Introduction 2012

INTRODUCTION

The Legislature and the Governor were able to accomplish major agreements on the following issues: public employee pension, housing mortgage relief, workers’ compensation, improvement of full and equal access for the disabled while protecting California businesses, use of greenhouse emission auction (cap-and-trade) revenue, stronger human trafficking laws, clarifying mandated child abuse reporting laws in light of the 2011 Penn State scandal, keeping state parks open, improvement of the Academic Performance Index law, and clarifying the role of the Department of Fish and Game.

STATE BUDGET

As in 2011, the Legislature was able to present an “on time” budget to the Governor.

On 1/5/12, the Governor presented his budget. At that time, the Administration estimated a budget deficit of $9.2 billion. The deficit consisted of a projected $4.1 billion deficit at the end of 2011-12 and an operating deficit of $5.1 billion. The proposed budget provided for $10.3 billion in cuts and revenues and a $1.1 billion reserve at the end of 2012-13. The proposed budget also was predicated on the passage of the Governor’s proposed initiative to be voted on at the November General Election. The proposed initiative, at that particular time, provided an increase on the state’s wealthiest taxpayers as follows:

1. A 10.3% tax rate on income between $250,000 and $300,000 for individuals; $340,000 and $408,000 for heads of household; and $500,000 and $600,000 for joint filers.
2. A 10.8% tax rate on income between $300,000 and $500,000 for individuals; $408,000 and $680,000 for heads of household; and $600,000 and $1 million for joint filers.
3. An 11.3% tax rate on income in excess of $500,000 for individuals; $680,000 for heads of household; and $1 million for joint filers.

It also provided a temporary increase in the state’s sales and use tax by 1/2%. The new revenues would go to schools and protection of the 2011 Realignment funds for local public safety. After accounting for an increased Proposition 98 (Education) minimum guarantee of $2.5 billion, there would be a $4.4 billion net benefit to the General Fund.

In the event that voters do not pass the initiative, another $5.9 billion in cuts would have to be made.

Major proposals of the January 2012 budget proposal included:

1. $946 million reduction to CalWORKs, including a significant redesign of the program.
2. $842 million in cuts to the Medi-Cal program mainly from a proposal to enroll more seniors and disabled Medi-Cal recipients in managed care.
3. $163 million in cuts to the In-Home Supportive Services program.
4. $544 million from K-14 education by applying a consistent approach to accounting for the various programmatic adjustments made to the Proposition 98 guarantee.
5. $447 million in child care reductions.
6. $301 million in Cal Grant program reductions.
7. $823 million in savings from reform of state mandates owed local governments.
8. $631 million from extending loan repayments to various special funds borrowed in previous budget years.
9. $417 million from using a loan from the Unemployment Compensation Disability Fund to make interest payments to the federal government for unemployment insurance benefits. A new employer surcharge would generate revenue to pay future interest payments and the borrowed funds from the Disability Fund.
10. $350 million from additional weight fee revenues.
11. Eliminating the Department of Mental Health and the Department of Alcohol and Drug Programs and reorganizing behavioral health programs to other departments.
12. Eliminating the Managed Risk Medical Insurance Board and shifting its programs and responsibilities to the Department of Health Care Services.
13. Transferring certain direct-care health programs from the Department of Public Health to the Department of Health Care Services.
14. Consolidating five specialty health offices into an Office of Health Equity.
15. Invest proceeds from cap-and-trade fees to reduce greenhouse gases under AB 32 (2006) - climate change legislation.
16. Reduces Department of Parks and Recreation by $22 million resulting in the closure of 70 state parks.
17. Reflects the recent action by the California Supreme Court that found constitutional the elimination of redevelopment agencies, but found unconstitutional the voluntary alternative redevelopment program, which would have allowed communities to continue redevelopment by making remittance payments to schools.
18. Provides an overall financial structure for the 2011 Public Safety Realignment, including the creation of accounts and rules that govern the flexibility of counties to transfer monies between accounts and directing the allocation of funding among accounts, including the allocation of growth funding.

In March 2012, the Governor, after negotiating with the Restoring California Coalition, consisting of the California federation of Teachers, California Calls, the Courage Campaign, and the Alliance of Californians for Community Empowerment, the Governor was able to keep a competing proposed initiative off the ballot by merging his with the Coalition. The Coalition’s plan included no sales tax increase and had a two-tiered increase on California’s millionaires. The Governor’s revised plan, which became Proposition 30, provides for a one-quarter sales tax and use tax increase to be in effect for four years, and increases the personal income tax rates on higher incomes until the end of 2018, as follows:

• A 10.3% tax rate on income between $250,000 and $300,000 for individuals; $340,000 and $408,000 for heads of household; and $500,000 and $600,000 for joint filers.
• An 11.3% tax rate on income between $300,000 and $500,000 for individuals; $408,000 and $680,000 for heads of household; and $600,000 and $1 million for joint filers.
• A 12.3% tax rate on income in excess of $500,000 for individuals; $680,000 for heads of household; and $1 million for joint filers.

At that time, the Administration projected that Proposition would increase state revenues by $8.5 billion in 2011-12 and 2012-13 combined. After accounting for a $2.9 billion increase in the Proposition 98 minimum guarantee, the measure would result in about $5.6 billion of net General Fund benefits.

In May, the Governor presented the May Revise budget proposal. Between January and May, the deficit grew to $15.7 billion due to projected higher school funding requirements in 2012-13, combined with a $4.3 billion lower revenue assumption, and lower anticipated net costs in other areas. The May Revise proposed a 16% increase in funding for K-12 education and continued funding to local governments that are implementing public safety realignment and proposed legislation to create a permanent funding structure as local governments could have a reliable funding source into the future. The May Revise provided an additional $4.1 billion in additional spending reductions, for a total of $8.3 billion. The rest of the deficit gap was predicated on revenues coming from Proposition 30.

Proposed May Revise reductions included:

1. Using local reserves to affect General Fund costs for local trail courts on a one-time basis and putting on hold the court construction program.
2. Making various reductions to hospital and nursing home funding to lower Medi-Cal costs.
3. Reducing In-Home Supportive Services hours by 7%.
4. Using proceeds from the national Mortgage Settlement to offset existing General Fund costs for assisting homeowners and protecting consumers, rather than creating new programs.
5. Making various adjustments, including a 2011-12 overappropriation of the minimum guarantee to pre-pay Proposition 98 funding required by a court settlement.
6. Prohibiting colleges and universities that are unable to meet minimum performance standards from participating in the Cal Grant Program, as well as aligning future student awards to federal financial need standards.
7. Reducing the cost of state employee compensation by 5% through a reduced workweek or a commensurate reduction in work hours and pay.

On 6/15/12, the Legislature passed the final budget plan, AB 1464 and AB 1497, without the assistance of any Republican members. The Legislature also passed, and the Governor signed into law, 28 trailer bills. The total state and federal fund expenditures were as follows:

• General Fund $91.338 billion
• Special Funds $39.409 billion
• Selected Bond Funds $11.674 billion
• Federal Funds $82.956 billion

The spending from the state funds is a 7% increase over the 2011-12 Budget. Federal fund spending is projected to be about a 6% increase over 2011-12. The final budget compromise restored some of the Governor’s proposed cuts especially the Cal Grant, Child Care, and the CalWORKs programs.

The final budget took into consideration the revenues from Proposition 30, if it passes.

Some final major budget actions included the following:

I. Education

1. K-12 and Community Colleges. Maintains current year spending levels of $47.8 billion. Provides a Proposition 98 minimum guarantee of approximately $53.5 billion for 2012-13 which reflects an increase of $6.6 billion above the 2011-12 funding level for K-14 assuming if Proposition 30 passes. (Proposition 30 passed in the General Election).
2. Universities. Provides a base funding increase of $125 million each beginning in 2013-14 for the University of California (UC) and the California State University (CSU) to avoid having to increase student fees in 2012-13. The funds are contingent upon the Governor’s tax initiative passing and upon the UC not increasing fees in 2012-13 and the CSU rescinding their approved fee increase for 2012-13.
3. Charter Schools. Provides $50 million in growth funding for charter schools. The Budget includes several statutory changes to (1) streamline the deferral waiver process for charter schools; (2) improve access to external financing for charter schools, and (3) give charter schools priority for lease or purchase of surplus school property.
4. Cal Grants. Restores cuts to Cal Grants for students at non-profit private schools. Grants will be reduced for new students to $9,000 in 2013-14 and to $8,000 in 2014-15 (instead of $5,500 in earlier version of the budget agreement). Eliminates renewal Cal Grants for students at poorly performing for-profit private schools.
5. Child Care. Reduces child care by $185 million, including the Governor’s item vetoes. The specific actions in the budget package include:
   1. Transfer funding from general child care to the part-day state preschool program to acknowledge the part of the day that is curriculum-based. Funding for the remainder of the day continues to be provided through general child care funds.
   2. Align preschool age eligibility with the new kindergarten start date.
   3. Require families to pay fees for the part-day preschool program.
   4. Impose an 8.7% across-the-board cut ($80 million) to direct service programs, except Stage 2. This cut affects general child care, migrant, alternative payment, and Stage 3 programs.
   5. Reduce alternative payment programs (non-CalWORKs vouchers) by $20 million and state preschool by $30 million.

II.        Health and Human Services

1. Medi-Cal and Medicare. Merges the delivery of services for those who are eligible for both Medi-Cal and Medicare to reduce costs and improve services.
2. Mental Health.  Eliminates the Department of Mental Health and creates the Department of State Hospitals to administer state hospitals. Shifts the state-level oversight for most of mental health programs to the Department of Health Care Services.
3. Healthy Families. Transitions the Healthy Families Program to Medi-Cal. Shifts $40 million in First 5 California funding to Medi-Cal for children (aged 5 and under) to offset General Fund support in the Program for 2012-13.
4. Health Care Services. Transfers Every Woman Counts, Family Planning Access and Treatment, and the Prostate Cancer Treatment Program from the Department of Public Health to the Department of Health Care Services.
5. Rural Health Care. Expands Medi-Cal managed care to 28 rural counties.
6. Department of Alcohol and Drug Programs. Transfers the Department of Alcohol and Drug Programs to the various departments within the Health and Human Services Agency, effective 7/1/13.
7. Office of Health Equity. Creates the Office of Health Equity to focus on health disparities of all types and the interactions and overlapping dynamics between them.
8. CalWORKs. Shifts to 24-month program to meet state requirements, with key provisions to extend services for recipients on track for employment. The overall welfare-to-work program remains a 48-month program, with 24 months being limited to those meeting federal requirements.
9. In-Home Supportive Services (IHSS). Rejected the Governor’s proposal concerning IHSS and instead continues the 3.6% across-the-board reduction in IHSS.
10. Hospitals. Provides $345 million in savings from various proposals that provide budgetary savings related to public and private hospitals.

III.      Criminal Justice and Judiciary

1. Realignment. Reduces the budget for the Department of Corrections and Rehabilitation (CDCR) by 4.4% below the 2011-12 level of spending. The decrease reflects additional savings in 2012-13 from the decline of the state inmate and parolee populations due to the 2011realignment of adult offenders.
2. Prison and Parole Operations. Implementation of the blueprint to reorganize the CDCR which is explained in the criminal justice overview. The plan is designed to reduce state spending on adult prison and parole operations by $1 billion in 2012-13, growing to $1.5 billion by 2015-16.
3. Trial Courts. Reduces trial court operations to be offset through the one-time use of $285 million of local trial court reserves.
4. Division of Juvenile Justice. Reduces the Division of Juvenile Justice’s age of jurisdiction from 25 to 23.
5. Major Reductions to Judicial Branch. Contains $544 million in reductions to the Judicial Branch. Includes a significant reduction to the trial courts, a delay in courthouse construction, and administrative savings at the Administrative Office of the Courts.
6. Custody:  Female Inmates. Expands eligibility for the Alternative Custody Program for Female Offenders.

IV. Other Issue Areas

1. Cap-and-Trade. Includes authority for the state to expend at least $500 million in cap-and-trade auction proceeds consistent with AB 32 (2006), the major greenhouse gas emission reduction legislation.
2. Redevelopment Agencies.  Creates a process for determining the liquid assets that redevelopment agencies should have shifted to their successor agencies when they were dissolved, and the amount that should be available for distribution to the affected taxing entities as of 7/1/12. Provides a variety of possible collection tools if successor agencies fail to provide the assets identified for distribution to the affected taxing entities, or if cities or counties that improperly received assets from their former redevelopment agencies fail to return those assets.
3. Employee Compensation. Reduces $839.1 million in employee compensation, equivalent to a 5% reduction in pay.
4. Property Tax Rebates. Expands the authority of local governments to attract business by targeted property tax rebates.
5. Unemployment Insurance. Provides a loan of $312.6 million from the Unemployment Insurance Disability Fund to pay for the unemployment insurance interest to the federal government.
6. Mandates. Suspends various mandates, except for most mandates related to law enforcement or property taxes, resulting in a savings of $728.8 million.
7. State Parks. Reduced General Fund for the Department of Parks and Recreation. However, after the passage of the Budget, the Administration reported the discovery of about $20 million in additional unspent funds in the State Parks and Recreation Fund which aided in keeping state parks open.
8. High-Speed Rail. Appropriates $7.2 billion to the High-Speed Rail Authority to begin the construction of the high-speed rail line.
9. Transportation. Provides $819 million in Proposition 1A bond funds to Caltrans for capital improvement projects to intercity and commuter rail lines and urban rail systems that provide direct connectivity to the high-speed rail.
10. Commission on the Status of Women and Girls. Continues funding for the Commission on the Status of Women and adopts reforms, including changing the name to the Commission on the Status of Women and Girls and focusing its studies and advocacy on issues such as gender equity in education and business, and women veterans and their families.
11. Business and Economic Development. Establishes the stand alone Office of Business and Economic Development to provide a focus for business assistance and development.
12. Mediation and Conciliation Services. Transfers the State Mediation and Conciliation Services Program in the Department of Industrial Relations to the Public Employment Relations Board.
13. Motor Vehicle Fuel Account. Transferred funding from the Motor Vehicle Fuel Account and additional weight fee revenues to the General Fund.
14. Mortgages. Creates a deposit fund for direct payments from the National Mortgage Settlement.
15. Unemployment Insurance. Reduces the size of the California Unemployment Insurance Appeals Board from seven to five and increases the qualifications of the Board members.
16. Forestry. Provides for a 1% assessment on timber products, as well as reforms to the timber harvest plan review process and timber fire immunity. The assessment will primarily pay for regulatory activities related to timber harvest plan review and forest restoration activities. Provides $8.3 million to implement the State Responsibility Area fee.
17. Public Safety Realignment. Provides for an overall financing structure for the 2011 Public Safety Realignment.
18. State Agencies and Departments. Eliminates, consolidates, or streamlines more than 200 reporting requirements for state agencies and departments. Eliminates the Technology Services Board, the Electronic Funds Transfer Task Force, and the Salton Sea Restoration Council. Eliminates the Rehabilitation Appeals Board, Accountancy Board Advisory Committee on Ethics Curriculum, Advisory Committee on Automobile Insurance Fraud, Advisory Committee of the Genetically Handicapped Persons Program, Committee on Executive Salaries, Lead in Candy Interagency Collaboration, naturopathic Childbirth Attendance Advisory Subcommittee, State Social Services Advisory Board, and Committee on Welfare and Social Services. Eliminates the Fair Employment and Housing Commission and transfers its functions to the Department of Fair Employment and Housing. Eliminates underutilized programs within the Department of Toxic Substances Control. Consolidates special health functions into the Office of Health Equity. Eliminates the Department of Mental Health and transfers functions to the Department of State Hospitals and Community-Based Mental health entities. Consolidates the Commission on Uniform State Laws within the Legislative Counsel Bureau.
19. Voluntary Investment Program Fund.  Creates the Voluntary Investment Program Fund, within the State Treasury, for the receipt of voluntary deposit by local governments. Allows cities, counties, school districts or special districts to deposit between $200 million and $10 billion into the Fund, upon approval by their governing bodies. Specifies that deposit amounts may not exceed the amount needed to address actual or anticipated General Fund cash shortfalls.

The Governor item-vetoed $129 million in General Fund spending and $67 million in special fund spending. After the Legislature returned from their summer break, it adopted over a dozen additional budget-related bills which made various amendments to the 2012-13 Budget and a measure implementing a lumber tax that changes statutory provisions related to timber harvest plans.

If Proposition 30 had not passed, there would have been $5,951.4 billion in additional cuts made. Funding for schools would be reduced by $5.4 billion and the University of California and the California State University would have been reduced by $250 million. Also, cuts would have been made in grants to local law enforcement for water safety patrol; grants for city police; the Department of Forestry and Fire Protection; the state’s public safety officers in the departments of Parks and recreation (park rangers) and Fish and Game (wardens); flood control programs in the Department of Water Resources; Department of Justice’s law enforcement programs; and services to individuals with developmental disabilities.

Ballot Trigger Reductions
 (dollars in millions)

1-        This level of savings may be offset by Cal Grant increases if the universities raise tuition.

The 2012-13 Budget and Budget-related (trailer) legislation are listed as follows:

Bill Number   Chapter          Subject

AB 1464a      21       2012-13 Budget Act
AB 1465         22       Transportation
AB 1467         23       Health
AB 1470         24       Transition to Department of State Hospitals
AB 1472         25       Developmental services
AB 1484         26       Implementation of redevelopment agency dissolution
AB 1485         27       Augmentations to the 2011-12 Budget Act
AB 1494         28       Transition from Healthy Families Program to Medi-Cal
AB 1497         29       Amendments to the 2012-13 Budget Act
AB 1499         30       Order of measures appearing on statewide ballots
AB 1502         31       Higher education
SB 81 2         2011-12 Budget Act: Home-to-School Transportation
SB 95 1         Cash management
SB 1006         32       State government
SB 1008         33       Medi-Cal Coordinated Care Initiative
SB 1009         34       Mental health realignment
SB 1013         35       Child welfare services realignment
SB 1014         36       Alcohol and drug programs realignment
SB 1015         37       Tax enforcement
SB 1016         38       Education
SB 1018         39       Resources and environmental protection
SB 1020         40       Public safety realignment—account structure
SB 1021         41       Public safety
SB 1022         42       Correctional facilities
SB 1023         43       Public safety realignment
SB 1029         152     High-speed rail
SB 1033         44       Cash management (create investment account for local agencies)
SB 1036         45       In-Home Supportive Services changes
SB 1038         46       State government
SB 1041         47       Human services

August Budget-Related Legislation

AB 1468         438     Health—amendments
AB 1471         439     Human services—amendments
AB 1477         630     Amendments to the 2012-13 Budget Act
AB 1478a       530     State parks
AB 1481         342     Public safety—amendments
AB 1487         343     Special funds reporting and accounting
AB 1488         440     State hospitals—amendments
AB 1489         631     Nursing home quality assurance fee
AB 1492         289     Timber harvest plans and lumber tax
AB 1496         717     2011 Realignment—amendments
SB 71a            728     Boards, commissions, and reports
SB 1028         575     Education—amendments

a          AB 1464 and AB 1478 authored by Assembly Member Blumenfield; SB 71 authored by Senator Leno; all other Budget-related legislation was introduced by the Budget Committee in either the Assembly or the Senate.

Proposition 31 (2012), an initiative constitutional amendment and statute which appeared on the 2012 General Election ballot, makes major revisions to the state’s budgetary process, allows local governments to develop new plans for coordinating how they provide services to the public and alter administration of state-funded programs, and restricts the Legislature’s ability to pass certain bills. Specifically, it:

• Establishes a two-year state budget cycle.
• Prohibits the Legislature from creating expenditures of more than $25 million unless offsetting revenues or spending cuts are identified.
• Permits the Governor to cut the budget unilaterally during declared fiscal emergencies of the Legislature fails to act.
• Requires performance reviews of all state programs.
• Requires performance goals in state and local budgets.
• Requires publication of bills at least three days prior to legislative vote.
• Allows local governments to alter how laws governing state-funded programs apply to them, unless the Legislature or state agency vetoes change within 60 days. 

ELECTIONS

I. 2012 Election

At the 2012 June Presidential Primary Election, the two-top primary election process was in effect for the first time in which the two-top vote getters in legislative and congressional races would face off in the November election (regardless if they are from the same political party). Before the election was held, two bills were enacted as urgency legislation to make improvements to the system in order that county election officials could easily implement the election. They were
AB 1200 (Ma) and AB 1413 (Fong).

