healthcare ($80 million), and other state operations-related governmental efficiencies ($269 million).

III. Public Safety Realignment

The final version included $5.5 billion to fully-fund the revised public safety realignment program. Approximately $5 billion of this comes from reestablishing a portion of the state sales tax revenues as a local sales tax, dedicated for the realigned programs. In addition, approximately $453 million in vehicle license fee revenues is being redirected from the support of the DMV, with local governments providing the balance.

In March, the Legislature passed AB 109, which realigned low-level offenders from state prison to local jurisdiction. This policy change went into effect October 1, 2011.

The realignment plan will enable the state to meet the order set out by a United States Supreme Court decision that affirmed the lower court’s decision to require the reduction of overcrowding in the state prison system. The state has two years to reduce the prison population by over 30,000 inmates. Realignment will allow the state to accomplish this reduction in a way that has significant potential benefits for public safety. Funded realignment will allow for funding to flow with the offender back to the community where it can be invested in support services, programs, and law enforcement that enhance the safety of communities.

Other Public Safety programs not directly related to the implementation of AB 109 continued with minimal changes until additional 2011 realignment legislation was passed in September. This included funding for child welfare services, mental health services, substance abuse treatment, and adult protective services.

The Public Safety Realignment fully funds the local public safety programs that had previously been funded by a dedicated 0.15% of the vehicle license fee (that additional 0.15% expired on June 30).

IV. Reducing State Government

The budget package achieved savings related to 23 eliminations and 14 program reductions that were proposed in the Governor’s May Revision. The Legislature also adopted policy to put in motion a major reorganization and consolidation of various health care programs that, when fully implemented, may result in the further elimination of additional agencies. These actions help the Governor to achieve the $269 million GF savings related to efficiencies in state government operations. The mechanism to achieve these savings is a budget control section that provided the Administration with the authority to make the required budgetary reductions to achieve the total savings.

The Administration identified, and in some cases already achieved, savings through a variety of executive actions, including eliminating the offices of the Secretary of Education and the American Recovery and Reinvestment Act Inspector General, banning non-essential travel, implementing a statewide building rental rate reduction, reducing the number of state-issued cellular phones, and reducing the statewide vehicle fleet, including the elimination of any non-essential vehicles and reducing the number of home-storage permits.

V. Budget Trigger/Expenditure Cuts

The Budget provides for additional expenditure cuts of up to $2.5 billion, if revenue falls by $1 billion or more, below expectations in 2011-12. General Fund revenues in 2011-12 are anticipated to be $88.5 billion. If revenues are forecast in December 2011 to be lower by $1 billion to $2 billion, expenditure cuts of $600 million are triggered on. If revenues are forecast in December 2011 to be lower by more than $2 billion, then additional expenditure cuts of up to $1.9 billion are triggered on. The trigger is in Control Section 3.94 of the Budget Act and operates as follows:

A. Requires the Department of Finance to provide notification to the Joint Legislative Budget Committee, by December 15, 2011, with an updated revenue forecast for 2011-12 that is based on the higher of (1) the November 2011 Legislative Analyst’s revenue forecast, or (2) the Department of Finance’s December 2011 revenue forecast.

B. If the December 15, 2011 updated forecast of revenues predicts revenues less than $87.5 billion, the following additional “Tier I” reductions, which total about $601 million, shall occur up to the amount specified. These reductions, if triggered, would take effect on or after January 1, 2012.

  • $100 million to the University of California.
  • $100 million to the California State University.
  • $100 million to the Department of Developmental Services.
  • $110 million to the In-Home Supportive Services program, including $100 million in service hour cuts, and $10 million for local anti-fraud efforts.
  • $92 million to the Department of Corrections and Rehabilitation (CDCR), including $72.1 million in increased county charges for youthful offenders sent to CDCR.
  • $30 million to the California Community Colleges backfilled with a $10 per unit fee increase.
  • $23 million to the Department of Education related to childcare funding.
  • $16 million to the California State Library related to library grants.
  • $15 million to the California Emergency Management Agency related to local vertical prosecution grants.
  • $15 million to Medi-Cal from extending the March 2011 cuts to all managed care plans.

C. If the December 15, 2011 updated forecast of revenues predicts revenues less than $86.5 billion, the cuts outlined above are still triggered, and the following additional “Tier II” reductions, which total about $1.9 billion, would also occur up to the amount specified. These reductions, if triggered, would take effect on or after January 1, 2012; however, the reduction to the 2011-12 school year would take effect on or after February 1, 2012.

  • $1.5 billion from reducing the 2011-12 school year by up to seven days.
  • $248 million from eliminating dedicated funding for home-to-school transportation.
  • $72 million to the California Community Colleges related to an apportionment decrease.

D. Requires that the Director of the Department of Finance notify the Joint Legislative Budget Committee of any trigger reduction within 10 days of the reduction.

The following consists of Budget-related legislation passed and chaptered into law along with SB 87:

  • SB 73 Health and human services trigger cuts
  • SB 79 State funds: State Agency Investment Fund
  • SB 89 Vehicle license fee and registration fee
  • SB 91 Adult day health care centers
  • SB 92 Public safety programs
  • SB 93 In-home supportive services changes
  • AB 102 Health
  • AB 104 Developmental services
  • AB 106 Human services
  • AB 107 Public resources
  • AB 108 Education
  • AB 110 Courts
  • AB 112 Amendments to the 2010-11 Budget Act
  • AB 114 Education finance
  • AB 115 Transportation
  • AB 116 Criminal justice realignment
  • AB 117 Public safety realignment
  • AB 118 Sales tax shift for realignment
  • AB 119 State government
  • AB 120 Resources
  • AB 121 Overall trigger cuts
  • AB 122 Budget Act augmentations: 2009 and 2010 Budgets
  • AB 19X1 Long-term care
  • AB 26X1 Community redevelopment
  • AB 27X1 Alternative Voluntary Redevelopment Program

When the Legislature reconvened after the summer recess in August, revisions were made to several of the budget trailer bill that had been signed into law in order to take care of some issues which surfaced. The following were the bills which had the revisions:

  • SB 4X1 Supplemental Law Enforcement Services Account: revised AB 118 public safety realignment.
  • AB 16X1 Local Revenue Fund: revised AB 118 public safety realignment.
  • AB 21X1 Public health managed care plan tax law extension.
  • AB 30X1 Healthy Families Program additional budget appropriation.
  • AB 32X1 Education finance: revised certain budget items, AB 114, and SB 70.

The Governor, during the budgetary process, vetoed the following trailer bills:

  • SB 6X1 Would have revised the trigger cuts.
  • SB 8X1 Would have revised the redevelopment provisions of AB 26X1 and AB 27X1.
  • AB 96 Would have established the Keeping Adults Free from Institutions program.
  • AB 34X1 Would have established the Senior Citizens and Disabled Citizens Property Tax Postponement Fund and would have made transfers of funds in excess of $10 million that would accumulate in the fund to the General Fund.

In its final budget actions document, the Department of Finance stated that “the 2011 Budget Act made substantial progress in reducing an annual structural deficit of up to $21 billion (forecasted in January), through the combination of ongoing spending reductions and an improved revenue outlook, to $5 billion annually. Despite eliminating most of the structural deficit, the state continues to face major long-term challenges and must address the remaining structural deficit. California remains burdened by a $35 billion debt from a decade of unprecedented budgetary deferrals and borrowing. Education funding is more than $6 billion below the level provided in 2007-08. The Administration plans to seek voter approval of a ballot measure by November 2012 to better position California for the future by constitutionally protecting public safety realignment, supplementing the state’s revenues to restore education funding, paying down the state’s wall of debt, and balancing the Budget into the future.”

In the regular session, the Governor signed SB 15 (DeSaulnier), which requires the Governor’s budget documents to provide estimates for anticipated revenues and expenditures for the three final years succeeding the budget year as part of documents that accompany the January 10th proposal, the May revision, and the final budget summary upon enactment of the Budget Bill. This is designed to provide more information to the Legislature so that they will understand the impacts of decisions they make on the fiscal health of the state in subsequent budget years. However, the Governor vetoed SB 14 (Wolk) which would have provided a statutory framework for the implementation of performance based budgeting and for a systematic program review by the Legislature.

On September 10, 2011, the Legislature passed SCR 2 (Steinberg), ending the 2011-12 First Extraordinary Session.

Note: The information compiled for this section was from the Senate Budget and Fiscal Review Committee, the Assembly Budget Committee, the Legislative Analyst, Legislative Members press releases, and the Department of Finance budgetary documents.

CRIMINAL JUSTICE

I. Realignment/Corrections

In 2009, a federal three-judge panel ruled that California’s prisons were so overcrowded that they violated constitutional standards for medical and mental health care.

As part of the 2011-12 Budget Act, the Legislature enacted AB 109 (Assembly Budget Committee), the Governor’s criminal justice realignment program shifting responsibility of certain low-level offenders, parole violators, and parolees from the state to the counties in March 2011.

Under public safety realignment:

  • No inmates currently in state prison will be transferred to county jails.
  • No inmates currently in state prison will be released early.
  • All felons sent to state prison will continue to serve their entire sentence in state prison.
  • All felons convicted of current or prior serious or violent offenses, sex offenses, and sex offenses against children will go to state prison.
  • There are nearly 60 additional crimes that are not defined in the Penal Code as serious or violent offenses but, at the request of law enforcement, were added as offenses that would be serviced in state prison.

Specifically, AB 109 provides for the following:

1. Expands the authority of local correctional administrators to use alternative custody methods and establishes day for day credit for offenders serving time in a jail facility.

2. Makes various changes to the Post-Release Supervision statutes as follows:

A. Specifies the population to be released into post-release supervision (non-violent/serious, no third strike conviction, no high risk sex offenders).

B. Requires the Local Corrections Community partnership to create an implementation plan for post release supervision of offenders and establishes an executive committee within the partnership to make recommendations to county board of supervisors.

C. Requires the county board of supervisors to designate a county agency to be responsible for post-release supervision.

D. Requires notification by the California Department of Corrections and Rehabilitation (CDCR) to counties regarding who is being released into post release supervision.

E. Requires offenders to enter into a post-release community supervision agreement, which includes terms and conditions.

F. Requires the court to establish a process to determine violations of conditions of post-release supervision and revocations.

G. Sets parameters for one-time offenders to be on post-release supervision and provides authority for release.

3. Makes various changes to State Parole statutes as follows:

A. Specifies who remains on state parole (violent/serious conviction, third strike conviction, high risk sex offenders).

B. Specifies that only lifers can be returned to state prison for a parole violation.

C. Specifies CDCR’s jurisdiction over all offenders currently on parole.

D. Adds the courts as the authority for determining revocations.

4. Makes various changes to Low Level Offender statutes as follows:

A. Redefines a felony to include imprisonment in a county jail for more than a year.

B. Changes all enumerated penalty code sections to include the phrase “pursuant to subdivision (h) of Penal Code Section (PC) 1170.”

C. Amends Penal Code Section 1170 to include (h), which provides 16 months, two, or three years if the punishment is specified to be served in county jail unless the person has a prior violent, serious, or sex offense (in which case they serve time in state prison).

D. Provides that counties can contract with the state to house felony offenders.

5. Stops state intake and allows local agencies to contract with CDCR for housing juvenile offenders.

Funding for implementing AB 109 was being negotiated and would not be finalized until the 2011 Budget was enacted in June. Also enacted into law at the time was AB 111 (Assembly Budget Committee), which gives counties additional flexibility to access funding to increase local jail capacity for the purpose of implementing realignment. Specifically, AB 111:

Accelerates Availability of Jail Construction Funding. Shifts $132.9 million in undesignated funds appropriated in AB 900 (Solorio), Chapter 7, Statutes of 2007, from Phase I to Phase II, as well as removes requirements that this funding cannot be awarded until at least 4,000 local jail beds and 2,000 reentry beds are under construction or sited. These changes will allow all Phase II jail funding to be available more quickly.

Changes Award Preferences for Counties Seeking Jail Construction Funding. Removes requirements under AB 900 that the state give funding preference to those counties seeking jail funding that assist the state in siting reentry facilities or those that assist the state in siting mental health day treatment and crisis care and continuum of care programs for parolees. Requires that preference shall be given to counties that have the largest percentage of inmates in state prison in 2010.

In April, AB 94 (Assembly Budget Committee) was enacted to make clarifying changes to AB 111 which (1) allow participating counties that received Phase I conditional awards to relinquish the awards and reapply, provided that no state monies have been encumbered; (2) add a funding preference to counties that relinquish their conditional awards, provided that those counties continue to assist the state in siting reentry facilities; (3) reduce county contribution of project costs from 25% to 10%; and (4) specify that participating counties shall not receive awards greater than $100 million.

On May 23, 2011, the United States Supreme Court upheld the federal three-judge panel requiring the state to reduce overcrowding in its prisons to 135.7% of its design capacity within two years. The ruling did not specify the particular measures the state must implement to comply. However, the high court indicated that the state could request the three-judge panel to modify certain aspects of its ruling. The high court did state that, given potential public safety concerns and ongoing efforts to improve medical care in the prisons, the state may wish to move for modification of the three-judge court’s order to extend the deadline of the required reduction to five years. On June 7 and July 21, the Governor’s Administration submitted reports to the three-judge panel describing specific measures that have been taken to reduce overcrowding in California prisons, including the passage of AB 109 and AB 117 realignment. The Legislative Analyst, in the August 5th report entitled “Reducing Prison Overcrowding in California,” stated, “the administration’s reports to the court do not preclude the Legislature from assessing the measures identified by the administration (in the reports) and considering its own strategy for compliance with the court ruling based on its priorities. The Legislature has already taken an important first step in complying with the court’s ruling by recently approving a package of legislation to shift the responsibility for certain low-level offenders from the state to counties. Although this realignment of services would significantly reduce prison overcrowding upon full implementation, and go a long way to complying with the court mandates, it may fall several thousand inmates short of meeting the requirements within the deadlines. Based on the information and data available to us at the time of this analysis regarding how realignment will reduce the prison population, we recommend that the Legislature(1) encourage the administration to request additional time from the court to comply with tis mandate to reduce overcrowding in California prisons, (2) direct the CDCR by statute to report on the justification of each prison construction project that it now proposes , including projects that have already been approved, in light of the inmate population reductions that will occur because of the three-judge panel ruling and the enactment of the realignment plan (entering into contracts for these projects would be put on hold until the Legislature received and reviewed the report in January); and (3) change state law to authorize CDCR to continue to transfer prison inmates involuntarily to out-of-state contract beds at least until the court’s requirements are met.”

With the May court ruling it gave the needed boost for the Governor and the Legislature to negotiate the trailer bills for the criminal portion realignment to go along with the on-line 2011 State Budget. The following are the bills which were part of the final budget negotiation:

• AB 117 (Assembly Budget Committee) making corrections to AB 109 by (1) delaying the operative date of AB 109, from July 1, 2011 to October 1, 2011, concerning implementation of shift of prisoners from the state to counties; (2) delaying the operation date of AB 109 when the courts assume specified jurisdiction concerning felons subject to past-prison supervision from July 1, 2011 to July 1, 2013; (3) excluding specific times from AB 109 concerning felons subject to imprisonment in county jail, and thus providing that executed sentences for those felons be served in state prison; (4) deleting the juvenile justice language from the realignment contained in AB 109; and (5) making other clarifying changes to AB 109.

• AB 118 (Assembly Budget Committee) (1) outlining the financial structure for allocating funds to a variety of accounts for realignment; (2) establishing the Local Revenue Fund 2011 for receiving revenue and appropriates from that account to the counties; (3) directing the deposit of revenues associated with 1.0625% of the state sales tax rate to be deposited in the Fund; (4) establishing a reserve account should revenues come in higher than anticipated; (5) developing the reallocation formulas more permanently using appropriate data and information for the 2012-13 fiscal year and each fiscal year thereafter; (6) implementing sufficient protections to provide ongoing funding and mandated protection for the state and local government; and (7) providing that the smallest of counties that benefit from the minimum grant will each receive approximately $77,000 in 2011-12.

• SB 87 (Leno) providing counties with a one-time appropriation of $25 million to cover costs associated with hiring, retention, training, data improvements, contracting costs, and capacity planning pursuant to each county’s AB 109 implementation plan.

• SB 89 (Senate Budget Committee) (1) dedicating a portion ($12) of the Vehicle License Fee (VLF) to the Fund; (2) revenue comes from two sources – freed up VLF previously dedicated to Department of Motor Vehicles administration and VLF that was previously dedicated to cities for general purpose use; and (3) estimated total amount of VLF revenue now dedicated to realignment is $354.3 million in 2010-11.

• SB 92 (Senate Budget and Fiscal Review Committee) making changes to SB 678 (Aanestad), Chapter 608, Statutes of 2009, relative to the California Community Corrections Performance Incentive Act and the laws relating to prisoner’s health services. It also removes the Corrections Standard Authority from the CDCR and creates the Community Corrections Board.

Lastly, during the summer recess stakeholders concerned with the criminal justice realignment found problems relative to its implementation and the following legislation was enacted to finalize the issue. AB 16X1 (Blumenfield) makes clarifying amendments needed to ensure implementation of AB 118 (Assembly Budget Committee), Chapter 40, Statutes of 2011, which provided the overall framework to enable the 2011 Public Safety Realignment. The allocation of the funding for 2011 Public Safety Realignment is for one fiscal year, ending June 30, 2012; AB 18X1 (Blumenfield) makes various technical, clarifying, and conforming changes to implement the 2011 public safety realignment proposal as contained in AB 109 (Assembly Budget Committee), Chapter 15, Statutes of 2011, AB 117 (Assembly Budget Committee), Chapter 39, Statutes of 2011, and AB 116 (Assembly Budget Committee), Chapter 136, Statutes of 2011, pertaining to the public safety realignment of 2011. SB 44 (Senate Budget and Fiscal Review Committee) reenacts Government Code Section 30061, as was amended by AB 16 X1 (Blumenfield) and passed by the Legislature in the current session, to remove the language that had required cities, as a condition of the receipt of funds from the Local Law Enforcement Services Account in the Local Revenue Fund 2011, to maintain their overall funding for frontline municipal police services at or above the 2010-11 fiscal year level. Police chiefs and cities have raised significant issues with this maintenance of effort requirement and its elimination is being proposed to further maximize public safety goals locally.

The Legislative Analyst’s Office, in its report, states the following: “According to the administration, the realignment of certain lower-level offenders, parole violators, and parolees will reduce the inmate population by nearly 40,000 inmates upon its full implementation in 2015; however, not all of these types of offenders are placed in the department’s prisons (the facilities that fall under the order of the three-judge panel). Some of them are typically housed in contract beds and inmate fire camps. For example, in its July 21 report to the court, the CDCR noted that currently there are only roughly 32,000 inmates in its 33 prisons who would qualify for placement under local jurisdiction under the realignment law. This means that as much as one-fifth of the inmate population reduction that results from the realignment plan may result in the placement of

fewer inmates in contract beds and fire camps, rather than resulting in a reduction in overcrowding in regular state prison institutions. In addition, potential changes in the practices of district attorneys in what charges they choose to bring against criminal offenders could result in fewer offenders being shifted to the counties than anticipated and more such offenders being sent to state prison facilities. Even taking these factors into account, however, the realignment plan will likely shrink the size of the state prison population by at least the low tens of thousands of inmates over the next two years and beyond. This is because, in setting its criteria regarding which offenders were eligible to be kept at the county level, the realignment package approved by the Legislature shifts a sizeable group of drug and property offenders and parole violators out of the state prison system. This means the realignment plan will go a long way toward reducing overcrowding in the next several years.”

The following, which is from CDCR, indicates what crimes are excluded from realignment:

Administering stupefying drugs to assist in commission of a felony PC 222

Battery against a juror PC 243.7

Gassing of a peace officer or local detention facility employee PC 243.9

Abduction or procurement by fraudulent inducement for prostitution PC 266a

Purchasing a person for purposes of prostitution or placing a person for immoral purposes PC 266e

Sale of a person for immoral purposes PC 266f

Pimping and pimping a minor PC 266h

Pandering and pandering with a minor PC 266i

Procurement of a child under age 16 for lewd or lascivious acts PC 266j

Felony child abuse likely to produce great bodily injury or death PC 273a

Assault resulting in death of a child under age 8 PC 273ab

Felony domestic violence PC 273.5

Sex Offender Registration Violation PC 290.018

Poisoning or adulterating food, drink, medicine, pharmaceutical product, spring, well, reservoir, or public water supply PC 347

Felony physical abuse of an elder or dependent adult PC 368b

Brandishing firearm or deadly weapon to avoid arrest PC 417.8

Unlawfully causing a fire that causes an inhabited structure or inhabited property to burn PC 452

Felony stalking PC 646.9

Solicitation for murder PC 653f(b)

Petty theft with specified prior convictions PC 666(b)

Possession of a firearm by a prohibited person PC 120212021.1

Carrying a firearm with detachable magazine PC 12021.5(b)

Carrying concealed firearm by gang member PC 12025(b)(3)

Possession of an explosive or destructive device PC 12303.2

Escape PC 4532

Possession of a controlled substance while armed with a firearm HS 11370.1

Evading a peace officer by driving in a willful or wanton disregard for safety of persons or property VC 2800.2

Evading a peace officer causing death or serious bodily injury VC 2800.3

Hit and run driving causing death or injury VC 20001

Felony driving under the influence causing injury VC 23153

Felony convictions with a Penal Code Section 186.11 enhancement PC 186.11

Bribing an Executive Officer PC 67

Executive or Ministerial Officer Accepting a Bribe PC 68

Bribing a Legislator PC 85

Legislator Excepting a Bribe PC 86

Judicial Bribery PC 92/93

Peace Officer Intentionally Planting Evidence PC 141

Local Official Accepting a Bribe PC 165

Misappropriation of Public Funds PC 424

Embezzlement of Public Funds PC 504/514

Conflict of Interest by Public Officer or Employee GC 1090/1097

Taking Subordinate Pay GC 1195

Destruction of Documents GC 1855

Public Official Who Aids and Abets Voter Fraud EC 18501

Assault on a Peace Officer PC 245(d)

Persuading, Luring, or Transporting a Minor Under 13 PC 272(b)

Employment of Minor to Sell Controlled Substance HS 11353

Employment of Minor to Sell Controlled Substance HS 11354

Use of Minor to Transport/Possess/Possess for Sale HS 11380(a)

Employment of Minor to Sell Marijuana HS 11361(a)(b)

Brandishing Firearm in Presence of Peace Officer PC 417(c)

Brandishing Firearm or Deadly Weapon to Resist Arrest PC 417.8

Vehicular Manslaughter While Intoxicated PC 191.5 (c)

Knowingly Exposes Someone to HIV HS 120291

Knowingly Facilitates the Collection of Wrongfully Attributed DNA Specimens PC 298.2

Wrongful Use of DNA Specimens PC 299.5

Criminal Gang Activity PC 186.22

Street Gang Activity PC 186.26

Gang Registration Violation PC 186.33

Possession or Importation of Horse Meat PC 598c

Sale of Horse Meat PC 598d

Manufacture/Distribution of False Documents for Citizenship Purposes PC 113

Use of False Documents for Citizenship Purposes PC 114

Other significant Corrections legislation enacted into law included SB 26 (Padilla) (1) providing that any inmate found to be in possession of a wireless communication device shall be subject to time credit denial or loss of up to 90 days, (2) facilitating the deployment of managed access technology that will prevent smuggled cell phones from sending or receiving communications within the secure perimeter of a prison, and (3) providing that any person, employee or nonemployee who possesses cell phones with the intent to deliver, or delivers, to an inmate is guilty of a misdemeanor, punishable by six months in jail for each device and a fine of up to $5,000 per device. This is intended to assist in cutting down the smuggling of cell phones and other wireless devices in the prison system; SB 484 (Rubio) providing the Legislative Analyst’s Office (LAO) with the same level of access to confidential CDCR health care services contracts, including rates, as the Joint Legislative Audit Committee and the Bureau of State Audits, as specified; SB 608 (DeSaulnier) permitting the Prison Industry Authority to offer their goods and services for sale to nonprofit organizations; SB 913 (Pavley) permitting a probation officer to authorize a medical exam that complies with regulations promulgated by the Corrections Standards Authority for a minor who has been taken into temporary custody, as specified; AB 44 (Logue) extending, from 45 days to 60 days, the period of time in which the Board of Parole Hearings or the CDCR must notify local law enforcement of the scheduled release of an inmate convicted of a violent felony; AB 420 (Davis) requesting the Citizens Redistricting Commission (CRC), when adjusting district boundaries for state Legislature, Congress, and the Board of Equalization (BOE), to deem an incarcerated person as residing at his or her last known residence, rather than the institution of his/her incarceration; AB 645 (Block and Fletcher) requiring that at least 10 days before the Governor acts upon any application for a commutation of sentence, the application must be served upon the district attorney in the county where the conviction was had, except as specified. (This was done in response to Governor Schwarzenegger’s commutation of Esteban Nunez, former Speaker Fabian Nunez’s son on his last day in office.); and AB 1114 (Lowenthal) providing that an inmate of the CDCR shall not be administered psychotropic medications without his/her informed consent or with a noticed hearing, as specified.