There were seven congressional districts where candidates represented the same party that faced each other in the General Election:

District 8        Assemblymember Paul Cook (R) vs. Gregg Imus (R)
District 15      Congressmember Fortney Stark (D) vs. Eric Swalwell (D)
District 30      Congressmember Howard Berman (D) vs. Congressmember Brad Sherman (D)
District 31      Congressmember Gary Miller (R) vs. Senator Robert Dutton (R)
District 40      Congressmember Lucille Roybal-Allard (D) vs. David Sanchez (D)
District 43      Congressmember Maxine Waters (D) vs. Bob Flores (D)
District 44      Congressmember Janice Hahn (D) vs. Laura Richardson (D)

In the General Election, the following individuals won: Paul Cook, Eric Swalwell, Brad Sherman, Gary Miller, Lucille Roybal-Allard, Maxine Waters, and Janice Hahn.

NOTE: Howard Berman was Majority Leader in the Assembly, served 10 years in the State Assembly, and 30 years in the U.S. Congress.

In the California Senate, there were two same party candidate races:

District 13      Assemblymember Jerry Hill (D) vs. former Assemblymember Sally Lieber (D)
District 15      Assemblymember Jim Beall (D) vs. former Assemblymember Joe Coto (D)

For the California Assembly, there were 18 contested same party candidate races:

District 1        Rick Bosetti (R) vs. Brian Dahle (R)
District 2        Assemblymember Wesley Chesbro (D) vs. Tom Lynch (D)
District 5        Frank Bigelow (R) vs. former Senator/Assemblymember Rico Oller (R)
District 6        Assemblymember Beth Gaines (R) vs. Andy Pugno (R)
District 10      Assemblymember Michael Allen vs. Marc Levine (D)
District 18      Rob Bonta (D) vs. Abel Guillen (D)
District 19      Michael Breyer (D) vs. Phil Ting (D)
District 20      Jennifer Ong (D) vs. Bill Quirk (D)
District 23      Jim Patterson (R) vs. Bob Whalen (R)
District 39      Former Senator/Assemblymember Richard Alarcon (D) v. Raul Bocanegra (D)
District 47      former Assemblymember Joe Baca (D) vs. Cheryl Brown (D)
District 50      Assemblymember Betsy Butler (D) vs. Richard Bloom (D)
District 51      Jimmy Gomez (D) vs. Luis Lopez (D)
District 59      Reggie Jones-Sawyer (D) vs. Rodney D. Robinson (D)
District 67      Melissa Melendez (R) vs. Phil Paule (R)
District 72      Travis Allen (R) vs. Troy Edgar (R)
District 76      Rocky Chavez (R) vs. Sherry Hodges (R)

In the June Primary, there were two ballot propositions voted upon: Proposition 28 which passed and Proposition 29 which failed.

Proposition 28 reduces the total amount of time a person may service in the State Legislature from 14 to 12 years. It allows a person to serve a total of 12 years either in the Senate, in the Assembly, or a combination of both. It applies only to legislators first elected at the 2014 election and makes legislators elected before it was passed to continue to be subject to existing term limits. Proposition 39 would have imposed an additional five cent tax on cigarettes to fund cancer research.

In the General Election, the Democrats won 15 of the 20 State Senate districts and the Republicans won five. With the recognition of Senator Doug La Malfa at the end of the 2012 Session, a special session was needed to fill his seat which Assemblymember/former State Senator Jim Nielsen won. At the time of this writing, in the Assembly, there may be 38 new members (due to term limits, members running for higher office, and members losing their seats in the elections).

With the election of Senators Gloria Negrete McLeod and Juan Vargas to the U.S. Congress, two special elections will be held in 2013.

Due to the election, the Democrats will have a supermajority meaning they have 2/3 of the membership in both houses. Former Assemblymember Hannah-Beth Jackson will be returning to the Legislature winning a Senate race. Former members who were unsuccessful in their legislative comebacks included Richard Alarcon, Rico Oller, George Plescia, Joe Coto, Sally Lieber, and Joe Baca, Jr. Former Assemblymember Steve Clute lost his bid for State Senate in the 2012 June election.

The following propositions were voted upon at the General Election:

Proposition 30 Temporary taxes to fund education and guaranteed local public safety funding – PASSED
Proposition 31 State Budget reform – DEFEATED
Proposition 32 Political contributions by payroll deduction – DEFEATED
Proposition 33 Auto insurance: prices based on driver’s history of insurance coverage – DEFEATED
Proposition 34 Repeal of death penalty – DEFEATED
Proposition 35 Enhance human trafficking penalties – PASSED
Proposition 36 Three Strikes Law revision – PASSED
Proposition 37 Genetically engineered foods: labeling – DEFEATED
Proposition 38 Tax to fund education and early childhood programs – DEFEATED
Proposition 39 Tax treatment for multistate businesses – PASSED
Proposition 40 Senate District redistricting referendum – PASSED

Due to the enactment of AB 1422 (Perea), the Safe, Clean, and Reliable Drinking Water Supply Act (the Water Bond) was taken off the November 2012 election schedule and moved to the November 2014 General Election.

II. Elections Legislation

A major piece of legislation enacted into law was AB 1499 (Assembly Budget Committee), which was considered a budget trailer bill, establishes the order in which bond measures and constitutional amendments, which are proposed by initiatives, appear on the ballot. Specifically, it makes bond measures, including those proposed by initiatives are to appear first on ballot in the order in which they qualify and makes constitutional amendments, including those proposed by initiative are to appear after bond measures and constitutional amendments, including those proposed by initiative. This law took effect immediately and became applicable for the November 2012 General Election ballot propositions.

Another major elections piece of legislation enacted into law was AB 1436 (Feuer) which allows same-day voter registration, giving Californians the right to vote with a provisional ballot if the conditional voter registration is deemed effective. The law does not take effect until the Secretary of State certifies California’s new statewide voter database known as VoteCal.

Other elections legislation of note enacted into law include SB 35 (Padilla) adds the California health Benefit Exchange to the list of public assistance agencies required by the national Voter Registration Act of 1993 to provide voter registration opportunities and codifies various other provisions of the Act; SB 488 (Correa) ensures that public safety governmental and organizational logos, insignias, emblems, trademarks and other identifiers are used only with the approval of the governmental agency, department, or organization to which the identifier belongs in connection to state mailings and other types of mass mailings; SB 1001 (Yee) imposes fees on specified committees that are required to file disclosure reports pursuant to the Political Reform Act (PRA), increases fees on lobbying firms and lobbyist employers, and requires the new fee revenue to be used for the online and electronic disclosure of reports filed pursuant to the PRA; SB 1275 (Lieu) modifies timelines associated with conducting special elections to fill vacancies in congressional or legislative offices in order to better facilitate compliance with federal election law regarding military and overseas voters; SB 1272 (Kehoe) provides for county central committee elections to be held every four years instead of every two years, and makes other party-specific changes; AB 216 (Swanson) permits county election officials to use change-of-address information from customer credit reporting agencies, instead of using change-of-address information from the U.S. Postal Service, for the purpose of updating and maintaining the accuracy of voter registration lists; election officials believe that credit bureau change-of-address data is more up-to-date and comprehensive than Postal Service data; AB 481 (Gordon) makes numerous changes to laws governing the reporting of independent campaign expenditures and identifying an independent expenditure committee’s principal officer for liability purposes; AB 1509 (Hayashi) requiring the Internet posting of local elected officials required to file statement of economic interests; AB 1626 (Yamada) allows election officials to seek a writ of mandate or injunction to amend or delete elections materials for district and school district elections; AB 1724 (Fong) resolving a conflict in existing law that governs the amount of time that a voter can spend in the voting booth, and permits a voter to receive additional time to mark his/her ballot when necessary; AB 1805 (Huffman) establishes new voting procedures for military and overseas voters to comply with the federal Uniformed and Overseas Citizens Absentee Voting Act and implements the policies of that Act and the Uniform Military and Overseas Act adopted by the National Conference of Commissioners on Uniform State Laws; AB 1929 (Gorell) establishes processes and procedures for the review and approval of ballot marking systems for use in California elections; AB 2062 (Davis) allows an agency to permit the electronic filing of a statement of economic interests, including amendments, in accordance with regulations adopted by the Fair Political Practices Commission, as specified; AB 2191 (Norby) provides that candidates for political party central committees who receive contributions and make expenditures of less than $1,000 in a calendar year are not required to file campaign disclosure reports; AB 2410 (Fuentes) bans ex-felons who were convicted of a felony that violates the public trust from running for elected office; and AB 2692 (Assembly Elections and Redistricting Committee) repeals the legal descriptions of the 2001 Assembly and congressional districts effective 1/1/13, and the legal descriptions of the Senate and Board of Equalization districts effective 1/1/15 (since redistricting is done by resolution now instead of by statute making the description obsolete).

The Governor vetoed the following elections legislation: SB 1233 (Padilla) which would have required the Attorney General to prepare a translation of the circulating title and summary of a proposed initiative or referendum into the languages covered by the Federal Voting Rights Act, as specified, and the information be made available to a potential signer of a petition who is limited-English proficient; AB 145 (Pan) 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; AB 2054 (Fong) which would have allowed 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; AB 2162 (Portantino) which would have adjusted the dollar increments for investments and income that are to be used by public offenders in filing a Statement of Economic Interest; and AB 2220 (Gatto) which would have required a specified disclaimer to be included in the summary statement prepared by the Legislative Analyst for a proposed initiative measure that provides new revenues for new or existing programs, as specified.

PUBLIC EMPLOYMENT

One of the most important issues which the Legislature and the Governor compromised on was public pension reform through the enactment of AB 340 (Furutani).

California currently has dozens of public retirement systems and individual retirement plans. The largest are the California Public Employees’ Retirement System (CalPERS), serving over 1.6 million members and retirees, and the California State Teachers’ Retirement System (CalSTRS), serving over 850,000 members and retirees. CalPERS also administers the Judges’ Retirement Systems I and II and the Legislators’ Retirement System. In addition, there are many independent public retirement systems, including the 20 county systems that operate under the 1937 Act County Employees’ Retirement Law, the University of California Retirement Plan, plans for the City and County of San Francisco, and cities of San Diego, Fresno, Sacramento, Oakland, San Jose, and others.

Some of these retirement systems and individual retirement plans are established under a statutory framework, while others operate under their own regulations and charters. Benefit formulas vary widely with differing retirement formulas for non-safety and safety employees and benefit levels and plan designs varying among retirement systems and employers. Finally, Social Security (SS) coverage varies. Non-safety state employees are coordinated with SS, while state safety employees are not. Teachers are not coordinated with SS, but school classified employees are coordinated. Employees of counties and cities have varying coverage.  It is common that safety employees do not have SS, while non-safety employees do have SS; however, that is not the case for every public employer. In some cases all employees of a public employer are coordinated, and in other cases no employees are coordinated.

The unifying factor for all public retirement systems and plans (with one or two known exceptions) is that they provide a defined benefit for retirees that is derived by multiplying the individual’s years of service, highest average compensation over a 12 or 36 month period, and the individual’s retirement benefit age factor (e.g., 2% at age 60). In addition, all systems provide cost-of-living adjustments in varying levels to retiree benefits, death and disability benefits, and survivor benefits. Finally, all defined benefit plans must comply with applicable federal laws in order to maintain their status as tax-qualified plans.

Benefits for retirement system members are funded over the employee’s working career from three sources. First, employees make contributions as a percentage of payroll. Employee contribution rates are established in statute, or in rules and charters for the smaller plans. In some cases, employers and employees agree, through collective bargaining, to adjust employee contribution rates. The second source of funding is derived from investment returns on the retirement funds. For example, CalPERS estimates that historically, investment returns have paid for approximately two-thirds of the cost of providing benefits. The third source of funding is employer contributions, which are also determined and paid as a percentage of employee income. When investment returns do not perform as expected, employers make up the difference in the form of higher rates. Similarly, when investment returns exceed expectations, employer rates are reduced accordingly. These rate reductions and increases are actuarially “smoothed” over a period of years in order to ease employer rate volatility and ensure continued funding of the retirement systems.

NOTE: Refer to the Overview section of the 2011 Digest of Legislation for the actions which took place in 2011 leading up to the 2012 compromise.

On 2/2/12, the Governor resubmitted his October 27th pension reform plan to the co-chairs of the legislative conference committee and to the legislative leadership. Assembly Republican members introduced legislation supporting the Governor’s plan while the Democratic leadership was working with conference committee members to come up with a proposal.

On 8/31/12, the last day of session, the Legislature passed the conference report (AB 340) and the Governor signed the bill on September 12th. Also, a follow-up bill, AB 197 (Furutani), was enacted to clarify the report. The final version provided for the following:

Caps Pensionable Salaries

• Caps pensionable salaries at the Social Security contribution and wage base of $110,100 (or 120% of that amount for employees not covered by Social Security).

Establishes Equal Sharing of Pension Costs as the Standard

• California state employees are leading the way and are paying for at least 50% of normal costs of their pension benefits. Requires new employees to contribute at least half of normal costs, and sets a similar target for current employees, subject to bargaining.
• Eliminates current restrictions that impede local employers from having their employees help pay for pension liabilities.
• Permits employers to develop plans that are lower cost and lower risk if certified by the system’s actuary and approved by the Legislature.
• Provides additional authority to local employers to require employees to pay for a greater share of pension costs through impasse proceedings if they are unsuccessful in achieving the goal of 50-50 cost sharing in five years.
• Directs state savings from cost sharing toward additional payments to reduce the state’s unfunded liability.

Unilaterally Rolls Back Retirement Ages and Formulas

• Increases retirement ages by two years or more for all new public employees.
• Rolls back the unsustainable retirement benefit increases granted in 1999 and reduces the benefits below the levels in effect for decades.
• Eliminates all 3% formulas going forward.
• For local miscellaneous employees:  2.5% at 55 changes to 2% at 62; with a maximum of 2.5% at 67.
• For local fire and police employees:  3% at 50 changes to 2.7% at 57.
• Establishes consistent formulas for all new employees going forward.

Ends Abuses

• Requires three-year final compensation to stop spiking for all new employees.
• Calculates benefits based on regular, recurring pay to stop spiking for all new employees.
• Limits post-retirement employment for all employees.
• Felons will forfeit pension benefits.
• Prohibits retroactive pension increases for all employees.
• Prohibits pension holidays for all employees and employers.
• Prohibits purchases of service credit for all employees.

The Conference Committee Report included 10 of the 12 points that were part of the Governor’s plan. As an alternative to the hybrid plan proposed by the Governor, the Conference Committee included a hard cap on the amount of compensation that can be used when calculating a retirement benefit. There are only two other provisions of the 12-Point Plan that were not included at all and those were the changes to the CalPERS Board of Administration and the proposal to increase state retiree health care vesting. The Governor chose to drop the CalPERS Board issue and, on the health care vesting issue, state employee bargaining units have shown a willingness to bargain over this issue and so the Conference Committee believed it should remain subject to collective bargaining.

Specifics of the measure are as follows:

1. Establishes the California Public Employees’ Pension Reform Act of 2013 (PEPRA) which applies to all public employers and public pension plans on and after 1/1/13.
2. Excludes the University of California and charter cities and counties that do not participate in a retirement system governed by state statute from the PEPRA requirements.
3. Establishes a cap on the amount of compensation that can be used to calculate a retirement benefit on for all new members, as specified, of a public retirement system equal to the Social Security wage index limit ($110,100) for employees who participate in Social Security, or 120% of that limit ($132,120) if they do not participate in Social Security.
4. Requires the retirement systems to adjust the compensation cap annually, as specified, based on changes in the Consumer Price Index (CPI) for all Urban Consumers
5. Specifies that the Legislature reserves the right to modify the annual CPI adjustments to the compensation cap prospectively.
6. Prohibits an employer from offering a defined benefit (DB) plan, or combination of DB plans, on compensation in excess of the compensation cap.
7. Defines “new member” with regard to eligibility for the PEPRA as:

1. An individual who has never been a member of any public retirement system prior to 1/1/13.
2. An individual who moved between retirement systems with more than a six month break in service, as specified.
3. An individual who moved between public employers within a retirement system after more than a six month break in service, as specified.

8. Permits employers who offer alternate plans established prior to 1/1/13 that have lower benefit formulas and that result in a lower normal cost to continue offering those plans to new employees.
9. Permits employers who offer a retirement benefit plan established prior to 1/1/13 that consists solely of a Defined Contribution (DC) plan to continue offering that plan to new employees.
10. Excludes members of the Judges Retirement Systems I and II (JRS I and JRS II) from the PEPRA retirement formula and the compensation cap.
11. Permits employers who offer a retirement benefit plan that was approved by the voters prior to 1/1/13, that have lower benefit formulas and that result in a lower normal cost to continue offering those plans to new employees.
12. Permits employers to provide contributions to a DC plan for compensation in excess of the cap provided that the plan and the contribution comply with federal law. Employees who receive an employer contribution to a DC plan will not have a vested right to the employer contribution.
13. Specifies that the retirement formula for the DB plan will be 2% at age 62 for all new non-safety employees, excluding teachers. The formula is adjusted to encourage members to retire at later ages. The earliest an employee would be eligible to retire is age 52 with a 1% factor and the maximum retirement factor of 2.5% is provided at age 67.
14. Specifies that the retirement formula for new members of the California State Teachers’ Retirement System (CalSTRS) will be 2% at age 62. The earliest an employee would be eligible to retire is age 55 and with a maximum formula of 2.4% at age 65.
15. Specifies three retirement formulas for the DB plan that will apply to new safety employees, as specified. The three formulas are: 2% at age 57; 2.5% at age 57; and, 2.7% at age 57.
16. Requires contributions from employees to the DB plan equal to one-half of normal cost of the DB.
17. Requires that final compensation be defined for all new employees as the highest average annual compensation over a three-year period.
18. Prohibits the following types of compensation from being used to calculate a retirement benefit on: compensation paid to enhance a retirement benefit; compensation previously provided “in-kind” and converted to cash in the final compensation period; one-time or ad hoc payments; terminal pay; pay for unused leave or time off; pay for work outside of normal hours; uniform, housing or vehicle allowances; pay for overtime, except planned overtime, extended duty workweek, or pay defined in the federal labor codes; employer contributions to DC plans; and, bonuses.
19. Prohibits a public employer from providing a better health benefit vesting schedule for excluded and exempt employees than for represented employees in the same retirement classes.
20. Limits the maximum salary taken into account for any retirement plan to the federal limit established under 401(a)(17) of the Internal Revenue Code (IRC) and prohibit an employer from seeking a federal exemption from the limit.
21. Prohibits an employer from making contributions to any public retirement plan on any amounts of compensation that exceed the 401(a)(17) limit.
22. Prohibits a public employer from offering a benefit replacement plan for any member or survivor who is subject to the federal limit on benefits established by IRC Section 415(b) for an employee first hired on and after 1/1/13, or to any group of employees that was not offered a benefits replacement plan prior to that date.
23. Permits a public retirement system to continue administering a 415(b) benefit replacement plan for employees first hired prior to 1/1/13.
24. Prohibits a retroactive enhancement to a benefit formula, either due to a change to an existing formula, or due to a change to the retirement classification for a specific job.
25. Prohibits the purchase of non-qualified time (“airtime”) on and after 1/1/13. Any application to purchase airtime received by a retirement system prior to 1/1/13 is grandfathered.
26. Specifies that local elected members first elected on or after 1/1/13 may not receive a retirement benefit for the elected service based on compensation earned in any other public employment. The retirement benefit for the elected service shall only be based on compensation earned for that service.
27. Prohibits all employers from suspending employer and/or employee contributions necessary to fund annual pension normal costs.
28. Prohibits post-retirement employment from exceeding 960 hours in a consecutive 12-month period. If a retiree receives unemployment benefits, he/she is prohibited from working for 12 months as a retiree for a public employer.
29. Prohibits a person who retires on or after 1/1/13, from returning to work as a retired annuitant for a period of 180 days after retirement unless the action is approved in an open meeting, as specified by the governing body of the employer, or by Department of Human Resources (CalHR) authority if state retiree, as specified. However, in no case could a person who receives a retirement incentive return to work as a retired annuitant for a period of 180 days after retirement.
30. Establishes the following exceptions to 180-day rule:

    1. The retiree is participating in the Faculty Early Retirement Program pursuant to a collective bargaining agreement with the California State University.
    2. The retiree is a public safety officer or firefighter.
    3. The retiree is a trustee, administrator, or fiscal advisor appointed to address academic or financial weaknesses in a school or community college district, pursuant to specified requirements.
    4. The retiree is a subordinate judicial officer whose position, upon retirement, is converted to a judgeship and he/she returns to work in the converted position.
    5. The retiree is a person taking office as a judge, as specified.