Vetoed Corrections legislation included SB 139 (Alquist) which would have required CDCR to oversee and conduct periodic and random searches of employees and vendors entering the secure perimeter of a state prison for contraband; SB 601 (Hancock) which would have required the Secretary of CDCR to develop a Corrections Accountability Report for each institution and to post it on CDCR’s Internet Web site, as specified. (The Governor indicated in his veto that he had signed SB 26 and issued an Executive Order B-11-11, which is to mobilize CDCR to use existing resources to crack down on the prison’s cell phone problem. The Order calls for an increase in physical searches of people who enter prisons, development of technologies to disrupt unauthorized transmissions and a report on the feasibility of creating “airport-style” security at prison entrances. The Governor also felt the bill was too prescriptive requiring monthly searches and detailed quarterly reports.); and AB 568 (Skinner and Mitchell) which would have required that inmates and wards in the custody of CDCR, CDCR’s Division of Juvenile Facilities, and local correctional and juvenile facilities, who are known to be pregnant, shall not be shackled by the wrists, ankles, around the abdomen, or to another person, unless deemed necessary for safety, and if necessary for safety, be restrained in the least restrictive way possible.

II. Human Trafficking

Another issue of significance in the criminal justice system in 2011 was sexual slavery and human trafficking. Human trafficking and sexual exploitation involves the recruitment, transportation, and sale of people, primarily women and children, to work in the sex trade. California has become a major hub over the last few years of international and domestic interstate human trafficking. A United States Department of Justice study estimated that over 300,000 American children are at risk of being forced into prostitution. Some children, as young as four-years old, are being trafficked. Researchers argue that the minimum age for the entrance of girls into prostitution is 14-years of age. In the United States, the ages vary from state to state and in California the average is about 12 years of age.

In response to this problem, the Legislature passed several bills which the Governor signed into law: SB 285 (Correa) providing that when a person is prosecuted for a crime in connection with massage therapy, including crimes relating to prostitution, the arresting law enforcement agency may provide to the California Massage Therapy Council information concerning the person’s massage therapy training, including the name of any school attended by the person (the author stated that gathering this information in a single location makes it easier for law enforcement to recognize and promote fraudulent massage schools; AB 12 (Swanson), the Abolition of Child Commerce, Exploitation, and Sexual Slavery Act of 2011 (ACCESS Act of 2011), requiring the court to impose a special fine of up to $25,000 in a case where a defendant is convicted of prostitution involving a minor, and provides that the proceeds of such funds be available, upon legislative appropriation, to fund programs and services for sexually exploited minors in the county of conviction (The intent of AB 12 is to recast the state’s laws relating to human trafficking and child sex slavery to track the trafficking. It will ensure that persons funding the illicit activities of human trafficking and paying for the services of child sex slaves are treated severely under the law as an adult engaging in a sex act with a minor. The author believes the predator should be dealt with the same, regardless of whether that person is paying for the sexual services of the minor he/she is abusing. AB 12 will insure that the victimized children are given access to proper treatment and the resources they need to be safe from the men and women who exploit them); AB 90 (Swanson) (1) providing that any crime in which the defendant persuaded or induced a minor to engage in a commercial sex act can be the basis of criminal profiteering asset forfeiture; (2) providing that any crime in which the defendant coerced or forced a minor to engage in a commercial sex act can be the basis of criminal profiteering asset forfeiture; (3) defining a commercial sex act as sexual conduct for which anything of value is given or received by any person; and (4) providing that the proceeds of criminal asset forfeiture in such cases be used for programs to assist minors who are sexually exploited or the victims of human trafficking, as specified; and AB 764 (Swanson) permitting the addition of the Child Victims of Human Trafficking Fund check-off to the personal income tax form upon the removal of another voluntary contribution fund from the form, or as soon as space is available.

III. Death Penalty Update

In June 2011, Judge Arthur Lawrence Alarcon, Federal Judicial Service: Judge, United States Court of Appeals for the Ninth Circuit, and Legal Law School Professor Paula M. Mitchell released a comprehensive analysis of the death penalty costs entitled “EXECUTING THE WILL OF THE VOTERS?: A ROADMAP TO MEND OR END THE CALIFORNIA LEGISLATURE’S MULTI-BILLION-DOLLAR DEATH PENALTY DEBACLE.” The report indicated that $4 billion of state and federal taxpayers money has been spent administering the death penalty in California since 1978, with a cost in 2009 of nearly $184 million above what taxpayers would have spent without the death penalty. They forecasted that the cost for maintaining the death penalty will climb to $9 billion by 2030, when the San Quentin’s death row could have over 1,000 inmates.

They outlined three options for voters concerning the death penalty: (1) fully preserve capital punishment with approximately $85 million in funding for courts; (2) reduce the number of death penalty-eligible crimes for an annual savings of $55 million; and (3) abolish capital punishment and save taxpayers about $1 billion every five or six years.

On June 28th, Senator Loni Hancock amended her SB 490 in the Assembly which abolishes the death penalty and provides instead for imprisonment in the state prison for life without the possibility of parole. The bill halts executions unless the voters fail to approve this bill and provides that, where a defendant or inmate was sentenced to death prior to the date of the enactment voter approval of the bill, the defendant’s or inmate’s sentence automatically is converted to life imprisonment without the possibility of parole. The bill requires persons sentenced pursuant to the provisions of the bill to work in a maximum security prison for the term of their imprisonment, as specified. The bill states findings and declarations of the Legislature regarding the death penalty. The bill provides that it will only become effective if certain of its provisions are submitted to and approved by the electors at the November 6, 2012 statewide general election. The bill passed the Assembly Public Safety Committee on a vote of 5-2 and is awaiting action in the Assembly Appropriations Committee.

Implementation of the Death Penalty in California. As of August 2011, California had 712 offenders with a death sentence. Male condemned inmates are housed at San Quentin State Prison, while female condemned inmates are housed at the Central California Women’s Facility in Chowchilla. By law, death penalty verdicts are automatically appealed to the California Supreme Court. Such cases ordinarily involve an extensive series of appeals both to state and federal courts, which are commonly referred to as habeas corpus petitions.

Both the state and county governments incur costs for murder trials, including costs for the courts, prosecution, and defense of indigent persons charged with murder. The state also incurs costs for death penalty appeals both for prosecution of such cases and for defense of indigent persons.

As of August 2011, the California Supreme Court had affirmed 293 death sentences under the automatic appeal process. Many additional cases remain pending in the courts. Thirteen persons have been executed since the current death penalty law was enacted in 1978.

At the time of this writing, there is an initiative measure being circulated for petition signature gathering concerning the abolishing the death penalty.

This measure changes state law to repeal the state’s current death penalty statute, generally require murder offenders to work while in prison, and provide funding for new local law enforcement grants on a limited-term basis.

Elimination of Death Sentences. This measure eliminates the imposition of death as the penalty for any crime punished by the state. The measure also specifies that offenders currently under a sentence of death would not be executed and would instead serve a prison term of life without the possibility of parole.

Resolution of Pending Appeals and Petitions. This measure outlines a process for possibly resolving ongoing death penalty appeals and habeas corpus petitions for capital cases that are pending in state courts. Specifically, it allows the California Supreme Court to transfer all such cases to any of the state’s Courts of Appeal or superior courts.

Inmate Work Requirement. Current state law generally requires that inmates work while they are in prison. California statutes and CDCR regulations allow for some exceptions to these requirements, such as for inmates who pose too great a security risk to participate in work programs. This measure specifies that every person found guilty of murder must work while in state prison, subject to existing state laws and regulations. Thus, if enacted by voters, this new work requirement could not be changed in the future without a vote of the public.

Establishment of Fund for Local Law Enforcement. The measure establishes a new special fund, called the SAFE California Fund, to support grants to police departments, sheriff’s departments, and district attorney’s offices, for the stated purpose of increasing the rate at which homicide and rapes are solved. The measure specifies that the money could be used to speed up the processing of physical evidence collected in rape cases, improve the use of forensic science in investigations, increase staffing in homicide and sex offense investigation and prosecution units, and to relocate crime witnesses. The measure also states that it could be used by these agencies for other projects and activities related to this measure. Under the terms of the measure, $10 million would be transferred in 2012-13 from the state General Fund, the main state fund used for the support of various types of state programs, to the SAFE California Fund. Each year, from 2013-14 through 2015-16, $30 million more would be transferred from the General Fund to the SAFE California Fund, bringing the total amount of transfers to $100 million. Monies in the SAFE California Fund would be distributed to local agencies based on a formula determined by the state Attorney General.

The Legislative Analyst’s Office did a fiscal impact on the initiative which states:

• Net savings to the state and counties could amount to the high tens of millions of dollars annually on a statewide basis due to the elimination of the death penalty.

• One-time state costs totaling $100 million, from 2012-13 through 2015-16, provide funding to local law enforcement agencies.

Other significant Criminal Justice legislation signed into law included SB 61 (Pavley) extending the sunset date to 2015 on the law authorizing wiretaps by law enforcement under specified circumstances; SB 208 (Alquist) providing the restitution in an identity theft case include, for a reasonable period of time, costs of repairing the victim’s credit and monitoring the victim’s credit report; SB 291 (Vargas) requiring that when a defendant is extradited back to the State of California that judges issue bail in the amount of $100,000, in addition to any bail already issued for the underlying original offense; SB 360 (DeSaulnier) enhancing the law regarding security printers for prescription forms for controlled substance for prescriptions; SB 390 (La Malfa) including search and rescue personnel in existing misdemeanor assault and battery crimes applicable where the victim is a firefighter, peace officer, emergency medical technician or other similarly-situated professional, as specified; SB 406 (Liu) adding security officers and custody assistants, as defined, to the list of public safety officers that triggers a greater penalty when they are the victim of simple battery; SB 425 (Calderon) providing for minimum fines for specified dog fighting and cockfighting violations and to allow for forfeiture of property acquired through cockfighting; SB 430 (Kehoe) enacting the “Diana Gonzalez Strangulation Prevention Act of 2011” specifying, for purposes of the felony domestic violence statute, “traumatic condition” includes injury as a results of strangulation or suffocation; SB 514 (Simitian) making it an infraction for any person, corporation, or retailer to sell a substance containing dimenhydrinate or DXM, as defined, over-the-counter without a prescription to a person under the age of 18; SB 534 (Corbett) conforming state law concerning the sexual forensic protocol to the federal requirements for Violence Against Women Act funding; SB 557 (Kehoe) permitting the Cities of San Diego and Anaheim, and the Counties of Alameda and Sonoma to create a two-year pilot project for the establishment of family justice centers; SB 576 (Calderon) extending the sunset on California’s current sentencing law to January 1, 2016; SB 610 (Wright) streamlining the process of which Californian’s apply for a concealed weapon’s permit; SB 622 (Corbett) clarifying that an out-of-state sex offender is required to register with the Department of Justice when they move to California; SB 636 (Corbett) providing greater protection to participants in the “Safe at Home” address confidentiality program for domestic violence victims; SB 687 (Leno) providing that a defendant cannot be convicted based on the uncorroborated listening of an in-custody informant; SB 718 (Vargas) permitting mandated reporters to report known or suspected elder abuse over the Internet, as specified; SB 723 (Pavley) expanding the court’s authority regarding restraining orders in domestic violence cases, authorizing a court to issue a protective order for up to 10 years, regardless of the sentence; SB 756 (Price) clarifying jurisdiction for prosecuting sex offender registrants who fail to comply with registration requirements upon release from custody; SB 796 (Blakeslee) curbing the streaming of contraband into mental hospitals by making it a misdemeanor; SB 917 (Lieu) increasing misdemeanor penalty for animal neglect and making it a crime to sell a live animal on any street, public right-of-way, parking lot, carnival, or boardwalk; AB 123 (Mendoza) expanding an existing misdemeanor related to interference or disruption of school activities and punishable by up to six months in the county jail to include any person who willfully or knowingly creates a disruption with the intent to threaten the immediate physical safety of K-8 pupils arriving at, attending, or leaving school; AB 141 (Fuentes) requiring the courts, as part of the admonishment to jurors, to clearly explain the prohibition on communication or research about the case, including the use of electronic wireless communication, and requires the court officer in charge of the jury to prevent these activities, and making that violation of this provision contempt of court, which is a misdemeanor; AB 144 (Portantino) making it a misdemeanor for any person to carry an exposed and unloaded handgun outside a vehicle upon his/her person while in any public place or on any public street in an incorporated city, or in any public place or public street in a prohibited area of an unincorporated county; AB 177 (Mendoza) expanding the authority of the juvenile court to order the parent or guardian of a minor to attend anti-gang violence parenting classes; AB 220 (Solorio) extending the sunset date on the Interstate Compact for Juveniles, until January 1, 2014; AB 316 (Carter) creating a separate section of law for grand theft of copper materials and adding a fine of up to $2,500 on to the existing penalties; AB 332 (Butler) increasing the fines for fraud embezzlement, theft, etcetera, against an elder or dependent adult when the amount taken is more than $950; AB 353 (Cedillo) prohibiting the impoundment of a vehicle stopped at a sobriety checkpoint if the driver’s sole offense is the failure to be properly licensed; AB 364 (Bonilla) allowing the seizing and preservation of assets of a criminal defendant charged with a single large-scale financial crime; AB 366 (Allen) revising procedures governing the involuntary administration of antipsychotic medication to state hospital patients; AB 396 (Mitchell) requiring the Department of Health Services to develop a process to maximize federal financial participation for the health care services provided by counties to juveniles in custody who would otherwise be eligible for Medi-Cal; AB 434 (Logue) allowing funds remaining in a county’s DNA Identification Fund to reimburse a regional state crime laboratory for costs associated with the analysis and comparison of crime scene DNA with forensic identification samples; AB 486 (Hueso) prohibiting the sale, dispensing, distribution, administration, or giving or attempting to sell, dispense, furnish, administer, or give, or possession for sale specified synthetic stimulants (referred to as “bath salts,” “Ivory Wave,” “Red Dove,” “Vanilla Sky,” and many other names) or specified synthetic stimulant derivatives; AB 520 (Ammiano) allowing a person convicted of alcohol-related reckless driving to apply for a restricted license early if he/she complies with specified requirements, including installation of an ignition interlock device; AB 547 (Gatto) making is a misdemeanor for a care provider in a state-licensed facility to coerce an elder into voting for or against a candidate or measure contrary to the elder’s intent; AB 665 (Torres) increasing the punishment for the crime of “peeping” with the naked eye or with the use of an instrumentality to a maximum of one year in the county jail, a fine of up to $2,000, or both, when the victim of the crime is a minor, or the perpetrator is a repeat offender; AB 708 (Knight) providing that a criminal complaint in specified offenses relating to concealed cameras be filed within one year of the camera being found, AB 717 (Ammiano) making the Child Abuse Central Index constitutional by only including the reports from local agencies of investigations that are substantiated; AB 809 (Feuer) applying the same regulations relating to the reporting and the retention of records for handguns to long guns; AB 813 (Fletcher) providing immunity from liability to Sex Offender Management Board members and certified sex offender management professionals for criminal acts committed by persons, as specified; AB 898 (Alejo) increasing the minimum restitution fine incrementally over a three-year period from $200 to $300 for a felony conviction and from $100 to $150 for a misdemeanor conviction; AB 1010 (Furutani) giving city attorneys prosecuting misdemeanors the ability to record conversations; AB 1016 (Achadjian) clarifying that, commencing January 1, 2012, a county to be reimbursed for specified nontreatment costs incurred that are associated with a trial of a mentally disordered offender; AB 1026 (Knight) placing the crimes of assault with a deadly weapon and assault by means of force likely to produce great bodily injury in separate paragraphs of subdivision (a) of Penal Code Section 245; AB 1053 (Gordon) increasing the fees for juveniles receiving public defender services; AB 1117 (Smyth) making it an infraction, punishable by a fine, for a person convicted of animal abuse to possess an animal for either five or ten years following conviction; AB 1122 (John A. Perez) establishing the California Voluntary Tattoo Removal Program to serve individuals between 14 and 24 years of age, who are in the custody of CDCR or county probation departments, who are on parole or probation, or who are in a community-based organization serving at-risk youth, as specified; AB 1281 (Garrick) allowing prosecutors, victims, family members of victims, and designated victim representatives to appear at “lifer” parole hearings through audio conferencing, if audio conferencing is available; AB 1293 (Blumenfield) permitting the seizing and preservation of assets of a criminal defendant charged with felony elder or dependent adult financial abuse; and AB 1384 (Bradford) amending current law relating to expungement standards to permit expungement in the “interest of justice.”

Vetoed Criminal Justice legislation included SB 296 (Wright) which would have created a process whereby a person subject to a gang injunction can petition for injunction relief if he/she meets certain criteria; SB 427 (de Leon) which would have clarified that ammunition records could not be provided to a non-authorized person or third party, unless there was written consent of the purchaser and required a court issuing an injunction against gang activity to state whether any or all the defendants would be enjoined from possessing a firearm; SB 888 (Lieu) which would have prohibited picketing, except on private property, targeted at a funeral during a time period beginning one hour prior to the funeral and ending one hour after the conclusion of the funeral and would have made a violation a misdemeanor; SB 914 (Leno) which would have restricted the authority of law enforcement to search portable electronic devices without obtaining a search warrant; AB 142 (Fuentes) which would have provided for an additional advisement when a noncitizen pleads guilty so that the person is aware that if he/she is deported and returns to the United States he/she will face harsh federal penalties for reentry; AB 239 (Ammiano) which would have required the Crime Laboratory Review Task Force to reconvene to prepare a supplemental report, to be submitted to the Legislature by July 1, 2013, and would have included a recommendation regarding the composition of a statewide body to oversee crime laboratories, as specified; AB 322 (Portantino) which would have required the Department of Justice to establish a ten-county pilot project to open and test all rape kits collected in those counties during the period of the pilot project; and AB 446 (Carter) which would have authorized a county to adopt a restorative justice program to address the needs of minors, victims, and the community.

EDUCATION

I. K-12

A. No Child Left Behind

In 2011, the United States Congress has been working on the reauthorization and reforms to the No Child Left Behind Act of 2011.

No Child Left Behind requires all government-run schools receiving federal funding to administer a statewide standardized test annually to all students. This means that all students take the same test under the same conditions. The students’ scores determine whether the school has taught the students well. Schools which receive Title I funding through the Elementary and Secondary Education Act of 1965 must make Adequate Yearly Progress (AYP) in test scores (e.g., each year, its fifth graders must do better on standardized tests than the previous year’s fifth graders).

If the school’s results are repeatedly poor, then steps are taken to improve the school.

Schools that miss AYP for a second consecutive year are publicly labeled as being “in need of improvement” and are required to develop a two-year improvement plan for the subject that the school is not teaching well. Students are given the option to transfer to a better school within the school district, if any exists.

Missing AYP in the third year forces the school to offer free tutoring and other supplemental education services to struggling students.

If a school misses its AYP target for a fourth consecutive year, the school is labeled as requiring “corrective action,” which might involve wholesale replacement of staff, introduction of a new curriculum, or extending the amount of time students spend in class.

A fifth year of failure results in planning to restructure the entire school; the plan is implemented if the school fails to hit its AYP targets for the sixth year in a row. Common options include closing the school, turning the school into a charter school, hiring a private company to run the school, or asking the state office of education to run the school directly.

The Act requires states to provide “highly qualified” teachers to all students. Each state sets its own standards for what counts as “highly qualified.” Similarly, the act requires states to set “one high, challenging standard” for its students. Each state decides for itself what counts as “one high, challenging standard,” but the curriculum standards must be applied to all students, rather than having different standards for students in different cities or other parts of the state.

The Act also requires schools to let military recruiters have students’ contact information and other access to the student, if the school provides that information to universities or employers, unless the students opt out of giving military recruiters access.

On September 23rd, President Obama, after being frustrated with Congress’ reaction on legislation to make reforms to law, took action on his own by letting states opt out of federal school rules by eliminating the requirement that every student pass testing by the 2013-14 school year and letting states draft their own plans to improve the performance of struggling students in low performance schools. States will be eligible for more flexibility on how they spend federal money provisory marked for special tutoring programs. Children will still have to take yearly tests in math and reading to reserve flexibility through waivers of the law and must develop a rigorous and comprehensive plan addressing the three critical areas that are designed to improve educational outcomes for all students, closing achievement gaps, increasing equity, and improving the quality of instruction:

1. Transitioning to College- and Career-Ready Standards and Assessments: To request Elementary and Secondary Education Act (ESEA) flexibility, a state must have already adopted college- and career-ready standards in reading/language arts and mathematics designed to raise the achievement of all students, including English Learners and students with disabilities. The state will then help its schools and districts transition to implementing those standards and will commit to administering statewide tests aligned with college- and career-readiness.

2. Developing Systems of Differentiated Recognition, Accountability, and Support: Under ESEA flexibility, a state will establish a differentiated recognition, accountability, and support system that gives credit for progress towards college- and career-readiness. The system each state develops will recognize and reward the highest-achieving schools that serve low-income students and those that show the greatest student progress as Reward Schools.

For a state’s lowest-performing schools, priority schools, generally, those in the bottom 5%, a district will implement rigorous interventions to turn the schools around. In an additional 10% of the state’s schools, Focus Schools, identified due to low graduation rates, large achievement gaps, or low student subgroup performance, the district will target strategies designed to focus on students with the greatest needs.

3. Evaluating and Supporting Teacher and Principal Effectiveness: Each state that receives the ESEA flexibility will set basic guidelines for teacher and principal evaluation and support systems. The state and its districts will develop these systems with input from teachers and principals and will assess their performance based on multiple valid measures, including student progress over time and multiple measures of professional practice, and will use these systems to provide clear feedback to teachers on how to improve instruction.

October 12th was the date by which states had to express interest in applying for waivers. At the time of this writing, 42 states had expressed interest. California had not applied for a waiver.

Related state legislation was SB 547 (Steinberg) which would have repealed, as of July 1, 2014, the Academic Performance Index (API), the state’s accountability system for schools and districts, and would have replaced it with the Education Quality Index (EQI). Currently, California’s public school accountability system has no mechanism for measuring success in terms of outcomes or opportunities beyond performance on core academic assessments, including civic and community responsibility, career or college readiness and acquisition of life skills; the current accountability system also has no way of identifying or rewarding those schools that educate the whole pupil in any way other than is measured by testing skills and knowledge in mathematics, language arts, history and science. The indices proposed in this bill were intended to replace and augment the information composited in the current API, thus including information on student opportunities and student success so as to provide broader and more comprehensive information on school performance than is available from the API focus on achievement test scores alone. The proposed EQI would have aggregated information from at least four sub-indices, related to different dimensions of student performance and opportunity, including academic performance, advancement and graduation rates, preparation for career or post-secondary education, and enhanced student learning opportunities. However, the Governor vetoed this bill.

B. School Bullying

One of the major problems which exists in the school system has been, and still is, school bullying. A publication from the United States Department of Justice, Office of Juvenile Justice and Delinquency Programs, notes that bullying can have short-term and long-term psychological effects on both those who bully and those who are bullied. Long-term consequences have been linked to increases in criminal behavior and substance abuse. Recently, a number of teen and youth suicides have been traced to cyber bullying activities perpetrated by the use of social networks to post harassing, malicious, and intentionally harmful messages. A 2001 report by the National Institute of Child Health and Human Development estimated that 1.6 million children in grades six through 10 in the United States are bullied at least once a week and 1.7 million bully others frequently.

A 2007 report from the National Association of Attorneys General Task Force on School and Campus Safety noted that bullying is an important issue in examining school violence and recommended states continue to implement and expand bullying prevention measures. The report stated “Bullying was recognized as an important issue in examining school violence. The growth in the use of technology and social networking sites by younger Americans has fueled a fear among professionals that cyber bullying will become the means most often utilized to harass, threaten, or otherwise cause distress.” The Task Force recommended that states “continue to implement and expand bullying prevention measures, including cyber bullying.”

Over the years, the Legislature has responded to bullying through legislation. Bullying is defined in existing law as an act by a pupil engaging in sexual harassment, hate violence, harassment, threats or intimidation that may include bullying committed via an electronic act that includes, but is not limited to, a message, text, sound, or image by means of an electronic device (e.g., a telephone, wireless telephone or other wireless communication device, computer or pager).

Existing law prohibits the suspension or the recommendation of a pupil for expulsion from school unless a school district superintendent or the principal of the school determines that the pupil has committed certain specified acts, including having engaged in an act of bullying and bullying committed by means of an electronic act. Existing law specifies that an electronic act means the transmission of a communication, including but not limited to, a message, text, sound, or image by means of an electronic device.