31. Prohibits a public retiree who is first appointed on or after 1/1/13, from serving full-time on a salaried state board or commission without suspending their retirement allowance or choosing to serve as a non-salaried member of the board or commission, as specified. Retiree health care benefits for these individuals would be protected so that the person is eligible to receive any prior employer provided retiree healthcare coverage upon re-retirement after leaving the board or commission. Appointees to the Parole Board are exempt from this prohibition.
32. Specifies that retirees of CalSTRS are subject to the post-retirement employment limitations specified in that system.
33. Requires public officials and employees to forfeit pension and related benefits if they are convicted of a felony in carrying out official duties, in seeking an elected office or appointment, or in connection with obtaining salary or pension benefits.
34. Permits public safety members who qualify for Industrial Disability Retirement (IDR) and are under age 50 to receive an actuarially reduced retirement benefit. This pilot project will sunset in 2018 unless extended by subsequent legislation.
35. Prohibits newly elected statewide officers and legislative officers from participating in the Legislators’ Retirement System. They would continue to be optional members in the California Public Employees’ Retirement System (CalPERS).
36. Specifies that the Alternate Retirement Plan will not apply to new state employees subject to PEPRA.
37. Permits more flexibility for bargaining increased cost sharing between employers and existing employees in CalPERS and retirement systems established pursuant to the County Employees’ Retirement Law of 1937 (‘37 Act). Using impasse procedures to impose cost sharing arrangements achieved through this new flexibility would be prohibited if the proposed contribution exceeds statutorily required contributions for current employees, or half of the normal cost of benefits for employees first hired on or after 1/1/13.
38. Provides additional flexibility to CalPERS contracting agencies to achieve cost sharing goals with current employees, as specified.
39. Requires CalPERS contracting agencies and school employers to achieve specific cost sharing goals by 1/1/18.
40. Requires additional contributions for various state bargaining units, and excluded and exempt employees of the state, executive, legislative and judicial branches that have not yet achieved equal cost sharing of normal cost.
41. Requires CalPERS to develop a system for monitoring excessive increases to salaries that create significant liabilities for former employers due to reciprocity, and for requiring the employers that caused the significant liability to be responsible for it.
42. Increases the retirement formula for new state miscellaneous members who opt to participate in the Second Tier from 1.25% at age 65 to 1.25% at age 67.
43. Prohibits certain cash payments from being counted as compensation earnable for retirement purposes in ‘37 Act counties.
44. 4Provides ‘37 Act retirement boards with more independence to perform audits and assess penalties relating to pension spiking.
45. Requires ‘37 Act county employers and districts to achieve specific cost sharing goals by 1/1/18.
46. Specifies that if any provision of the bill is held invalid, the rest may still go into effect.
47. Makes conforming changes to provisions of the Education Code administered by CalSTRS.

Other public employment legislation of importance enacted into law included:  SB 955 (Pavley) authorizes CalPERS and CalSTRS to prioritize investment in in-state infrastructure projects over alternative out-of-state projects if the investments are consistent with its fiduciary responsibility; SB 996 (Senate Public Employment and Retirement Committee) restates and clarifies existing law (‘37 Act) regarding the rebuttable presumption that heart trouble incurred by a safety member arises from the safety member’s employment; SB 1308 (Senate Public Employment and Retirement Committee) codifies the statutory changes that were put into effect upon passage of the Governor’s Reorganization Plan 1 which consolidates the Department of Personnel Administration and the State Personnel Board into a single agency to be known as the Department of Human Resources; SB 1309 (Senate Public Employment and Retirement Committee) makes statutory changes necessary to implement the Governor’s Reorganization Plan 1 with respect to the consolidation of the Department of Personnel Administration and the State Personnel Board into a single agency to be known as the Department of Human Resources; AB 1519 (Wieckowski) requires the boards of retirement or investments for the 20 retirement systems established pursuant to the County Employees’ Retirement Law of 1937 to adopt a policy for providing board member education, as specified; AB 1606 (Perea) permits an employee organization to request that the parties’ differences be submitted to a fact-finding panel not sooner than 30 days, but not more than 45 days, following the appointment of a mediator or entering into a mediation process; and AB 1654 (Cook) disqualifies a public employee, as specified, who is convicted of a felony, as specified, from public employment for a period of five years.

HOUSING

The major pieces of legislation in the area of housing that were enacted included SB 900 (Leno) and AB 278 (Eng) which were known as the Homeowner Bill of Rights.  On 4/6/12, a federal judge signed-off on the $25 billion foreclosure settlement, first announced in February 2012, between banks (Citi, Wells Fargo, Bank of America, Chase and Ally), federal agencies, and the state attorneys general from 49 states and the District of Columbia.  The investigation began in October 2010 as media stories highlighted widespread allegations regarding the use of “robo-signed” documents used in foreclosure proceedings around the country.  The attorneys general formed working groups to investigate the widespread allegations, however, further investigation led to a larger discussion with the five largest mortgage loan servicers regarding various facets of the foreclosure and loan modification process.  While conducting their investigation the attorneys general identified deceptive practices regarding loan modifications, foreclosures occurring due to the servicer’s failure to properly process paperwork, and the use of incomplete paperwork to process foreclosures in both judicial and non-judicial foreclosure cases.

The complaint filed by the attorneys general, provided a detailed list of allegations concerning several key areas related to foreclosure and servicing practices.  The specific allegations included (1) unfair, deceptive, and unlawful servicing process; (2) unfair, deceptive, and unlawful loan modification and loss mitigation processes; (3) wrongful conduct related to foreclosures; (4) unfair and deceptive origination practices; and (5) violations of the Servicemembers Civil Relief Act.

In resolving the aforementioned claims, the settlement provided for relief for borrowers in the form of modifications, mortgage loan servicing reforms, increased compliance monitoring and enforcement. 

The settlement required a total of $17 billion to be allocated to facilitate loan modifications to borrowers with the intent and ability to stay in their homes.  Of the $17 billion, 60% must be allocated to principal reduction modifications.  Additionally, banks must offer refinance programs through the use of $3 billion to assist borrowers with negative equity whom otherwise would be unable to refinance.  Additional settlement monies are dedicated to borrowers who were wrongfully foreclosed on after 1/1/08 (approximately $1.5 billion in relief), and another $2.5 billion to the states for foreclosure relief and housing programs.  The settlement also required major changes in loan servicing required of the five banks party to the settlement. 

The Homeowner Bill of Rights legislation incorporates the settlement agreement.  The major provisions of the legislation include:

• Dual track foreclosure ban:  Mortgage servicers will be required to render a decision on a loan modification application before advancing the foreclosure process by filing a notice of default or notice of sale, or by conducting a trustee’s sale. The foreclosure process is essentially paused upon the completion of a loan modification application for the duration of the lender’s review of that application.
• Single point of contact:  Mortgage servicers will be required to designate a “single point of contact” for borrowers who are potentially eligible for a federal or proprietary loan modification application. The single point of contact is an individual or team with knowledge of the borrower’s status and foreclosure prevention alternatives, access to decision makers, and the responsibility to coordinate the flow of documentation between borrower and mortgage servicer.
• Enforceability:  Borrowers will have authority to seek redress of “material” violations of the California Homeowner Bill of Rights. Injunctive relief will be available prior to a foreclosure sale and recovery of damages will be available following a sale.
• Verification of documents:  The recording and filing of multiple unverified documents will be subject to a civil penalty of up to $7,500 per loan in an action brought by a civil prosecutor. Enforcement will also be allowed under a violator’s licensing statute by the Department of Corporations, Department of Real Estate or Department of Financial Institution.

Also, the following legislation was enacted as follow-up legislation to the Homeowner Bill of Rights:

• SB 1474 (Hancock) gives the Attorney General’s Office the ability to use a statewide grand jury to investigate and indict the perpetrators of financial crimes involving victims in multiple counties.
• AB 1950 (Davis) extends the statute of limitations for prosecuting mortgage-related crimes from one year to three years, and gives the Department of Justice and local district attorneys the time needed to investigate and prosecute complex mortgage fraud crimes.
• AB 2314 (Carter) provides additional tools to local governments and receivers to fight blight caused by multiple vacant homes in neighborhoods.
• AB 2610 (Skinner) requires purchasers of foreclosed homes to given tenants at least 90 days before starting eviction proceedings.  If the tenant has a fixed-term lease-the new owner must honor the lease unless the owner demonstrates that certain exceptions intended to prevent fraudulent leases apply.

Other housing legislation of importance enacted included:  SB 825 (Corbett) maintains existing law for six years with respect to notifying tenants of rights when rental property is sold in foreclosure; SB 875 (Price) makes a number of changes to enhance and streamline the Department of Real Estate’s (DRE) enforcement authority and reduce associated costs, clarify DRE’s examination procedures, and allow active military more time to complete continuing education required to maintain a Mortgage Loan Originator license endorsement; SB 978 (Vargas) enacts several changes to the Real Estate Law and Corporations Code, by increasing real estate investor protections, and requiring the Department of Corporations to focus greater regulatory scrutiny on, and provide greater transparency regarding, the activities of those who solicit investors in connection with real estate investments; SB 980 (Vargas) extends from 1/1/13 to 1/1/17, the sunset date on the state’s prohibition against the collection of upfront fees in connection with mortgage loan modifications and other forms of mortgage loan forbearance; SB 1055 (Lieu) bans the practice of online-only rental payments and protects tenants from being forced to obtain Internet connections and/or PayPal accounts; SB 1069 (Corbett) extends a borrower’s protection against a deficiency judgment to include refinance loans, but only to the extent that the refinance loan is used to pay off the unpaid principal amount of the original purchase money mortgage loan (which itself already enjoys such protection); SB 1191 (Simitian) requires disclosure to prospective tenants when the owner of certain residential property receives a notice of default; SB 1198 (Calderon) requires the Department of Veterans Affairs to publicize information relating to the federal and state benefits that are available to homeless veterans; SB 1229 (Pavley) prohibits landlords from imposing conditions on occupancy of real property that might cause an animal that is allowed on the premises to be devocalized or declawed; SB 1394 (Lowenthal) delays the date by which an owner must install a carbon monoxide device in an existing hotel/motel unit from 1/1/13 to 1/1/16, and makes a number of changes to existing laws relating to the installation of smoke detectors in residential dwellings; AB 1511 (Bradford) requires real estate sale contracts to include a specified notice informing the buyer about the existence of a database where information about transmission pipelines can be obtained; AB 1551 (Torres) permits the California Housing Finance Agency, under the Home Purchase Assistance and Extra Credit Teacher Programs, and the Department of Housing and Community Development, under the CalHome program, to subordinate a second mortgage under certain conditions; AB 1585 (John A. Perez) reappropriates $50 million of Proposition 1C bond funds to the Infill Infrastructure Grant Program and the Transit-Oriented Development Program, and provides that the provisions of the Community Redevelopment Law governing administrative and planning costs for the Low and Moderate Income Housing Fund shall apply to any funds retained by a housing successor agency that assume the responsibilities of a former redevelopment agency; AB 1599 (Feuer) requires a foreclosing financial institution to provide the borrower with a copy of a recorded Notice of Default or recorded Notice of Sale that contains a summary of the respective notice that is translated into Spanish, Chinese, Tagalog, Vietnamese, and Korean, codifies the contents of that summary and requires the Department of Corporations to translate the summary and post the translation on their Internet Web site; AB 1672 (Torres) revises the Housing-Related Parks Program to simplify the application process for the Program, enables jurisdictions to receive their grant funds sooner, permits awards for the acquisition, rehabilitation, and preservation of affordable housing, as opposed to just new construction, and increases incentives for local governments to spend award funds in park-deficient and disadvantage neighborhoods; AB 1699 (Torres) permits the Department of Housing and Community Development to refinance and restructure older loans made through affordable, rental housing programs; AB 1951 (Atkins) transfers $30 million from the Affordable Housing Innovation Fund to the Multifamily Housing Program; AB 1953 (Ammiano) establishes a conditional defense from eviction for nonpayment of rent in cases where the tenant has not been notified who or where to pay rent; AB 2010 (Bonilla) requires a prospective borrower to receive reverse mortgage counseling in person, unless the borrower elects to receive the counseling in another manner; AB 2308 (Torres) permits cities and counties to reduce their share of the regional housing need by the number of units built between the start of a housing element project period and the housing element due date; AB 2519 (Berryhill) specifies a number of required or discretionary disciplinary actions to be taken by the Office of Real Estate Appraisers against its licensees, and makes other changes to the law governing real estate appraisers and appraisal management companies; and AB 2521 (Blumenfield) increases, from $300 to $700, the threshold amount of determining whether the landlord must dispose of the departed tenant’s unclaimed property via a public sale, with the proceeds of the sale (less storage and sale costs) held for the tenant, or whether the landlord may dispose of the property in any manner or retain it for his/her own use.

LABOR

The major piece of labor legislation that was enacted into law was SB 863 (de Leon) dealing with workers’ compensation reform.  SB 863 reflected a negotiated compromise between employers and employees to adopt a substantial increase in permanent disability benefits ($740 million), to ameliorate unexpected reductions that flowed from the 2004 reforms, balanced by substantial changes in the benefit delivery system to eliminate waste, inefficiency, and other loopholes that result in unnecessary employer costs that go to recipients other than injured workers.  The legislation creates an independent review process for medical treatment and billing disputes, fee schedules for home health care, language interpretation, and other workers’ compensation-related services and fees for current and future lien filings.  It shortens the timeline for approval of treatment from 24 months down to three months.  It also increases compensation for disabled workers by $740 million a year which will increase benefits by nearly 30% for individual disabled workers.  The bill limits the role of chiropractors so they cannot serve as a worker’s primary care doctor after hitting a 24-visit/year cap.  It also improves retraining and increases awards for those with career-ending injuries and reduces workers’ compensation rates through the allowance of a state alternative dispute resolution program.  Lastly, it provides $120 million a year in a special fund for victims of catastrophic accidents who cannot go back to work.

Another significant piece of legislation was SB 1234 (de Leon) which establishes the California Secure Choice Retirement Saving Program (SCRSP) aimed at 6.3 million of California’s workers who have no access to a retirement plan at work by providing them a portable and reliable retirement plan that will serve as a modest supplement to Social Security.  Under the SCRSP, voluntary contributions from employers are deposited into a professionally-managed retirement fund to be administered by the California Secure Choice Retirement Savings Board (Board).

According to a recent report by the University of California, Berkeley Center for Labor Research and Education, Meeting California’s Retirement Security Challenge (October 2011), 62% of private sector workers in California do not participate in an employer-sponsored retirement plan, compared to 57% in the United States as a whole.  Also, workers in small and medium sized firms are disadvantaged in their access to employer-sponsored retirement plans – in California, 84% of people working for employers with 25 or fewer workers do not participate in a retirement plan at work.

This legislation also requires the Board (prior to opening the SCRSP for enrollment), if there is sufficient interest by vendors to participate and provide the necessary funding, to establish a Retirement Investments Clearinghouse (Clearinghouse) on its Internet Web site.  The Clearinghouse, among other features, would contain the following:  (1) information about employer-sponsored retirement plans, and payroll deduction individual retirement accounts and annuities offered by private sector providers; and (2) specified other information, including investment performance, fees, and other information.

Unlike employer-sponsored retirement plans such as 401Ks, employers participating in the SCRSP would not bear any fiduciary responsibility and are not be required to pay administrative fees or comply with federal quarterly-reporting requirements.  Zero liability is ensured by the state by requiring the Board to secure private underwriting and reinsurance to protect the returns earned by program participants.  A follow-up measure, SB 923 (de Leon), adds two additional members (for a total of nine) and provides that the Board shall not open the SCRSP for enrollment until a subsequent authorizing statute is enacted that expresses the approval of the Legislature for the SCRSP to be fully implemented.

Other labor legislation enacted into law included:  SB 691 (Lieu) permits information sharing between the Employment Development Department (EDD) and the Contractors State License Board to assist with its workers’ compensation fraud investigations, and requires the EDD Director to provide the Agricultural Labor Relations Board with information in EDD’s possession including employee, wage, and employer information for use in the investigation or enforcement of the Agricultural Labor Relations Act; SB 1255 (Wright) provides a statutory definition clarifying that a worker is deemed to “suffer injury” if he/she is unable to readily and easily determine from the wage statement alone specific information such as the total gross and net wages, employer’s name and address, or which deductions were taken; SB 1513 (Negrete McLeod) expands, until 1/1/25, the investment options available to the State Compensation Insurance Fund (SCIF) to include preferred and common equity and additional fix asset investments, and allows SCIF to participate in the Federal Home Loan Bank of San Francisco; AB 1660 (Campos) requires persons representing artists who are minors, under 18 years of age, to obtain a Child Performer Services Permit from the Labor Commissioner; AB 1675 (Bonilla) establishes civil penalties for unlicensed farm labor contractors; AB 1844 (Campos) establishes prohibitions on the ability of an employer to require the disclosure of information on personal social media accounts; AB 1845 (Solorio) implements new federal requirements related to Unemployment Compensation Insurance program integrity; AB 1855 (Torres) extends existing law related to liability for financially-insufficient contracts to the warehouse industry; AB 2103 (Ammiano) provides that payment of a fixed salary to a nonexempt employee shall be deemed to provide compensation only for the employee’s regular, non-overtime hours, notwithstanding any private agreement to the contrary; AB 2386 (Allen) clarifies that breastfeeding and related medical conditions are included in the definition of “sex” as protected category for unlawful employment discrimination under state law, and provides that this clarification is declaratory of existing law; AB 2396 (Assembly Arts, Entertainment, Sports, Tourism, and Internet Media Committee) clarifies that prior to obtaining a temporary work permit for infants, a medical certification from a doctor must first be obtained and verified; AB 2674 (Swanson) requires an employer to maintain personnel records for a specified period of time and to provide a current or former employee, or his/her representative, an opportunity to inspect and receive a copy of those records within a specified period of time, except during the pendency of a lawsuit filed by the employee or former employer relating to a personnel matter; AB 2675 (Swanson) specifies that short-term bonuses and temporary incentives are not included under the definition of “commission,” therefore not requiring the employer to provide a new written contract every time the employer provides a short-term bonus or incentive to their employees; and AB 2677 (Swanson) provides that an increased employer payment contribution that results in a lower hourly straight time or overtime wage is not considered to be a violation of the applicable prevailing wage determination so long as specified conditions are met.

Vetoed labor legislation included:  AB 889 (Ammiano) which would have required the Department of Industrial Relations to adopt regulations governing the working conditions of domestic work employees, as specified; AB 1145 (Cedillo) which would have required vouchers for supplemental job displacement benefits under the workers’ compensation system to be provided to injured workers no later than 80 days after the first medical report indicates that there will be some degree of permanent partial disability and the injured worker is permanent and stationary; AB 1450 (Allen) which would have prohibited an employer, employment agency, or a person who operates an Internet Web site for posting jobs in this state, unless based upon a bona fide occupational qualification, from publishing an advertisement or announcement for any job that includes either of the following:  (1) a provision stating or indicating that an individual’s current employment is a requirement for a job; or (2) a provision stating or indicating that an employer will not consider an applicant for employment based on that individual’s employment status; AB 1687 (Fong) which would have required notice to an employee of the options available to object to a decision made pursuant to a workers’ compensation utilization review process that would modify, delay, or deny medical treatment; AB 2346 (Butler) which would have enacted various provisions of law related to heat illness and outdoor places of agricultural employment, including provisions related to civil liability and enforcement; AB 2451 (John A. Perez) which would have extended the statute of limitations to allow a safety officer’s dependents to receive workers’ compensation death benefits where the safety officer dies of cancer or other “presumed” job-related injuries; AB 2493 (Hernandez) which would have permitted the Administrative Director of the Division of Workers’ Compensation to certify interpreters; and AB 2676 (Calderon) which would have made it a misdemeanor to fail to provide adequate shade and water to an agricultural employee.

EDUCATION

I. K-12

On 12/16/11, Governor Brown and State Superintendent of Public Instruction Tom Torlakson announced that California was one of nine state winners to receive Race to the Top early learning challenge grants.  California received $52.6 million in funds which were used for funding of local Quality Rating and Improvement Systems (QRIS) that was developed by Regional Leadership Consortia – voluntary groups of local First 5 commissions, county offices of education, and county government.  These consortia work with licensed child care programs, school districts, and child care partners.  The local QRIS are meant to make information about the quality of child care programs readily available to parents and policymakers through simple, independent, and publicly available ratings.

A major reform that was enacted in education this year was SB 1458 (Steinberg) which redefines the Academic Performance Index (API).  California established the Public Schools Accountability Act in 1999 to measure academic performance and growth.  The API is a single number, ranging from 200-1,000, that reflects a school’s and it’s subgroups’ performance on statewide tests.  The API is an improvement model (not a growth model that tracks an individual pupil’s performance over time) that compares school and subgroup API scores from year to year.  School ranking are produced by comparing API scores across the state and with 100 other schools with similar demographics.  The API is also used for purposes of calculating Adequate Yearly Progress, as required by the federal No Child Left Behind Act.  Existing law requires the API to consist of a variety of indicators including the results of Standardized Testing and Reporting program (STAR) tests, the California High School Exit Exam, attendance rates, and high school graduation rates.  The results of the STAR tests and the high school exit exam constitute at least 60% of the value of API scores.  To date, the only indicators used to calculate the API have been test scores.  Therefore, test scores constitute 100% of API scores.  Two types of API ranks are reported, a statewide rank (compares scores statewide) and a similar schools rank (compare scores with 100 schools with similar demographics).  A school’s Base API is used to determine its rank, and is done separately for elementary, middle, and high schools.

SB 1458 has the effect of relying less on testing and more on factors such as population rates, and students’ readiness for higher education, technical training, and entering into a globally competitive job market.  It limits test scores to account for no more than 60% of the API for high schools.  The State Superintendent of Public Instruction is directed to develop methods for increasing emphasis on science and social science, which currently carry little weight with API. 

According to the author, “It is time for the API to evolve into a less punitive, more constructive representation of school performance, and to encompass a more comprehensive set of expectations and aspirations for school performance, such as graduation and/or dropout rates, and, as appropriate, measures of pupil preparedness for college and career.”  A recent report from Education Sector, “Ready by Design:  A College and Career Agenda for California” (June 2012) finds that there is no correlation between a school’s API score and its graduation or college enrollment rates and concludes that the API is a flawed measure of college and career readiness.  The report suggests that other measures, which are based on data that are already collected and that are better indicators of college and career readiness, could be added to the API at the high school level.  These measures include (1) high school graduation and/or dropout rates; (2) data on pupils who pass the “a-g” requirements (coursework required for admission to the University of California (UC)); (3) passage rates and test-taking rates on Advanced Placement and Early Assessment Program exams; and (4) data on enrollment in postsecondary institutions.

On the 2012 ballot, there are two competing measures which will have the revenue being used for education.  Proposition 30, the Governor’s proposal, increases the income tax on annual earnings over $250,000 for seven years and increases sales and use tax for four years – 89% of the tax revenues will go to K-12 schools and 11% to community colleges.  The state’s 2012-13 Budget plan assumes passage of this measure.  The Budget, however, also includes a backup plan that requires spending reductions in the event that voters reject this Proposition - $5.4 billion to K-14 reductions and $500 million to public universities.  Proposition 38 increases personal income tax rates on annual earnings over $7,316 using a sliding scale from .4% for lowest individual earners to 2.2% for individuals over $2.5 million for 12 years.  During the first four years, allocates 60% of revenues to K-12 schools; 30% to repaying state debt, and 10% to early childhood programs.  Thereafter, it allocates 85% of the revenues to K-12 schools and 15% to early childhood programs.  It provides K-12 funds on a school-specific, per-pupil basis, subject to local control, audits, and public input.

Other K-12 education legislation of importance chaptered into law included:  SB 754 (Padilla) requires a school district, as a condition of the receipt of economic impact aid funds, to post in an easily accessible location on its Internet Web site data related to economic impact aid funding, for purposes of budget transparency; SB 803 (DeSaulnier) makes funds available for youth leadership opportunities through an income tax checkoff; SB 993 (de Leon) permits social science instruction in grades 7-12 inclusive, to include instruction on the Bracero program; SB 1016 (Senate Budget and Fiscal Review Committee) makes various statutory changes to the Proposition 98 budget for K-14 education and child care; SB 1028 (Senate Budget and Fiscal Review Committee) makes the necessary statutory changes in the area of education in order to enact modifications to the 2012-13 Budget Act; SB 1070 (Steinberg) extends the provisions of the Career Technical Education Pathways program sunset date from1/1/13 to 6/30/15; SB 1088 (Price) specifies that a pupil shall not be denied enrollment or readmission to a public school solely on the basis that he/she had been arrested, adjudicated by a juvenile court, had been formally or informally supervised by a probation officer, or was detained for any length of time in a juvenile facility or was enrolled in a juvenile court school; SB 1108 (Padilla) requires the Department of Education (CDE) to analyze the way school districts reclassify English learners and recommend to the Legislature and State Board of Education (SBE) any changes necessary to improve education in California; SB 1137 (Huff) requires all heritage school employees to be mandated reporters and subject to the requirements of the Child Abuse and Neglect Reporting Act and requires each heritage school to file an electronic registration form to the Superintendent of Public Instruction, regardless if one entity operates multiple schools; SB 1200 (Hancock) permits the Superintendent of Public Instruction to recommend and the SBE to approve, modifications to the common core academic content standards in mathematics adopted by the SBE and modifies existing deadlines relative to the revision and adoption of the science content standards; SB 1264 (Vargas) makes any athletic coach, including, but not limited to, an assistant coach or graduate assistant involved in coaching at a public or private postsecondary institution, mandated reporters for the purposes of the Child Abuse and Neglect Reporting Act; SB 1290 (Alquist) requires the authority that granted a charter school to consider increases in pupil academic achievement for all groups of pupils served by the charter school as the most important factor in determining whether to grant a charter renewal or whether to revoke a charter school; SB 1292 (Liu) permits school districts to evaluate principals and establishes provisions to guide principal evaluations; SB 1316 (Hancock) exempts early and middle college high schools from the 240-minute requirement for a minimum school day and establishes a day of attendance as 180 minutes for pupils enrolled in these programs if they are also enrolled part-time in classes at the UC, California State University (CSU), or a community college, as specified; SB 1404 (Hancock) permits a governing board of a school district to, until 1/1/20, charge an entity for using school facilities or grounds, an amount for maintenance, repair, restoration, and refurbishment, proportional to the use of the school facilities or grounds; SB 1509 (Simitian) extends the sunsets authorizing kindergarten through grade 12 (K-12) and community college districts to utilize design-build contracts for the design and construction of education facilities, from 1/1/14 to 1/1/20; SB 1540 (Hancock) permits the SBE to consider the adoption of a revised curriculum framework and evaluation criteria for instructional materials in history-social science, but only permits the CDE to do so after CDE has completed work related to the development of curriculum frameworks for the common core academic standards; SB 1568 (DeSaulnier) requires school districts to allow a former foster youth to remain in his/her school of origin through the end of the highest grade maintained at that school; SB 1571 (DeSaulnier) permits the addition of a new income tax checkoff to provide school supplies and health-related products to homeless children; AB 401 (Ammiano) strikes the provisions in the intent section of the Carl Washington School Safety and Violence Prevention Act specifying that sexual orientation shall not include pedophilia; AB 644 (Blumenfield) permits a school district or county office of education to claim attendance for pupils in grades 9-12 participating in online synchronous courses, as specified, toward average daily attendance for the purpose of calculating revenue limit funding; AB 733 (Ma) amends the Education Code to conform with the federal Family Education Rights and Privacy Act provisions relating to the confidentiality of pupil records; AB 794 (Wieckowski) revises the methods through which the interest of bond assumption notes issued by school districts may be paid; AB 1246 (Brownley) makes revisions to the process for adopting instructional materials for kindergarten and grades 1-8, inclusive (K-8), and authorizes the SBE to adopt instructional materials aligned to the mathematics common core academic content standards by 3/30/14; AB 1435 (Dickinson) makes athletic coaches, athletic administrators, and athletic directors employed by any public or private school that provides any combination of instruction for kindergarten, or grades 1 to 12, inclusive, mandated reporters for the purposes of the Child Abuse and Neglect Reporting Act; AB 1451 (Hayashi) adds new requirements to the California High School Coaching Education and Training Program for training on understanding the signs and symptoms of concussions and the appropriate response to concussions; AB 1521 (Brownley) makes the standards-aligned primary language assessment available for administration to non-English learners enrolled in dual immersion programs; AB 1575 (Lara) codifies the constitutional prohibition on the imposition of pupil fees and establishes procedures to ensure compliance with the prohibition; AB 1662 (Fong) makes an employee of a school district that is not within the jurisdiction of the county board of education eligible to be a member of that county board of education; AB 1668 (Carter) expands the current definition of a dropout recovery high school to help better identify the schools that enroll pupils who have not been enrolled for at least 180 days; AB 1705 (Silva) delays implementation of the high school exit exam alternatives for eligible pupils with disabilities until 7/1/15; AB 1719 (Fuentes) provides for the development and review of supplemental instructional materials for English learners to serve as a bridge between the revised and aligned English language development standards to the California common core language arts standards; AB 1729 (Ammiano) requires that all forms of suspension be imposed only when other means of correction fail to bring about proper conduct; AB 1732 (Campos) specifies that bullying via an electronic act using a post on a social network Internet Web site includes posting to or creating a burn page, a credible impersonation of another actual pupil, and a false profile; AB 1799 (Bradford) requires that, when a pupil transfers from one school to another within the state, the pupil’s records be transferred from the prior school to the new school within 10 schooldays following the date the request was received by the prior school; AB 1909 (Ammiano) requires notification of a foster child’s attorney and social worker (or appropriate welfare representative), in addition to parental or guardian notification, in specified situations where the foster child faces possible suspension or expulsion from school; AB 1967 (John A. Perez) requires the Instructional Quality Commission and the SBE to ensure the health and science frameworks, adopted in the course of the next submission cycle include the subject of organ procurement and tissue donation, as appropriate; AB 1987 (Davis) adds that “leadership opportunities” may be part of the educational opportunities offered through independent study; AB 2193 (Lara) creates standard definitions of “long-term English learner” and “English learners at risk of becoming long-term English learners” to properly identify these students so they receive appropriate assistance; AB 2202 (Block) extends from 12/1/12 to 12/1/13, the due date for a report on findings, conclusions, and recommendations from a task force review of the Interstate Compact on Educational Opportunity for Military Children; AB 2262 (Bradford) permits the governing board of each school district, at the request of parents or guardians, to provide the annual notice of parent or guardian rights and responsibilities in an electronic format; AB 2269 (Swanson) deems the month of May as Labor History Month and encourages school districts to commemorate that month with appropriate educational exercises that make pupils aware of the role that the labor movement has played in shaping California and the U.S., and repeals language deeming the first week of April as Labor History Week; AB 2278 (Swanson) permits a school district with a state-appointed administrator to conduct an annual advisory evaluation of an administrator for the duration of the administratorship, as specified; AB 2279 (Swanson) permits the Superintendent of Public Instruction to remove a state-appointed trustee from a school district that received an emergency loan after three years, provided the district has adequate fiscal systems in place and the Superintendent determines the district’s future compliance with its fiscal plan is probable; AB 2307 (Butler) requires a classified school employee, who is placed on a reemployment list and is subsequently reemployed in a new position, retains the right to be returned to the reemployment list for the remainder of the 39-month period in the event he/she fails to complete the probationary period in the new position; AB 2367 (Bonilla) permits a school district, charter school, or county office of education that is operating an Instructional School Garden Program to sell any surplus produce grown as part of the program, as specified; AB 2368 (Block) separates the reference to school police departments from the provision authorizing the establishment of a school security department and establishes a new subdivision giving school districts authority to establish police departments; AB 2435 (Hernandez) establishes rules governing the indirect rate that local education agencies may charge when implementing federal or state grant programs; AB 2491 (Blumenfield) requires the SBE, upon the next revision of the Gifted and Talented Education (GATE) program criteria, to adopt a standard for pupil identification to ensure the identification procedures of an applicant school district provide economically disadvantaged pupils and pupils of varying cultural backgrounds with full participation in the GATE programs; AB 2537 (V. Manuel Perez) clarifies that possessing an imitation firearm, over-the-counter medicine or student’s prescription medicines are not zero tolerance offenses that automatically require expulsion and eliminates an existing fine imposed on a principal who fails to notify law enforcement of certain crimes allegedly committed by students; AB 2555 (Carter) requires a school district to submit a waiver for the Summer Food Service Program for Children no later than 60 days before the last regular meeting of the SBE before the start of the summer school session for which the waiver is sought; and AB 2616 (Carter) provides school administrators with more discretion when determining if students are truant and in imposing consequences for truant students to focus truancy reduction efforts away from law enforcement and courts.

Vetoed legislation included:  SB 1154 (Walters) which would have required a publisher or manufacturer that offers equivalent digital formats of printed instructional materials to offer the digital formats at the same cost as or lower cost than, the cost of the purchased printed format; SB 1235 (Steinberg) which would have encouraged schools to implement evidence-based and other schoolwide strategies for the purpose of reducing the suspension rate if the number of pupils suspended out of the school’s enrollment or any numerically significant pupil subgroup is above a specified threshold, and would have required the Superintendent of Public Instruction and the CDE to provide training and technical assistance on the implementation of evidence-based schoolwide strategies to address school climate; SB 1497 (Negrete McLeod) which would have prohibited a pupil who has dropped out of school, re-enrolled, and dropped out again from being counted more than once when computing dropout rates for the Annual Report on Dropouts in California and when compiling data for the California Longitudinal Pupil Achievement Data System (CALPADS); AB 18 (Brownley) which would have created a 21-member California Task Force on School Finance to be appointed, as specified, by the Governor, the Speaker of the Assembly, and the Senate Rules Committee, to review and analyze alternative formulas for allocating funds to public schools and to recommend formulas that best meet the needs of California’s public school system and pupils; AB 1166 (Solorio) which would have prohibited school districts from including any information about a pupil’s scores on standardized tests or course grades on that pupil’s school identification card or any other object that he pupil is required by school officials to carry on his/her person while present at school; AB 1594 (Eng) which would have required a charter school to provide each needy pupil with one nutritionally adequate free or reduced-price meal, that qualifies for reimbursement under the federal child nutrition program regulations, each schoolday; AB 1765 (Brownley) which would have required the Commission on Teacher Credentialing to convene an advisory panel on teacher leaders and make recommendations; AB 1790 (Hagman) which would have required a publisher or manufacturer submitting printed instructional material for adoption by the SBE or the governing board of a school district to ensure that the printed instructional material is also available in digital format, during the entire term of the adoption; AB 1853 (Bonilla) which would have permitted the Commission on Teacher Credentialing to convene a workgroup to develop program standards for the issuance of recognition of study in transitional kindergarten for holders of a multiple subject teaching credential who will be teaching pupils enrolled in a transitional kindergarten program; AB 1919 (Brownley) which would have required the CDE to provide a school district with individual pupil test score data of pupils who attend a charter school for which the school district is the chartering authority, as specified; and AB 2242 (Dickinson) which would have prohibited pupils who are found to have disrupted school activities or otherwise willfully defied the authority of school officials from being subject to extended suspension, or recommended for expulsion.

With the passage of Proposition 30, the Governor’s revenue measure, education was spared being cut by $5,353.6 billion.

II. Higher Education

The major legislation in higher education were SB 1052 (Steinberg) and SB 1053 (Steinberg) which establishes development of open source digital textbooks for 50 lower division courses which college students can electronically access for free, or for a modest cost of $20 per printed textbook.  According to the author, “The cost of attending California’s public colleges and universities has skyrocketed in recent years.  While fees often tend to be the most visible cost, other non-tuition related costs, like the cost of textbooks, significantly burden students and families as well.  Recent studies show that due to the cost of textbooks, many students forego purchasing them altogether.  Through Open Education Resources (OER), California can offer students in the 50 most widely taken lower-division courses, the highest quality textbooks and related materials for free online or for about $20 hardcopy.  It also allows faculty to customize learning materials in a manner that best suit their classroom learning objectives.”  SB 1053 adds provisions to the Donahoe Higher Education Act to establish the California Digital Open Source Library, under the administration of the California State University, in coordination with the California Community Colleges (CCC), for the purpose of housing open source materials while providing an Internet Web-based way for students, faculty, and staff to easily find, adopt, utilize, or modify course materials for little or no cost.  It also provides that the CSU act in coordination with the UC in administering the California Digital Open Source Library if the Regents act, by appropriate resolution, to authorize the University to participate in the administration of the Library.  SB 1028 (Senate Budget and Fiscal Review Committee), an Education Budget Trailer Bill, provides that private funding is required for implementation of SB 1052 and SB 1053.  $5 million has been appropriation from the Golden State Scholarshare Trust Fund but can only be used as it is matched dollar-for-dollar by private foundation or individual donations.

Other higher education legislation of importance enacted into law included:  SB 114 (Yee) requires, beginning 7/1/13, community college districts to submit collective bargaining agreements or employment agreements for part-time instructors and adult education instructors to the California State Teachers’ Retirement System (CalSTRS) in order to facilitate the accurate reporting of creditable hours worked by CalSTRS covered employees working on a part-time basis; SB 960 (Rubio) limits the reallocation of student-approved, campus-based mandatory fees that are enacted at the CSU after 1/1/13; SB 1016 (Senate Budget and Fiscal Review Committee) makes various statutory changes to higher education, including Cal Grants, necessary to implement the 2012-13 Budget; SB 1103 (Wright) requires the California Student Aid Commission, commencing on a specified date, to post annual reports submitted by institutions participating in the Cal Grant program which will be made available on a searchable database, and provide other information useful to student and parents; SB 1280 (Pavley) permits a CCC district and the UC to let any contract for expenditures greater than $50,000 and $100,000, respectively for the purchase of supplies and materials in accordance with “best value” policies as adopted by the local governing board, and UC Regents, respectively; SB 1289 (Corbett) requires private or independent postsecondary educational institutions, the CSU, and the UC, if the UC Regents concur, to provide specified information to students regarding federal and private student loans; SB 1349 (Yee) establishes a privacy policy for postsecondary education students with respect to their use of social media; SB 1402 (Lieu) extends the CCC Economic and Workforce Development Program from 1/1/13 to 1/1/18; SB 1456 (Lowenthal) establishes additional requirements for students to be eligible to receive a CCC Board of Governors fee waiver, and places new conditions on community colleges for use of state funds made available for matriculation services; SB 1510 (Senate Budget and Fiscal Review Committee) makes various statutory changes to higher education to implement the 2012-13 Budget; SB 1525 (Padilla) enacts a Student Athlete Bill of Rights and places specified requirements on collegiate athletic programs commencing with the 2013-14 academic year and ending 1/1/21; SB 1539 (Corbett) requires the publisher of a college textbook, or an agent or employee of the publisher, to provide prescribed data about the textbook to prospective purchasers; AB 633 (Olsen) permits the CSU to purchase vehicles for its state fleet without the approval of the Department of General Services until 1/1/15; AB 970 (Fong) establishes state policies applicable to resident student financial aid and mandatory systemwide fees charged at the UC and the CSU; AB 1434 (Feuer) makes employees and administrators of a public or private postsecondary institution whose duties involve contact with children on a regular basis, as to child abuse or neglect occurring on that institution’s premises, or at an official activity of, or program conducted by the institution, mandated reporters for the purpose of the Child Abuse and Neglect Reporting Act; AB 1502 (Assembly Budget Committee) appropriates $120 million each to UC and CSU, in 2013-14 (budget year +1), provides that these funds shall only be available to each segment if the Governor’s realignment/tax initiative measure is successful in November, and the segment does not increase student tuition in 2012-13, and appropriates an additional $38 million to UC for retirement costs; AB 1663 (Dickinson) requests the UC Regents set a tuition fee for the California State Summer School for Mathematics and Science program, also known as COSMOS, that corresponds to actual program costs, up to, but not exceeding, $2,810 per session in the year 2012, and sets this amount as the base for future 5% annual fee increases; AB 1723 (Fuentes) requires the governing boards of the CCC, the CSU, and the California Student Aid Commission, and requests the UC Regents, to provide live video transmission of all board meetings open to the public and to archive and post video and audio transmissions for at least the preceding 12 months, and within 48 hours of the initial transmission, on their respective Web sites; AB 1899 (Mitchell) extends eligibility for residency, for tuition/fee purposes and student financial aid programs, to noncitizen victims of trafficking, domestic violence and other serious crimes, as defined, to the same extent as available to individuals admitted into the country as refugees; AB 1955 (Block) requires the CSU Board of Trustees, and requests the UC Board of Regents, to require each of its campuses to designate an individual to serve as a liaison between campus law enforcement agencies and students exercising specified constitutionally guaranteed rights; AB 2122 (Lara) requires the test sponsor of the Law School Admission Test (LSAT) to provide testing accommodations to a disabled test subject, as specified; AB 2126 (Block) extends the sunset date for provisions governing the adoption, amendment, or repeal of regulations by the CSU Trustees from 1/1/13 to 1/1/18; AB 2133 (Blumenfield) permits a former member of the U.S. Armed Forces to use his/her four years of priority registration enrollment at the CSU and the CCC within 15 years of leaving active duty; AB 2171 (Fong) permits a governing board of a community college district to deny enrollment, permit enrollment, or permit conditional enrollment to a student who has been expelled or is being considered for expulsion from another district within the preceding five years for specified offenses; AB 2296 (Block) requires institutions regulated by the Bureau for Private Postsecondary Education to provide additional disclosures to prospective students; AB 2462 (Block) requires, by 7/1/15, the CCC Chancellor, using common course descriptors and pertinent standards of the American Council on Education, to determine for which courses credit should be awarded for prior military experience; AB 2478 (Hayashi) extends resident classification for up to one year to CCC students who were stationed in California on active duty for more than one year immediately prior to being discharged; AB 2497 (Solorio) requires the Legislative Analyst’s Office, in cooperation with the SCU, to report by 1/1/14, and every two years thereafter until 1/1/18, specified information measuring the impact of the CSU’s Early Start Program on students’ mathematics and English proficiency; and AB 2572 (Furutani) permits the governing board to eliminate the requirement for the Los Angeles Community College District to conduct a run-off election if no candidate for an individual seat on the district’s governing board receives more than 50% of the total votes cast in the primary election, commencing with the 2013 election.