However, the incidents of bullying have grown in recent years. In September 2010, Sean Walsh, a 13-year-old in Tehachapi committed suicide after experiencing persistent and long-term bullying due to his sexual orientation and gender expression. His mother reported that even school teachers and administrators were aware of it and, in some instances, participated in the harassment and the pleas went unheeded. There have been other cases in the central state where bullying has come in the form of harassing a person because of their weight and appearance, and the Internet has been used to embarrass students. The Legislature passed, and the Governor signed, the following legislation to enhance the laws concerning bullying: AB 9 (Ammiano) requiring a school district to include specific information in its policies and procedures regarding discrimination, harassment, intimidation, and bullying and requiring the policies to include complaint procedures and alternative discipline policies for pupils who engage in this behavior; AB 746 (Campos) expanding the definition of bullying committed by an electronic act to include posting on a social network Internet Web site, and adding bullying committed by posting of messages on a social network Internet Web site to the list of issues school districts are encouraged to address within their strategies to improve school attendance and reduce school crime and violence; and AB 1156 (Eng) requiring the training of school site personnel in the prevention of bullying, providing a mechanism under which the option is available for the student who is the target of an act of bullying to be removed from an unhealthy setting, and expanding the definition of bullying by linking it to such impacts, as academic achievement and participation.

C. Administration of Epilepsy Medication in the Schools

Another important piece of legislation was SB 161 (Huff), which had the school boards and medical association lined up against a coalition of union groups such as the nurses associations and school employees. SB 161, which the Governor signed, permits school districts, county offices of education, or charter schools to participate in a program to train nonmedical school employees who volunteer to administer emergency anti-seizure medication to students with epilepsy.

More than 90,000 children in California have epilepsy, a common symptom of which is seizures. The anti-seizure medication which is to be used is Diastat, which is a trademark administration system of diazepam (valium) and is the only FDA-approved, at-home medication for the treatment of acute repetitive seizures, or “cluster” seizures. Diastat, a rectally-administered gel, was specifically developed to be administered by people without medical training and is considered the fastest, safest and most effective way to treat epileptic seizures. Many seizure patients, despite maintenance medication, experience breakthrough seizures. Up to 35% of patients on anti-seizure medications may not be adequately controlled. Between 50,000 and 200,000 generalized convulsive status epileptic seizures occur every year in the United States, an overall mortality rate of 20%. Status Epilepticus seizures lasting more than one hour have a mortality rate of 32%, compared with 2.7% for seizures of shorter duration.

Due to school budget cuts, many school nurses have been removed from their schools which have left the schools vulnerable to provide health protection to the students and having to find ways to provide effective medical services.

Proponents of SB 161 indicated that without it, school personnel would have to wait for the child’s parent or an ambulance to arrive in order for the drug to be administered. If a student was suffering from a prolonged seizure, they could run the risk of having permanent brain damage or death if they could not receive immediate medical treatment. Supporters stated that it has been common practice for over 10 years for trained non-medical personnel to have the authority to administer doctor-prescribed Diastat to a student suffering a severe and possibly life threatening seizure. They further contended that the bill is patterned after two existing laws which allow non-medical school personnel to administer drugs, Epinephrine and Glucagon. Supporters argued these medications must also be given in a specified and extremely short amount of time from the onset of the episode. They argue that the administration of Diastat, Epinephrine, and Glucagon is a life-saving measure.

The opposition argued that Diastat is a dangerous medication that has to be administered rectally to control seizures and because a seizure is unpredictable providing for any level of privacy is nearly impossible. They argued that school employees face legal liability if something goes wrong, as school districts generally do not cover punitive damages. Lastly, they believe licensed health care personnel provide the high quality care needed to assure children are treated correctly.

Other significant K-12 Education legislation signed into law included SB 70 (Senate Budget and Fiscal Review Committee), AB 108 (Assembly Budget Committee), AB 114 (Assembly Budget Committee), and AB 32X1 (Blumenfield) enacting Education trailer bill statutory language to the 2011-12 State Budget; SB 128 (Lowenthal) expanding the use of modernization funding under the School Facility Program to include the cost of designs and materials that promote the characteristics of high-performance schools, and expanding eligibility for funding from the High Performance Incentive Grant program to include projects approved to receive a Career Technical Education Facilities Program grant; SB 140 (Lowenthal) requiring the California Department of Education, on a one-time basis, to develop a list, on or before July 1, 2012, of supplemental instruction materials for use in kindergarten and grades 1 to 8, inclusive, that are aligned with California’s common core academic content standards in language arts and for kindergarten and grades 1 to 7, inclusive, that are aligned with California’s common core standards in mathematics; SB 300 (Hancock) permitting the revision of academic content standards in science by authorizing the State Superintendent of Public Instruction to convene a group of science experts and make recommendations to the State Board of Education on a set of revised science content standards; SB 309 (Liu) permitting schoolage child care centers to serve persons with developmental disabilities who are age 18 to 22 and are enrolled in a special education program, under specified conditions; SB 429 (DeSaulnier) permitting after school programs to offer a six-hour program using existing supplemental grant funds; SB 509 (Price) modifying a provision of the Williams settlement to authorize school districts to purchase the newest instructional materials for pupils in all of the neediest schools, without incurring a duty to purchase these materials for pupils in the remaining schools in the district; SB 537 (Correa) permitting the expansion of the existing California Cadet Corps program; SB 614 (Kehoe) permitting a pupil in grades 7 through 12, to conditionally attend school for up to 30 calendar days beyond the pupil’s first day of attendance for the 2011-12 school year, if that pupil has not been fully immunized with all pertussis boosters appropriate for the pupil’s age, if specified conditions are met; SB 753 (Padilla) making changes related to the timing and administration of the required English language development assessments; SB 1X1 (Steinberg) establishing the Clean Technology and Renewable Energy Job Training, Career Technical Education, and Dropout Prevention Program for the purpose of creating California Partnership Academies that focus on clean technology and renewable energy businesses, as specified; AB 25 (Hayashi) requiring a school district that elects to offer athletics to require that an athlete suspected of sustaining a concussion or head injury to be removed from the activity and be evaluated and cleared by a health care provider before returning to the activity; AB 124 (Fuentes) establishing a process to update, revise, and align the English language development standards to the common core state standards in English language arts and requiring the Superintendent of Public Instruction and the State Board of Education to present to the Governor, and the appropriate policy and fiscal committees of the Legislature, a schedule and implementation plan for integrating the revised English language development standards into the education system; AB 169 (Torres) clarifying that county offices of education are eligible for federal funding pursuant to state and federal law; AB 176 (Lara) requiring a test sponsor to provide alternative methods for verifying the identity of test subjects who are unable to provide other required forms of identification for purposes of admission to a standardized test administered by the test sponsor; AB 180 (Carter) requiring the Superintendent of Public Instruction and the State Board of Education to permit dropout recovery high schools, numbering no more than 10, to report the results of an individual pupil growth model, that the Superintendent certifies as meeting specified criteria, in lieu of other indicators under the state’s alternative accountability system; AB 189 (Eng) requiring local educational agencies to hold the regularly scheduled public hearing to take testimony from the public prior to and independent of a meeting where the school district or the governing board of the county office of education adopts a budget; AB 199 (Ma) expressing the encouragement of the Legislature that instruction in social science includes the role of Filipinos in World War II; AB 207 (Ammiano) requiring school districts to accept reasonable evidence that a pupil meets residency requirements for school attendance within the district, and specifying certain types of documents that shall be considered reasonable evidence for a pupil living with his/her parent or legal guardian; AB 230 (Carter) exempting a student attending a middle college high school from the requirement that California Community College governing boards assign a low enrollment priority to concurrent enrollment students, if that student is seeking to enroll in a community college course that is required for the student’s middle college high school program; AB 250 (Brownley) establishing a structure for the implementation of the common core state standards by developing and adopting curriculum frameworks and professional development opportunities that are aligned to the common core state standards; AB 339 (Bonilla) reestablishing, until January 1, 2017, provisions of the Education Code that sunsetted relating to the social content review of instructional materials conducted at the request of publishers; AB 387 (Bonilla) adding spending time with an active duty family member who is on military deployment, as specified, to the list of reasons that justify a pupils excused absence from school; AB 501 (Campos) clarifying that all public school employees have the right to union representation; AB 709 (Brownley) clarifying that foster youth must be immediately enrolled in a school, even if the pupil is unable to produce his/her immunization records prior to enrollment; AB 790 (Furutani) establishing the Linked Learning Pilot Program to be administered by the California Department of Education according to specified requirements for the purpose of implementing district-wide linked learning programs, as specified, in all participating school districts; AB 815 (Brownley) establishing the State Seal of Biliteracy to recognize high school graduates who have attained a high level of proficiency in speaking, reading, and writing in one or more languages in addition to English; AB 1304 (Furutani) defining linked learning programs and authorizing the Commission on Teacher Credentialing to convene a workgroup to develop standards for the issuance of a recognition of study in linked learning for single subject credential holders; and AB 1330 (Furutani) adding career technical education, as defined, beginning with the 2012-13 school year, as an option for pupils to fulfill the existing high school graduation requirement to complete a course in visual or performing arts or foreign language, and requiring school districts that elect this option to notify parents, teachers, pupils and the public, as specified.

Vetoed K-12 Education legislation of significance included SB 512 (Price) which would have required API reporting to include performance data for any pupil subgroup that includes 10 or more pupils with valid test scores; SB 745 (Hernandez) which would have required a school district of choice to give admissions priority to English learners, pupils with exceptional needs, and, pupils who are eligible for free and reduced-price meals; AB 47 (Huffman) which would have modified open enrollment provisions to exempt schools with API scores of at least 700, schools with at least 50 point growth, certain special education schools, and would have made charter schools subject to being on the list of low-achieving schools; AB 86 (Mendoza) which would have expanded existing signature requirements for charter school petitions to include classified employees and would have required the signature petitions to prominently display a statement that classified employees signing the petition have a meaningful interest in working at the charter school; AB 200 (Hayashi) which would have established the Health and Fitness Award Program for the purpose of recognizing schools that have standards-aligned physical education courses and increase the numbers of pupils that meet the minimum standards on the physical performance test; AB 203 (Brownley) which would have specified and expanded requirements in several areas of parent empowerment provisions, including the contents of petitions, the signatures for petitions, petition review procedures, and meeting requirements; AB 532 (V. Manuel Perez) which would have modified the assessment and accountability system as it pertains to English learning students; and AB 1034 (Gatto) which would have made changes to the requirements for charter schools regarding student admission requirements.

II. Higher Education

The most significant Higher Education legislation signed into law were AB 130 (Cedillo) known as the California Dream Act and AB 131 (Cedillo) giving AB 540 (undocumented students or permanent residents who are residents of another state) to qualify for scholarships and student aid and waivers of student fees, as specified. Since 2003, the Legislature has considered legislation to ensure that these students were able to receive financial assistance; however, either they were held in legislative committees or the Governor vetoed them. Undocumented students without lawful immigration status have been eligible for in-state tuition in public postsecondary institutions in California, if they met all of the following requirements, for the past decade: (1) attended a California high school for three or more years; (2) graduated from a California high school or attained an equivalent degree; (3) registered or attended an accredited California higher education institution not before fall of the 2001-02 academic year; and (4) filed an affidavit, if an alien without lawful immigration status, stating that the student has filed an application to legalize his/her immigration status or will file such an application as soon as he/she is eligible to do so. These “AB 540 students” are not generally eligible for federal, state, or institution-based financial aid. AB 540 students can receive private scholarships from foundations and individuals separate from the institutions they attend, but are generally not eligible to receive scholarships or other aid that is provided at the discretion of a University of California (UC), California State University (CSU), or California Community College (CCC) campus, regardless of the original funding source. According to the higher education segments, in 2009-10, AB 540 students were a small fraction of enrollment at all three systems, as follows: 1,941 at UC (of these, 32% were undocumented immigrants); 3,633 at CSU; and 38,203 at CCC. CSU and CCC do not identify the immigration status of AB 540 students, but believe that undocumented students made up a larger proportion of these students than they do at UC. In 2010-11, nonresident undergraduate student tuition amounted to approximately $22,879 at UC, $10,000 at CSU, and $4,800 at CCC per year.

The authors of the Dream Act legislation have been concerned that AB 540 undocumented high school graduates who have been accepted to California’s premier colleges and universities were ineligible for state financial and federal grants or loans and also unable to legally work due to no fault of their own.

Specifically, AB 130 (1) requires, beginning January 1, 2012, that any student admitted under the provisions of AB 540 and attending the CSU, CCC, or the UC, be eligible to receive a scholarship derived from non-state funds (received for the purpose of scholarships) at the segment where he/she is enrolled; (2) declares that its provisions are in compliance with specified federal immigration law; and (3) extends immunity granted to California’s public postsecondary institutions from any monetary damages, refunds/waivers, or other retroactive relief that may result from the implementation of AB 540 to include any provisions adopted as a result of this bill, should a state court declare them unlawful.

Specifically, AB 131 establishes the California Dream Act, expanding the existing exemption from non-resident tuition established by AB 540 (Firebaugh, 2001) to include students who graduate from technical schools and adult schools. Beginning July 1, 2012, the bill expands eligibility for financial aid. Specifically, the bill (1) requests the UC, and requires that the CSU and the Board of Governors of the CCC, and the California Student Aid Commission, to establish procedures and forms to enable AB 540 students to be eligible to apply for and participate in all student financial aid administered by these segments; (2) expands eligibility for state administered student financial aid programs to include AB 540 students; and (3) requires the CCCs to waive the student fees of any AB 540 students who would otherwise qualify for such a waiver, as specified.

California will now join the only two other states that offer financial aid to undocumented students – New Mexico and Texas.

At the time of this writing, Assemblymember Tim Donnelly and the chair of the California Republican Party, Tom Del Beccaro, began a referendum drive to repeal AB 131.

Since 2001, the United States Congress has unsuccessfully considered various Development, Relief and Education for Minors (or DREAM) legislation. On May 11, 2011, the Senate Majority Leader Harry Reid introduced the latest piece of federal DREAM Act legislation.

On October 25, 2011, President Obama proposed a pay-as-you-earn plan that will cap certain student loan borrowers’ loan payment at 10% of their discretionary income. In 2010, the United States Congress passed, and the President signed, an improved income-based repayment (IBR) plan, which allows student loan borrowers to cap their monthly payments of 15% of their discretionary income. Starting July 1, 2014, the IBR plan is scheduled to reduce that limit from 15% to 10% of their discretionary income. The President, in the plan he proposed, starts the limit of 10% in 2012. The debt would be forgiven after 20 years instead of 25 years, as current law. This plan is expected to affect 1.6 million students. Also, the plan will allow borrowers to consolidate their Direct Loans and Federal Family Education Loans into a single lender. Borrowers that take advantage of this consolidation option will receive up to a 5% reduction in their interest rate on some of their loans. This part of the plan could affect 5.8 million borrowers. Also, as part of the “Know Before You Owe” project the Consumer Financial Protection Bureau, in collaboration with the United States Department of Education, released a “Financial Aid Shopping Sheet,” a draft model financial disclosure form. The sheet is to be a tool that colleges and universities could use to help students better understand the type and amount of aid they qualify for and easily compare aid packages offered by different institutions. The form is to also make the total costs and risk of the student loans clear before they enroll by outlining their total estimated student loan debt, monthly loan payments, after graduation and additional costs covered by federal aid.

Other significant Higher Education legislation signed into law included SB 8 (Yee) establishing the Richard McKee Transparency Acts of 2011, requiring records maintained by a CSU, community college auxiliary organization or UC campus foundation to be made available to the public to follow specified timelines and procedures for responding to public records requests, consistent with the California Public Records Act; SB 70 (Senate Budget and Fiscal Review Committee), AB 108 (Assembly Budget Committee), AB 114 (Assembly Budget Committee), and AB 32X1 (Blumenfield) enacting the Higher Education statutory language to the 2011-12 State Budget; SB 451 (Price) requiring the California Student Aid Commission to prioritize Cal Grant C awards to students pursuing study in areas of high employment need, high salary or wage protection, or high growth, and establishing related authority and requirements; SB 611 (Steinberg) requesting the UC Regents to establish and maintain the UC Curriculum Integration Institute to facilitate, among secondary level teachers, postsecondary education instructors, and statewide career technical education associations, the development and promotion of integrated academic and technical education courses that meet UC and CSU admission requirements and align with identified high-priority industry sectors; SB 612 (Steinberg) extending the sunset date of the California Subject Matter Projects until January 1, 2018; SB 774 (Hancock) increasing the maximum amount students and employees of a CCC district may be charged for parking services; SB 813 (Senate Veterans Affairs Committee) extending priority registration enrollment for veterans at the CSU and CCCs, from two to five years; SB 835 (Wolk) expanding the Best Value Construction Contract Pilot Program to all UC campus construction projects statewide valued over $1 million, and extending the sunset date of the Best Value Pilot Program to January 1, 2017; AB 194 (Beall) requiring each campus of the CSU and CCCs, and requests the UC, to give priority in enrollment in classes to any foster youth or former foster youth; AB 668 (Block) defining what constitutes an “undue hardship” on the CSU for the purpose of denying a request to reschedule a test or examination by a student for whom the test time violates the student’s religious creed; AB 670 (Block) requiring the CSU to ensure appeal procedures for applicants who are denied admission are clearly set forth, as specified, by each of its campuses; AB 743 (Block) requiring the CCC Board of Governors to establish a common assessment system to be used for the purposes of community college placement and advisement; AB 795 (Block) granting authority to the governing bodies of the CSU, the UC, and each community college district to set smoking and tobacco enforcement standards, impose fines, and post signs stating the tobacco use policy on campus; AB 844 (Lara) permitting any student, including a person without lawful immigration status or AB 540 students, to serve in any capacity in student government and to receive any grant, scholarship, fee waiver, or reimbursement for expenses at the CSU and the CCCs, consistent with federal law, and requesting the UC to comply with these same provisions; AB 882 (Cook) amending state law to conform with federal law granting a member of the Armed Forces, or his/her dependent, as provided, entitlement to resident classification for so long as he/she is continuously enrolled at that institution, and requests the UC Regents to establish the same residency requirements as those established by the bill for students enrolled at the UC; and AB 1163 (Brownley) recasting the definition of “private college” to allow the California Educational Facilities Authority to facilitate tax-exempt bond programs for religious colleges, as specified, in conformance with a California Supreme Court decision.

Vetoed Higher Education legislation included SB 185 (Hernandez) which would have permitted the UC and the CSU to consider race, gender, ethnicity, national origin, geographic origin, and household income in admission so long as no preference is given; AB 91 (Portantino) which would have established a three-year pilot program to increase participation among community college students and state and federal financial aid programs; and AB 288 (Fong) which would have permitted the governing board of a community college district to deny admission to someone expelled from another community college district within the previous five years, under specified circumstances.

HEALTH AND HUMAN SERVICES

One of the most significant health bills signed into law was SB 946 (Steinberg) requiring health plans and health insurance policies to cover behavioral health therapy for pervasive developmental disorder or autism, requiring plans and insurers to maintain adequate networks of autism service providers, establishing an Autism Advisory Task Force in the Department of Managed Health Care, and sunsetting this bill’s autism mandate provisions on July 1, 2014. Autism is a developmental disorder that appears in the first three years of life that affects the brain’s normal development of social and communication skills. Most researchers believe autism is a physical condition linked to abnormal biology and chemistry in the brain. The exact causes of these abnormalities remain unknown. It is estimated that one in every 110 children is diagnosed with autism, making it more common than childhood cancer, juvenile diabetes and pediatric AIDS combined. An estimated 1.5 million individuals in the United States and tens of millions worldwide are affected by autism. Government statistics suggest the prevalence rate of autism is increasing 10% to 17% annually and Autism Spectrum Disorders (ASDs) costs the nation over $35 billion per year and is estimated to exceed $200 billion in 10 years. Most school districts have seen a doubling of students with ASDs in the past five years. The number of Californians with ASDs who are served by the Department of Developmental Services new exceeds 50,000, which is a number that has increased fivefold since 1998, and is more than 12 times what it was in 1987. Since 1969, California has been a leader in the area of treating and educating the public concerning autism. In 2007, the Legislative Blue Ribbon Commission on Autism and Related Disorders provided specific findings and recommendations in its report entitled “An Opportunity to Achieve Real Change for Californians with Autism Spectrum Disorders.”

In 2008, the Senate Rules Committee established the Senate Select Committee on Autism and Related Disorders, which has appointed regional autism taskforces comprised of consumers and their family members, advocates, providers, researchers, and other experts in the area of ASCs, and other stakeholders, to provide assistance to, and to support the work of, the select committee. Senator Steinberg, as Chair of the Senate Select Committee on Autism and Related Disorders, has established the Statewide Coordinating Council of Autism Taskforces that consists of the leadership of the regional autism taskforces and has provided input and integrated recommendations for consideration by the Senate Selection Committee on Autism and Related Disorders. The former Secretary of the Senate, Rick Rollens, was one of the founders of Families for Early Autism Treatment (FEAT) and the University of California, Davis M.I.N.D. Institute (Medical Investigation of Neurodevelopmental Disorders) which has made studies in the treatment of Autism through applied behavior intervention and Applied Behavior Analysis (ABA). ABA is a method of teaching children with autism and pervasive developmental disorders (A/PDD). It is based on the premise that appropriate behavior, including speech, academics and life skills, can be taught using scientific principles. ABA assumes that children are more likely to repeat behaviors or responses that are rewarded and they are less likely to continue behaviors that are not rewarded. Eventually, the reinforcement is reduced so that the child can learn without constant rewards.

The author has indicated that consumers and advocates have noted that many health plans and insurance companies are failing to provide appropriate healthcare services for individuals with A/PDD, even when these interventions and treatments are being prescribed by physicians and other licensed medical professionals. The author states coverage is particularly problematic when it comes to behavioral intervention therapy (BIT), ABA and other developmentally-based interventions. Until several years ago, many plans denied BIT on the basis that it was “not medically necessary;” “experimental” and/or “lacked evidence of proven efficacy.” The issue of whether these services were “covered services” was not contested at that time, and these cases were referred for an Independent Medical Review by appropriate and licensed health care providers.

The author indicated that recently, a significant number of plans have denied BIT services, not on the basis of medical necessity, but on the basis that these services are “educational” and “not a covered benefit.” Since issues related to “coverage” are resolved by an administrative process, physicians and other licensed mental health providers are excluded from this process.

The impact of these denials by health plan and insurer denials shifts their financial responsibility of millions of dollars to the taxpayers. Currently many A/PDD-related health care services for insured Californians are being paid for by the Regional Centers, counties and school districts. Taxpayers also bear the long term social, educational and social service costs of not treating individuals with ASD when they need additional services later in life, which could have been avoided with appropriate intervention in earlier years.

Existing law requires health plans and insurance companies to provide coverage for medically necessary services for the diagnosis and treatment of A/PDD that are in parity with the coverage that is provided for other diseases and conditions. However, according to many consumers and advocates, health plans and insurance companies fail to provide adequate clarity with regard to the issues of “coverage and medical necessity for individuals with A/PDD.

Specifics of SB 946 (Steinberg)

1. Requiring health care service plans and health insurers to provide coverage for behavioral health treatment for A/PDD from July 1, 2012 through July 1, 2014, in a manner that is consistent with existing state mental health parity law. Providing that as of the date that proposed final rulemaking for essential health benefits is issued pursuant to the Patient Protection and Affordable Care Act, these provisions would not require any benefits to be provided that exceed the essential health benefits, which all health plans and insurers would be required to offer. If the federal rules are defined prior to July 1, 2014 then the provisions in this bill would sunset prior to that date. Additionally, these provisions may effectively sunset earlier than July 1, 2014, since the Act’s essential health benefits law would go into effect January 1, 2014.

2. Defining “behavioral health treatment” as professional services and treatment programs, including applied behavior analysis and evidence-based behavior intervention programs, that develop or restore, to the maximum extent practicable, the functioning of an individual with pervasive developmental disorder or autism and that are provided by licensed, unlicensed, or uncertified providers, as specified. Requiring the Department of Managed Health Care to establish the Autism Advisory Task Force and to submit a report to the Governor and the Legislature by December 31, 2012.

3. Does not apply to specialized health care service plans or insurance policies that do not deliver mental or behavioral health services and health plans or insurers that contract with the state’s Medi-Cal Program, Healthy Families Program, and the California Public Employees’ Retirement System.

Lastly, six states and the District of Columbia have passed health insurance benefits mandates related to Autism.

In the 2010 Digest of Legislation under the health overview, there was a discussion of the federal Patient Protection and Affordable Care Act and how the legislation enacted for California to implement the federal law. Since the passage of the federal legislation, a majority of states, numerous organizations, and individuals filed actions with the federal court challenging the constitutionality of the federal law. As of September 2011, federal appellate courts are almost evenly divided on the constitutional issues raised in this litigation at the district court level, three judges upheld the constitutionality of the law and three declared it unconstitutional in part. Several other challenges were dismissed on technical grounds, such as jurisdiction and plaintiffs lacking standing to sue. Most likely, the United States Supreme Court will make a ruling on the constitutionality of the law in 2012. Also in 2011, the Republican-controlled House of Representatives approved a bill to repeal the Patient Protection and Affordable Care Act. However, the United States Senate voted it down and President Obama indicated if it had passed he would have vetoed it.

Significant Health and Human Services legislation signed into law included SB 20 (Padilla) repealing current law governing menu labeling requirements for food facilities and instead conforms state law to federal labeling standards; SB 36 (Simitian) permitting counties that participate in the County Health Initiative Matching Fund program to draw federal matching funding by providing health care coverage to qualified children with family income at or below 400% of the federal poverty level; SB 43 (Liu) requiring counties to screen work registrants to determine whether they will participate in or be deferred from the state’s CalFresh Employment and Training Program, as specified; SB 53 (Alquist) establishing enforcement authority in California law to implement provisions of the federal Patient Protection and Affordable Care Act related to the Medical Loss Ratio requirements on health plans and health insurers and prohibitions on annual and lifetime benefits; SB 72 (Senate Budget and Fiscal Review Committee), SB 73 (Senate Budget and Fiscal Review Committee), AB 97 (Assembly Budget Committee), AB 100 (Assembly Budget Committee), AB 102 (Assembly Budget Committee), AB 104 (Assembly Budget Committee), and AB 106 (Assembly Budget Committee) enacting the statutory provisions to implement the Health and Human Services portions of the 2011-12 State Budget; SB 100 (Price) requiring the Medical Board of California to adopt regulations on or before January 1, 2013, on the appropriate level of physician availability necessary within clinics using laser or intense pulse light devices for elective cosmetic surgery; SB 222 (Evans) requiring policies in the individual health insurance market to provide coverage for maternity services; SB 309 (Liu) permitting school age child care centers to serve persons with developmental disabilities who are age 18-22 and are enrolled in a special education program under specified conditions; SB 335 (Hernandez) imposing a Quality Assurance Fee on specified hospitals for 30 months from June 11, 2011 until December 31, 2013, to which the funds will be used to draw down federal funds to provide supplemental payments to private hospitals in fee for service Medi-Cal, Medi-Cal managed care, and for acute psychiatric days; SB 368 (Liu) giving juvenile courts the authority to limit a parent or guardian’s right to make decisions about the regional center and other developmental services for a child with developmental disabilities, and to appoint a developmental services decisionmaker; SB 380 (Wright) permitting the Medical Board of California to set contents standards for an educational activity concerning chronic diseases; SB 422 (Wright) including the designated staff of the local public health agency for HIV partner services among the people to whom a physician, who has confirmed a positive test for HIV of an individual may disclose that information without criminal or civil liability; SB 431 (Emmerson) requiring a pharmacy, within 14 days, to report certain information and evidence about businesses relative to chemical, mental, or physical impairment to the extent it affects his/her ability and theft to the Board of Pharmacy; SB 502 (Pavley) establishing on January 1, 2014, the Hospital Infant Feeding Act which will require all general acute care and special hospitals that have a perinatal unit to have an infant-feeding policy, as specified, to clearly post the policy and routinely communicate the policy to perinatal unit staff; SB 539 (Price) extending the Board of Vocational Nursing and Psychiatric Technicians sunset date to January 1, 2016; SB 540 (Price) extending the Dental Board of California’s sunset date to January 1, 2016; SB 583 (Vargas) reauthorizing the ALS/Lou Gehrig’s Disease Research Fund income tax checkoff; SB 695 (Hancock) permitting, until January 1, 2014, Medi-Cal benefits to be provided to a Medi-Cal eligible individual awaiting adjudication in a county juvenile detention facility if the count agrees to pay the state’s share of Medi-Cal expenditures and administrative costs; SB 718 (Vargas) permitting mandated reporters to report known or suspected elder abuse over the Internet; SB 751 (Gaines) prohibiting a health insurance carrier contract with a provider for hospital services from containing a provision that would block the dissemination and disclosure of cost and quality data to members of the health plan or insurers but not to the general public; SB 796 (Blakeslee) creating a misdemeanor, punishable by a fine of up to $1,000 per item, to possess with the intent to deliver to a patient in state hospital, specified items – wireless communication devices, tobacco products or cash – prohibited for possession by a patient, by law or regulation; SB 850 (Leno) requiring an electronic health record system or electronic medical record system to automatically record any change or deletion of any electronically stored medical information; SB 897 (Leno) requiring licensees of residential care facilities for the elderly to notify the State Long-Term Care Ombudsman, residents and potential residents, and the Department of Social Services of specified events indicating financial distress; SB 930 (Evans) repealing requirements that In-Home Supportive Services recipients provide fingerprint images and that provider timesheets include spaces for provider and recipient fingerprints; SB 945 (Senate Health Committee) permitting the Department of Health Care Services to implement a largely federally funded program that provides monetary incentives to eligible Medi-Cal providers who install and use certified Electronic Health Records; AB 6 (Fuentes) enhancing the policies relating to the Administration of the California Work Opportunity and Responsibility to Kids, and CalFresh programs; AB 69 (Beall) permitting counties to identify, through the Social Security Administration benefits database, seniors who may be eligible for CalFresh benefits in order to enroll them in the program and improve their nutrition; AB 113 (Monning) establishing the Non-Designated Public Hospital Inter-governmental Transfer Program, administered by the Department of Health Care Services, under which public entities would voluntarily transfer funds to the state for the purpose of drawing down federal funds to make supplemental Medi-Cal payments to these Non-Designated Public Hospitals; AB 136 (Beall) expanding the California Public Utilities Commission Deaf and Disabled Telecommunications Program to include assistance to individuals with speech disabilities by January 1, 2014; AB 138 (Beall) establishing the Elder Economic Security Act of 2011 and requiring the Department of Aging to report the Elder Economic Security Standard Index for each service area in its state plan and use it as a reference when making decisions about allocating its existing resources; AB 151 (Monning) permitting an individual to drop Medicare Advantage coverage and enroll in Medicare supplement coverage of the same issuer, or the issuer’s parent company, if the Medicare Advantage issuer increases premiums; AB 186 (Williams) requiring the Department of Public Health to establish a list of communicable diseases and conditions for which clinical laboratories must submit specimens to local public health laboratories to undergo further testing; AB 210 (Hernandez) requiring, as of July 12, 2012, group health insurance policies to provide maternity services for all those insured; AB 212 (Beall) making various federal compliance changes to the California Fostering Connections to Success Act of 2010; AB 300 (Ma) imposing minimum statewide standards for the regulation of practitioners engaged in the business of tattooing, body piercing, and the application of permanent cosmetics in California; AB 301 (Pan) prohibiting, until January 1, 2016, California Children’s Services program covered services from being incorporated into Medi-Cal managed care contracts, except for contract within specified county organized health systems and regional health authorities; AB 313 (Monning) requiring residential care facilities for the elderly to provide residents, their responsible party, and the local long-term care ombudsman with prescribed notice when specified actions are taken in response to violations that could result in suspension or revocation of the facility’s license or that relate to the health and safety of residents; AB 395 (Pan) expanding the statewide screening of newborns for diseases to include testing for severe combined immunodeficiency and other T-cell lymphopenias; AB 415 (Logue) enacting the Telehealth Advancement Act of 2011 to revise and update existing law to facilitate the advancement of telehealth as a service delivery mode in managed care and the Medi-Cal Program; AB 499 (Atkins) permitting a minor, who is 12 years of age or older, to consent to medical care related to the prevention of a sexually transmitted disease; AB 507 (Hayashi) removing remaining legal barriers to optimal pain management for patients with cancer, HIV/AIDS, and other diseases or conditions causing pain; AB 536 (Ma) requiring the Medical Board of California to post on its Internet Web site notification of an expungement order and the date of the order within six months of receiving a certified copy of the expungement order from a licensee; AB 581 (John A. Perez) creating the California Healthy Food Financing Initiative, the California Healthy Food Financing Initiative fund and the California Healthy Food Financing Initiative Council, for the purpose of expanding access to healthy foods in underserved communities; AB 641 (Feuer) eliminating the citation review conference process from the citation appeals process for long-term care facilities, and permitting fines to be levied from both state and federal agencies when an incident violates both state and federal laws; AB 655 (Hayashi) requiring a peer review body to produce relevant peer review information about a physician and surgeon that was subject to peer review for a medical disciplinary cause or reason; AB 667 (Mitchell) establishing medical necessity standards for Medi-Cal subacute care programs; AB 678 (Pan) establishing a supplemental payment program for governmental entity providers of Medi-Cal emergency medical transportation services using certified public expenditures to match federal funds; AB 688 (Pan) prohibiting a retailer or retail food facility from selling, or offering for sale, infant formula, baby food, and over-the-counter drugs beyond the expiration or “use by” date indicated on the product’s packaging and imposes a $10 fine per item, per day, in violation; AB 762 (Smyth) permitting the reuse of medical sharps and pharmaceutical wastes common containers and requires the consolidated waste to be treated by either incineration at a permitted medical waste treatment facility or with an alternative technology; AB 876 (Valadao) narrowing the circumstances that allow a provider of in-home supportive services to sign, on the client’s behalf, the form that allows the client to hire a provider with a criminal record that includes various felonies; AB 922 (Monning) transferring the Department of Managed Health Care from the Business, Transportation and Housing Agency to the Health and Human Services Agency and transferring the Office of the Patient Advocate from the Department of Managed Health Care to the Health and Human Services Agency, effective July 1, 2012; AB 1059 (Huffman) adding new data elements to the annual report to the Legislature required of each county establishing a Maddy Emergency Medical Services Fund regarding the moneys collected and disbursed; AB 1066 (John A. Perez) enacting technical and conforming statutory changes necessary to implement the Special Terms and Conditions required by the federal Centers for Medicaid and Medicare Services in the approval of California’s Section 1115(a) Medi-Cal Demonstration Project entitled “California’s Bridge to Reform,” approved on November 2, 2010; AB 1122 (John A. Perez) enacting, until January 1, 2017, the California Voluntary Tattoo Removal Program in California Emergency Management Agency, as specified, and provides that it be funded with federal and private moneys; AB 1127 (Brownley) making it unprofessional conduct for a physician and surgeon who is the subject of an investigation by the Medical Board of California to repeatedly fail, in the absence of good cause, to attend and participate in an interview scheduled by the mutual agreement of the physician and surgeon and the Medical Board of California; AB 1296 (Bonilla) enacting the Health Care Eligibility Reform, Enrollment, and Retention Planning Act, which requires various agencies and stakeholders to undertake a planning and development process regarding the federal Patient Protections and Affordable Care Act, including regulations or guidance related to eligibility, enrollment, and retention in state health subsidy programs; AB 1297 (Chesbro) expediting, beginning July 1, 2012, federal reimbursement to counties for their Medi-Cal specialty mental health claims by conforming the procedures and timeframes required by the Department of Mental Health to federal Medicaid requirements and the approved Medicaid state plan and waivers; AB 1319 (Butler) prohibiting the sale, manufacture, or distribution of a bottle or cup or a liquid, food, or beverage in a can, jar, or plastic bottle that contains bisphenol A if the item is primarily intended for children three years of age or younger; AB 1329 (Davis) requiring the Department of Public Health to establish a process to receive applications for, and award a grant to, an agency to operate the statewide Ken Maddy California Cancer Registry; AB 1382 (Hernandez) permitting HIV counselors to perform hepatitis C virus or combined HIV/hepatitis C virus rapid tests; and AB 1400 (Assembly Human Services Committee) stating that the name of the federal Supplemental Nutrition Assistance Program be administered in California shall be CalFresh and specifying that any reference in any other law to the Food Stamp Program shall refer to CalFresh.

Vetoed Health and Human Services legislation of note included SB 105 (Yee) which would have required persons under 18 years of age to wear property fitted and fastened snow sport helmets while downhill skiing or snowboarding, and establishing penalty for skiers, snowboarders, and/or their parent or legal guardian for noncompliance; SB 278 (Gaines) which would have required ski resorts to prepare an annual safety plan, as specified, and made the plan available to the public upon request, the same day that the request is received; SB 416 (Kehoe) would have required appropriate, voluntary, demographic, self-identification questions related to sexual orientation, gender identity, gender expression, to domestic partnership and gender of one’s spouse to be included in the California Health Interview Survey and the Behavioral Risk Factor Surveillance System; SB 442 (Calderon) which would have required a hospital’s policy for providing language assistance services to patients with language or communication barriers to ensure meaningful access to translation and interpreter services by limited- or non-English-speaking individuals and to include appropriate criteria for demonstrating the proficiency of the translation and interpreter services; SB 538 (Price) which would have extended the sunset date of the Board of Registered Nursing from January 1, 2012 to January 1, 2016; SB 791 (Simitian) which would have required health facilities at which mammography examinations are performed to provide a specified notice to patients who have dense breast tissue; AB 584 (Fong) which would have required that a physician, as defined in the workers’ compensation law, who is conducting utilization review of the proposed treatment for an injured worker, be licensed in California; AB 1147 (Yamada) which would have required social workers to file a report with the court for review at periodic status review hearings documenting the services provided to allow a minor parent in foster care to provide a safe home for his/her child; and AB 1182 (Hernandez) which would have deleted the requirement that county welfare departments assess the value of a vehicle when determining and re-determining eligibility for applicants and recipients of California Work Opportunity and Responsibility to Kids program.

PUBLIC EMPLOYMENT

The major public employment issue is the reforming of public pensions. In 2010 several bills were signed into law which brought some transparency in the California Public Employees’ Retirement System (CalPERS) (see 2010 Digest of Legislation).

On February 24, 2011, the Little Hoover Commission released its study on public pensions. Since April of 2010 the Commission had held hearing and conducted research into how best to make reforms. The Commission concluded “pension plans are dangerously underfunded, the result of overly generous benefit promises, wishful thinking and an unwillingness to plan prudently.” The Commission provided the following recommendations:

Recommendation 1: To reduce growing pension liabilities of current public workers, state and local governments must pursue aggressive strategies on multiple fronts.

• The Legislature should give state and local governments the authority to alter the future, unaccrued retirement benefits for current public employees.

• State and local governments must slow down pension costs by controlling payroll growth and staffing levels.

Recommendation 2: To restore the financial health and security in California’s public pension systems, California should move to a “hybrid” retirement model.

• The Legislature must create pension options for state and local governments that would retain the defined-benefit formula – but at a lower level – combined with an employer-matched 401(k)-style defined-contribution plan.

• The 401(k)-style component must be risk-managed to provide retirement security and minimize investment volatility.

Recommendation 3: To build a sustainable pension model that the public can support, the state must take immediate action to realign pension benefits and expectations.

• To provide more uniform direction to state and local agencies, the Legislature must:

  • Cap the salary that can be used to determine pension allowances, or cap the pension, at a level that is reasonable and fair. Once the employee exceeds the threshold, employees and employers could make additional retirement contributions into a risk-managed, 401(k)-type defined-contribution plan.
  • Set appropriate pension eligibility ages to discourage early retirement of productive and valuable employees.
  •  Set a tight definition of final compensation, computed on base pay only, over a five-year average to prevent and discourage pension “spiking.” Set uniform standards for the maximum hours that retirees can return to work and continue to receive public-sector pensions.
  • Set uniform standards and definitions for disability benefits.
  • Restrict pension allowances to exclude service in an elected office.
  • Eliminate the purchase of “air time.” Strengthen standards for revoking or reducing pensions of public employees and elected officials convicted of certain crimes involving the public trust.
  • To minimize risk to taxpayers, the responsibility for funding a sustainable pension system must be spread more equally among parties.
  • The Legislature must prohibit employees and employers, except under rare circumstances, from taking contribution “holidays” which allows an employer and each employee to voluntarily participate in a suspension of pension contributions.
  • The Legislature must prohibit retroactive pension increases.
  • The Legislature must require employees and employers to annually adjust pension contributions based on an equal sharing of the normal costs of the plan.
  • State and local governments must explore options for coordinating pension benefits with Social Security.

Recommendation 4: To improve transparency and accountability, more information about pension costs must be provided regularly to the public.

• The Legislature must require government retirement boards to restructure their boards to add a majority or a substantial minority of independent, public members to ensure greater representation of taxpayer interests.

• All proposed pension increases must be submitted to voters in their respective jurisdictions.

  • The ballot measures must be accompanied by sound actuarial information, written in a clear and concise format.

• The Legislature must require all public pension systems to include in their annual financial reports:

  • The present value of liabilities of individual pension funds, using a sensitivity analysis of high, medium and low discount rates.
  • The government entity’s pension contributions as a portion of the general operating budget and as a portion of personnel costs, trended from the past and projected into the future.

• The State Controller must expand the Public Retirement System’s Annual Report to include the above information. Administrative fees to pension systems should be considered as a funding source to support actuarial expertise and the timely production of the report.

• The Legislature must require pension fund administrators to improve procedures for detecting and alerting the public about unusually high salary increases of government officials that will push pension costs upward.

The Governor’s Budget, as introduced, did not contain pension reform language and as time went on during the budget process the issue became one of the major talking points to attempt to obtain Republican votes for the Budget.

On February 11th, the Legislative Analyst came out with their recommendations to fix the pension crisis. They indicated the following as problems with the current system: tendency not to fully fund costs as they accrue, deferring costs to future generations, inflexible benefits, employers and taxpayers bearing almost all of the financial risks, employer costs are subject to considerable volatility, and defined benefits are very generous. The Analyst also doubts that the substantial disparity between public- and private-sector retirement benefits can be sustained much longer.

The Analyst recommended the following options to make the system better as follows:

1. Creating new models for public retirement programs for future employees:

• Defined benefit programs with more cost sharing – when costs rise, both employer and employee contributions rise. The advantages of more employee cost sharing would be greater understanding of true costs of benefits for workers and employers alike, makes employees less likely to seek unsustainably high benefits, and encourages greater fiduciary care by retirement boards.

• Employer contributions to both a defined contribution and a less generous defined benefit program (“hybrid program”).

Advantages of Hybrid Programs: (1) employer continues to help employees save for retirement, (2) employees still receive tax benefits, (3) large unfunded liabilities less likely, and (4) employer cost liability reduced.

2. End retroactive retirement benefit increases.

3. Pay costs as they accrue.

4. Provide much needed clarity about employer obligation.

The Analyst also provided the following recommendations which the Legislature could provide:

1. For CalPERS and Local Pension Benefits:

• Approve laws or MOUs creating hybrid or cost-sharing programs for future state employees.

• Approve laws requiring CalPERS and other systems to offer such programs for local agencies.

• Existing unfunded liabilities already being paid through annual contributions to the system.

2. For State Retiree Health Benefits:

• Approve laws to give state more flexibility to change retiree health benefits for future employees.

• No idea what health care will be like 30 to 40 years from now when they retire.

• Changes in pension benefits will tend to increase retirement age thereby reducing future retiree health costs.

3. For California State Teachers’ Retirement System (CalSTRS) Pension Benefits:

• Approve laws to implement hybrid or cost-sharing programs for future employees.

• Future employees’ benefits should be funded entirely from district and teacher contributions.

• The state probably will need to make payments for many years to retire existing unfunded liabilities.

4. For UC Pension Benefits:

• The state probably will need to contribute additional state funds in the future.

• Additional contributions should be made contingent on comparable pension system changes as those made for state and school employees.

On March 31, 2011, Governor Brown released a 12-point pension reform plan which was presented and discussed in detail with Republican leaders which was to be used in bargaining a budget solution as follows:

1. Eliminate Purchase of Airtime. Eliminate the opportunity, for all current and future employee members of all state and local retirement systems, to purchase additional retirement service credit.

2. Prohibit Pension Holidays. All California public agencies would be prohibited from suspending employer and/or employee contributions necessary to fund the normal cost of pension benefits.

3. Prohibit Employers from Making Employee Pension Contributions. All California public agencies would be prohibited from making employee contributions that fund the normal cost of employee retirement benefits in whole or in part.

4. Prohibit Retroactive Pension Increases. All California public agencies would be prohibited from granting any retroactive pension benefit increases, such as benefit formula improvements that credit prior service.

5. Prohibit Pension Spiking: Three-Year Final Compensation. Final compensation for new employees would be defined as the highest average annual compensation during a consecutive 36-month period.

6. Prohibit Pension Spiking: Define Compensation as Only Regular, Non-recurring Pay. Compensation means normal rate of pay or base pay. (Note: SB 27 (Simitian) would exclude from defined benefit changes in compensation principally for the purpose of enhancing benefits and would place stricter limits on creditable compensation.)

7. Felony Convictions. Prohibits payment of pension benefits to those who commit a felony related to their employment.

8. Impose Pension Benefit Cap.

9. Improve Retirement Board Governance.

10. Limit Post-Retirement Public Employment.

11. Hybrid Option.

12. Address CalSTRS Unfunded Liability.

Senate Majority Leader Bob Dutton responded to the Governor as follows:

Republicans could agree on:

• Eliminating the purchase of airtime

• Prohibiting pension holidays

• Prohibiting employers from making employee pension contributions

• Prohibiting retroactive pension increases

• Prohibiting pension splitting

• Felony convictions

Republicans agreed, in concept:

• Impose pension benefit caps

• Improve retirement local governance

• Limit post-retirement public employment

The Republicans also (1) wanted the people to vote on permanent public pension reform, (2) felt a voluntary hybrid pension system does nothing to address the state’s long term financial risk, they believed only a mandatory hybrid pension system modeled after the Little Hoover Commission and the Legislative Analyst’s Office recommendations can reduce financial risk effectively, (3) wanted the $60 billion unfunded state health benefit liability addressed, (4) wanted the flexibility to change future pension contracts for new employees, and (5) wanted a two-thirds super majority vote of the legislature to change the salary and benefits of public employees.

As mentioned in the overview of the Budget, negotiations broke down between March and June due to the Governor wanting a constitutional amendment on extending the temporary taxes which Republicans would not vote for. In June, before the final vote on 2011-12 Budget, the Governor tried negotiating again. However Republicans would not provide budget votes unless pension reform was placed on the ballot, and pension reform became tabled.

While pension reform became part of the budget process, stand-alone legislation concerning reform was introduced. SB 27 (Simitian) provides that any salary enhancement for the principal purpose of increasing a member’s retirement benefit will not be included in the calculation of a member’s final compensation for determining that benefit, requires the boards of each state public retirement system to establish regulations that include an ongoing audit process, and prohibits a retiree from returning to work as a retired annuitant or contract employee for a period of 180 days after retirement. It is presently in the Assembly Appropriations Committee. Senator Mimi Walters has a 10-bill package which provided for some of the reforms pointed out already in this overview. The package (SB 520-528 and SB 820) includes:

• Creating a defined contribution plan.

• Eliminating pension plans for part-time locally elected officials.

• Prohibiting the granting of retroactive pension benefit increases.

• Raising the “minimum retirement age” to 55 years of age.

• Restricting the ability of state employees to spike their pensions

• Eliminating collective bargaining to determine retirement benefits, with the exception of the amount employees will contribute to their pension plans.

• Removing elected members from the California Public Employees’ Retirement System (CalPERS) Board and creating fiscal and actuarial requirements for board membership.

• Legislation designed to provide greater transparency for the CalPERS Board.

AB 961 (Mansoor) excludes matters relating to pension benefits from the scope of representation of public employees by recognized public employee organizations under the Meyers-Milias-Brown Act, the Ralph C. Dills Act, the Educational Employment Relations Act, the Higher Education Employer-Employee Relations Act, including supervisory employees, the Trial Court Employment Protection and Governance Act, the Trial Court Interpreter Employment and Labor Relations Act, and the Los Angeles County Metropolitan Transportation Authority Transit Employer-Employee Relations Act. AB 961 failed passage in policy committee but was granted reconsideration.

At the end of session, the Legislature placed SB 827 (Simitian) and AB 344 (Furutani) into a Joint Legislative Conference Committee on Public Employee Pensions to be used as vehicles for proposed legislation which comes from its hearings during the interim that it conducts on pension reform, which will be introduced in the 2012 Session. The members of the Committee consist of Senators Negrete McLeod (Co-Chair), Simitian, and Walters, and Assemblymembers Furutani, Allen, and Silva.

On October 27th, Governor Brown presented a new plan on pension reform which contains the following items:

New Workers

• Hybrid pensions – new workers’ retirement money would come from a blend of Social Security, a small guaranteed pension, and a professional managed 401(k) type plan. Public safety workers do not participate in Social Security, so the other two components would be larger.

• Later retirement – instead of the current age of 50 or 55 (public safety) or 62 (just about everyone else), the plan sets full government retirement at 67, but public safety workers could retire sooner (no specifics at this time).

• Three-year averaging – instead of using employees highest year salary of earnings to calculate pension benefits, the plan will use an average of the highest three years to keep workers from “spiking” their pensions with short-term promotions or raises.

• Definition of base pay – unused leave, overtime and other extra income would be excluded from pay calculations for pension purposes.

All Workers (applies to current and future employees)

• Fifty-Fifty contribution split – employers and employees would share pension costs equally, where right now most employees pay a smaller share and some local government workers pay nothing.