Vetoed higher education legislation included:  SB 259 (Hancock) which would have expended the right, under the Higher Education-Employee Relations Act, for student employees at the UC, CSU, and Hastings College of Law to be covered by collective bargaining; SB 721 (Lowenthal) which would have established specified goals to guide budget and policy decisions regarding postsecondary education and required the development of metrics to measure progress in meeting the goals; SB 885 (Simitian) which would have authorized the CDE, California’s three public higher education systems, the Commission on Teacher Credentialing, Employment Development Department, SBE, and California School Information Services to enter into a joint powers agreement for the purpose of implementing the preschool through higher education (P-20) statewide educational data system; AB 2132 (Lara) which would have required the CSU and requested the UC to consider community service for the purposes of appointment, promotion, retention, and tenure review; AB 2309 (Hill) which would have permitted the CCC Board of Governors, once sufficient funding becomes available, to establish a competitive grant pilot program to evaluate a public-private partnership model designed to accomplish specified objectives relating to business development and job creation; and AB 2442 (Williams) which would have established the California Hope Public Trust to support the CSU, CCC, and UC systems.

With the passage of Proposition 30, the UC and CSU were spared from having their budgets cut by $250 million each.

CRIMINAL JUSTICE

Issues of importance in the area of criminal justice were death penalty, human trafficking, child abuse, gun control, correctional realignment, and three-strikes.

I. Death Penalty

As indicated in the 2011 Digest of Legislation, there was an initiative that was being circulated which would repeal the death penalty.  There were enough signatures to have it qualify for the 2012 General Election ballot as Proposition 34.  However, the voters defeated the measure.  Specifically, it would have:

A. Repealed the death penalty and replaces it with life imprisonment without the possibility of parole.

B. Applied retroactively to persons already sentenced to death.

C. Stated that persons found guilty of murder must work while in prison as prescribed by the Department of Corrections and Rehabilitation (CDCR), with their wages subject to deductions to be applied to any victim restitution fines or orders against them. 

D. Directed $100 million to law enforcement agencies for investigations of homicide and rape cases.

II. Human Trafficking

Another initiative which qualified for the 2012 General Election ballot was Proposition 35 which makes several changes to state law related to human trafficking.  Specifically, it (1) expands the definition of human trafficking; (2) increases the punishment for human trafficking offenses; (3) imposes new fines to fund services for human trafficking victims; (4) changes how evidence can be used against human trafficking victims; and (5) requires additional law enforcement training for handling human trafficking cases.  It also places additional requirements on sex offender registrants.  It passed overwhelmingly.

Legislatively, the following bills were enacted into law which enhance the human trafficking laws:  SB 1091 (Pavley) adds specified crimes relating to human trafficking, pandering, procurement, prostitution, aggravated sexual assault against a child and child pornography to the crimes for which a prosecuting witness may have up to two support persons while testifying; SB 1133 (Leno) permits the forfeiture of vehicles, boats, airplanes, money, negotiable instruments, securities, real property, or other things of value used for the purpose of facilitating human trafficking involving a commercial sex act where the victim is an individual under 18 years of age at the time of the commission of the crime and property acquired through human trafficking or which was received in exchange for the proceeds of human trafficking of a person under 18 years of age when the crime involved a commercial sex act, and provides that 50% of the forfeiture proceeds shall be distributed to the Victim-Witness Assistance Fund for grants to community organizations serving human trafficking victims and 50% of the proceeds shall be distributed to the General Fund of the state or county, depending on whether the Attorney General or district attorney prosecuted the matter; SB 1193 (Steinberg) requires specified businesses most often connected with human trafficking to post informational signs, as specified, at the business entrance or in other areas visible to employees and the public.  These signs, posted in English, Spanish, and any other language widely spoken in the country, will identify trafficking, state its illegality and that victims are protected under U.S. law, and each sign will provide two toll-free, anonymous hotline numbers for victims or members of the public to call to seek help or report unlawful or suspicious activity; AB 1956 (Portantino) expands the California Voluntary Tattoo Removal Program to serve individuals, between 14 and 24 years of age, who were tattooed for identification in human trafficking or prostitution and are in custody of the CDCR or county probation departments, who are on parole or probation, or who are in a community-based organization serving at-risk youth; AB 2212 (Block) clarifies that buildings or places used for human trafficking can be declared a public nuisance, and specifies that half of any civil penalties collected therefrom shall be directed to fund grants for human trafficking victim services and prevention programs; and AB 2466 (Blumenfield) permits the freezing of assets in human trafficking cases prior to the first judgment in the case.

III.   Child Abuse

At the end of 2011, prosecutors in Pennsylvania filed criminal charges against assistant football coach Jerry Sandusky of Penn State for alleged sexual abuse charges.  In the case against Sandusky, the Grand Jury found that there had been at least eight victims of sexual assaults throughout his career at Penn State.  The head coach of the Penn State football team, Joe Paterno, allegedly knew of instances of sexual abuse but failed to report these directly to Child Welfare Services.  Instead, he reported to a supervisor who also failed to report to Child Welfare Services.  Sandusky was found guilty and received a sentence of 30 to 60 years in state prison.

In response to this event, legislation was enacted to enhance the mandated child abuse and neglect reporting requirements in California.  The legislation included:  SB 1264 (Vargas) adds any “athletic coach, including, but not limited to, an assistant coach or a graduate assistant involved in coaching, at public or private postsecondary institutions,” as a mandated child abuse and neglect reporter, and to raise penalties relating to failure to report, including fine increases and making an existing misdemeanor a felony punishable by state prison; AB 1434 (Feuer) makes employees and administrators of a public or private postsecondary institution whose duties involve contact with children on a regular basis, as to child abuse or neglect occurring on that institution’s premises, or at an official activity of, or program conducted by the institution, mandated reporters for the purposes of the Child Abuse and Neglect Reporting Act; AB 1435 (Dickinson) includes an “athletic coach, athletic administrator, or athletic director employed by any public or private school that maintains any combination of instruction from kindergarten to grade 12, inclusive,” in the mandated child abuse and neglect reporter laws; AB 1713 (Campos) makes “image processors” mandated reporters under the Child Abuse and Neglect Reporting Act (CANRA) and expands the list of media subject to CANRA provisions; and AB 1817 (Atkins) makes commercial computer technicians mandated reporters of suspected child abuse and neglect for the purpose of the Child Abuse and Neglect Reporting Act.

Also, AB 1707 (Ammiano) was signed by the Governor which revises the law concerning the Child Abuse Central Index (CACI) to provide that a person listed in the CACI when they were under 18 years of age at the time of the report shall be removed from the CACI 10 years from the date of the incident resulting in the CACI listing, if no subsequent report concerning the same person is received during that time period, as specified.

The Governor vetoed SB 1352 (Corbett) which would have statutorily permitted the establishment of Child Advocacy Centers to coordinate the investigation and prosecution of child abuse, as specified.  In his veto message, the Governor stated, “Currently, 33 counties in the state have established child advocacy centers, indicating that state prescription in this area is unnecessary.  More to the point, this bill would lock into statute specific requirements for these centers that may or may not fit with what local county leaders see as the best way to handle these sensitive cases.  A ‘one-size-fits-all’ approach goes against the goals of Child Welfare Services Realignment, which was designed to give counties flexibility to tailor programs as they deem appropriate.”

IV.  Firearms

Last year, the Legislature and the Governor signed AB 144 (Portantino) which made it a crime to carry an unloaded handgun in any public place or street and made it a misdemeanor punishable by up to one year in jail and/or a fine of up to $1,000, and exempts hunters and others carrying unloaded weapons under specified circumstances.  The author indicated the dispute came to a head when gun enthusiasts began showing up in coffee shops and restaurants and public beaches with unloaded guns strapped to their hips.  This led to merchants calling the police because they were afraid that the guns could be loaded and disrupt business.  The Peace Officers Research Association of California (PORAC) indicated that the practice by individuals and organizations to “openly carry” firearms in public places, in order to challenge law enforcement and firearm statutes in California, is increasing in frequency.  While PORAC understood that most of these open carry demonstrations were being done by law abiding citizens, it placed law enforcement and the public in a precarious and possibly dangerous situation.  Most often, law enforcement is called to the scene based on a citizen or merchant complaint.  When the officer arrives at the scene, it is their obligation to question those persons carrying the firearms and to inquire as to whether the firearm is loaded.  Until that officer has physically seen if the firearm is loaded, that officer must assume that their lives and the lives of those around them may be in danger.

In 2012, as a follow-up to AB 144, the author introduced AB 1527 which was enacted into law extending AB 144 provisions to carrying of unloaded long guns.  This bill was in response to incidents where some gun rights advocates were shifting their focus to openly carrying rifles and shotguns in public places.  The Governor also signed SB 1315 (de Leon) which removes the state preemption of any local ordinances regarding the manufacture, sale, or possession of imitation firearms, BB devices, and air rifles with the County of Los Angeles.  Specifically, it allows the County of Los Angeles or any city within that county to enact and enforce an ordinance or resolution that is more restrictive than state law regulating the manufacture, sale, possession, or use of any BB device, toy gun, replica of a firearm, or other device that meets both of the following:  (1) the device is so substantially similar in coloration and overall appearance to an existing firearm as to lead a reasonable person to perceive that the device is a firearm, and (2) the device expels a projectile that is no more than 16 millimeters in diameter; and AB 1559 (Portantino) which allows for the importation of short-barreled rifles and short-barreled shotguns for use as a prop for a motion picture, television, or video production or entertainment event when the Department of Justice issues a permit finding good cause as it currently does for the manufacture, possession,transportation, or sale of short-barreled weapons, and it also adjusts the payment of fees for purchase and possession of specified firearms.

The Governor vetoed the following gun legislation:  SB 1366 (DeSaulnier) which would have made it a crime to fail to report the theft or loss of a firearm he/she owns or possesses to a local law enforcement agency within 48 hours of the time he/she knew or reasonably should have known that the firearm was lost or stolen; AB 2333 (Solorio) which would have specified that any person who keeps a BB device within any premises that is under the person’s custody or control, who knows or reasonably should know that a minor is likely to gain access to that BB device without the permission of the minor’s parent or legal guardian, and if a minor obtained access to that BB device and thereafter carried the BB device off-premises and openly displayed or exposed the BB device in a public place in violation of provisions of existing law, could have been subject to a written warning for the first instance, a civil fine of $100 for the second instance, and a civil fine for the third or subsequent instance; and AB 2460 (Dickinson) which would have specified that the Department of Justice, police departments, sheriffs’ officials, marshals’ offices, CDCR, California Highway patrol, district attorneys’ offices, and military or naval forces of the State of California may not sell or otherwise transfer the ownership of an unsafe handgun to any entity or person that is not otherwise exempted from possession of an unsafe handgun.

V.  Corrections

On 4/23/12, the CDCR released a plan entitled “The future of California Corrections:  A Blueprint to Save Billions of Dollars, End Federal Oversight, and Improve the Prison System.”  The plan is designed to cut billions in spending, comply with multiple federal court orders for inmate and medical, mental health, and dental care, and significantly improve the operation of California’s prison system.

According to CDCR Secretary Matthew Cate, “Since Public Safety Realignment took effect, CDCR’s offender population has dropped by approximately 22,000 inmates and 16,000 parolees.  Overcrowding has been reduced from a high of more than 200 percent of design capacity to just 155 percent today.  The thousands of makeshift beds in gymnasiums and dayrooms that CDCR had been forced to use for years are now gone.

CDCR’s plan will:

• Reduce CDCR’s annual budget by more than $1.5 billion upon full implementation, including $160 million dollars in savings from closing the California Rehabilitation Center;
• Eliminate $4.1 billion in construction projects that are no longer needed because of population reductions;
• Eliminate $2.2 billion annually that would have been spent had Realignment not been implemented;
• Return all out-of-state inmates to California by 2016 to bring back jobs and manage offenders closer to home while saving millions in taxpayer dollars;
• Satisfy the U.S. Supreme Court’s order to lower the state’s prison population;
• Satisfy the federal courts that CDCR has achieved and maintained constitutional levels of medical, mental health and dental care to avoid costly oversight;
• Incorporate a standardized staffing formula to better manage staff levels and cost; and
• Improve the classification system to provide proper inmate housing placement and reduce the reliance on costly high-security facilities.

This plan ends a long-term uptick in corrections costs.  CDCR accounted for just three percent of General Fund spending 30 years ago, which increased to 11 percent in FY 2008-09. CDCR’s plan will lower it to 7.5 percent in FY 2015-16.  When realignment is fully implemented, CDCR expenditures will drop by 18 percent overall.”

The Director indicates that the federal healthcare oversight shall end by 2013.

The final 2012-13 budget for CDCR contained $8.9 billion from the General Fund which was a net reduction of $413 million, or 4.4% below the revised 2011-12 level of spending.  This decrease, according to the Legislative Analyst, reflected additional savings in 2012-13 from the decline of the inmate and parolee populations due to the 2011 realignment of adult offenders.  The following are the budget trailer bills concerning ongoing corrections realignment that were enacted:

• SB 1020 (Senate Budget and Fiscal Review Committee) provides for an overall financing structure for the 2011 Public Safety Realignment.  The funding structure includes the creation of accounts and rules that govern the flexibility of counties to transfer monies between accounts.  Also directs the allocation of funding among accounts, including the allocation of growth funding.
• SB 1021 (Senate Budget and Fiscal Review Committee) makes a number of statutory changes to implement the 2012-13 Budget relating to the following corrections programs:  (a) Expansion of the Female Offender Alternative Custody Program; (b) Community Corrections Performance Incentive Grants; (c) Medical Parole Medi-Cal Reimbursements; (d) Integrated Services for Mentally Ill Parolees; (e) Use of Generic Pharmaceuticals for Inmates; (f) CDCR Reporting Requirements; (g) Future of Corrections Plan (Blueprint) Accountability; (h) Office of the Inspector General Oversight; (i) Board of State and Community Corrections Clean-up Implementation; (j) Division of Juvenile Justice State Jurisdiction and Fees; (k) Division of Juvenile Justice Time Adds; and (l) Sunsets the Civil Addicts Program.
• SB 1022 (Senate Budget and Fiscal Review Committee) makes statutory changes to the 2012-13 Budget relating to public safety facilities as follows:  (a) reduces revenue bond authority by roughly $4 billion reflecting reduced state capacity needs associated with the Public Safety Realignment of 2011; (b) authorizes up to $500 million in revenue bonds, notes, or bond anticipation notes to fund the acquisition, design, construction, and renovation of approved adult local criminal justice facilities, as specified; (c) authorizes the shift of $171 million in AB 900 (Solorio, Chapter 7, Statutes of 2007) funding from Phase I of the program to Phase II of the program allowing participating counties to benefit from an enhanced level of state financial participation; (d) authorizes the expenditure of AB 900 funding for the design and construction of improvements to medication distribution facilities at state prison facilities; (e) authorizes the expenditure of up to $810 million in revenue bonds, notes, or bond anticipation notes to finance the design, construction, and construction-related of three Level II dorm facilities at existing prisons; and (f) requires CDCR to deactivate the California Rehabilitation Center located in Norco, California, no later than either 12/31/16, or six months after construction of the three Level II dorm facilities authorized in this act, whichever is earlier.
• SB 1023 (Senate Budget and Fiscal Review Committee) provides the statutory changes necessary to implement the Public Safety Realignment portions of the 2012-13 State Budget by (a) making sentencing changes; (b) making mandatory supervision changes; (c) making Board of Parole Hearings revocation changes; (d) clarifying terms for multiple offenses; (e) expanding Proposition 69, DNA identification evidence; (f) clarifying post-release community supervision time limit certification; (g) expanding pre-trial electronic monitoring; (h) clarifying booking fee provisions; (i) making changes in Community Oriented Policing Services/Juvenile Justice Crime Prevention Act funding; (j) clarifying small and rural sheriff’s funding; (k) clarifying juvenile probation and juvenile camp funding; and (l) clarifying California Emergency Management Agency Grant funding.
• AB 1481 (Assembly Budget Committee) provides the statutory changes necessary to implement the Public Safety portions of the 2012 Budget Act of 2012-13.  Specifically, this bill (a) clarifies that at least one party demanding a jury on each side of a civil case shall pay non-refundable fee of $150, and that all plaintiffs shall be considered one side of the case, and all other parties shall be considered the other side of the case and specifies that the fee shall be due at least five days before the trial date for unlawful detainer actions and makes other non-substantive clarifying changes related to the jury deposit fee; (b) makes clarifying technical change to exclude CDCR, Division of Juvenile Justice (DJJ) wards committed pursuant to In re C.H. from recently enacted statute SB 1021 (Leno), that changed the maximum age of jurisdiction for DJJ wards from 25 to 23.  DJJ wards committed pursuant to C.H. have a maximum age of jurisdiction of 21 and should not have been subject to the jurisdictional change made in SB 1021; and (c) clarifies the operative date for the recently enacted prohibition on the use of time-adds as a DJJ disciplinary tool and removes the requirement that the DJJ promulgate regulations relating to ward discharge consideration date extensions.
• AB 1496 (Assembly Budget Committee) makes corrective technical amendments to the 2012-13 Budget specifying that 94.481% of funds allocated to the Juvenile Justice Subaccount be allocated, by the Controller, to the Youthful Offender Block Grant Special Account and that 5.519% be allocated to the Juvenile Reentry Grant Special Account.  These allocations are consistent with projected base funding for each program ($93.3 million for the Youthful Offender Block Grant Special Account and $5.4 million for the Juvenile Reentry Grant Special Account).

Other corrections legislation enacted into law included:  SB 542 (Price) specifies that the state Inmate Welfare Fund (IWF) is to be used for specific programs, including education, recreation, and re-entry, in order to support the welfare and benefit of inmates and establishes an advisory group at each institution to advise the warden in identifying priority programs and services to be funded by the IFW; SB 1210 (Lieu) gives counties the authority to collect restitution from convicted felons to help the victims of their crimes receive the restitution they are due; SB 1351 (Rubio) ensures that custody staff working for public community correctional facilities retain sworn peace officer status; SB 1371 (Anderson) prohibits a defendant from satisfying an order to pay client restitution to a victim, a restitution fine, or both, through time spent in custody at the statutory rate of $30 per day; SB 1462 (Leno) permits a sheriff to release a prisoner from a county jail after conferring with a jail physician if the sheriff determines the prisoner would not reasonably pose a threat to public safety and the prisoner is deemed to have a life expectancy of six months or less (same as a state compassionate release); AB 1165 (Achadjian) provides immunity from civil liability to county probation departments responsible for the certification of domestic violence batterers programs, similar to immunity that is provided to public entities in the Government Code; AB 1445 (Mitchell) extends the operative period for two years to 1/1/15, for a pilot project allowing specified county sheriffs to use inmate welfare fund money to provide former county jail inmates with re-entry services upon their release and extends the period of time in which the money could be used for re-entry from 14 to 30 days; AB 1593 (Ma) requires that the parole board give great weight to any information or evidence that proves the prisoner experienced intimate partner battery and its effects at the time the crime was committed; AB 1907 (Lowenthal) provides that no individual sentenced to imprisonment in county jail is to be administered by psychiatric medication without his/her prior informed consent, unless specified circumstances are met and makes conforming changes to the process by which inmates of the CDCR can be involuntarily medicated; AB 2127 (Carter) permits a sheriff or other official to permit a participant in a work release program to receive work release credit for documented participation in educational programs, vocational programs, substance abuse programs, life skills programs, or parenting programs in lieu of performing labor; AB 2251 (Feuer) permits prosecutors to send victim contact information to the CDCR without the victim’s consent for purposes of recouping restitution; AB 2357 (Galgiani) makes it explicitly clear that CDCR has the statutory authority to temporarily remove an inmate for purposes of assisting in a search and recovery effort in order to identify possible murder victims and gather other such evidence of a serial killing; AB 2490 (Butler) requires CDCR to develop policies to assist veteran inmates in pursuing veteran’s benefits; and AB 2530 (Atkins) prohibits the shackling of inmates and wards incarcerated by CDCR who are known to be pregnant or in recovery after delivery, with leg irons, waist chains, or handcuffs behind the body.