• “Double-dipping” limits – sets a 960-hour annual cap on the work government retirees can do for a public employer. This aims to curb retirees drawing both a pension check and a paycheck. The state already follows this rule.

• Pensions for criminals – employees would lose their pensions if they are convicted of a felony that happened on the job, while seeking office or appointment, of if the crime was connected with securing pay or benefits. (This idea was inspired by the City of Bell scandal.)

• Pension holidays – mandates that employers and employees always pay their pension payments.

• Retroactive pension hikes – prohibits retroactive pension hikes.

• Elimination of “airtime” – eliminates the buying of “airtime,” the practice where workers can by years of service time they do not actually work to increase their pension payouts.

Other provisions

• State retiree health benefits – increases the years which state employees must work to qualify for the government to pay half of a predetermined sum toward their health care premiums when they retire from 10 years to 15 years. It also increases the years of service for an employee to work to get 100% of their premiums paid from 20 years to 25 years (applies to new hires only).

• CalPERS Board compensation – adds two gubernatorial appointees to the CalPERS Board of Administration without career ties to the state, but with financial expertise.

The Governor estimates his plan would save the state $4 billion to $11 billion over 30 years and $21 billion to $56 billion over 60 years. Local governments would have to comply with the plan and would save proportionately similar sums.

On November 8, 2011, the Legislative Analyst put out its initial response to the Governor’s proposal. In their summary, they stated the following:

“The Governor’s 12-point pension and retiree health plan would result in bold changes for California’s public employee retirement programs. His proposals would shift more of the financial risk for pensions—now borne largely by public employers—to employees and retirees and would, in so doing, substantially ameliorate a key area of long-term financial risk for California governments. Despite the proposal’s strengths, it leaves many questions unanswered, such as how his hybrid plan and retirement age proposals would work and how the state should cope with large unfunded liabilities already affecting the California State Teachers’ Retirement System, the University of California Retirement Plan, and the health benefit program for state and California State University retirees. The Governor’s proposal to increase many current public employees’ pension contributions also raises significant legal and practical issues.”

At the time of this writing, several initiatives were cleared for petition signature gathering relating to public pension reform.

Other Public Employment legislation signed into law includes SB 151 (Correa) providing legislative ratification for the memorandum of understandings agreed to between the state and Bargaining Unit (BU) 2 (California Attorneys, Administrative Law Judges, and Hearing Officers in State Employment), BU 6 (California Correctional Peace Officers Association), BU 7 (California State Law Enforcement Association), BU 9 (Professional Engineers in California Government), BU 10 (California Association of Professional Scientists), and BU 13 (International Union of Operating Engineers); SB 203 (Correa) making various changes to the process for filling vacancies on boards of retirement and boards of investment in counties operating retirement systems under the County Employees’ Retirement Law of 1937; SB 609 (Negrete McLeod) making the decision of an administrative law judge final regarding recognition of certification of an employee organization if the Public Employment Relations Board does not issue a ruling that supersedes the decision on or before 180 days after an appeal is filed; AB 195 (Hernandez) clarifying the specific acts against an employee and an employee organization constitute a violation of the Meyers-Milias-Brown Act; AB 501 (Campos) clarifying that all public school employees have the right to union representation; AB 646 (Atkins) permitting local public employee organizations to request a fact-finding panel to address a dispute with the employer if a mediator is unable to reach a settlement within 30 days; AB 692 (Hall) permitting a state employee appealing a termination action to request a priority hearing from the State Personnel Board if an evidentiary hearing has not begun within six months of the filing of the appeal; AB 782 (Brownley) permitting CalPERS to assess a reasonable charge on employers to recover additional costs incurred when an audit of the employer takes an excessive amount of hours to complete; AB 873 (Furutani) strengthening existing restrictions on post-government employment activities by board members and high-level staff at CalPERS and CalSTRS; and AB 1151 (Feuer) amending the California Public Divest from Iran Act to clarify that pension boards must divest pension funds, as specified, unless to do so would fail to satisfy a fiduciary responsibility, modifying the types of companies that fall within the scope of the bill, and requiring that certain findings and determinations must be made in noticed public hearings.

Vetoed Public Employment legislation included SB 350 (Negrete McLeod) which would have raised the oldest and lowest level pre-retirement death benefits in CalPERS’ 1959 Survivor Benefit Program for local contracting agencies by merging the two original pools into the third level pool; SB 439 (Negrete McLeod) which would have prohibited CalPERS and CalSTRS board members and specified employees from accepting gifts of more than $50 from a single person who has secured a contract with or submitted a contract proposal to, the retirement system within the previous five years; AB 455 (Campos) which would have specified the composition of local public agency personnel or merit system commissions and the process of appointment of their members and chairperson; AB 1379 (Bradford) which would have permitted public retirement systems with assets over $4 billion to report annually to the State Controller on investments in California and emerging domestic markets, as specified; and AB 1395 (Swanson) which would have required all state agencies to post examination announcements and job vacancies on the State Personnel Board Internet Web site.

ENVIRONMENT

One of the major legislative actions taken this year was streamlining of environmental review for construction projects in order to create jobs while ensuring all projects meet the California Environmental Quality Act. AB 900 (Buchanan) enacting the Jobs and Economic Improvement Through Environmental Leadership Act of 2011 which establishes a fast-track judicial review process in the California Court of Appeals of environmental impact reports and approvals granted for a leadership project related to a development of a residential, retail, commercial, sports, cultural, entertainment, or recreational use project, or clean renewable energy or clean energy manufacturing project. This new law permits the Governor to certify a leadership project for streamlining if: (1) a project will result in a minimum investment of $100 million; (2) a project creates high wage, highly skilled jobs that pay prevailing wages and living wages; (3) a project does not result in any net additional emission of greenhouse gases as determined by the Air Resources Board; (4) a project applicant has entered into a binding and enforceable agreement that all mitigation measures will be conditions of project approval, and (5) project applicant pays court of appeal costs in deciding any case, including costs for appointment of a special master, and costs of preparing the administrative record. This act has a repeal date of January 1, 2015. The Governor also signed SB 292 (Padilla) designating the Farmers Field NFL football stadium in Los Angeles as a leadership project subject to a streamlined review that mirrors AB 900. It enacts a strict set of criteria for the stadium’s construction, requires that the project be carbon neutral, mitigates impacts on traffic and air quality, and establishes a less onerous review process. The only review timeframe reduced by SB 292 impacts the city of Los Angeles and the developer, who will now have five days rather than 30 days to reply to project challenges, and who retain that timeframes already laid out by the California Environmental Quality Act. Another related bill signed into law was SB 226 (Simitian) establishing exemptions and limitations to environmental review under the California Environmental Quality Act for the installation of a solar energy system on the roof of an existing building or at an existing parking lot and infill projects such as residential, retail, commercial, transit station, school, or public office building projects located within an urban area.

An environmental issue of interest which was signed into law dealt with “shark finning,” which refers to the removal and retention of shark fins and the discarding of the rest of the fish. Finning takes place at sea so the fishers only have to transport the fins. Many countries prohibit finning but many international waters are unregulated. International fishing authorities are considering banning shark fishing and finning in the Atlantic Ocean and Mediterranean Sea, but shark fishing and finning continues in most of the Pacific and Indian Ocean. According to the National Oceanic and Atmospheric Administration (NOAA) Fisheries, most sharks are vulnerable to overfishing because they are long-lived, take many years to mature and only have a few young at a time. NOAA indicates that since the mid-1980s a number of shark populations in the United States have declined, primarily due to overfishing. According to officials at the Monterey Bay Aquarium, over a third of shark species worldwide are currently threatened with extinction. Demand for shark fin is largely believed to be the primary driver behind overfishing of sharks and recent shark population declines. Under the Clinton administration, finning was banned in the United States and with U.S. regulated vessels, but not foreign-registered vessels and shark fins cannot be imported into the U.S. without the associated carcass. In 2010, Hawaii became the first state to ban the possession, sale, and distribution of shark fins. The law became effective on July 1, 2011. Similar laws have been enacted in Washington and Oregon.

In January 2011, President Obama signed the Shark Conservation Act closing loopholes of the 2000 Shark Finning Prohibition Law which prohibits any boat to carry shark fins without corresponding number and weight of carcasses, and all sharks must be brought to port with their fins attached.

In the 2011 session, AB 376 (Fong) and AB 853 (Fong) were enacted to have the state respond to the issue of finning. AB 376 makes it unlawful for any person to possess, sell, offer for sale, trade or distribute a shark fin, provides an exception to the prohibition on possession of shark fins for any person who holds a permit to possess a shark fin for scientific purposes, and for any person who holds a license or permit to take sharks for recreational or commercial purposes and possesses a shark fin consistent with that license or permit, defines a shark fin as a raw, dried or otherwise processed detached fin or tail of a shark, makes legislative findings and declarations regarding the importance of sharks for the ocean ecosystem, and the impacts of the practice and market demand for shark finning, and allows any restaurant, before January 1, 2013, to possess, sell, offer for sale, trade, or distribute a shark fin possessed by that restaurant as of January 1, 2012, that is prepared for consumption.

AB 853, the follow-up legislation to AB 376, permits any person who holds a license or permit to take or land sharks for recreational or commercial purposes to possess, for purposes of consumption or taxidermy, a shark fin or fins consistent with that license or permit, and authorizes such persons to also donate the fin or fins to a person with a license or permit to take or possess animals for scientific, educational or propagation purposes, permits any person until January 1, 2013, to possess, sell, offer for sale, trade or distribute a shark fin possessed by that person as of January 1, 2012, clarifies that nothing in the operative language of AB 376 prohibits the sale or possession of a shark carcass, skin or fin for taxidermy purposes, pursuant to existing fish and game laws governing taxidermy, requires the Ocean Protection Council to submit an annual report to the Legislature listing any shark species that has been independently certified to meet internationally accepted standards for sustainable seafood.

Other significant Environmental legislation signed into law includes SB 170 (Pavley) permitting local and regional air pollution control districts and air quality management districts to sponsor air pollution prevention and mitigation projects, and permitting districts to share in revenues generated from the commercialization of intellectual property, as specified; SB 215 (Huff) extending the sunset of existing provisions that prohibit the possession or importation to the state of dreissenid mussels and giving the Department of Fish and Game authority to enforce the prohibition to January 1, 2017; SB 328 (Kehoe) revising the Eminent Domain Law to establish requirements for acquisition of property subject to a conservation easement; SB 369 (Evans) establishing a Dungeness Crab trap limit program; AB 436 (Kehoe) permitting a state or local agency to allow a qualified and approved nonprofit organization or special district to hold property and long-term stewardship funds (i.e., accompanying funds) to mitigate adverse impacts to natural resources caused by a permitted development project; SB 482 (Kehoe) transferring primary jurisdiction for the beach water quality monitoring program from the Department of Public Health to the State Water Resources Control Board; SB 567 (DeSaulnier) requiring plastic products sold in the state and labeled as “compostable,” “home compostable,” or “marine degradable,” to meet specified standards; SB 595 (Wolk) providing the State Lands Commission with administrative authority to dispose of abandoned vessels located on state waterways; SB 646 (Pavley) requiring parties who were signatories to an amended consent judgment, entitled People vs. Burlington Coat Factory Warehouse Corporation, et al., and those who signed later virtually identical agreements to comply with the enforcement provisions of the Lead-Containing Jewelry Law; SB 739 (Lowenthal) requiring the ports of Los Angeles, Long Beach, and Oakland to assess their infrastructure and air quality improvement needs; SB 841 (Wolk) prohibiting a local government from enforcing an indemnity obligation against a solid waste enterprise for claims arising out of Proposition 218 or Proposition 26 violations; AB 42 (Huffman) permitting the Department of Parks and Recreation to enter into operating agreements with qualified nonprofit organizations to operate a state park unit; AB 54 (Solorio) establishing new requirements for organizing and operating corporations for the domestic sales distribution, supply and delivery of water, as specified; AB 95 (Assembly Budget Committee), AB 107 (Assembly Budget Committee), AB 120 (Assembly Budget Committee), and AB 29 X1 (Blumenfield) making statutory changes concerning the Environment and Natural Resources to implement the 2011-12 Budget Bill; AB 291 (Wieckowski) extending, for two years, a temporary fee, from 1.4 mills to 2 mills, per gallon on motor vehicle fuel, that the owner of an underground storage tank must pay; AB 320 (Hill) clarifying the persons who must be named as a real party in interest in complaints for specified violations of California Environmental Quality Act by removing reference to “any recipient of approval,” and, instead, require a petitioner or plaintiff to name, as a real party in interest, any person or persons identified by the public agency in its notice of determination, or notice of exemption, that is filed with the Office of Planning and Research; AB 341 (Chesbro) establishing a state policy goal that 75% of solid waste generated be source reduced, recycled, or composted by 2020; AB 358 (Smyth) ensuring that all local agencies that perform underground storage tank project oversight and remediation have the same lines of responsibility and review in following state policies on closure of underground storage tank sites; AB 359 (Huffman) requiring expanded public notification, groundwater recharge mapping, and coordination with local planning agencies in the groundwater management planning process; AB 462 (Lowenthal) permitting an air pollution control district, until January 1, 2015, to use motor vehicle registration fee revenues to replace natural gas fuel tanks or fueling infrastructure; AB 470 (Halderman) permitting an air pollution control district, until January 1, 2015, to use motor vehicle registration fee revenues for retrofit of emissions control equipment for existing school buses; AB 525 (Gordon) permitting the Department of Resources Recycling and Recovery to award grants from the California Tire Recycling Management Fund to cities, counties, and other local government agencies for the funding of public works projects that use waste tires; AB 528 (Chesbro) extending the sunset date and operation of the Steelhead Trout Fishing Report Restoration Card until January 1, 2017; AB 681 (Wieckowski) extending the Environmental Protection Trust Fund expenditures until June 1, 2013, and providing that unexpended funds be deposited in the Unified Program Account for further support for Certified Unified Program Agencies aboveground storage tank activities; AB 712 (Williams) prohibiting, on and after July 1, 2012, the Department of Resources Recycling and Recovery from providing the Beverage Container Recycling and Litter Reduction Act funds to a city, county, or city and county that prevents the siting or operation of a certified recycling center at a supermarket site; AB 818 (Blumenfield) requiring an owner of a multifamily dwelling with five or more living units to arrange for recycling services that are appropriate and available for the dwelling except under specified circumstances; AB 913 (Feuer) requiring the Department of Toxic Substances Control to develop a California Green Business Program and specifies requirements for the Program; AB 938 (V. Manuel Perez) requiring the written public notice of noncompliance with drinking water standards given by a public water system to include information in English, Spanish, and other languages spoken by the impacted community, as specified; AB 1112 (Huffman) permitting the Office of Oil Spill Prevention and Response to raise the maximum per barrel assessment fee from $0.05 to $0.065 beginning January 1, 2012, and then reduce the fee back to $0.05 effective January 1, 2015; and AB 1149 (Gordon) extending for five years the Department of Resources Recycling and Recovery plastic market development program, which provides Bottle Bill funds to support recyclers and manufacturers using empty plastic beverage containers.

Vetoed Environmental legislation included SB 211 (Emmerson) which would have required that tire pressure gauges used to meet the Under Inflated Vehicle Tires regulation be accurate within a range plus or minus two pounds per square inch, and provides that automotive service providers are not required to inflate a tire that it determines is an “unsafe tire”; SB 263 (Pavley) which would have required the Department of Water Resources to make the reports that well drillers must submit when a well is constructed, deepened, reperforated, or destroyed available, with certain restrictions, to governmental agencies for studies, college-level or higher academics for research, geologists, geophysicists, hydrologists, civil engineers, licensed well contractors or any person who obtains written authorization from the well owner; SB 356 (Blakeslee) which would have required the Department of Parks and Recreation, if it proposes to fully close a state park unit with no planned public access, to notify the county or city in which the unit is located and give the county or city an opportunity to take over operation of the park; SB 386 (Harman) which would have required the Department of Parks and Recreation to post specified information on its Web site prior to closing a state park; SB 469 (Vargas) which would have required cities and counties to cause to be prepared an economic impact report before they approve or disapprove the construction or conversion of superstore retailers; AB 135 (Hagman) which would have required, until 2017, that at least one of the 11 members of the Air Resources Board be a small business owner; and AB 275 (Solorio) which would have permitted the installation and use of rainwater capture systems for non-potable purposes.

ENERGY AND UTILITIES

On the evening of September 9, 2010, a 30-inch natural gas transmission line ruptured in a residential neighborhood in the City of San Bruno. The rupture caused an explosion and resulting fires killed eight people and destroyed 37 homes and damaged dozens more. Gas service was also disrupted for 300 customers.

The pipeline in question is owned and operated by Pacific Gas and Electric (PG&E), and was originally built in 1948. In 1956, it was relocated and rebuilt to accommodate new housing development. The National Transportation Safety Board (NTSB), in conjunction with the Public Utilities Commission (PUC), was on scene within 24 hours to investigate the cause of the explosion.

On September 10, 2010, acting Governor Abel Maldonado proclaimed a state of emergency declaring the explosion site to be a state disaster. However, the Explosion was never declared a federal disaster. Such a federal declaration would have triggered the automatic exclusion of qualified disaster relief payments under both state and federal law. The state did act, on its own initiative, to provide tax relief to victims of the disaster. Specifically, 0n October 19, 2010, Governor Arnold Schwarzenegger signed AB 11X6 (Hall), Chapter 2, Statutes of 2009-10 Sixth Extraordinary Session into law, which added the explosion to the list of disasters eligible for full state reimbursement of local property tax losses.

On September 13, 2010, PG&E announced that it would be setting aside up to $100 million to assist individuals impacted by the explosion. Among other things, this fund would be used to reimburse insurance deductibles, and to help those with needs “above and beyond” the temporary housing and other basic necessities already provided. Specifically, PG&E announced that it would be providing cash disbursements of up to $50,000 per household to residents in the affected area. PG&E also announced that individuals would not be asked to waive potential claims in order to receive these funds.

According to PG&E, $17.7 million has already been distributed from the fund. Of this total, roughly $8.5 million has been paid to 668 people for “involuntary conversion” of a principal residence that was partially or totally destroyed by the explosion and fire.

On September 23, 2010, the PUC created in Independent Review Panel of experts to conduct a comprehensive study and investigation of the September 9, 2010, explosion and fire. The PUC directed the panel to make a technical assessment of the events, determine the root causes, and offer recommendations for action by the PUC to best ensure such an accident is not repeated elsewhere. The PUC encouraged the panel to make such recommendations as necessary. Such recommendations could include changes to design, construction, operation, maintenance, and replacement of natural gas facilities, management practice at PG&E in the areas of pipeline integrity and public safety, regulatory changes by the PUC itself, and statutory changes to be recommended by the PUC.

The panel released its findings on June 9, 2011, and concluded that the pipeline rupture was a “consequence of multiple weakness in PG&E’s management and oversight of the safety of its gas transmission system,” and that the PUC “did not have the resource to monitor PG&E’s performance in pipelines integrity management adequately or the organizational focus that would have elevated concerns about PG&E’s performance in a meaningful way.”

In the 2011 legislative session, the Legislature passed, and the Governor signed into law, the following legislation which responded to the explosion, providing tax relief and ensuring that safety procedures are in place so that this type of disaster does not occur again: SB 44 (Corbett) designating the Public Utilities Commission (PUC) as the state authority responsible for regulating and enforcing intrastate gas pipeline transportation and pipeline facilities pursuant to federal law, including the development, submission, and administration of a state pipeline safety program certification for natural gas pipelines; SB 216 (Yee) permitting the PUC to require automatic shut off or remote controlled valves on certain natural gas facilities, and unless prohibited by federal law, to require automatic shut off or remote controlled valves on intrastate natural gas transmission lines located in “high consequence areas” or that traverse an active seismic earthquake fault line; SB 705 (Leno) requiring natural gas utilities regulated by the PUC to develop service and safety plans; SB 879 (Padilla) directing the PUC, in any ratemaking proceeding in which PUC authorizes a gas corporation to recover expenses for the inspection, maintenance, or repair of natural gas transmission pipelines, to establish and maintain a one-way balancing account for the recovery of those expenses, and also increasing the penalty per violation from $20,000 to $50,000 for violation of statute, commission rules, orders, or other directives; AB 50 (Hill) deeming that the San Bruno explosion to be a qualified disaster for purposes of disaster payments, thereby allowing taxpayers to exclude disaster relief payments from state income, and provides similar treatment for involuntary conversions resulting from a disaster; and AB 56 (Hill) implementing a number of public safety measures with regard to natural gas pipeline facilities, including requiring the owner and operator of a gas pipeline to develop a public safety program and a facilities modernization program, and requiring the PUC to track proposed repairs to gas facilities to determine if the repairs were made.

Other Energy and Utilities legislation signed into law included SB 3 (Padilla) extending the sunset date for the California High Cost Fund A and California High Cost Fund B collections, and requiring voice over Internet protocol service providers to collect and remit surcharges to state universal service programs to January 1, 2015; SB 16 (Rubio) requiring the Department of Fish and Game to take steps to expedite the processing of renewable energy permits; SB 136 (Yee) providing that specified energy-related projects are public works projects and subject to applicable prevailing wage laws; SB 454 (Pavley) permitting the California Energy Commission (CEC) to adopt an administrative enforcement process, including civil penalties, for violations of its appliance efficiency standards; SB 489 (Wolk) expanding net metering eligibility to include other types of renewable energy generating facilities, as defined; SB 585 (Kehoe) permitting the PUC to authorize investor owned utilities to continue to collect funds from ratepayers so that a funding shortfall within the California Solar Initiative can be addressed; SB 674 (Padilla) repealing the California High Speed Internet Access Act of 1999, clarifies that contracts between utilities and third parties to facilitate a customer’s access to consumption data require a customer’s prior consent for the third party use and release of a customer’s data for a secondary commercial purpose, and excludes from the definition of rebate an incentive received from the California Solar Initiative for a solar thermal or photovoltaic system that service only a mobilehome park; SB 679 (Pavley) appropriating $25 million to the Energy Conservation Assistance Account from $50 million previously appropriated from the Renewable Resource Trust Fund to the California Alternative Energy and Advanced Transportation Financing Authority to support Property Assessed Clean Energy programs; SB 771 (Kehoe) specifying that landfill and digester gas turbines, engines, and microturbines may be considered renewable energy eligible for financial assistance under the California Alternative Energy and Advanced Transportation Financing Authority Act; SB 790 (Leno) revising and expanding the definition of Community Choice Aggregation (CCA), requiring the PUC to initiate a Code of Conduct rulemaking, and allowing CCAs to receive Public Purpose funds to administer energy efficiency programs; SB 1X1 (Steinberg) establishing a dedicated funding stream to invest in career technical education that delivers skills and knowledge needed for successful employment in clean technology, renewable energy or energy efficiency; AB 136 (Beall) expanding the PUC Deaf and Disabled Telecommunications Program to include assistance to individuals with speech disabilities, by January 1, 2014; SB 2X1 (Simitian) requiring investor owned utilities, local publicly owned utilities, and energy service providers to increase purchases of renewable energy and in such that at least 33% of retail sales are procured from renewable energy resource by December 31 2012, and in the interim each entity is required to procure an average of 20% of renewable energy for the period of January 1, 2011 through December 31, 2016, and 33% by 2020. (refer back to 2010 Digest of Legislation Energy overview which gives the history of SB 14 a similar bill which was vetoed.) AB 512 (Gordon) increasing the capacity of a powerplant from 1 megawatt (MW) to 5 MWs that would be eligible for a local government program that allows a municipality to generate electricity at one location to offset electricity usage at another municipal location, as specified; AB 631 (Ma) exempting from the definition of a public utility, a facility that supplies electricity to the public only for use to charge light duty plug-in electric vehicles; AB 841 (Buchanan) permitting the PUC to require interconnected Voice over Internet Protocol service providers to collect and remit state universal surcharges on their California intrastate revenue; AB 1027 (Buchanan) requiring local publicly owned electric utilities, including irrigation districts, to make appropriate space and capacity on and in their utility poles and support structures available for use by communication service providers; AB 1074 (Fuentes) extending the same immunity from ordinary negligence that telephone companies have in their tariff to other service providers when they are functioning as part of the 911 emergency system, as specified; AB 1150 (V. Manuel Perez) permitting the PUC to collect funds for an additional $83 million, in 2012, from gas and electric ratepayers to fund the Self-Generation Incentive Program through December 31, 2014; AB 1386 (Bradford) encouraging cable television corporations and direct broadcast satellite providers to voluntarily adopt a plan for increasing women, minority, and disabled veteran business enterprise procurement and to voluntarily report activity in this area to the Legislature on an annual basis; AB 1390 (Assembly Utilities and Commerce Committee) requiring the Attorney General, until January 1, 2013, to succeed the Electricity Oversight Board in any litigation or settlement to obtain electricity ratepayer relief as a result of the 2000-02 energy crisis; and AB 1392 (Bradford) permitting the CEC to transfer an additional $50 million to the Department of General Services for the Energy Efficient State Property Revolving Loan Program in the 2011-12 and 2012-13 fiscal years, to help finance energy efficiency retrofits in state buildings.

Vetoed Energy and Utilities legislation included AB 306 (Gatto) which would have required the CEC to conduct research on generating electricity using piezoelectric technology under roadways and railways and establishing pilot projects employing this technology; and AB 1035 (Hill) which would have prohibited a commissioner or employee of the PUC from knowingly soliciting charitable, political, or other contributions from any person or corporation subject to regulation by the PUC, or from any person that represents any entity subject to PUC regulation.

TRANSPORTATION

The major issue in Transportation was the High-Speed Rail Authority (HSRA). Governor Brown’s January budget proposed to allocate $192 million for the High Speed Rail Act activities for 2011-12. The federal government awarded the state $3 billion in funds for building the rail system of which $2.3 billion comes from the 2009 federal economic stimulus legislation. The Federal Rail Administrative (FRA) initially required that the state obtain environmental clearance of the segment of the project financed with stimulus funds by September 2011. The FRA required the stimulus funds be expended by 2017 and the state must forfeit any stimulus funds that are unspent at that time. In November 2010, the FRA announced a requirement that all federal funds for construction awarded to the state be spent on a segment of the rail line planned for the state’s Central Valley. Specifically, FRA concluded that the segments most likely able to meet the 2017 deadline for expenditure of the stimulus monies were in the Central Valley in part because there was little public opposition to this part of the project which potentially could slow the project down.

On December 2, 2010, the High Speed Rail Authority Board voted to begin construction on the first 54 miles of the system 3 miles south of Madera at Borden and continue through downtown Fresno to Corcoran. On December 20th, the federal government gave another $616 million reallocated from states that cancelled their high speed rail plans, and the initial segment of construction was extended to Bakersfield. On May 9, 2011, another $300 million was reallocated extending the funded segment north to the existing Chowchilla Wye (near the City of Chowchilla). This segment is to break ground in September 2012 at a cost of $5 to $6 billion. Also, after the Authority Board approved the Central Valley section, the FRA dropped the September 2011 deadline for environmental clearance work.

Also in May, the Legislative Analyst released a report outlining serious problems that they felt could jeopardize the project which included (1) the availability of funding necessary for the new system is highly uncertain; (2) federal project requirements limit state’s options for development of the system; (3) the HSRA’s structure sand staffing levels are inadequate for its changing role, and (4) the Legislature lacks good information for decision making.

The report indicated the state needed to negotiate more reasonable deadlines for obtaining federal aid for the project and if that’s not possible the project should be stopped. They also urged the Legislature to direct the Rail Board to reconsider which segments of the system should be built first, with an emphasis on segments that have a better chance of penciling out financially in the event the entire project is not completed. The report recommended that the Legislature turn management of the project over to the Department of Transportation which the Legislative Analyst’s Office indicated has the experience in running grant construction projects, and will ensure that the state’s overall interests, including state fiscal concerns, are fully taken into account as the project is developed. Lastly, the report indicated that since HSRA’s approved of starting the building in the Central Valley, significant local opposition has arisen, relating largely to concerns over how the alignment of tracks could affect agricultural operations, which could cast doubt whether the 2017 deadline for spending the stimulus funds can be met.

On November 1, 2012, the Authority’s Board released a proposed new business plan which included (1) a forecast of the anticipated patronage, operating and maintenance costs, and capital costs for the system, (2) an estimate and description of the total anticipated federal, state, local and other funds the Authority intends to access to fund the building and operation of the system, including an official assessment of the level of confidence of funding, (3) an alternative financial performance for the different levels of service, (4) the proposed chronology for the construction, and (5) an analysis of all reasonably foreseeable risks and proposals for dealing with them. The public will have 60 days to comment and help shape the final plan, which is to be completed and provided to the Legislature in January 2012. If the business plan is approved, the HSRA will start construction in the fall of 2012 in the Central Valley, expanding the line to San Francisco, and the Los Angeles area by 2033. The HSRA estimates construction could cost $98.5 billion in inflation adjusted dollars, more than twice the previous estimate of $43 billion.

Legislation affecting the High Speed Rail Authority Act signed into law was AB 615 (B. Lowenthal-D), appropriating $4 million from the Safe, Reliable High-Speed Passenger Train Bond Act, to fund engineering and public outreach for the Los Angeles to San Diego rail system. The Governor vetoed AB 952 (Jones) which would have imposed specific conflict of interest requirements and limitations on the Authority, its employees, businesses, and consultants that are doing, or want to do, business with the authority including a three-year revolving door ban. AB 952 came about because in the fall of 2010, the FPPC investigated several Authority Board members and the former executive director to ascertain if they had violated rules regarding the receipt of gifts. The investigation centered on official having taken a number of overseas trips paid for by foreign governments that are hoping to participate in the development of the high-speed rail project in California. The investigation was officially closed earlier in the year and the FPPC reported that there was no evidence of any violations having occurred. As it turns out, individual recipients of the trips were not required to disclose the trips as gifts on annual conflict of interested reports because the trips were given to the Authority, not the individuals.

Legislation relating to high-speed rail reform to be considered in the 2012 Session include SB 22 (La Malfa), SB 517 (Lowenthal), SB 749 (Steinberg), AB 16 (Perea), AB 31 (Beall), AB 58 (Galgiani), AB 145 (Galgiani), AB 277 (Galgiani), AB 292 (Galgiani), AB 365 (Galgiani), AB 471( Lowenthal), and AB 1206 (Galgiani).

Other Transportation legislation of note signed into law included SB 89 (Senate Budget and Fiscal Review Committee), SB 94 (Senate Budget and Fiscal Review Committee), AB 105 (Assembly Budget Committee), and AB 115 (Assembly Budget Committee) enacting Transportation Budget Trailer Bill statutory language, SB 310 (Hancock) permitting cities and counties to create incentives for transit priority projects; SB 325 (Rubio) creating the Central California Railroad Authority to ensure the continuation of short-line rail service in the San Joaquin Valley for shippers and receivers; SB 739 (Lowenthal) requiring the ports of Los Angeles, Long Beach, and Oakland to assess their infrastructure and air quality improvement needs to improve cargo movement efficiency and reduce congestion impacts associated with cargo movements; SB 869 (Yee) increasing the penalty for a person after preparing a written estimate to repair a deployed airbag, fails to properly restore airbag to its original condition; SB 929 (Evans) requiring that children remain in booster seats an additional two years until they reach age eight or four feet nine inches tall or taller which permits the state to become eligible for federal grants pursuant to Safe, Accountable, Flexible, and Efficient Transportation Equity Act: A Legacy for Users; AB 475 (Butler) expanding the types of vehicles to include plug-in hybrid electric vehicles, which qualify to use designated off-street parking facilities; AB 516 (V. Manuel Perez) modifying the state Safe Routes to School program to help ensure increased participation from low-income communities; AB 529 (Gatto) requiring Caltrans to revise its regulations so that state and local authorities have greater flexibility in setting speed limits on roads under their jurisdictions; AB 674 (Bonilla) repealing the sunset date on provisions permitting counties to impose a $1 vehicle registration surcharge which funds fingerprint identification programs; and AB 1097 (Skinner) permitting the state or a local agency receiving federal funds for transit purposes to provide a preference to bidders that exceed the federal Buy American requirements.

Vetoed Transportation legislation of significance included SB 28 (Simitian) which would have increased the fine for cell phone use and text messaging while driving and extended these bans to bicycling; SB 29 (Simitian) which would have changed the law regarding automated traffic enforcement systems to ensure that red light camera programs are designed to maximize traffic safety and are implemented in a lawful and transparent manner; SB 582 (Yee) which would have allowed a local air district and a metropolitan planning organization to jointly adopt a commuter benefits for their common jurisdiction that require employers to offer several options; SB 910 (Lowenthal) which would have set requirements for safe passing of bicyclists by motor vehicles; AB 390 (Portantino) which would have required the Department of Motor Vehicles, no less than 60 days prior to the expiration date of an identification card, to provide a person with a written notice of the expiration date; AB 650 (Blumenfield) which would have established the Blue Ribbon Task Force on Public Transportation for the 21st Century; and AB 1389 (Allen) which would have set standards for the establishment and operation of sobriety checkpoints.

ELECTIONS

In 2012, the next United States Presidential Election takes place. The Legislature passed, and the Governor signed, two pieces of legislation which will affect California’s participation in presidential elections. AB 80 (Fong) moving the Presidential primary to June starting with 2012 Presidential Election, and AB 459 (Hueso) ratifying an interstate compact whereby the state agrees to award its electoral vote to the Presidential ticket that receives the most popular votes nationwide (AB 459 cannot affect the 2012 race).

I. Presidential Primary

From 1946 to 1994, California’s primary elections were held in June of every even-numbered year. Frustrated, however, with the perceived lack of importance and impact that California had on the presidential nominating process, the state passed several pieces of legislation to move up the presidential primary election. In 1996, California’s presidential primary was held on the fourth Tuesday in March. In 2000, the presidential primary was held on the first Tuesday in March.

Regardless of the earlier primary dates, California struggled to gain influence on the selection of presidential candidates as other states also moved up their primaries. In 2000, California’s March 7th presidential primary came after nine other states held their primaries or caucuses and was held on the same day as 13 other state contests.

The legislation that permanently moved the primary to the first Tuesday in March, SB 1999 (Costa), Chapter 913, Statutes of 1998, did so for all future primary elections - not just presidential primary elections. Discouraged by the perceived lack of clout California was having in the presidential primary process, even with the earlier primary date, and concerned that the earlier primary for legislative, congressional, and statewide offices was increasing the costs of campaigning by lengthening the campaign season, the Legislature and Governor chose to move California’s primary election, including presidential primaries, back to June. SB 1730 (Johnson), Chapter 817, Statutes of 2005, required California’s primary election to be held on the first Tuesday after the first Monday in June in every even-numbered year.

For 2008, the Legislature and Governor again attempted to increase California’s influence in the presidential campaign and encourage candidates to discuss and debate issues relevant to this state. SB 113 (Calderon), Chapter 2, Statutes of 2007, moved California’s presidential primary to February 5th – the earliest vote in state history. In addition to moving up the presidential primary, SB 113 required a separate primary election for legislative and congressional offices to be held in June. By the time California voters went to the polls on election day, 33 other states had also moved up their presidential primaries and 15 states held their primary on the same day as California – giving February 5th the title of “Super Tuesday.” As a result of the primary date change, California conducted three separate statewide elections in 2008. According to information provided by the State Controller’s Office and the Secretary of State’s Office, California spent approximately $96,980,195 on the stand-alone presidential primary election in 2008.

AB 80 moves the presidential primary election from February to June in presidential election years and consolidates it with the statewide direct primary election. Eliminating the state’s stand-alone presidential primary election and consolidating it with other statewide elections will save millions of dollars, increase voter turnout, and ensure that California’s primary is held in accordance with national party rules.

II. National Popular Vote Interstate Compact

The National Popular Vote Interstate Compact is an agreement among the United States to replace current state rules governing the electoral college system of presidential elections with rules guaranteeing election of the national popular vote winner states joining the Compact will continue to award their electoral votes in their current manner until the compact has been joined by enough states to represent a controlling majority of the Electoral College (270 of the votes). After that point, all of the electoral votes of the member states would be cast for the winner of the national popular vote in all 50 states and the District of Columbia. With the national popular winner sure to have a decisive majority in the Electoral College, he/she would automatically win the Electoral College and thus the presidency. This Compact was the idea of John Koza, a computer science professor at Stanford in 2006, which is detailed in the book “Every Vote Equal.” “National Popular Vote,” a non-profit group, was formed to promote the adoption of the Compact on the states.

Section 1 of Article II of the United States Constitution provides, in part, that “each State shall appoint, in such Manner as the Legislature thereof may direct, a Number of Electors, equal to the whole Number of Senators and Representatives to which the State may be entitled in Congress.” In accordance with that authority granted to the state legislatures, California and 47 other states (along with the District of Columbia) have chosen to award all electoral votes to the Presidential ticket that receives the greatest number of votes in the state (or in the District).

Two states, Maine and Nebraska, have chosen to award one electoral vote to the Presidential ticket that receives the greatest number of votes in each Congressional district in the state, and two electoral votes to the Presidential ticket that receives the greatest number of votes in the state. Maine has used this system of electoral vote allocation since 1972, while Nebraska adopted this method in 1996. However, since adopting this system of electoral vote allocation, Maine has always awarded all electoral votes to the candidate who won the statewide vote. Nebraska split its electoral votes between different Presidential campaigns for the first time in 2008, when John McCain and Sarah Palin earned four electoral votes for winning the statewide vote and for winning in two of the state’s three congressional districts, while Barack Obama and Joe Biden earned one electoral vote for winning in one of the state’s congressional districts.

While the “winner take all” method of awarding electoral votes used in California and the district-based method of awarding electoral votes that is used in Maine and Nebraska are the only two methods that states currently use to award electoral votes, the states are not limited to these two options. Rather, the United States Constitution gives the state legislatures complete authority to determine how presidential electors are appointed. The California Legislature has previously considered bills to adopt the district-based method, to award electoral votes proportionately to the Presidential tickets based on the share of the vote that each ticket received, and to provide that voters shall vote directly for Presidential electors, rather than voting for candidates for President and Vice President at the general election.

This Compact has been ratified by the states of Illinois, Maryland, Massachusetts, Hawaii, New Jersey, Vermont, Washington, and the District of Columbia. With AB 459 becoming law, the Compact has 48.9% of the 270 vote that is needed for it to become operative.

National Popular Vote additionally reports that legislation to ratify the interstate compact included in this bill has been introduced in all 50 states, and legislation to ratify the Compact has been approved in at least one house of the Legislature in 14 of the 44 states that have not already ratified the Compact.

III. Online Registration

Another significant Elections bill signed into law was SB 397 (Yee) permitting online voter registration to begin prior to completion of a new statewide vote registration database, if certain conditions are met.

Current law allows voters to submit an affidavit of voter registration electronically under Elections Code Section 2196 once the statewide online database known as VoteCal is implemented. Unfortunately, VoteCal is delayed until at least 2015. The author stated, “in the 21st century, especially here in California, it is long overdue to have online voter registration. SB 397 will not only help protect the integrity of the vote, but will allow many more individuals the opportunity to register and participate in our democracy.”

On October 29, 2002, President George W. Bush signed the Help America Vote Act (HAVA) of 2002 (116 STAT. 1666, Public Law 107-252). Among other provisions, HAVA requires every state to implement a computerized statewide voter registration list. To fully comply with the requirements of HAVA, the state is in the process of developing a new statewide voter registration system known as VoteCal.

Since the plans for VoteCal were developed, the Legislature has approved a number of bills that sought to take advantage its capabilities. One of those bills was SB 381 (Calderon), Chapter 613, Statutes of 2008, which will allow a person to register to vote on the SOS’s Internet Web site if he/she has a valid California driver’s license or state identification card. SB 381 will not become operative until VoteCal has been deployed. According to information provided to the Legislature when it was considering SB 381, online voter registration is expected to save the state and counties a significant amount of money by reducing costs for printing, processing, and data input from paper voter registration forms. Additionally, online voter registration is expected to improve the accuracy of the voter registration rolls while making voter registration more convenient for many voters. At the time the Legislature was considering SB 381, VoteCal was expected to be deployed by 2010. However, since that time, delays in the procurement process pushed back the estimated completion date for the VoteCal system to 2015. SB 397 would allow online voter registration to proceed outside of the development of the VoteCal system, provided that adjustments are made to existing systems that allow the SOS to obtain an electronic copy of the signature from the DMV of each person attempting to register to vote online, and to transmit that signature to the county elections official. This bill may help accelerate the availability of online voter registration, and thus accelerate the cost savings and other benefits that could come about from deploying such a system.

IV. Initiative Legislation

Another significant piece of legislation relating to Elections that was signed into law was SB 202 (Hancock), which provides that state initiative and referendum measures that qualify for the ballot on or after July 1, 2011 shall appear on the ballot only at the November statewide general election or at the statewide general election.

Since the initiative and referendum processes were created in 1911, the state Constitution has always provided that qualified measures will appear on the ballot at the next general election held after a specified time period, or at any special election called by the governor held prior to that general election. In 1972, however, the Secretary of State placed an initiative on the ballot at a primary election that was not consolidated with a statewide special election for the first time, and has since continued the practice of including initiatives on the ballot at primary elections.

Although it appears that the courts have not been asked to consider a challenge to the Secretary of State’s practice of placing initiative and referendum measures on the ballot at primary elections, a dissenting opinion in a state Supreme Court case raised a question about whether such a practice was consistent with the state Constitution. In her dissenting opinion in Brosnahan v. Eu, (1982) 31 Cal.3d 1, Chief Justice Bird noted that the constitutionality of submitting initiatives to voters at primary elections “would appear to be an open question.” In a footnote to her dissenting opinion, the Chief Justice wrote:

An additional issue, not raised by parties here, apparently has never been resolved by this court. The Constitution requires that initiative and referendum measures be submitted to the voters “at the next general election” after the measures qualify, or at a special election called by the Governor. (Cal. Const. art. II §8, subd. (c) and §9, subd.(c)…) The Elections Code defines a general election as “the election held throughout the state on the first Tuesday after the first Monday of November in each even-numbered year.” (Elec. Code, §20.) A special election is an election the timing of which is not otherwise prescribed by law. (Elec. Code, §27.) The election scheduled for June of 1982 is a regularly scheduled “direct primary” (see Elec. Code, §23) – not a special election or a general election. Thus, the constitutionality of submitting an initiative to the voters at a June primary election would appear to be an open question.

Subsequent to the Supreme Court’s decision in Brosnahan v. Eu, the definition of “general election” was revised in AB 1466 (Statham), Chapter 405, Statutes of 1993, to include regularly scheduled statewide primary elections.

SB 202 provides a new definition of the term “general election” for the purposes of provisions of the state constitution that specify when a qualified state initiative or referendum measure will appear on the ballot, this bill would result in initiative measures appearing on the ballot only at general elections. The author stated that placing initiatives on general election ballots will increase voter participation in the initiative process because general elections have higher turnouts.

According to information from the National Conference on State legislatures, only four (Alaska, California, North Dakota, and Oklahoma) of the 24 states that have the initiative process allow initiatives to be placed on the ballot at a primary or special election.

SB 202 also moves ACA 4 (Gatto, 2010), which proposes various changes to the state budget process and the state’s Budget Stabilization Fund to the November 4, 2014 General Election.

At the time of this writing, the Secretary of State cleared a proposal referendum for signature circulation to overturn SB 202.

Another piece of legislation signed into law is AB 732 (Buchanan) requiring the summary prepared by the Attorney General for state bond measures that are submitted to the voters for their approval or rejection to include an explanatory table summarizing the Legislative Analyst’s estimate of the net state and local government fiscal impact, and providing that this explanatory table shall not count against the limitation on the space of the summary.

Vetoed Elections legislation which would have revised the initiative process included SB 168 (Corbett) which would have prohibited a person paying another person or being paid based on the number of signatures obtained on an initiative, referendum, or recall petition; SB 448 (DeSaulnier) which would have required a person who receives compensation for collecting petition signatures to wear a badge indicating that her/she is a paid signature gatherer; AB 65 (Gatto) which would have required a specified disclaimer to be included in the summary statement by the Legislative Analyst for the proposal initiative measures that provide new revenues for new or existing programs; AB 651 (Hueso) which would have required professional petitioner firms to register with the Secretary of State and established penalties for noncompliance; and AB 1021 (Gordon) which would have required additional fiscal information be included in the circulating title and summary prepared by the Attorney General and the summary statements prepared by the Legislative Analyst for a proposed initiative measure.

Other Elections legislation of significance that was signed into law included SB 183 (Correa) prohibiting a voter from placing personal information, as defined, upon a ballot that identifies the voter; SB 441 (Vargas) repealing existing law which permits the county central committee of each qualified political party to supply county elections officials with party contribution envelopes or letters, as specified, to be included with the mailing of the sample ballot to each of the registered voters who indicated the same political party affiliation; AB 84 (Fong) permitting a new citizen to register and vote until the close of polls on Election Day; AB 193 (Knight) prohibiting a single family home from being designated as a polling place if it is the residence of a registered sex offender; AB 362 (Lowenthal) requiring a write-in candidate for any of several specified local offices to include a declaration on the statement of write-in candidacy that he/she satisfies the eligibility requirements for that office and revising the number of signatures required on a petition for a write-in campaign for superior court judge; AB 413 (Yamada) creating a pilot program allowing Yolo County to conduct not more than three local elections as all-mailed ballot elections; AB 461 (Bonilla) requiring a write-in vote to be counted, if the voter’s intent can be determined, regardless of whether the voter has complied with the voting instructions; AB 503 (Block) permitting an elections official, upon the request of a qualified write-in candidate, to hand tally the votes for the write-in candidate, as specified, and to count each ballot if the intent of the voter can be determined; AB 547 (Gatto) making it a misdemeanor for a care provider in a state-licensed facility to coerce an elder into voting for or against a candidate or measure contrary to the elder’s intent; AB 754 (Fletcher) permitting a person who is deployed on military service outside the state to designate another person to file candidacy and nomination documents on the deployed person’s behalf; AB 985 (Williams) permitting elections officials to conduct a two-part public manual tally of ballots as part of the official canvass of an election in which a voting system is used, in lieu of conducting a public manual tally of the ballots cast in 1% of the precincts; AB 1343 (Fong) requiring a voter’s name to be deleted from the permanent vote by mail voter list if he/she fails to return a vote by mail ballot for four consecutive statewide general elections, instead of two consecutive statewide general elections; and AB 1357 (Swanson) permitting county elections officials to provide voter registration forms online and requiring the Secretary of State to design and make available on his/her Internet Web site an affidavit of registration, as specified.

Vetoed Elections legislation included SB 199 (Correa) which would have permitted a vote by mail voter to return his/her ballot to any polling place within the state, instead of being limited to polling places within the jurisdiction of the elections official who issued the ballot; SB 205 (Correa) which would have prohibited a person from paying another person or receiving payment for registering voters if that payment is on a per-affidavit basis; SB 334 (DeSaulnier) which would have required the Secretary of State to include in the ballot pamphlet a list of the five highest contributors of $50,000 or more to each primarily formed committee supporting or opposing each state measure, as well as the total amount of their contributions; and AB 293 (Hill) requiring elections officials to establish a free access system that allows a vote by mail voter to find out whether his/her ballot was counted and, if not, the reason why the ballot was not counted.

LABOR RELATIONS

Labor Relations legislation of significance signed into law included SB 56 (Corbett) streamlining auditing requirements of the California Apprenticeship Council; SB 126 (Steinberg) requiring the Agricultural Labor Relations Board to certify a labor organization in the event of gross employer misconduct that prevents future fair elections and strengthens mandatory mediation requirements; SB 136 (Yee) providing that specified energy services contracts entered into pursuant to existing law are public projects and subject to application prevailing wage laws; SB 272 (DeSaulnier) clarifying existing law to aid employers in the proper implementation of the Michelle Maykin Memorial Donation Protection Act, which provides a leave of absence for an organ donation; SB 299 (Evans) requiring employers to maintain and pay for a pregnant employee’s medical coverage during pregnancy leave; SB 459 (Corbett) enacting a number of provisions of law related to the classification (or misclassification) of individuals as independent contractors; SB 684 (Corbett) providing that a workers’ compensation insurer that intends to use a dispute resolution or arbitration agreement to resolve disputes arising in California shall disclose to the employer, contemporaneously with a written quote that offers to provide insurance, that choice of law and choice of venue or forum may be a jurisdiction other than California; SB 922 (Steinberg) establishing parameters for the use of project labor arguments for publicly-funded construction projects; AB 22 (Mendoza) prohibiting, except as specified, an employer or prospective employer from using a consumer credit report for employment purposes; AB 55 (Gatto) removing the January 1, 2012 sunset date on the law that permits a motion picture payroll services company to serve as the employer of motion production workers for purposes of tax reporting and benefits; AB 228 (Fuentes) expanding the authority for the State Compensation Insurance Fund to provide workers’ compensation coverage to out of state employees if the employer has its principal place of business in California; AB 240 (Bonilla) permitting the Labor Commissioner to recover liquidated damages for an employee who brings a complaint alleging payment of less than minimum wage; AB 243 (Alejo) requiring an employer who is a farm labor contractor to disclose on the itemized payroll statement given to employees the name and address of the grower or other contractors that secured the employer’s services; AB 335 (Solorio) requiring the Administrative Director of the Division of Workers’ Compensation to adopt, by regulation, new notices and rules governing notices that are provided to employees in the Workers’ Compensation system; AB 378 (Solorio) regulating the dispensing of compounded medications and other pharmacy goods in the Workers’ Compensation system; AB 436 (Solorio) making changes to existing law related to the prevailing wage enforcement mechanism within the Department of Industrial Relations in order to address potential legal questions about the funding method of that process; AB 469 (Swanson) providing that in addition to being subject to a civil penalty, any employer who pays or causes to be paid to any employee a wage less than the minimum fixed by the Labor Commissioner is to be subject to paying restitution of wages to the employee, and makes it a misdemeanor if an employer willfully violates specified wage statutes or orders; AB 514 (Hernandez) clarifying the definition of “hauling of refuse” for purposes of the prevailing wage law; AB 551 (Campos) increasing the maximum penalty on contractors and subcontractors who fail to pay the prevailing wage from $50 to $200 a day; AB 554 (Atkins) requiring local workforce investment bonds to coordinate programs and service funded by the Workforce Investment Act of 1998 and approved by the Division of Apprenticeship Standards with community colleges to provide preapprenticeship training; AB 587 (Gordon) extending the sunset date on the exemption for volunteers on public works projects to January 1, 2017; AB 592 (Lara) making it an unlawful employment practice for an employer to interfere with, restrain, order the exercise of, or the attempts to exercise, any right provided under pregnancy disability leave; AB 735 (Mitchell) establishing a hiring preference for state internships and student assistants for foster youth; AB 766 (Monning) requiring nonredacted copies of certified payroll records to be provided upon request to any agency included in the Joint Enforcement Strike Force on the Underground Economy and other specified agencies; AB 878 (Berryhill) requiring a workers’ compensation insurer to report to the Contractors State License Board, a licensed contractor whose insurance policy it cancels; AB 1136 (Swanson) enacting the Hospital Patient and Health Care Worker Injury Protection Act requiring hospitals to adopt a safe patient handling policy; AB 1168 (Pan) requiring the Administrative Director of the Division or Workers’ Compensation to adopt a fee schedule for services and testimony by vocational experts in the workers’ compensation system; AB 1396 (Assembly Labor and Employment Committee) requiring that all employers provide a written contract to employees who are paid commission; and AB 1401 (Assembly Arts, Entertainment, Sports, Tourism, and Internet Media Committee) establishing an Internet Web site permit process to be administered by the Division of Labor Standards Enforcement for the issuance of temporary work permits for minors working in the entertainment industry.