Vetoed corrections legislation included:  SB 1098 (La Malfa) which would have required CDCR to provide all inmate history files to the Department of Forestry and Fire Protection personnel assigned to the conservation camp in which an inmate has been placed; and AB 1270 (Ammiano) which would have required CCR to permit media representatives to inmates personally in California’s prison on a prearranged, as well as random, basis unless the warden determines the interview poses an immediate threat to public safety or security of the institution.

VI. Three Strikes Reform

There are three categories of crimes:  felonies, misdemeanors, and infractions.  A felony is the most serious type of crime, and an individual convicted of a felony may be sentenced to state prison under certain circumstances.  Individuals convicted of felonies who are not sentenced to state prison are sentenced to county jail, supervised by the county probation department in the community, or both.

Existing law classifies some felonies as “violent” or “serious,” or both. Examples of felonies currently defined as violent include murder, robbery, and rape.  While almost all violent felonies are also considered serious, other felonies are defined only as serious, such as assault with intent to commit robbery.  Felonies that are not classified as violent or serious include grand theft (not involving a firearm) and possession of a controlled substance.

Three Strikes Sentencing.  Proposition 184 (commonly referred to as the “three strikes” law) was adopted by voters in 1994.  It imposed longer prison sentences for certain repeat offenders.  Specifically, the law requires that a person who is convicted of a felony and who previously has been convicted of one or more violent or serious felonies be sentenced to state prison as follows:

Second Strike Offense.  If the person has one previous serious or violent felony conviction, the sentence for any new felony conviction (not just a serious or violent felony) is twice the term otherwise required under law for the new conviction.  Offenders sentenced by the courts under this provision are referred to as “second strikers.”  As of March 2012, approximately 33,000 inmates were second strikers.

Third Strike Offense.  If the person has two or more previous serious or violent felony convictions, the sentence for any new felony conviction (not just a serious or violent felony) is a life term with the earliest possible parole after 25 years.  Offenders convicted under this provision are referred to as “third strikers.”  As of March 2012, about 9,000 inmates were third strikers.

While the law requires the sentences described above, in some instances the court may choose not to consider prior felonies during sentencing.  When this occurs, an offender who would otherwise be sentenced as a second or third striker would be sentenced to a lesser term than required under the three strikes law.

Prison Release Determination.  Under current law, most second strikers are automatically released from prison after completing their sentences.  In contrast, third strikers are only released upon approval by the state Board of Parole Hearings (BPH).  After third strikers have served the minimum number of years required by their sentence, a BPH panel conducts a parole consideration hearing to consider their possible release.  For example, BPH would conduct such a hearing for a third striker sentenced to 25-years-to-life after the third striker served 25 years.  If BPH decides not to release the third striker at that hearing, the BPH would conduct a subsequent hearing in the future.  Since the three strikes law came into effect in 1994, the first third strikers will become eligible for hearings on their possible release from prison near the end of this decade.

Post Release Supervision.  All second and third strikers are required under current law to be supervised in the community after release from prison.  If a second striker’s most recent conviction was for a nonserious, non-violent crime, he/she will generally be supervised in the community by county probation officers.  Otherwise, the second striker will be supervised in the community by state parole agents.  All third strikers are supervised in the community by state parole agents following their release.  When second or third strikers violate the terms of their community supervision or commit a new offense, they could be placed in county jail or state prison depending on the circumstances.

Three strikes in California came about because of the murders of Kimber Reynolds and Polly Klaas.  Mike Reynolds and Marc Klaas, fathers of the victims, felt that the laws were lenient and they successfully put Proposition 184 on the ballot.

Proposition 36, on the 2012 General Election ballot, which was passed by the voters, makes changes to the three strikes law by reducing prison sentences served under the three strikes law by certain third strikers whose current offenses are nonserious, non-violent felonies, and allowing resentencing of certain third strikers who are currently serving life sentences for specified nonserious, non-violent felonies.  Both of these changes are described below:

Shorter Sentences for Some Third Strikers.  The measure requires that an offender who has two or more prior serious or violent felony convictions and whose new offense is a nonserious, non-violent felony receive a prison sentence that is twice the usual term for the new offense, rather than a minimum sentence of 25-years-to-life as is currently required.  For example, a third striker who is convicted of a crime in which the usual sentence is two to four years would instead receive a sentence of between four to eight years – twice the term that would otherwise apply – rather than a 25-years-to-life term.  The measure, however, provides for some exceptions to these shorter sentences.  Specifically, the measure requires that if the offender has committed certain new or prior offenses, including some drug-, sex-, and gun-related felonies, he/she would still be subject to a life sentence under the three strikes law.

Resentencing of Some Current Third Strikers.  This measure allows certain third strikers to apply to be resentenced by the courts.  The measure limits eligibility for resentencing to third strikers whose current offense is nonserious, non-violent and who have not committed specified current and prior offenses, such as certain drug-, sex-, and gun-related felonies.  Courts conducting these resentencing hearings would first determine whether the offender’s criminal offense history makes them eligible for resentencing.  The court would be required to resentence eligible offenders unless it determines that resentencing the offenders would pose an unreasonable risk to public safety.  In determining whether an offender poses such a risk, the court could consider any evidence it determines is relevant, such as the offender’s criminal history, behavior in prison, and participation in rehabilitation programs.  The measure requires resentenced offenders to receive twice the usual term for their most recent offense instead of the sentence previously imposed.  Offenders whose requests for resentencing are denied by the courts would continue to serve out their life terms as they were originally sentenced.

Proponents of Proposition 36 included Los Angeles District Attorney Steve Cooley, Santa Clara County District Attorney Jeffrey Rosen, San Francisco District Attorney George Gascon, and Los Angeles County Police Chief Charlie Beck.  They believe (1) Proposition 36 will make punishment fit the crime that previous financial and law enforcement resources should not be improperly diverted to impose life sentences on some non-violent offenses, (2) it will save California over $100 million every year which could go to fund schools, fight crime, and reduce the deficit, and (3) it will make room in prison for dangerous felons by stopping the overcrowding of prisons with non-violent offenders so there will be room to keep the most violent felons in jail.  Those in opposition included major law enforcement groups and victim groups who stated that California’s crime rate dropped 37% in the first four years after the original Three Strikes implementation and that some offenders will be released without proper parole or any supervision and commit new crimes.

Other criminal justice legislation of importance enacted into law included:  SB 9 (Yee) permits a prisoner who was under 18 years of age at the time of committing an offense for which the prisoner was sentenced to life without the possibility of parole to submit a petition for recall and resentencing to the sentencing court, as specified; SB 561 (Corbett) requires the Alameda County District Attorney’s Office and the Los Angeles County Sheriff’s Department to collect and report statistical data relating to crimes involving or furthered by the gathering of private information from the Internet; SB 661 (Lieu) prohibits 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 defines “picketing” for purposes of this section as protest activities engaged in by any person within 300 feet of a burial site, mortuary, or place of worship; SB 760 (Alquist) permits the district attorney or county counsel to request a replacement evaluator from the Department of Mental Health who resigns or retires in cases of commitment of a sexually violent predator; SB 989 (Vargas) clarifies bail in extradition cases; SB 1082 (Corbett) makes modifications and clarifications in the Safe at Home program; SB 1145 (Emmerson) increases the maximum fines for various offenses relating to animal fighting; SB 1177 (Leno) provides that where an employer is convicted of a crime against an employee, the restitution order shall not be offset by workers’ compensation insurance payments unless the court finds substantial evidence that all insurance premiums have been made in full accordance with the law; SB 1248 (Alquist) requires a victim of a sex crime who is under 16 years of age, and is facing a contempt charge for refusing to testify in a related legal proceeding, to meet with a victim advocate, as defined, unless the court finds, for good cause that it is not in the best interest of the victim; SB 1281 (Blakeslee) requires that where a psychiatrist or psychologist evaluates a defendant for purposes of a plea of not guilty by reason of insanity, the evaluation report shall include the following:  the defendant’s history of drug abuse, his/her drug use on the day of offense, and a review of the police report of the offense; SB 1299 (Wright) modifies the process by which crime victims seek reimbursement from the California Victim Compensation and Government Claims Board for pecuniary losses resulting from a crime by permitting social workers to represent victims and permits for-profits to provide mental health services to victims; SB 1357 (Cannella) provides that the grand jury presenting the accusation against an officer for willful or corrupt misconduct in office may also be a criminal grand jury; SB 1387 (Emmerson) prohibits a junk dealer or recycler from possessing fire hydrants, manhole covers or backflow devices unless specified provisions are met and results in a criminal fine for failure to comply; SB 1403 (Yee) permits a tenant to terminate his/her tenancy if the tenant or a household member was the victim of elder or dependent adult physical abuse; SB 1425 (Negrete McLeod) prohibits a court from granting a hearing to modify a denial of reunification services, or modification in a custody or visitation order, for parents whose children were removed for extreme physical or sexual abuse, or because the parent caused the death of another child, as specified, unless it appears that the best interests of the child would be promoted by the proposed change in order; SB 1474 (Hancock) permits the Attorney General to convene a statewide grand jury in cases of theft or fraud where the same defendant(s) committed the offense in multiple counties; SB 1479 (Pavley) provides that in music or video piracy cases, restitution shall include the value of pirated works that were seized from the defendant, but not actually sold; SB 1489 (Harman) permits a court to order the destruction of exhibits in a death penalty case one year after the death of defendant awaiting execution; SB 1500 (Lieu) permits pre-conviction forfeiture of a defendant’s seized cat or dog in animal abuse and neglect cases; AB 40 (Yamada) requires mandated reporters of elder or dependent adult abuse to report suspected or known instances of physical abuse, occurring in a long-term care facility, to both the Long-Term Care Ombudsman and local law enforcement; AB 324 (Buchanan) specifies that juvenile offenders who have been adjudicated for an offense requiring registration as a sex offender may be committed to the CDCR’s Division of Juvenile Facilities; AB 472 (Ammiano) provides that it shall not be a crime to be under the influence of , or in possession of, a controlled substance or drug paraphernalia if that individual seeks medical assistance for himself, herself, or another person for a drug-related overdose; AB 526 (Dickinson) requires the Board of State and Community Corrections to consolidate grant funds related to gang intervention and youth crime prevention and create a uniform grant application process; AB 593 (Ma) permits victims of domestic violence whose expert testimony was incompetent and unsubstantial during their trial court proceedings to file for a writ of habeas corpus; AB 1404 (Feuer) permits the Counties of Los Angeles, San Diego, and San Bernardino to increase their $1 vehicle registration surcharges for vehicle theft prevention to $2 if the increase is adopted by their boards of supervisors by resolution; AB 1432 (Mitchell) enacts Caylee’s Law which requires a parent or guardian to report to law enforcement the disappearance or death of a child under the age of 14 within a specified period of time; AB 1835 (Fletcher) permits access to sex offender management professionals certified by the California Sex Offender Management Board to all relevant records pertaining to a sex offender registrant, as specified; AB 1971 (Buchanan) increases the maximum fine from $250 to $1,000 for junk and second-hand dealers who knowingly purchase or receive metals used in transportation or public utility services without due diligence; AB 2015 (Mitchell) clarifies that law enforcement officers are responsible to ask whether an arrestee is a custodial parent at the time of arrest or booking, and to inform the individual of the right to make two additional phone calls to arrange for care of his/her minor children, and ensures that these rights are communicated in written and oral form in the arrestee’s own language; AB 2020 (Pan) removes the option of providing urine samples, and mandate blood tests, for determining the level of drug intoxication when a person is accused of driving under the influence of drugs; AB 2029 (Ammiano) re-establishes the Bail Fugitive Recovery Persons Act which requires that all bail fugitive recovery persons meet specified training requirements and comply with particular laws; AB 2040 (Swanson) permits a person adjudicated as a ward of the court for an act of prostitution to have his/her record sealed or expunged without having to show that he/she has not been convicted of a felony, an offense involving moral turpitude, or has been rehabilitated; AB 2051 (Campos) permits courts to refer victims of domestic violence cases to a domestic violence counselor when they refuse to testify and permits prosecutors to re-file charges when they dismiss cases due to a domestic violence victim’s failure to testify; AB 2055 (Fuentes) establishes procedures for the issuance of a search warrant authorizing the electronic tracking of a vehicle; AB 2078 (Nielsen) clarifies that peace officers are prohibited from engaging in consensual sex with a person in a detention facility or being transported after arrest to a detention facility; AB 2094 (Butler) increases the domestic violence fund fee form a minimum of $400 to a minimum of $500, and requires the court to state a reason on the record if it reduces or waives the minimum fee; AB 2284 (Chesbro) imposes an additional civil penalty for cultivating marijuana within a state park, and allows law enforcement to stop any vehicle transporting agricultural irrigation supplies into a specified area, if agricultural irrigation supplies are in plain view; AB 2285 (Eng) makes any peace officer trainee who cheats, or knowingly conceals efforts by others to cheat, on a basic course exam mandated by the Commission on Peace Officer Standards and Training liable for a civil fine up to $1,000 per occurrence; AB 2371 (Butler) provides restorative relief to a veteran defendant who acquires a criminal record due to a mental disorder stemming from military service; AB 2467 (Hueso) permits a court with jurisdiction over a criminal matter to include electronic monitoring as part of a protective order, as specified; AB 2483 (Blumenfield) removes the requirement that victims alleging stalking as the basis for eligibility in the Safe at Home Program provide evidence supporting allegations of stalking in their application; and AB 2527 (Swanson) instructs the courts to consider educational attainment, community services, and internships in determining whether to terminate the period of probation for good conduct and reform.

Vetoed legislation included:  SB 1434 (Leno) which would have prohibited a government entity from obtaining the location of an electronic device without a valid search issued by a magistrate; and AB 1081 (Ammiano) which would have prohibited law enforcement officials from detaining an individual based on an immigration hold when the individual is otherwise eligible for release from criminal custody, unless specified conditions are met.

With the passage of Proposition 30 at the 2012 General Election, more funding will be forthcoming for the Governor’s realignment.

ENVIRONMENT

I. State Parks

A. The Administration announced in May 2011 its intent to close 70 state parks, which the Department of Parks and Recreation (DPR) indicated was necessary due to budget cuts.  Since that time, due to the efforts of nonprofit organizations and private donors, DPR announced earlier this summer that 69 of the 70 parks would be able to avoid closure at least temporarily as a result of donations, operating agreements and concession contracts.  In July 2012, it was revealed that DPR had an additional $20 million in previously undisclosed funds in the State Park Recreation Fund (SPRF) and $33.5 million in the Off-Highway Vehicle Fund.  Funds in the SPRF consist of fees paid by park users, income from concessionaires, and other park generated revenues received by DPR for support of state parks.  Shortly after this discovery, the Governor’s Office asked the Attorney General to conduct an audit of DPR focusing on the discrepancies in the SPRF.  The Governor’s Office has also asked the Department of Finance’s Office of State Audits and Evaluations to audit DPR.  Additionally, the Joint Legislative Audit Committee ordered the Bureau of State Audits to review and evaluate the long-term misreported surplus.  These discoveries led to the resignation of DPR Director Ruth Coleman.

In response to this discovery, AB 1478 (Blumenfield) was enacted, which placed a moratorium on state park closures and provided new funds to keep the state parks open, and reform state park management.  Specifically, it contains the following provisions:

1. A two-year moratorium on the closure of state parks.
2. $10 million targeted to aid state parks at risk of closure.
3. $10 million in funds to match private and local donations raised to keep state parks open.
4. $10 million in bond funds to prevent closures by overdue maintenance needs.
5. Provides a $10 million one-time appropriation of bond funds for capital improvement projects to prevent full or partial park closures.
6. Establishes criteria for membership positions on the State Parks and Recreation Commission including requirements for cultural and park management experience.  Require the appointment of two ex‑officio legislative members by the Speaker of the Assembly and Senate Rules committee, respectively.  Allows the Commission a more direct oversight role of the DPR, particularly over DPR’s deferred maintenance backlog. 
7. Appropriates $240,000 from existing funds to allow the State Park and Recreation Commission to evaluate the department’s deferred maintenance obligations, hold public hearings on the subject, provide advice to the department on budgetary matters, and to conduct workshops.
8. Clarifies funds appropriated to the California State Park Enterprise Fund, established to enable the DPR to set revenue targets and goals, are transferred appropriately from the State Parks and Recreation Fund.  Provides for annual accounting and reporting.

B. The Legislative Analyst’s Office (LAO) released a report on 3/9/12, entitled “Strategies to Maintain California’s Park System.”  Among other things, the LAO recommended increasing park user fees and shifting toward entrance fees rather than parking fees, and increasing the number of parks subject to operating agreements.  The LAO estimated that if just an eighth of the people that currently visit day-use parks for free were charged an entrance fee this would increase revenues by the low tens of millions of dollars annually.  Similarly, the LAO estimated that raising the amount of fees that current visitors pay by $1 could also increase revenues by the low tens of millions of dollars annually.  The LAO report noted the lack of certainty as to how much funding can actually be saved from closing a given number of state parks noting that DPR is unable to provide information regarding the cost of operating an individual park, and the various costs associated with closure.  The LAO also noted that since the closure list was released, DPR has concluded that some parks on the closure list are too costly to close because it would cost more to close them in the near term because of the one-time costs associated with closures.  They further noted that since DPR will only minimally maintain closed parks, the cost to reopen these parks in the future will likely be substantial because the infrastructure would have been sufficiently maintained.

Prior to this report, Assemblymember Jack Huffman introduced AB 1589, which offered several funding opportunities and other strategies to prevent state parks from being closed.  The bill, which was signed into law, enacts the California State Park Stewardship Act of 2012 which, among other things, requires DPR to develop a prioritized action plan to increase revenues and collection of existing fees at state parks and allows an individual to apply all or a portion of their state income tax refund to purchase a state park access pass.

With the enactment of AB 1478 and AB 1589, it should provide transparency and accountability to DPR and bring about the needed maintenance and viability to our state parks.

NOTE: Earlier in the year, the Republicans attempted unsuccessfully to override the veto of SB 356 (Blakeslee) of 2011, which would have required DPR to notify a county or city that intends to fully close a park in its jurisdiction and given the locality the option of voluntarily assuming responsibility for the park.

The Governor in his veto message indicated it was unnecessary because DPR had already made its list of closures available to the public and a separate notification process for cities and counties would be duplicative. Moreover, DPR already has signed agreements with localities willing to operate state parks and intends to sign more.

Senator Blakeslee indicated he wanted to override the Governor’s veto because he believed it would allow facilities to stay open and he did not think there was room for compromise with the Administration.

II. California Fish and Wildlife Strategic Vision (CFWSV)

In 2010, AB 2376 (Huffman) was signed into law establishing a process to develop a strategic vision for the Department of Fish and Game (DFG) and the Fish and Game Commission (FGC) to improve and enhance California’s protection and management of fish and wildlife. Pursuant to AB 2376, the Natural Resources Agency appointed an executive committee, a Blue Ribbon Citizens Commission (BRCC), and a broad-based stakeholder advisory group (SAG), and established a public process that is focused on improving and enhancing the capacity of both the DFG and the FGC to protect and manage California’s fish and wildlife. The executive committee was a cabinet –level committee that included the Secretary of the Natural Resources Agency, the DFG Director, the FGC president, the chair of the California Energy Commission, and a representative of the University of California. Members of the U.S. Fish and Wildlife Service and the National Marine Fisheries Service also participated.

The Executive Committee adopted three deliverables: a draft interim strategic vision in November 2011, an interim strategic vision in February 2012, and a strategic vision in April 2012. The BRCC comprised a diverse range of experience and perspectives, and included strategic problem solvers with expertise in policy, management and fiscal issues. The stakeholder advisory group represented a wide range of interests affecting state policies related to protecting and managing fish and wildlife, including fishing and hunting interests, non-profit conservation organizations, non-consumptive recreational users, landowners, scientific and educational interests, and others dedicated to protecting public trust resources.

Some examples of the recommendations in the CFWSV include ensuring successful recruitment and retention of fish and game wardens, building capacity within DFG to address the complex role that science plays in resource management, establishing an interagency coordination process to ensure consistency and efficiency in the review of multiple permits, removing barriers to small-scale restoration projects, increasing penalties for wildlife crimes, creating a permanent stakeholder advisory group to periodically advise DFG and FGC, and requiring open and transparent accounting practices in order to improve public confidence in how funds are managed.

In response to the recommendations made by the project, AB 2402 (Huffman) was introduced and signed into law. It renames DFG as the Department of Fish and Wildlife; articulates state policies regarding the DFG’s and the FGC’s use of ecosystem-based management, credible science, and partnerships; requires establishment of a science institute program to assist DFG and FGC in obtaining independent scientific review; authorizes DFG and FGC to adjust certain fees to provide for recovery of administrative costs; and makes other changes to the Fish and Game Code. The purpose of DFG being renamed was to accurately reflect the state agency’s broader mission.