Vetoed Labor Relations legislation of significance included SB 104 (Steinberg) which would have permitted agricultural employees to select collective bargaining representation through a specified “majority signup election process”; SB 931 (Evans) which would have permitted employers to pay employee wages by means of payroll card programs; AB 101 (John A. Perez) which would have permitted family child care providers to form, join, and participate in “provider organizations” for purposes of negotiating with state agencies on specified matters; AB 211 (Cedillo) which would have provided, for injuries that cause permanent partial disability for a supplemental job displacement benefit in the form of a voucher for up to $6,000 to cover various reeducation and skill enhancement expenses which would expire two years after the date of the voucher is given to the employee five years after the date of injury, whichever is later; AB 267 (Swanson) prohibiting any choice of law clause, venue selection clause, or forum selection clause in employment materials that are imposed on an employee as a condition of employment in California; AB 274 (Garrick) which would have required employees to be notified of the circumstances that constitute “good cause” to extend the time to answer a claim for unemployment insurance benefits; AB 325 (Lowenthal) which would have permitted employees to take four days of unpaid leave time off in the event of the death of certain relatives; and AB 947 (Solorio) which would have permitted up to 240 weeks of temporary disability benefits for workers under specified circumstances.

TAXATION

As described in the Budget Overview, attempts were made to extend the temporary taxes that were to be sunsetted on June 30, 2011 without success. As one of the revenue alternatives, the Legislature and the Governor turned to imposing a use tax collection responsibility on out-of-state retailers for the sale of goods shipped into the state. The background concerning this tax imposition is best summarized by a Board of Equalization analysis.

“One of the greatest controversies in the field of state taxation today concerns the constitutional authority of the states to impose a use tax collection responsibility on out-of-state retailers for the sale of goods shipped into the taxing state. Such transactions are generally conducted either through mail order, telephone orders, or via the Internet.

A December 2010 BOE estimate of uncollected use tax reveals that about $1.145 billion goes unpaid annually ($795 million in uncollected use tax from California consumers; $350 million from businesses). The estimate indicates that the unpaid use tax liability owed by the average California household is $61 per year and $102 per year for each California business.

Under constitutional law, states lack jurisdiction to require out-of-state retailers to collect a sales or use tax when the retailer has no “physical presence” in the taxing state. In 1992, the Supreme Court issued an opinion in Quill Corporation v. North Dakota (1992) 504 U.S. 298 and held that satisfying due process concerns does not require a physical presence, but rather requires only minimum contacts with the taxing state. Thus, when a mail-order business purposefully directs its activities at residents of the taxing state, the Due Process Clause does not prohibit the state’s requiring the retailer to collect the state’s use tax. However, the Court further held that physical presence in the state was required for a business to have a “substantial nexus” with the taxing state for purposes of the Commerce Clause. The Court therefore affirmed that in order to survive a Commerce Clause challenge, a retailer must have substantial nexus in the taxing state before that state can require the retailer to collect its use tax. Since the late 1990s, online shopping has taken off as an increasing number of businesses and consumers purchase increasingly diversified products on the Internet. That, combined with the states’ inability to require a use tax collection requirement on many out-of-state retailers, has prompted many states to seek new ways to enforce their use tax laws (every state that has a sales tax imposes the use tax). In California, for example, AB 8X4 was enacted in 2009 to require all businesses that have gross receipts from business operations of at least $100,000 annually and that are not already required to be registered with the BOE to register and file an annual use tax return to report and pay the applicable use tax on their untaxed purchases.

Prior related legislative efforts. In the 2007-08 Legislative Session, two bills contained changes to Section 6203(c) to extend nexus to the extent allowed under the U.S. Constitution and federal law: AB 1840 (Calderon) and AB 2X3 (Calderon). AB 1840 failed passage on the Assembly Floor and AB 2X3 was never heard in committee. During the 2009-10 Session, Assembly Member Calderon introduced a measure that would have imposed an information reporting requirement on out-of-state retailers without California nexus, without the imposition of any penalty. That bill, AB 2078, was subsequently amended to delete the information reporting requirement, and simply require out-of-state retailers without California nexus, to post information on their Internet websites and catalogs about use tax, and with only that provision remaining, died on the Senate Floor.

Also during the 2009-10 Legislative Session and various extraordinary sessions during that period, seven other bills were introduced containing “click through nexus” provisions (where retailers would be considered “engaged in business” in this state when they enter into agreements with California affiliates under which the affiliate, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link or an Internet Web site or otherwise, to the retailers, under specified conditions). Only one passed the Legislature – SB 17X3 (Ducheny). However, SB 17X3 also contained several other provisions related to tax enforcement and tax administration, and was vetoed by Governor Schwarzenegger. His veto message related to the bill as a whole, and not specifically to this particular provision.

As part of the Budget package in June 2011, AB 28X1 (Blumenfield) was passed by the Legislature and signed by the Governor which clarified the obligations under existing law for out-of-state retailers to collect and remit use tax on sales of tangible personal property to California residents. Specifically, it expanded the statutory definition of “retailer engaged in business in this state” under Revenue and Taxation Code Section 6203 to include any retailer entering into an agreement with a California resident under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link or an Internet Web site or otherwise, provided that (1) the retailer’s cumulative sales within the preceding 12 months to customers in California that were referred pursuant to affiliate agreements are in excess $10,000, and (2) the retailer in the preceding 12 months had sales of tangible personal property in the State in excess of $500,000. This provision requires an out-of-state retailer that has business relationships with affiliates in California to collect use tax on sales to California residents.

During the June recess, Amazon, who would have been affected by AB 28X1, actively pushed for a referendum on the state ballot next year that would have let the voters decide if AB 28X1 should be repealed. When the Legislature reconvened, negotiations took place with Amazon to see if a compromise could be worked out to amend AB 28X1. Near the end of session, an agreement was made and AB 155 (Calderon) was amended with the new language. AB 155 reverts the definition of retailer engaged in the state to its original language before AB 28X1 was enacted and will postpone the sales tax collection for a year unless a new federal law preempts it. AB 155 modifies AB 28X1 by increasing the small business exception for affiliate marketing. Instead of retailers with total sales of $500,000 or more in the state meeting the definition, it applies the definition only to those with $1 million or more in total sales.

AB 155 also required retailers that make sales into this state that meet the AB 28X1definition, but not the pre-AB 28X1 definition, to provide a notification to its customers on invoices or similar documentation. The notification must be confidential, contain specified contents, and warn customers that use tax may be due on the purchase, and may be provided electronically. The notification requirement is satisfied if it includes prominent notice that directs its customers to its Internet Web site regarding their use tax obligations. These retailers must also provide a statement of total sales to each of its customers to whom it sold tangible personal property subject to tax in the past year by March 1st of 2012 and 2013.

Lastly, AB 155 required the Department of Finance, on or before August 15, 2012, to certify in writing to the Governor, the Senate Rules Committee, the Speaker of the Assembly, and the State Board of Equalization whether or not federal law has been enacted on or before July 31, 2012, authorizing states to require remote sellers to collect taxes. If federal law is not enacted by July 31, 2012, the provision of AB 155 would require sales tax collection by September 15, 2012.

As part of the deal, Amazon indicated they will work to win support throughout the United States for a federal legislation sales tax bill that permits states to mandate sales tax collection if they have simplified their tax collection policies as part of the Streamlined Sales Tax Project. Amazon also agreed to take away their referendum movement and pledged to build distribution centers in the state, creating approximately 10,000 new full-time jobs, and hiring 25,000 seasonal workers by the end of 2015.

Other significant tax legislation signed into law included SB 86 (Senate Budget and Fiscal Review Committee) enacting the tax administration statutory language to implement the 2011-12 State Budget; SB 164 (Simitian) extending the sunset dates of the income tax check-off for the Children’s Trust Fund for the Prevention of Child Abuse and the Rare and Endangered Special Preservation Program to January 1, 2018; SB 583 (Vargas) reauthorizing the ALS/Lou Gehrig’s Disease Research Fund income tax check-off; AB 50 (Hill) providing tax relief for those affected by the San Bruno natural gas transmission line explosion of September 9, 2011; AB 152 (Fuentes) providing a tax credit to California growers for the costs of fresh fruits or vegetables donated to California food banks; AB 242 (Assembly Revenue and Taxation Committee) conforming the Personal Income Tax Law to specified provisions of the federal Patient Protection and Affordable Care Act; AB 509 (Skinner) requiring state departments and agencies that provide services to low-income persons to annually notify its program recipients that they may qualify for the earned income tax credit; AB 564 (Smyth) reestablishing the Municipal Shelter Spay-Neuter Fund income tax check-off; AB 624 (J. Perez) extending the Community Development Institution investment tax credit to January 1, 2017; AB 686 (Huffman) decreasing the rate at which a county or city may levy, increase, or extend a transactions and use tax from 0.25%, or a multiple thereof, to a rate of 0.125%, or a multiple thereof; AB 764 (Swanson) creating the Child Victims of Human Trafficking Fund income tax check-off; AB 820 (Gordon) requiring a county assessor, tax collector, and auditor to charge and collect a fee to cover the actual and reasonable costs incurred in preparing a certificate-of-payment showing taxes paid, instead of the existing $1 fee; AB 902 (Alejo) deleting the fixed fee amounts that tax collectors may charge out of tax sale proceeds for making reasonable efforts to contact last known assessees, obtaining names and last known mailing addresses, and sending and providing notices as part of tax sales, and instead provides that county boards of supervisors may fix the fees to reimburse the tax collector’s actual and reasonable costs; AB 971 (Monning) reenacting the Sea Otter Fund income tax check-off and repealing it on January 1, 2016; AB 1069 (Fuentes) extending for one year the California Motion Picture Tax Credit; AB 1090 (Blumenfield) enacting the County Deferred Property Tax Program for Senior Citizens and Disabled Citizens; AB 1307 (Skinner) permitting the Contractors State License Board to refuse to issue, reinstate, reactivate, or renew a license or to suspend the license of a contractor for the failure of the licensee to resolve all outstanding final liabilities assessed by the Board of Equalization, if the licensee has not entered into an installment payment agreement for that liability and is in compliance with that agreement; AB 1369 (Gatto) disallowing tax deductions for income derived by a taxpayer from specified illegal activities; AB 1423 (Perea) conforming state laws to recent federal changes that affect the tax treatment of regulated investment companies which are mutual funds and other similar investment companies; and AB 1424 (Perea) requiring both the Franchise Tax Board and the Board of Equalization to expand public lists of tax delinquents to include the 500 largest tax delinquencies and provide for the suspension of professional, occupational, and driver’s licenses of those whose names appear on the lists.

Vetoed Tax legislation of interest included SB 364 (Yee) which would have imposed a penalty on a qualified taxpayer that claims a business tax credit, enacted after January 1, 2012, but fails to maintain the requisite number of full-time equivalent employees in subsequent years, as provided, and SB 508 (Wolk) which would have required any bills enacting tax preferences to include specified information and a 10-year sunset.

HOUSING

The housing market in the United States, and especially in California, is still in a depressed state. As described in previous Digests of Legislation, various steps have been taken to try to stimulate and reform the real estate market.

On October 24, 2011, President Obama unveiled a new plan to revise the Making Home Affordable (MHA) Program through executive action to attract more eligible borrowers who can benefit from refinancing their home mortgage. The MHA Program was established in 2009 as part of the Obama Administration MHA Program which provides borrowers, who may not qualify otherwise, qualify for refinancing because of declining home values or reduced access to mortgage insurance, the ability to refinance mortgages into a lower interest rate and/or more stable mortgage product. It is the only refinance program that enables borrowers who owe more than their home is worth to take advantage of low interest rates and other refinancing benefits.

Borrower eligibility under the plan is as follows:

1. The existing mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009. Homeowners can determine if they have a Fannie Mae or Freddie Mac loan by going to:

http://www.FannieMae.com/loanlookup/ or calling 800-7FANNIE (8 am to 8 pm ET) https://ww3.FreddieMac.com/corporate/or 800-FREDDIE (8 am to 8 pm ET)

2. The program will continue to be available for loans with current loan-to-value (LTVs) above 80%.

3. Borrowers must be current on their mortgage payments with no late payment in the past six months and no more than one late payment in the past 12 months.

4. Borrowers should contact their existing lender or any other mortgage lender offering MHA refinances.

It is anticipated that about one million homeowners could be eligible. The President’s job proposal in Congress includes $15 billion for communities hard hit by foreclosure.

A state housing issue, which has developed, concerns the California Housing Finance Agency’s (Agency) strong stand against borrowers who rent their homes and foreclosing on their mortgage payments.

A California Senate Office of Oversight and Outcomes Committee faulted the Agency for foreclosing on homeowners who move into larger homes after renting out their first ones because they cannot sell them in the weak housing market. Each foreclosure costs the Agency more than $50,000 in uninsured losses, according to the report entitled, “Good Deeds Punished: State-Run Mortgage Lender Forecloses on Californians Current on their Loans.” The report indicated that the Agency foreclosed on at least 21 borrowers who were violating home-occupancy requirements, 49 borrowers who rented out residences are likely headed for foreclosures, and 186 more are renting out their Agency-financed homes without permission. Senators Darrell Steinberg and Mark DeSaulnier, in response to the report, sent a letter to the Agency director urging the Agency to revisit its owner-occupancy by formulating a more flexible approach. The Senators stated in the letter that, “Clearly, many of the borrowers described in the report did not set out to become landlords. Far from making money, these borrowers are accepting significant losses in an attempt to live up to their mortgage commitments.”

On October 26, 2011, the Director of the Agency agreed to temporally stop foreclosing on borrowers who remain current on their mortgage payments. The Director, in a response to the Senators indicated they have asked the Agency’s Board of Directors to review the rules regarding owner-occupancy at their next meeting in January 2012. He also said that the Agency’s past practice was guided on advice from the Agency’s legal and bond counsel regarding their interpretation of Internal Revenue rules.

Significant housing legislation signed into law included: SB 4 (Calderon), requiring, on or after April 1, 2012, that a reduce notice of non-judicial foreclosure sale contain specified information; SB 6 (Calderon) updating the California Real Estate Law, appraisal, and Civil Code to reflect changes enacted at the federal level by the Dodd-Frank Wall Street Reform and Consumer Protection Act; SB 53 (Calderon) strengthening the California’s Real Estate Law, to give the Department of Real Estate more enforcement tools with which to crack down against mortgage fraud and other real estate violations, and adds safeguards to protect consumers who seek out services from real estate licensees; SB 150 (Correa) prohibiting a common interest development from restricting the right of an owner to rent or lease his/her separate interest, if the owner had that right at the time of purchase, unless the owner waives the right to lease or rent; SB 209 (Corbett) providing that a prohibition or restriction in the installation or use of an electrical vehicle charging station in any of the governing documents of a common interest development is void and unenforceable; SB 217 (Vargas) allowing persons to exempt company registration under the California Finance Lenders Law in order to comply with the Secure and Fair Enforcement of Mortgage Licensing Act of 2008; SB 332 (Padilla) codifying the ability of a residential landlord to prohibit smoking on the property or in any building or portion of the building, including any dwelling unit; SB 337 (Kehoe) prohibiting a landlord from prohibiting a tenant from posting or displaying political signs relating to, an election or legislative vote, an initiative, referendum, or recall process, or issues before a public body for a vote, except under certain circumstances; SB 458 (Corbett) expanding anti-deficiency protection for all residential mortgages or deeds-of-trust, provided that the holder of the mortgage or deed-of-trust consents to the short sale; SB 8X1 (Senate Budget Committee), AB 26X1 (Blumenfield), and AB 27X1 (Blumenfield) enacting redevelopment budget trailer bill language to implement the 2011-12 Budget; AB 221 (Carter) permitting the Department of Housing and Community Development to expend bond funds earmarked for the Emergency Housing Assistance Program (EHAP) either for EHAP or further supportive Housing Program; AB 483 (Torres) redefining the target population that may occupy supportive housing units funded through the Supportive Housing Program; AB 588 (V. Manuel Perez) providing that a tenant who is a victim of domestic violence be given more time to give notice of intent to terminate a lease early; AB 793 (Eng) prohibiting an insurance broker or agent from participating in or employing any party that participates in the origination of a reverse mortgage, except as specified; AB 818 (Blumenfield) enacting the Renters’ Right to Recycle Act which requires an owner of a multifamily dwelling (MFD) with five or more living units to arrange for recycling services that are appropriate and available for the MFD, as specified; AB 1084 (Davis) permitting the Department of Veterans Affairs to fund a limited equity housing cooperative loan, through the California Veteran Home Loan Program and requires the fund transfer to take place within 30 days; AB 1103 (Huffman) permitting a city or county to accommodate a portion of its housing element needs for lower-income households through the provision of financial assistance to convert foreclosed homes to affordable units; and AB 1111 (Fletcher) prohibiting courts from garnishing the wages or levying a bank account of homeless youth under age 25 for outstanding unpaid citations relating to truancy, loitering, curfew violations, or illegal lodging until the youth is at least 25 years old.

Vetoed Housing legislation of note included SB 450 (Lowenthal) which would have reformed how redevelopment agencies spent their low and moderate housing funds; SB 759 (Lieu) which would have prohibited a common interest development from enforcing any provision of its governing documents that prohibits or has the effect of prohibiting the use of artificial turf or any other synthetic surface that resembles grass; AB 312 (Lowenthal) which would have added homeless persons to the list of individuals protected from violence and intimidation under the Ralph Civil Rights Act, thereby providing civil remedies to homeless persons who are injured as a result of such violence; AB 1216 (Fuentes) which would have permitted tenants who live in affected affordable housing units, the Department of Housing and Community Development, the local public housing authority, and the city or county in which the development is located, to bring an action in court to enforce the preservation right-of-first refusal law; and AB 1220 (Alejo) which would have permitted an entity in support of affordable housing to challenge a housing element or a specified city or county housing ordinance within three years of adoption.

CIVIL RIGHTS

I. Proposition 8 update

The Digest of Legislation 2010 provided an update of the status of Proposition 8 (restricting marriage to opposite-sex couples) to August 2010. This overview updates the legal history of the Proposition from August to November 2011.

On August 4, 2010, the United States District Court of Appeals for the Northern District of California (Ninth District Court) Judge Vaughn Walker ruled Proposition 8 unconstitutional and ruled that Imperial County did not have standing to bring suit to intervene in favor of Proposition 8. Imperial County was involved because no state governmental official would defend the case. Imperial County contended it had an interest in the case because county clerks have to issue marriage licenses and conduct ceremonies. The attorney for the County said it wanted to uphold the will of 70% of its voters who supported Proposition 8, and assure there was some party in the case that could bring an appeal. Judge Walker, in his August 4th decision, said counties are not independent of the state and under the law, only the state can defend its marriage laws. Imperial County then filed another appeal.

On August 16, 2010, a three-judge panel of the United States Ninth District Court of Appeals granted a motion to stop new same-sex marriages and directed parties to Perry v. Schwarzenegger to brief the issue of why the stop pending order should not be dismissed because of lacking of standing of the plaintiffs. On August 17th the same district Court of Appeals panel ordered an expedited briefing on the appeal by Imperial County to have the right to defend Proposition 8 and appeal of the decision of United States District Court Judge Vaughn Walker declaring Proposition 8 invalid. The decision by Judge Walker on August 4th had cast doubt on whether the defendant-intervenor had legal standing to appeal. If they lack the standing to appeal, only the named defendants could appeal, and the named defendants, Governor Schwarzenegger, and Attorney General Jerry Brown, had both expressed not to appeal the Proposition.

On September 8th, the California Supreme Court denied an emergency request by the Pacific Justice Institute to force the Governor and the Attorney General to defend the case on appeal. On December 1st, Senator Dennis Hollingsworth, et al., filed a motion to disqualify Senior Ninth Appellate Court Judge Stephen Reinhardt from the three-judge panel which was to hear the brief appeal which was denied on December 2nd. On December 6th, the three-judge panel heard oral arguments of the appeal, which were televised and made available on C-SPAN.

On January 4th, in the appeal by the defendant-intervenor, the Ninth Circuit certified a question to the California Supreme Court whether the backers of a challenged initiative had a particularized interest in the initiatives validity that would permit them to defend the law when state officials refuse to do so. The Ninth Circuit stayed the appeal pending a response from the Supreme Court. The State Supreme Court heard oral arguments on the question on September 6th. On November 17th, the California Supreme Court ruled that the proponents of Proposition 8 have legal standing under state law to defend the measure, even when the state’s elected officials decline to do so. The ruling puts back this question to the 9th U.S. Circuit Court of Appeals to make an official ruling on the legality of the Supreme Court’s answer to the Appellate Court’s question of standing.

In a related Proposition 8 matter, Judge Vaughn Walker retired in February of 2011 and on April 6th made public that he was gay and in a relationship. On April 25th, supporters of Proposition 8 filed a motion in District Court to vacate Walker’s decision of August 2010 arguing he should have recused (excused) himself or disclosed his relationship status. Ninth District Court Judge James Ware heard arguments on the motion on June 13th, and denied it the next day stating:

“After considering the Oppositions to the Motion and the governing law, as discussed below, the Court finds that neither recusal nor disqualification was required based on the asserted grounds. The sole fact that a federal judge shares the same circumstances or personal characteristics with other members of the general public, and that the judge could be affected by the outcome of a proceeding in the same way that other members of the general public would be affected, is not a basis for either recusal or disqualification under Section 455(b)(4) [of the United States Code (disqualification of justice, judge, or magistrate judge)]. Further, under Section 455(a), it is not reasonable to presume that a judge is incapable of making an impartial decision about the constitutionality of a law, solely because, as a citizen, the judge could be affected by the proceedings. …”

Also, another matter relating to Proposition 8 was Judge Walker’s decision approving of having the January 2010 proceedings recorded and even broadcast. The United States Supreme Court reversed Walker but the judge allowed the video to be produced for the court record. Since striking down Proposition 8 controversy broadened to include the question of releasing the video. Proponents of Proposition 8 protested Walker’s use of excerpts from the recordings in classes after he retired and filed suit with Judge Ware. Judge Ware ruled on September 19, 2011, ordering the tapes released on September 30th unless the court of a higher court finds a reason to delay the release further which a three-judge panel of the Ninth United States Circuit Court of Appeals did on October 24th. In their order, they said the court will expedite the consideration of the video appeal and will hear an hour of arguments during the week of December 5th. The panel also set a briefing schedule, with principal briefs from both sides due by November 14 and reply briefs by November 28th. Written transcripts of the 12 days of trial testimony and one day of closing arguments have already been made public.