III. Cap-and-Trade (AB 32 of 2006)

In order to achieve the state’s emission reduction goal as specified in AB 32 of 2006 (the California Global Warming Solutions Act of 2006), the Air Resources Board (ARB) adopted regulations establishing a new cap-and-trade program that places a “cap” on aggregate greenhouse gas emissions (GHG) from entities responsible for roughly 80% of the state’s emissions. The ARB will issue carbon allowances both freely and through an auction that these entities will, in turn, be able to trade (buy and sell) on the open market. The ARB will hold three auctions in 2012-13, the first of which is scheduled for November 2012. The 2012 Budget assumes that $500 million of the revenues generated from these auctions will affect the costs of GHG mitigation activities traditionally supported by the General Fund. The budget requires the Administration to submit a spending plan to the Legislature prior to the allocation of these funds. The budget also requires the Administration to submit a spending plan to the Legislature prior to the allocation of these funds. The budget also requires the Administration to submit each year an expenditure plan of cap-and-trade revenues as part of the Governor’s January budget proposal. The budget also adopted trailer bill language to provide greater oversight of ARB’s activities with other jurisdictions and the Western Climate Initiative, Inc. (a nonprofit corporation that will provide ARB with administrative and technical services regarding its GHG emissions trading program).

The Legislature passed two pieces of legislation which the Governor signed addressing the above issue: AB 1532 (John A. Perez) and SB 535 (de Leon). AB 1532 creates the Greenhouse Gas Reduction Fund Investment plan and Communities Revitalization Act to set procedures for the investment of regulatory fee revenues derived from the auction of GHG allowances pursuant to the cap-and-trade program adopted by ARB. SB 535 requires the investment plan related to the Greenhouse Gas Reduction Fund that is developed and submitted to the Legislature pursuant to AB 1532 to allocate (1) a minimum of 25% of the available moneys in the fund to projects that provide benefits to identified disadvantaged communities, and (2) a minimum of 10% of the available moneys in the fund to projects located within identified disadvantaged communities.

IV. Bay Delta Conservation Plan (BDCP)

On 7/25/12, Governor Brown and the U.S. Secretary of Interior unveiled goals to be used in the revision of the BDCP which are designed to achieve a reliable water supply for the state and a healthy California Bay Delta ecosystem. This revised plan is based on science according to Brown and Salazar, designed to help restore fish populations, protect water quality, and improve the reliability of water supplies for all water users to receive deliveries from state and federal projects.

The elements of a preferred proposal include the construction of water intake facilities with a total capacity of 9,000 cubic feet (cf) per second -- down from an earlier proposal of 15,000 cfs – operations of which would be phased in over several years and a conveyance designed to use gravity flow to maximize energy efficiency and to minimize environmental impact. Many other alternatives, including a no conveyance facility, and facilities with capacities ranging from 3,000 to 15,000 cfs, will also be fully considered as part of the upcoming environmental review process.

Specific objectives of this proposal revision are based on the following:

Science: In order to determine the benefits of additional habitat and Delta outflow to fish, the State and U.S. governments are developing a process, including independent scientific review, to ensure that science is playing a neutral and informative role in determining a way forward for the BDCP. All parties, including water users, conservation groups and public agencies will be invited to fully participate in the process. Science will guide how to best restore the ecosystem and how much water can be exported.

Conservation: The BDCP will contain biological goals and objectives to improve the status of a wide variety of listed species and species of concern under the Endangered Species Act, and will quickly implement new habitat projects in the Suisun Marsh and the Delta upon completion of appropriate environmental reviews.

Cooperation and Governance: State and U.S. governments will work cooperatively with local water agencies, environmental organizations, and Delta governments and districts under a proposed governance structure to achieve an open, transparent, and inclusive process, allowing affected parties to play an appropriate role in the governance and implementation of the BDCP.

Finance: State and U.S. governments are committed to the “user pay” principle, and the state and federal water contractors agree that the costs of the new water conveyance facility and associated mitigation of that facility will be paid through charges to the water users who would benefit from its development and operation. Habitat and other conservation measures in the BDCP would be financed in part by the contractors, but would mostly be paid by the state over a period of 40 years, with likely additional investment by the federal government through existing programs.

Adaptive Management: The proposal reflects the shared commitment by state and U.S. governments to incorporate adaptive management to ensure flexibility as factors such as climate change, new invasive species, and unexpected prolonged drought continue to affect the biology and water supplies of the Delta.

Sustaining Delta Communities: State and U.S. governments recognize the need to preserve the unique communities and agricultural productivity of the Delta. State and federal agencies will continue investment in the Delta for flood protection, community development, and biological restoration.

Protecting Upstream Water Users: State and U.S. governments will make sure implementation of BDCP will not result in adverse effects on the water rights of those in the watershed of the Delta, nor will it impose any obligations on water users upstream of the Delta to supplement flows in and through the Delta.

Improved Water Management Statewide: State and U.S. governments will continue to explore new ways to satisfy competing water demands, including commitments to an Integrated Water Management approach, reducing water demand, increasing water supply, and improving efficiency of operations. The Metropolitan Water District of Southern California and the Santa Clara Valley Water District – the two largest urban regional water agencies-- have committed to exceed the urban water savings target established in the 2009 Delta Reform Act by saving 700,000 acre-feet a year based on predicted future demands. This includes a commitment by Southern California to annually save more water through conservation and recycling than it receives, on average, from Northern California, as well as a commitment from the Santa Clara County Water District to meet Silicon Valley’s future increases in demand through conservation and recycling. With respect to agricultural water use, the Bureau of Reclamation has worked with local water agencies to invest close to $50 million over the last eight years in efficiency improvements in California. Reclamation is now partnering with the Natural Resources Conservation Service to provide funding for projects that improve water management and create new supplies for agricultural irrigation. In the last two years, approximately $15 million in federal funding has been invested in this effort. The State of California has invested more than $47 million in similar programs since 2001.

A draft BDCP and corresponding environmental impact report/environmental impact statement are expected most likely after this writing.

Delta-related legislation enacted in 2012 included: SB 200 (Wolk) extends, until 7/1/18, the authority of the Department of Water Resources to reimburse up to 75% of the costs in excess of $1,000 per mile that are incurred in any year for Delta levee maintenance; SB 1278 (Wolk) revises flood hazard planning and development requirements for those cities and counties located in the Sacramento-San Joaquin Valley; and SB 1495 (Wolk) specifies that certain Port of Sacramento and Port of Stockton harbor-related leases and routine dredging activities are not subject to Delta Stewardship Council review for consistency until the long-term management plan for the Sacrament-San Joaquin Delta.

V. Oil and Gas Wells: Fracking

Under existing law, operators of oil and gas wells are regulated by the Division of Oil, Gas and Geothermal Resources (DOGGR) within the Department of Conservation. DOGGR’s broad authority gives them the ability to regulate hydraulic fracturing (fracking) in order to protect life, health, property, and natural resources including water supply; however, DOGGR does not monitor fracking nor does it have reporting or permitting requirements. Fracking is a process where well operators pump water and a variety of chemicals into wells at very high pressures. This causes cracks to form or grow in the rock strata, allowing greater oil or gas production from the well. Fracking is done in both vertical wells and in horizontal bores that run horizontally through the target rock strata for as much as several thousand feet. There is growing public concern that fracking can lead to groundwater and surface water contamination.

According to the Department of Conservation, fracking was first used in 1947 in a well in Kansas. Since then, fracking has become a regular practice to tap into previously unrecoverable reserves, or to stimulate increased production from existing oil or gas wells in the United States. In California, fracking has been used as a production stimulation method for more than 30 years with no reported damage to the environment. With the increase in the development of horizontal shale gas wells in various regions of the United States, fracking has become the focus of significant attention. Some have questions about the safety of continued use of this technology. Congress and the U.S. Environmental Protection Agency are examining whether the practice is likely to contribute to the contamination of surface or groundwater, and whether it poses risks to public health or safety. Just as oil and gas production operations differ from region to region nationwide, so too do regional methods of fracking. To date, the Division is aware of very little, if any, fracturing of horizontal shale gas wells in California of the type performed in other parts of the United States. Most of California’s oil and gas production to date has been from vertical wells into traditional oil and natural gas reservoirs.

In California, most oil and natural gas reservoirs are “conventional.” That is, the reservoirs are found in layers of underground rock (“reservoir rock”) beneath a layer of less permeable rock (“cap rock”). Over millennia, this less permeable cap rock trapped the oil and natural gas in the reservoir rock; without the cap rock, the oil and natural gas likely would have seeped to the surface long ago. These conventional reservoirs typically were under pressure. When they were first tapped, many would have had a natural “artesian” flow to the surface through the wells. Some would even have appeared as “gushers.” Today, after recovery of some of the reservoirs’ hydrocarbons, most of California’s oil and gas reservoirs require some form of stimulation to flow.

One way to stimulate flow is to fracture the rocks in the reservoir, creating channels through which the oil and/or natural gas can reach the well. The fluids are injected into the reservoir at high enough pressures to cause breaks in the reservoir rock. This type of hydraulic fracturing is conducted below the pressure at which the cap rock would fracture. This practice not only complies with Division regulations to protect groundwater and public health and safety, but is also common-sense practice for the oil producer. No producer wants to take a chance on breaking the cap rock because doing so can cause a loss of production capacity from the reservoir.

On 5/3/12, the Department of Conservation, in conjunction with DOGGR, released the Oil and Gas Issues Road Map, a working document outlining its plan to review state oversight of various oil and gas issues. In what amounts to a “to-do list” of short-term Department priorities, the Road Map sets forth an ambitious agenda for establishing rules to govern the use of fracking to stimulate oil and gas extraction from California wells and simultaneously overhaul existing, decades-old regulations applicable to underground injection methods of oil and gas extraction, including those that involve the use of cyclic steam, carbon dioxide, and waste gas.

The Department of Conservation held a series of seven workshops (in the cities of Bakersfield, Ventura, Culver City, Santa Monica, Long Beach, Salinas, and Sacramento) to discuss fracking and gather information and suggestions concerning regulations which the Department plans to make on the subject. On 9/12/12, at a symposium sponsored by the South Coast Air Quality Management District the DOGGR supervisor outlined the content of proposed regulations which laid out the following elements under consideration:

• Operators would be required to provide notification to DOGGR before engaging in fracking. As yet undetermined is whether notification to the public would also be required, as was contemplated by SB 1054 (Pavley) which failed on the Senate Floor in May 2012.
• DOGGR is reviewing its current well construction regulations as part of the process of considering new fracking regulations. Implicit in that review is the possibility that such regulations may be modified to address concerns associated with fracking.
• Well integrity testing will likely be required to ensure that the well casing is structurally sound before fracking activities begin.
• Inspection of nearby wells, particularly old abandoned wells whose structural integrity may raise concerns, may be required before fracking occurs.
• The structural integrity of the cap rock above the fracture zone may need to be tested to protect against potential migration of fracking fluids or hydrocarbons, as well as to ensure conservation of the hydrocarbon resource.
• Groundwater protection will likely be addressed, beyond existing well casing requirements.
• Fluid management, including the disclosure of the contents of the fracking fluid (an issue raised by AB 591, which failed in the Senate Appropriations Committee in August 2012) will be addressed in the regulations. Such disclosure requirements will likely create exemptions to address trade secret concerns.
• Operators would be required to report to DOGGR following completion of fracking operations. The details of such reporting were not disclosed.
• Operators would be required to report on past-fracking water disposal.

The proposed regulations are to be finalized sometime in 2013.

Other environmental legislation of importance enacted into law includes: SB 143 (Rubio) limits the renewal of an idle surface mining operation’s Interim Management Plan to one additional five-year renewal period at the expiration of the first five-year renewal period; SB 965 (Wright) establishes allowable ex parte communications with State Water Resources Control Board (SWRCB) and Regional Water Quality Control Board (RWQCB) members and increases the public access to the SWRCB and RWQCB public processes; SB 972 (Simitian) revises the scoping meeting notice requirements of the California Environmental Quality Act and enhances notice requirements of completion of environmental impact reports, as specified; SB 1018 (Senate Budget and Fiscal Review Committee) makes various statutory changes to natural resources and environmental protection programs that are necessary to implement provisions of the 2012-13 Budget; SB 1066 (Lieu) permits the California Coastal Conservancy to address the impacts and potential impacts of climate change on coastal resources and to award grants to public agencies and nonprofit organizations for this purpose; SB 1201 (de Leon) requires the Los Angeles County Flood Control District to provide access to navigable waterways under the District’s control, including the Los Angeles River, where such access is suitable for education and recreational purposes and not inconsistent with flood control and water conservation uses; SB 1219 (Wolk) extends the “At-Store Recycling Program” for plastic bags to 1/1/20, and repeals a preemption prohibiting local governments form implementing separate plastic bag recycling programs, additional auditing or reporting requirements, or from imposing a fee on plastic bags; SB 1221 (Lieu) prohibits the use of dogs to pursue bears and bobcats except as permitted by a depredation permit or scientific research permit issued by the Department of Fish and Game or where the pursuit occurs by a dog that is guarding crops or livestock. For remaining hounding activities, allows, but does not require, the Fish and Game Commission to establish a hound tag program; SB 1249 (Wolk) permits the Department of Fish and Game (DFG) to enter into agreements with nonprofit conservation groups for the management and operation of DFG-managed lands, and requires purchase of an entry permit to access DFG-managed lands; SB 1360 (Simitian) removes the sunset on existing law that prohibits the release of sewage from large passenger vessels into the state’s marine waters and makes other related changes to statute; SB 1386 (Lowenthal) removes barriers to groundwater storage in the Central Basin, by clarifying existing law, concerning the management of groundwater; SB 1541 (La Malfa) deletes the 1/1/13 sunset date for the Forest Fire Prevention Exemption, which allows limited timber harvesting to decrease field continuity; AB 146 (Dickinson) increases the membership of the Air Resources Board from 11 to 12 and requires the additional member to be a board member from specified air districts in the Sacramento region (Sacramento, Placer, Yolo-Solano, Feather River, or El Dorado air district); AB 480 (Solorio) requires the Department of Resources, Recycling, and Recovery to accept the use of a captive insurer for up to 50% of the financial assurance required of an operator of a solid waste landfill; AB 523 (Valadao) makes projects for the production of ethanol that is derived from corn ineligible for funding from the Alternative and Renewable Fuel and Vehicle Technology Program; AB 549 (Carter) modifies the Electronic Waste Recycling Act of 2003 fraud prevention and audit functions within the Department of Resources Recycling and Recovery; AB 685 (Eng) establishes in law a state policy that all residents of the state have a right to clean, affordable, and accessible water for human consumption, and directs relevant state agencies to implement the policy; AB 737 (Buchanan) recreates the Boating and Waterways Commission, within the Natural Resources Agency, and adds that an “interest in boating and waterways matters” shall be considered amongst other factors in selecting members for the Parks and Recreation Commission; AB 837 (Nestande) establishes documentation requirements for recycled content claims for plastic food container products; AB 845 (Ma) prohibits a local ordinance, whether approved by a city, county, or voters, from restricting or limiting the importation of solid waste into a privately-owned facility based on the place of origin; AB 890 (Olsen) exempts from the California Environmental Quality Act, repair, maintenance, and minor alterations of existing roadways, provided the project is carried out by a city or county to improve public safety, does not cross a waterway, and involves negligible or no expansion of an existing use, and sunsets on 1/1/16; AB 1162 (Chesbro) increases penalties for poaching involving trophy hunting; AB 1422 (Perea) moves the Safe, Clean, and Reliable Drinking Water Supply Act, which would provide $11.14 billion in general obligation bonds (Water Bond), from the November 2012 general election to the November 2014 general election; AB 1459 (Huber) repeals the Atmospheric Acidity Protection Act of 1988, which established the Atmospheric Acidity Protection Program (the Program lasted from 1983 to 1993 and is no longer in existence); AB 1492 (Assembly Budget Committee) makes various changes related to Timber Harvest Plans and revenues to implement the budget actions as part of the 2012-13 Budget package; AB 1540 (Buchanan) designates the Department of Boating and Waterways as the lead agency in treating and controlling South American spongeplant (Limnobium laevigatum); AB 1566 (Wieckowski) permits the Office of the State Fire Marshal to regulate the Aboveground Petroleum Storage Act and makes conforming changes to the Act; AB 1585 (Eng) removes a sunset date in an existing provision of the California Tort Claims Act that, until 1/2/13, grants qualified immunity to public entities that operate flood control and water recharge facilities; AB 1620 (Wieckowski) exempts hazardous waste activities from Department of Toxic Substances Control treatment permits for exhaust gas, flue gas, or other vapor stream, regardless of the source; AB 1647 (Gordo) revises the hearing and enforcement process for waste tire facility and waste tire hauling violations; AB 1665 (Galgiani) specifies that the California Environmental Quality Act does not apply to the closure of a railroad grade crossing by order of the Public Utilities Commission (PUC) when the PUC has found the crossing to present a threat to public safety; AB 1701 (Wieckowski) provides for state certification of cities and counties to oversee the cleanup of underground storage tanks; AB 1784 (Monning) permits the Department of Fish and Game to authorize scientific research projects involving mountain lions; AB 1886 (Chesbro) increases the regulatory fees for aquaculture facilities and expands the duties of the aquaculture program coordinator position within the Department of Fish and Game; AB 1933 (Gordon) strengthens tracking provisions for beverage containers transported into California by temporarily increasing handling fees paid to certified recycling centers until 3/1/13, and makes related changes to the method for calculating handling fees; AB 1961 (Huffman) establishes the Coho Salmon Habitat Leading to Preservation Act which, in order to prevent the extinction of coho salmon, provides the Department of fish and Game an expedited mechanism to approve specific types of voluntary on-the-ground habitat restoration projects that benefit coho salmon; AB 1965 (Pan) provides that the Department of Water Resources issuance of floodplain maps are not subject to the review and approval of the Office of Administrative Law, as specified; AB 1966 (Ma) requires, for oil and gas production-related activities, the owner of mineral rights in real property to give the surface owner up to five days’ notice for non-surface-disrupting activities and 30 days’ notice for surface-disrupting activities prior to the first entry upon the property; AB 2082 (Atkins) permits the State Lands Commission to impose civil penalties on a person who places an unauthorized structure on state-owned land under the jurisdiction of the Commission; AB 2230 (Gatto) requires new car washes to reuse at least 60% of the on-site wash and rinse water unless recycled water is utilized for washing and rinsing; AB 2245 (Smyth) exempts from the California Environmental Quality Act, a project that consists of restriping of streets and highways for bicycle lanes in an urbanized area that is consistent with a city or county bicycle transportation plan; AB 2284 (Chesbro) permits a peace officer to stop a person with irrigation supplies on a rock or unpaved road on specified public or forestry land, and creates civil penalties for cultivating a controlled substance on public lands; AB 2363 (Chesbro) modifies requirements for quality testing of Dungeness crab meat, changes the criteria governing transfers of Dungeness crab vessel permits, and modifies law regulating Dungeness crab trap tag allocations; AB 2443 (Williams) imposes a Quagga and Zebra mussel infestation prevention fee on vessel registrations to fund a grant program for implementation and administration of dreissenid mussel infestation inspection and prevention programs; AB 2509 (Nielsen) exempts activities related to the immediate restoration of lands affected by a natural disaster or flood from the Surface Mining and Reclamation Act without being subject to existing regulatory restrictions on the amount of mineral materials that can be exported for commercial purposes; AB 2544 (Gordon) clarifies and expands the Department of Forestry and Fire Protection’s authority regarding land transactions for the purpose of qualifying for the Department of General Services’ review exemption; AB 2609 (Hueso) modifies requirements for election of officers of the Fish and Game Commission (FGC) and states legislative intent that certain qualifications be considered in making appointments to the FGC; AB 2620 (Achadjian) adds reporting requirements of local trustees of granted public trust lands, requires the State Lands Commission to increase its oversight of public trust lands, and requires the Commission to evaluate its current staffing needs through a workload analysis; and AB 2669 (Assembly Natural Resources Committee) permits the Secretary of the Natural Resources Agency to update the protocol for reviewing prospective application of certified regulatory programs to evaluate the consistency of specified regulatory programs.

Vetoed environmental legislation included: SB 505 (La Malfa) which would have permitted the Department of Fish and Game, if they are not able to meet statutory goals for production of hatchery fish through fish produced at state hatcheries, to contract with privately-owned hatcheries to procure up to 20% of the pounds of fish needed to meet the goals; SB 1148 (Pavley) which would have established a program for review, approval, and oversight of mitigation and conservation banks; SB 1480 (Corbett) which would have made it unlawful to trap bats and restricts the netting and exclusion of bats, would have created a special trapping license for persons offering trapping services to the public and establish conditions for use of that license, would have required publicly-used lands to be posted with “Danger! Keep Dogs Out! Lethal Traps Set for Wildlife,” and made clarifying changes; AB 467 (Eng) which would have modified the allocation of the Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection Act of 2006 (Proposition 84) funds collected from responsible parties for groundwater contamination cleanup; and AB 955 (Huber) which would have extended the sunset of the California Recreational Trails Committee to 1/1/28, and would have updated the Committee’s responsibilities.