Lastly, on October 20, 2011, Ninth District Court Judge Morrison England ruled in the case of ProtectMarriage.com v. Bowen denying the plaintiffs bid to conceal identities of donors to Proposition 8. On January 9, 2009, supporters of Proposition 8 had filed a lawsuit to block public disclosure of their donations. They alleged that disclosure requirements have caused donors to become the target of boycotts, hate mails and threats. The lawsuit requested a preliminary injunction that ordered the California Secretary of State Debra Bowen to temporarily remove information about donations posted on its Web site. On January 30, 2009, Judge England denied the request to keep the names of the donors saying the public has a right to know who is giving money to state ballot measures. He indicated that campaign disclosure laws are intended to protect the public and are especially important during expensive initiative campaigns. He said many campaign committees have vague names obscuring their intent and the public would have no way of knowing who is behind the campaign unless they can see who is giving money. The Judge also denied the request by supporters to relieve ProtectMarriage.com and the National Organization for Marriage and all similarly situated persons from having to list any donors who gave $100 or more for any future campaigns.

On October 20, 2011, Judge England ruled against ProtectMarriage.com and the National Organization for Marriage to block their past and future campaign finance records from public view because of alleged harassment of their donors. His decision followed a similar decision by the United States District Court Judge in Washington State who denied a bid to keep secret the names of people who signed a petition for a referendum seeking a repeal of a domestic partnership law there. On October 24th, the Ninth Circuit Court granted an emergency stay pending appeal and set an expedited briefing schedule in conjunction with the releasing of the video recording case.

II. Civil Rights Legislation of 2011

Civil Rights legislation of significance signed into law included SB 48 (Leno) adding lesbian, gay, bisexual, and transgender Americans, persons with disabilities and other to the list of groups of people whose role and contributions shall be accurately portrayed in social science instruction; SB 117 (Kehoe) prohibiting a state agency from entering into a goods or services contract worth $100,000 or more, if in the provision of benefits, the contractor discriminates between employees with same or different sex spouses or partners, or discriminates between same or different sex spouses or partners of employees; SB 182 (Corbett) adding demographic data on gender identification and sexual orientation to the list of information collected annually on judicial nominees, applicants, appointees, judges, and justices; SB 559 (Padilla) prohibiting discrimination based on genetic information; SB 651 (Leno) eliminating the requirement the domestic partners have a common residence in order to establish a registered domestic partnership; SB 757 (Lieu) requiring every group health plan contract and every policy or certificate of group health insurance marketed, issued, or delivered to a resident of this state, regardless of the situs of the contract to comply with existing law that provides for equal coverage for registered domestic partners; AB 592 (Lara) prohibiting employers from interfering, restraining or denying an employee’s exercise or attempted exercise of their rights under the state’s medical leave law and stating that this bill is declarative of existing law; AB 673 (J. Perez) adding consideration of lesbian, gay, bisexual, and transgender communities to the duties of the Office of Multicultural Health; and AB 887 (Atkins) clarifying the definition of gender under the Fair Employment and Housing Act and the Unruh Civil Rights Act as well as other anti-discrimination laws.

Vetoed Civil Rights legislation of note included SB 111 (Yee) which would have made it a violation of the Unruh Civil Rights Act for a business to adopt or enforce a policy that requires, limits or prohibits the use of any language in or with a business establishment, unless the language is justified by business necessity and notification has been provided of the circumstances and the time when the language restriction is required to be observed, and of the consequences for its violation; SB 185 (Hernandez) permitting the University of California and the California State University to consider race, gender, ethnicity, national origin, geographic origin, and household income in admissions, so long as no preference is given; SB 416 (Kehoe) which would have required not later than January 1, 2015, appropriate, voluntary, demographic, self-identification questions related to sexual orientation, gender identity, gender expression, to domestic partnership and gender of one’s spouse to be included in the California Health Interview Survey and the Behavioral Risk Factor Surveillance System; SB 747 (Kehoe) which would have required various medical professionals to take at least one continuing education course that provides instruction on cultural competency, sensitivity, and best practices for providing adequate care to lesbian, gay, bisexual, and transgender persons; AB 312 (Lowenthal) which would have added homeless persons to the list of individuals protected from violence and intimidation under the Ralph Civil Rights Act, thereby providing civil remedies to homeless persons who are injured as a result of such violence; and AB 559 (Swanson) which would have exempted cases brought under the Fair Employment and Housing Act from the rule giving discretion to judges to deny fees in a case, other than a limited civil case, if the prevailing party recovers a judgment that could have been rendered in a limited civil case; and AB 1155 (Alejo) which would have stated that the percentage of disability determined by a physician to have been due to factors other than the industrial injury shall not include consideration of race, religious creed, color, national origin, age, gender, marital status, sex, sexual orientation, or genetic characteristics.

GENERAL GOVERNMENT

One of the most important pieces of legislation signed into law relative to General Government operations, other than the expedited judicial process for environmental impact reports for large projects (discussed under Environmental Issues in the overview), was SB 617 (Calderon) which makes reforms in the state regulatory procedure process. This issue, which was a bipartisan effort, requires each state agency to prepare a standardized regulatory impact analysis with respect to the adoption, amendment, or repeal of a major regulation that will have economic impact on California business enterprises and individuals to an amount exceeding $50 million, as estimated by the agency, proposed on or after November 1, 2013. The intent is to bring better oversight on how state regulations are adopted, and the impact these regulations have on California business activity in order for the state to be more business friendly.

Other General Government legislation signed into law included SB 10 (Evans) permitting each Veterans’ Home Allied Council to represent veterans who reside in that home in matters before the Legislature; SB 24 (Simitian) establishing a standard core content for security breach notifications in California; SB 32 (Leno) permitting bars and restaurants to infuse their drinks with colors and flavors; SB 33 (Simitian) making permanent the Elder and Dependent Adult Financial Abuse Reporting Act; SB 39 (Padilla) prohibiting the importation, production, manufacture, distribution, or sale of beer to which caffeine has been directly added as a separate ingredient at retail locations in the state; SB 78 (Senate Budget and Fiscal Review Committee) and SB 80 (Senate Budget and Fiscal Review Committee) enacting the General Government statutory provisions to the 2011-12 State Budget; SB 82 (Senate Budget and Fiscal Review Committee) providing the necessary statutory changes in the area of cash management and cash deferrals in order to ensure sufficient cash reserves during the 2011-12 fiscal year; SB 101 (Corbett) clarifying the relationship between athletic agencies, teams, and leagues, with regards to procuring and negotiating sponsorship agreements, media rights, endorsements, and sales of a team; SB 163 (Evans) making structural changes to the State Bar and providing a $10 reduction in Bar dues; SB 201 (DeSaulnier) establishing the Corporate Flexibility Act of 2011 which creates flexible purpose corporations; SB 220 (Price) permitting independent children to be eligible for coverage under group life insurance policies up to age 26; SB 221 (Simitian) increasing small claims court jurisdiction limits from $7,500 to $10,000; SB 238 (de Leon) increasing penalties for a violation of the Miller-Ayala Athlete Agents Act; SB 244 (Wolk) requiring cities, counties, and local agency formation commissions to plan for disadvantaged communities; SB 264 (Correa) continuing indefinitely deeming skateboarding at a public park a hazardous recreational activity; SB 292 (Padilla) establishing expedited judicial review procedures for the proposed downtown Los Angeles football stadium and convention center project; SB 293 (Padilla) reducing the time period a general contractor has to pay his/her subcontractor after the general contractor has been paid a progress payment from the owner; SB 405 (Corbett) ratifying the Judicial Council’s conversion to convert 10 subordinate judicial officer positions to judgeships; SB 426 (Calderon) classifying any building or property used to willfully conduct unlawful dogfighting or cockfighting as a public nuisance; SB 445 (Simitian) clarifying that patron use records, as defined, of any library which is in whole or in part supported by public funds shall remain confidential, except as provided; SB 474 (Evans) regulating indemnification agreements in specified private commercial and public works construction contracts; SB 495 (Fuller) extending the period of time the State Controller must hold property that has been delivered to the State under the Unclaimed Property Law; SB 510 (Correa) establishing various minimum requirements for an individual to become a branch manager for a real estate business; SB 513 (Cannella) creating a Rendering Industry Advisory Board, including membership and duties, reauthorizing the licensing of renderers and the collection of fees, and extending the sunset for Certified Farmers’ Market fees until January 1, 2014; SB 541 (Price) permitting the boards and bureaus within the Department of Consumer Affairs to use expert consultants; SB 543 (Steinberg) extending the sunset date on various boards, committees, and commissions, within the Department of Consumer Affairs; SB 555 (Hancock) permitting Mello-Roos Community facilities to finance renewable energy, energy efficiency, and water efficiency improvements on private property; SB 599 (Kehoe) requiring life insurance proceeds to be paid in a lump-sum payment of by written settlement option, including a retained-asset account; SB 602 (Yee) enacting the Reader Privacy Act, placing restrictions relative to user information on commercial businesses that offer “book services,” the rental, purchase, borrowing, browsing, or viewing of books to the public; SB 658 (Negrete McLeod) requiring funeral establishments that maintain an Internet Web site to make their general price list available on the Web site by January 1, 2013; SB 713 (Calderon) enacting the Life Insurance Proceeds Disclosure Act of 2011 requiring life insurers to provide disclosures regarding settlement payment options; SB 734 (DeSaulnier) requiring (beginning program year 2012) that at least 25% of federal Workforce Investment Act funds provided to local workforce investment boards be spent on workforce training programs; SB 741 (Dutton) making permanent the expiring Alternative Protest Process that is administered by the Department of General Services; SB 746 (Lieu) prohibiting the use of ultraviolet tanning devises by persons under the age of 18; SB 773 (Negrete McLeod) establishing requirements for ethics courses that certified accountants must complete to gain licensure; SB 861 (Corbett) prohibiting a scrutinized company, as defined, using conflict minerals from the Democratic Republic of Congo from bidding on a state goods or services contract; SB 926 (Runner) permitting an attorney for a dependent child to disclose limited case information to an individual being assessed for possible placement of the child; AB 28 (Huber) delegating responsibility to evaluate a plan to create a new board, advisory board, or new category of licensed professional to the appropriate policy committee of the Legislature; AB 29 (John A. Perez) creating the Governor’s Office of Business and Economic Development to promote greater economic development, foster job creation, and deliver specific services to the business community; AB 74 (Ma) requiring any state agency holding an event with expected attendance over 10,000 to conduct a threat assessment and permitting the Secretary of the Department of Food and Agriculture to enter into specified cooperative agreements with counties for agricultural inspection services; AB 118 (Assembly Budget Committee) providing various measures to mitigate the $350 million reduction to the Judicial Branch in the 2011-12 Budget to avoid disruptions and help keep courts open; AB 126 (Davis) requiring each member of the State Bar’s Commission on Judicial Nominees Evaluation to complete fairness and anti-bias training, and clarifying existing requirements for collection of demographical data of judicial applicants; AB 147 (Dickinson) permitting counties and cities to require fees to pay for constructing transportation facilities as a condition of approving final subdivision maps and building permits; AB 156 (Lara) providing an absolute defense to any civil or criminal action of a gambling establishment that conducts play of a controlled game that is later deemed unlawful; AB 167 (Cook) enhancing provisions of law relating to forfeiture of elected office under the Federal Valor Act; AB 173 (Gatto) extending the December 31, 2010 statutory deadline in order to permit any victims of the Armenian Genocide, or their heirs or beneficiaries who reside in California, and have a claim arising out of an insurance police purchased in effect in Europe or Asia from 1875-1923 to bring suit seeking benefits under those policies until December 31, 2016; AB 183 (Ma) prohibiting off-sale licensees from selling alcoholic beverages using a computer-operated checkout stand; AB 184 (Swanson) adding seismic strengthening improvements to the types of improvements to private property that can be financed with voluntary contractual assessments; AB 187 (Lara) permitting the State Auditor to establish a high-risk local government agency audit program to determine if there are any areas that are at risk of fraud, waste or mismanagement; AB 238 (Huber) providing that a motor vehicle conditional sales contract shall not be made unenforceable solely because of violation of requirements to disclose specified government fees and the total of those and other fees; AB 241 (Hill) extending the moratorium on the issuance of new gambling licenses for card rooms from January 1, 2015 to January 1, 2020; AB 280 (Silva) revising the definition of a California-bred standardbred horse to delete the requirement that the standardbred foal be conceived in California, in order to qualify for the California Standardbred Sires Stakes Program; AB 307 (Nestande) changing the definition of “public agency” for purposes of Joint Powers agreements to include federally recognized Indian tribes; AB 309 (Cook) requiring an appointed or ex officio office to become vacant when the incumbent is debarred, suspended, disqualified, or otherwise excluded from participating in a covered transaction, pursuant to federal law, and certain conditions are met; AB 361 (Huffman) permitting and regulating the formation and governance of a new form of corporate entity known as a benefit corporation; AB 431 (Ma) permitting the California Board of Accountancy to establish a retired status license for certified public accountants and public accountants; AB 438 (Williams) imposing requirements, until January 1, 2019,on a city or library district that intends to withdraw from a county free library system and operate libraries with a private contractor; AB 494 (Logue) permitting the Butte and Glenn County Boards of Supervisors to determine the legality of alcohol possession during summer holiday periods on a portion of the Sacramento River that runs between Butte and Glenn counties; AB 506 (Wieckowski) permitting a local government to petition for bankruptcy protection if it either participates in a neutral evaluation process or declares a fiscal emergency; AB 597 (Eng) establishing the California Financial Literacy Fund in the State Treasury, administered by the State Controller, to support partnerships with the financial services community and other stakeholders, to improve Californians’ financial literacy; AB 621 (Calderon) providing a mechanism for service of legal process on non-residents who cause injuries involving rental cars in California, up to a maximum contractual limit; AB 622 (Dickinson) permitting witnesses before a civil grand jury proceeding to be accompanied by counsel; AB 624 (John A. Perez) permitting the Insurance Commissioner to establish a California Organized Investment Network Advisory Board until January 1, 2015; AB 634 (Huber) permitting the use of carbon monoxides for the control of burrowing rodent pests; AB 664 (Ammiano) enhancing San Francisco’s ability to make improvements at Pier 70 for the holding of the America’s Cup in 2013; AB 686 (Huffman) decreasing the rate at which a county or city may levy, increase, or extend a transactions and use tax from 0.25%, or multiple thereof, to a rate of 0.125%, or a multiple thereof; AB 768 (Gatto) precluding any city, county, or city and county from prohibiting or restricting the practice of male circumcision, or the exercise of parental authority to have a child circumcised; AB 900 (Buchanan) enacting the Jobs and Economic Improvement Through Environmental Leadership Act of 2011 to expedite judicial review procedures under the California Environmental Quality Act for specific projects; AB 901 (V. Manuel Perez) expanding the definition of financial institutions eligible to participate in the California Capital Access Program and increases the program’s reporting requirements; AB 905 (Pan) prioritizing the person authorized to direct disposition indicated on a United States Department of Defense Record of Emergency Data, DD Form 93, as the agent authorized to take control of a decedent’s remains of a military service member who dies while on duty under state law; AB 973 (Campos) requiring trial courts to provide notice and an opportunity for comment before adopting their annual budgets; AB 981 (Hueso) providing additional incentives within the California Capital Access Program to encourage lenders to lend to small businesses; AB 1020 (Chesbro) ratifying a new tribal-state gaming compact entered into between the State of California and the Habematolel Pomo of Upper Lake, executed on March 17, 2011; AB 1069 (Fuentes) extending the California Motion Picture Tax Credit program for one year, to the film industry to encourage them to stay in the state; AB 1074 (Fuentes) extending certain immunities to specified companies providing 9-1-1-emergency assistance services; AB 1219 (Perea) permitting the collection of zip code information when a person or entity accepting a credit card in a sales transaction at a retail motor fuel dispenser or retail motor fuel payment island automated cashier uses the zip code information solely for prevention of fraud, theft, or identity theft; AB 1263 (Williams) restricting State Compensation Insurance Fund officers and directors post-separation lobbying and contracting activities; AB 1265 (Nielsen) creating a temporary program that counties can use when the state’s open-space (Williamson Act) subventions are less than a specified level; AB 1358 (Feuer) placing new requirements on employment contracts that are executed or renewed by local agencies as of January 1, 2012; AB 1349 (Fuentes) permitting a county to extend to misdemeanor Vehicle Code violations to the one-time infraction amnesty program allowing a person who owes an outstanding fine to pay 50% of the fine, except as specified; AB 1388 (Wieckowski) permitting the court to grant a judgment debtor’s claim of exemption for wage garnishment in cases where the underlying debt was incurred for medical care or hospital services rendered to the judgment debtor or his/her family; AB 1407 (Assembly Judiciary Committee) clarifying California’s social host liability law; AB 1417 (Hall) appropriating $9.1 million from the Indian Gaming Special Distribution Fund to the California Gambling Control Commission to provide grants to local agencies for the purpose of mitigating the adverse impacts of tribal gaming; AB 1418 (Hall) ratifying the tribal-state gaming compact entered into between the State of California and the Pinoleville Pomo Nation, executed on August 8, 2011; AB 1420 (Assembly Governmental Organization Committee) extending the sunset date on the Emergency Management Assistance Compact until January 1, 2015; and AB 1425 (Assembly Insurance Committee) requiring regulations adopted by the Insurance Commissioner relating to life settlements and the low-cost automobile insurance program to be adopted pursuant to the Administrative Procedure Act.

Vetoed General Government legislation of significance included SB 469 (Vargas) which would have required a city or county to prepare economic impact reports before it approves or disapproves the constitution or conversion of superstore retailers; SB 586 (Pavley) which would have restricted the issuance of signature stamps by state chartered bonds and credit unions; SB 590 (Calderon) which would have exempted the sale of certain life insurance policies for funeral and burial expenses from the requirement that the insurance agent provide the senior with a notice at least 24 hours prior to the initial meeting, provided a 60-day cancellation period is allowed; SB 676 (Leno) which would have permitted an eight year, four county pilot project with respect to the cultivation and processing of industrial hemp; SB 702 (Lieu) which would have required owners of an animal reclaimed or adopted from a shelter to implant a microchip in their animal upon release; SB 715 (Calderon) which would have required that insurance producers and insurers selling annuities have reasonable grounds to believe the products they recommend are suitable for consumers; SB 847 (Correa) which would have prohibited any medical marijuana entity that possesses, cultivates, or distributes, medical marijuana from locating within 600 feet of a residential area unless a local ordinance has been adopted regulating the location of these entities in relation to residential use; AB 38 (Bradford) which would have directed the Department of Financial Institutions to work with local agencies to compile a list of underserved communities or regions that lack a concentration of depositing institutions and financial services; AB 129 (Beall) which would have permitted local governments to streamline their code enforcement processes by combining their fine and penalty and nuisance abatement processes; AB 172 (Eng) which would have established the Reporting Transparency in Government Internet Web site to provide audit and summary data regarding contracts valued at $5,000 or more to the public; AB 696 (Hueso) which would have required the Infrastructure and Economic Development Bank to develop a methodology and process to measure the economic benefits of a proposed project; AB 700 (Blumenfield) which would have established an independently administered California Infrastructure and Economic Development Bank; AB 750 (Hueso) which would have established the Investment Trust Blue Ribbon Task Force, which would be a state bank receiving deposits of state funds; AB 767 (John A. Perez) which would have established the “State Capitol Sustainability Task Force” to develop and implement a State Capitol Sustainability Initiative; AB 894 (V. Manuel Perez) which would have established the California Industrial Development Financing Advisory Commission to establish and administer the California Manufacturing Competitiveness Loan and Loan Guarantee Program; AB 1116 (Fong) which would have required the California Management Agency to take measures to help people with limited English proficiency prepare for emergencies and understand information conveyed during emergencies; and AB 1121 (Pan) which would have permitted cities and counties to issue puppy licenses.

REDISTRICTING

In 2011, reapportionment of Senate, Assembly, Congressional, and Board of Equalization districts, which are required every 10 years, was done by the California Redistricting Commission which was created by voters at the 2010 November General Election (Proposition 11). The Commission consisted of 14 members: five Democrats, five Republicans, and four Decline to State. According to the Commission, 36,000 individuals applied to be members. A three-member panel of auditors reviewed the applications and conducted interviews to establish a pool of 20 Democrats, 20 Republicans, and 20 applicants from neither major party. The California Assembly Speaker, the California Senate President Pro Tempore, and the minority party leaders in the Assembly and the Senate, as authorized by the law, jointly reduced the pools to 12 members in each pool. The State Auditor then randomly drew three Democrats, three Republicans, and two applicants from neither major party to become commissioners. Finally, these first eight commissioners selected six commissioners from the remaining applicants in the pools. The Commission held 34 public hearings in 32 cities, in 23 counties. On August 15, 2011, the Commission made its final report. The Commission used the following criteria to draw district lines:

• United States Constitution compliance

• Federal Voting Rights Act

• Geographic contiguous

• Geographic integrity

• Geographic compactness

• Nesting where possible

• No consideration of incumbent status

The following, which comes from the Commission report, indicates how they numbered the Senate districts:

“Article IV, section 2 of the California Constitution provides that California’s 40 Senators are elected to four-year terms, half of which begin every two years. (Cal. Const., art. IV, § 2, subd. (a).) Under this system, 20 of California’s Senate seats are up for election every two years. The next Senate election-in 2012-will apply to all of the odd-numbered Senate districts, while even-numbered Senate districts are up for election in 2014.

“Because all of the odd-numbered Senate district seats will be up for election in 2012, the Commission took note of the following practical issue: following the release of the new maps, some Californians who had voted in Senate elections in 2008 and would have been eligible to vote again in 2012, because they had been in an odd-numbered district, might have to wait until 2014 to vote, because they would subsequently be in an even-numbered district after the decennial redistricting. This issue is commonly known as ‘deferral.’ Conversely, other Californians who had voted in Senate elections in 2010 and would have been eligible to vote again in 2014, because they had been in an even-numbered district, might be able to vote two years earlier in 2012, because they would subsequently be in an odd-numbered district. This is commonly known as ‘acceleration.’

“Consequently, in light of these issues, the Commission chose a numbering alternative for Senate districts that best maintained continuity in terms of the placement of voters in odd and even districts. In other words, if a voter was in an odd-numbered Senate district during the last decade, the Commission chose the numbering alternative that maximized the likelihood that this same voter would remain in an odd-numbered Senate district for the next decade, thereby minimizing deferral.

“For each Senate district that it drew, the Commission determined the percentage of the population in that district that had been in an odd-numbered district during the last decade. The Commission selected the 20 Senate districts with the highest percentage of voters who had been in odd-numbered districts during the last decade. These 20 districts were selected as the odd- numbered districts. The remaining 20 districts became the even-numbered districts.

“Next, the Commission took the 20 odd-numbered districts and started with the northernmost district along the Oregon Border. This was given the number SD 1. The Commission then moved south, based on the northernmost point in each remaining odd-numbered district, and numbered each district consecutively: SD 3, 5, 7, 9, etc.

“Finally, the Commission took the northernmost even-numbered district along the Oregon border and gave it the number SD 2. The Commission then moved south, based on the northernmost point in each remaining even-numbered district, and numbered each district consecutively: SD 2, 4, 6, 8, etc.

“The Commission did seriously consider alternative numbering systems for Senate districts, such as a simple north-to-south consecutive numbering scheme, but made the determination that an approach that minimized deferrals would result in the most fair and effective representation for voters throughout the state.”

After the Commission approved their redistricting plan, the California Supreme Court issued an order that any lawsuits concerning the plan were to be submitted electronically to court order to expedite the process by September 29th. On September 15, the Fair Districts 2012/Fair and Accountability in Redistricting Committee (FAIR) representing the Republican Party and the Senate Republican Caucus to repeal the Senate alleging the plan violated the state constitution as follows:

• 11 Districts violate compactness, contiguity and respect for geographic integrity of counties and communities of interest.

• 7 Districts unnecessarily split two major counties, San Bernardino and Sacramento Counties, giving each county parts of six different districts but no district wholly within either county. This is worse than the pre-Baker v. Carr Senate plan in which each county had at least one senator. The federal courts held the 1960s plan unconstitutional for lacking population equality, but at least San Bernardino and Sacramento Counties could be assured of a Senator under the old plan; they cannot, under the Commission’s plan.

• The Maps fail to assure Latino residents of Monterey and Santa Clara County effective representation by a single Senator from areas that have a history of electing Latino Assembly members; the Maps also dilute Latino voting interests in the western San Fernando Valley portion of Los Angeles County in violation of the Federal Voting Rights Act.

On September 29, 2011, a lawsuit was filed against the Congressional districts by former Republican Congressmember George Radanovich along with four others asking the court to appoint a special master to draw a whole new map for all 53 districts. On October 12, attorneys for the California Citizens Redistricting Commission requested that the court toss out of the lawsuits.

On October 26, 2011, the California Supreme Court in a 7-0 vote rejected both lawsuits and rejected the Republican requests for an emergency order to halt implementation of the redistricting plan. After the rejection by the Supreme Court, FAIR filed arguments with the United States Department of Justice indicating the Senate map is not legal because it deletes Latino voting power.

At the time of this writing, there are referendum petitions being circulated to overturn the Redistricting Commission’s Senate and congressional plans.

Attached to the end of this section, are the Commission’s maps for the State Senate, State Assembly, United States Congressional, and Board of Equalization Districts.