HEALTH AND PUBLIC SOCIAL SERVICES

The major event in the area of health in 2012 was the U.S. Supreme Court’s 5-4 decision upholding the federal Affordable Care Act stating that its requirement that most Americans obtain insurance or pay a penalty was permitted by Congress’ power to levy taxes. The Court substantially limited the law’s expansion of Medicaid, the joint federal-state program that provides health care to disabled people. Seven justices agreed that Congress had exceeded its constitutional authority by coercing states into participating in the expansion by threatening them with the loss of existing federal payments. California’s passage of SB 900 (Alquist), of 2010, creating the California Health Benefit Exchange put California in the forefront of implementing the federal law of which most of its important provisions goes into effect in 2014.

Health and human services Senate legislation of importance chaptered into law included: SB 35 (Padilla) adds the California Health Benefit Exchange to the list of public assistance agencies required by the National Voter Registration Act of 1993 to provide voter registration opportunities; SB 98 (Senate Budget and Fiscal Review Committee) establishes, until 1/1/16, a new Board of Registered Nursing; SB 135 (Hernandez) establishes a new health facility licensing category of hospice facility; SB 255 (Pavley) clarifies that existing definition of mastectomy includes lumpectomy; SB 289 (Hernandez) allows the Department of Public Health to approve providers of clinical laboratory scientist programs for instruction in clinical laboratory technique; SB 345 (Wolk) conforms various provisions of the codes authorizing the Office of State Long-Term Care Ombudsman to federal statutes; SB 623 (Kehoe) requires the Office of Statewide health Planning and Development to extend, until 1/1/14, the health Workforce Pilot Project No. 171 to evaluate the safety, effectiveness, and acceptability of nurse practitioners, certified nurse midwives, and physician assistants in providing aspiration abortions; SB 659 (Negrete McLeod) adds tuberculosis screening results to the information that may be disclosed from a patient’s medical record to the Department of Public Health or local health departments operating countywide or regional immunization information and reminder systems; SB 804 (Corbett) requires health care districts to include, in an agreement transferring more than 50% of the health care district’s assets, the appraised fair market value of any asset transferred to a nonprofit corporation, as defined; SB 920 (Hernandez) increases direct grants to district-owned or operated hospitals known as nondesignated public hospitals (NDPHs) from the funds generated by the fee and provides that NDPHs would no longer be eligible for payments from the Low Income Health Plan out-of-network supplemental fund; SB 951 (Hernandez) establishes, in the Insurance Code, the Kaiser Foundation Health Plan Small Group Health Maintenance Organization 30 plan contract as California’s Essential Health Benefits benchmark plan; SB 1008 (Senate Budget and Fiscal Review Committee) makes various statutory changes to enact the dual demonstration project for coordinating health care between Medi-Cal and Medicare eligible clients of the state budget; SB 1009 (Senate Budget and Fiscal Review Committee) makes the various statutory changes necessary to implement the state-county realignment of mental health funding of the state budget; SB 1013 (Senate Budget and Fiscal Review Committee) makes the statutory changes necessary to implement the state-county realignment of child welfare services funding of the state budget; SB 1014 (Senate Budget and Fiscal Review Committee) eliminates the Department of Alcohol and Drug Programs and makes various changes necessary to implement the state-county realignment of alcohol and drug funding of the state budget; SB 1036 (Senate Budget and Fiscal Review Committee) makes statutory changes necessary to integrate the In-Home Supportive Services into managed care as part of the long-term services and supports integration in the duals demonstration project of the state budget; SB 1041 (Senate Budget and Fiscal Review Committee) makes statutory changes to human services programs, including the CalWORKs programs and In-Home Supportive Services program, of the state budget; SB 1051 (Liu) requires the Department of State Hospitals and developmental centers within the Department of Developmental Services to report suspected abuse to the designated protection and advocacy agency; SB 1081 (Fuller) authorizes nondesignated public hospitals which are hospitals owned by a local health care district, to operate a Low Income Health Program in a county that does not have a designated public hospital if the county has previously filed an application to operate a Low Income Health Program but has formally withdrawn the application; SB 1095 (Rubio) authorizes outpatient settings and ambulatory surgical centers to purchase drugs at wholesale for administering and dispensing to their patients; SB 1172 (Lieu) prohibits a mental health provider, as defined, from engaging in sexual orientation change efforts with a patient under 18 years of age; SB 1196 (Hernandez) requires a qualified entity to comply with all requirements established pursuant to federal law, as specified, and any rules, regulations, and guidelines adopted pursuant to the federal Patient Protection and Affordable Care Act, to ensure the privacy and security of claims data; SB 1228 (Alquist) establishes, until 1/1/20, within the Department of Public Health (DPH), the Small House Skilled Nursing Facilities Pilot Program to allow DPH to authorize the development and operation of up to 10 Small House Skilled Nursing Facilities; SB 1301 (Hernandez) permits a pharmacist to dispense up to a 90-day supply of a prescribed drug, excluding controlled substances, if the patient has completed an initial 30-day supply of the drug and other requirements are satisfied, as specified; SB 1329 (Simitian) expands the types of entities that can donate and dispense medication in the prescription drug depository and distribution program that provides donated medication to medically indigent patients; SB 1359 (Simitian) extends the date of repeal, from 1/1/13 to 1/1/18, for the income tax return checkoffs for the California Breast Cancer Research Fund and the California Cancer Research Fund; SB 1365 (Negrete McLeod) extends the civil liability immunity law to registered nurses trained in emergency services, and provides immunity to all listed professional rendering medical services during emergency ground or air transport; SB 1377 (Corbett) specifies that a protection and advocacy agency’s authority to access information and records of persons with disabilities, as otherwise specified, shall include access to specified unredacted records; SB 1381 (Pavley) removes references to “mental retardation” or “mentally retarded person” and replaces them with “intellectual disability” or “a person with an intellectual disability” to be consistent with federal law; SB 1391 (Liu) institutes a new process for the collection of CalFresh overissuance; SB 1407 (Leno) prohibits the disclosure of a dependent child’s mental health records or information based on the request of the child’s parent or guardian, unless the court orders otherwise; SB 1410 (Hernandez) modifies the external Independent Medical Review process established for individuals enrolled in health plan products licensed by the Department of Managed Health Care and insureds of health insurance policies licensed by the Department of Insurance by enhancing requirements of clinical reviewers, and requesting additional patient demographic information; SB 1436 (Lowenthal) makes permanent the existing protections that provide general immunity from civil damages in connection with the use of automated external defibrillators; SB 1465 (Yee) requires manufacturers of Asian rice-based noodles to place a date and time stamp on the packaging of the noodles indicating when the noodles first came out of hot holding, as specified, and the noodles are perishable; SB 1481 (Negrete McLeod) allows pharmacists to perform over-the-counter blood glucose, hemoglobin A1c (blood sugar), or cholesterol tests classified as waived under the federal Clinical Laboratory Improvement Amendments of 1988; SB 1521 (Liu) makes a number of amendments and federal conformity changes to the Welfare and Institutions Code relating to the provision of services for foster youth, including prohibiting reunification services to a parent or guardian who has been required to register as a sex offender by a court of law under the Adam Walsh Child Protection and Safety Act of 2006; SB 1522 (Leno) requires a state developmental center to report to local law enforcement all deaths, sexual assaults, assaults with a deadly weapon or force likely to produce great bodily injury, and other specified incidents; SB 1529 (Alquist) revises various provisions related to the screening, enrollment, disenrollment, suspensions, and other sanctions against fee-for-service providers and suppliers participating in the Medi-Cal Program to conform to requirements of the Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (Public Law 111-152) (collectively known as the Affordable Care Act); and SB 1538 (Simitian) requires health facilities at which mammography examinations are performed to include a specified notice in the summary of the written report that is sent to the patient in order to notify patients who have dense breast tissue that they may benefit from supplementary screening tests. Important Assembly legislation relating to health signed into law included: AB 137 (Portantino) requires every individual or group policy of health insurance to provide coverage for mammography, for screening or diagnostic purposes, upon the referral by a participating nurse practitioner, participating certified nurse-midwife, participating physician assistant, or participating physician, as specified, based on medical need regardless of age; AB 174 (Monning) establishes the California Health and Human Services Automation Fund and permits the Employment Development Department and the Franchise Tax Board to disclose certain information to the California Health Benefit Exchange; AB 377 (Solorio) permits a centralized hospital packaging pharmacy to prepare medications for administration only to inpatients within its own general acute care hospital and one or more general acute care hospitals if the hospitals are under common ownership and located within a 75-mile radius of each other; AB 389 (Mitchell) establishes requirements for providers of blood clotting products for home use (providers) to treat hemophilia and other bleeding disorders; AB 396 (Mitchell) requires the Department of Health Care Services to develop a process to allow counties and the Division of Juvenile Facilities of the Department of Corrections and Rehabilitation to obtain federal funds for inpatient hospital and psychiatric services provided to juvenile inmates; AB 439 (Skinner) establishes an affirmative defense against specified liability under the Confidentiality of Medical Information Act; AB 491 (Ma) permits two general acute care hospitals to provide cardiac catheterization services in a connected outpatient facility; AB 589 (Perea) establishes the Steven M. Thompson Medical School Scholarship Program to promote the education of medical doctors and doctors of osteopathy, as specified; AB 792 (Bonilla) establishes notification requirements about the availability of reduced-cost coverage available in the California Health Benefit Exchange and no-host coverage available in Medi-Cal to an individual filing a dissolution or nullity of marriage, divorce or separation, or petitioning for adoption or for an individual who ceases to be enrolled in health coverage through a health plan or health insurer; AB 969 (Atkins) prohibits the Department of Health Care Services from considering the cost of donated or discounted services provided to federally qualified health centers for care of the uninsured as a basis for reducing the rates paid for laboratory services in the Medi-Cal Program; AB 1083 (Monning) reforms California’s small group health insurance laws to enact the federal Patient Protection and Affordable Care Act, and eliminates preexisting condition requirements and establishes premium rating factors based only on age, family size, and geographic regions, except for grandfathered plans; AB 1217 (Fuentes) clarifies parentage rights of parties using assisted reproduction technology and specifies requirements for an assisted reproduction agreement for gestational carriers; AB 1359 (Skinner) amends the Welfare and Institutions Code to require county human services agencies to provide CalFresh benefits, in accordance with federal law, on an expedited basis to families deemed to be in need of immediate food assistance; AB 1453 (Monning) establishes the Kaiser Small Group HMO 30 plan as the essential health benefits benchmark plan for individual and small group health plan products licensed by the Department of Managed Health Care; AB 1467 (Assembly Budget Committee) makes various statutory changes to health-related programs that are necessary to implement provisions related to hospital savings, copays, and various other items included in the revised 2012-13 Budget; AB 1468 (Assembly Budget Committee) makes various revisions to the duals demonstration project (SB 1008), budget trailer bill revisions to AB 1467 hospital supplemental funds, and AB 1494 transfer of the Healthy Families Program to Medi-Cal budget trailer bill; AB 1470 (Assembly Budget Committee) eliminates the Department of Mental Health, establishes the Department of State Hospitals, increases county rate for commitment to state hospitals, and makes various other statutory changes necessary to implement provisions of the 2012-13 Budget; AB 1471 (Assembly Budget Committee) makes revisions to the human services budget trailer bill; AB 1472 (Assembly Budget Committee) makes various statutory changes to developmental services programs, including making significant new limitations on admissions criteria to the developmental centers that are necessary to implement provisions of the revised 2012-13 Budget; AB 1488 (Assembly Budget Committee) contains changes necessary to implement the elimination of the Department of Mental Health and the creation of the Department of State Hospitals, both of which were approved through 2012 budget trailer bills; AB 1489 (Assembly Budget Committee) reauthorizes the nursing home quality assurance fee, implements nursing home rate adjustments, and increases oversight of referrals to community-based services by nursing facilities; AB 1494 (Assembly Budget Committee) transitions children from the Healthy Families Program into Medi-Cal through a four-phased process, and requires various “readiness” factors before transition; AB 1526 (Monning) allows the Managed Risk Medical Insurance Board to further subsidize the premium contributions paid by individuals receiving coverage in the Major Risk Medical Insurance Program from 1/1/13 to 12/31/13; AB 1548 (Carter) stiffens financial penalties for corporate scofflaws violating the existing bar on the corporate practice of medicine through sham “rent-a-doc” business schemes that are all too common in the cash-intensive cosmetic medical procedures segment of patient care; AB 1569 (Allen) extends the sunset date in current law providing counties with the option to implement court-ordered assisted outpatient treatment programs for mentally ill persons from 1/1/13 to 1/1/17 (so-called Laura’s Law); AB 1616 (Gatto) regulates the production and sale of certain non-potentially hazardous foods prepared in a home kitchen; AB 1640 (Mitchell) requires payment of CalWORKs aid and CalFresh benefits to otherwise eligible pregnant mothers; AB 1710 (Yamada) modernizes the way nursery home administrator licensing fees are calculated; AB 1712 (Beall) enhances the California Fostering Connections to Success Act of 2010; AB 1731 (Block) establishes the Newborn Critical Congenital Heart Disease Screening Program and requires hospitals, beginning 7/1/13, to offer a pulse oximetry test for the identification of critical congenital heart disease to parents of newborns prior to discharge; AB 1751 (Pan) requires that county child welfare agencies and county probation departments be given access to specified child support information related to the noncustodial parents of children who are subject to juvenile court proceedings; AB 1761 (John A. Perez) prohibits an individual or entity from holding himself/herself/itself out as representing, constituting, or otherwise providing services on behalf of the California Health Benefit Exchange unless that individual or entity has a valid agreement with the Exchange to engage in those activities; AB 1793 (Yamada) adds long-term care facilities to the list of entities eligible to receive federal funding allocated for the prevention of, and response to, public health emergencies; AB 1803 (Mitchell) requires Medi-Cal benefits to include emergency services and care that are necessary for the treatment of an emergency medical condition, and medical care directly related to the emergency medical condition, for fee-for-service Medi-Cal beneficiaries; AB 1846 (Gordon) establishes a licensing framework at the Department of Insurance and the Department of Managed Health Care for Consumer Operated and Oriented Plans, which may be established and seek funding under the Patient Protection and Affordable Care Act; AB 1856 (Ammiano) requires foster care providers to receive instruction on cultural competency and sensitivity with respect to lesbian, gay, bisexual, and transgender youth in out-of-home care; AB 1869 (John A. Perez) adds federal veterans health benefits to the list of public programs that the Office of Patient Advocate will be required to include, commencing 1/1/13, in its efforts to provide outreach and education about health care coverage options; AB 1896 (Chesbro) exempts from California licensure all health care practitioners employed by a tribal health program as long as they are licensed in another state; AB 2009 (Galgiani) deletes and recasts existing law requiring the Department of Public Health to provide appropriate influenza (flu) vaccine to local governmental or private nonprofit agencies at no charge in order that the agencies may provide the vaccine, at a minimal cost, at accessible locations in the order of priority, first for all persons 60 years of age or older and then to any other high-risk groups, as specified; AB 2035 (Bradford) protects recipients of public social service benefits through the electronic benefits transfer system from a loss of benefits through the practice of skimming, as defined; AB 2066 (Monning) Establishes procedures to be followed in the event of revocation of a license to operate a residential care facility for the elderly and authorizes the Department of Social Services to require the licensee to prepare and submit a written plan for relocation and compliance with the terms and conditions of the approved plans; AB 2109 (Pan) requires, on and after 1/1/14, a separate form prescribed by the Department of Public Health to accompany a letter or affidavit to exempt a child from immunization requirements under existing law on the basis that an immunization is contrary to beliefs of the child’s parent or guardian; AB 2138 (Blumenfield) increases the fee charged to pay for health and disability insurance fraud investigations and prosecutions (fraud fee) from $0.10 to $0.20 per insured and increases the share of this fee revenue provided to district attorneys from 50% to 70%; AB 2253 (Pan) authorizes the electronic conveyance of clinical laboratory test results related to HIV antibodies, hepatitis, drug abuse, and specified test results that reveal a malignancy, if requested by the patient, and the health care professional deems electronic conveyance the most appropriate method of disclosure, and the professional has already discussed the results with the patient; AB 2348 (Mitchell) permits registered nurses (RN) to dispense and administer hormonal contraceptives under a standardized procedure, as specified, and allows RNs to dispense drugs and devices upon an order by a certified nurse-midwife, a nurse practitioner, or a physician assistant while functioning within specified clinic settings; AB 2356 (Skinner) authorizes a recipient of sperm donated by a sexually intimate partner of the recipient for reproductive use to waive a second or repeat testing of that donor if the recipient is informed of the donor testing requirements, as specified, and signs a written waiver; AB 2370 (Mansoor) enacts the Shriver “R-Word” Act which deletes in state law references to “mental retardation” or a “mentally retarded person” and instead replaces them with “intellectual disability” or “a person with an intellectual disability”; AB 2508 (Bonilla) prohibits a state agency authorized to contract for public benefits programs from contracting for services provided by a call center that directly serves applicants for, recipients of, or enrollees in those programs, and that the work will be performed solely by workers employed in California; and AB 2531 (Allen) requires the Department of State Hospitals to develop a list of items deemed contraband at every state hospital, authorizes each hospital to develop its own list, and requires each hospital to establish a contraband committee, comprised of hospital management and designated employees, to develop the list.

Vetoed health and human services legislation included: SB 336 (Lieu) which would have required every licensed general acute care hospital to assess the condition of its emergency department, using a crowding score, every four to eight hours; SB 359 (Hernandez) which would have authorized health care service plans to adjust payment to specific hospitals for prestabilization emergency services and care when a hospital exceeds and out-of-network emergency utilization rate of 50% or greater; SB 393 (Hernandez) which would have established the Patient-Centered Medical Home Act of 2012 to define a patient-centered medical home as a health care delivery model that meets specified criteria consistent with providing patient-centered, coordinated care; SB 411 (Price) which would have established the Home Care Services Act of 2012 requiring the Department of Social Services to license private agencies that provide non-medical home care services, and to certify home care aids; SB 764 (Steinberg) which would have promoted and encouraged the use of Tele-Health and Tele-Medicine applications for the diagnosis and treatment of autism spectrum disorder by the Department of Development Services and regional centers; SB 961 (Hernandez) which would have reformed California’s health insurance market for individual purchasers and implements provisions of the Patient Protection and Affordable Care Act prohibiting preexisting condition exclusions, requiring guaranteed issuance of products, establishing statewide open and special enrollment periods, and limiting premium rating factors to age, geography, and family size; SB 970 (de Leon) which would have permitted, upon consent of the applicant, information provided for the single state application for health subsidy programs to be used to initiate a simultaneous application for the CalWORKs or the CalFresh programs; SB 1050 (Alquist) which would have required the Department of Developmental Services to establish an autism telehealth task force to provide technical assistance and recommendations in the area of telehealth services for individuals with autism spectrum disorders; SB 1246 (Hernandez) which would have required the Department of Public Health, during its periodic inspections of hospitals, to review compliance with existing nurse staffing ratios and patient classification systems; SB 1318 (Wolk) which would have required clinics and licensed health care facilities to institute measures designed to maximize influenza vaccination rates and to prevent persons with privileges on the medical staff and onsite health care workers affiliated with the clinics or health care facilities from contracting, and transmitting to patients, the influenza virus; AB 217 (Carter) which would have restricted smoking in long-term health care facilities by only allowing smoking in a designated patient smoking area that is outdoors, in an area that reasonably prevents smoke from entering the facility or patient rooms, and that is not located in a patient’s room; AB 369 (Huffman) which would have prohibited health plans and health insurers that restrict medications for the treatment of pain from requiring a patient to try and fail on more than two pain medications before allowing the patient access to the pain medication, or generically equivalent drug, prescribed by the provider; AB 540 (Beall) which would have required the Department of Health Care Services, in consultation with the Department of Alcohol and Drug Programs, to provide reimbursement under the Medi-Cal program for alcohol and drug screening and brief intervention services for pregnant women or women of childbearing age; AB 1000 (Perea) which would have required a health plan contract or health insurance policy that provides coverage for prescription drugs and cancer chemotherapy treatment to limit enrollee out-of-pocket costs for prescribed, orally administered anticancer medications; AB 1223 (Assembly Veterans Affairs Committee) which would have repealed language creating a two-year pilot program to use the federal Public Assistance and Reporting Information System to identify veterans and their dependents or survivors who are enrolled in the Medi-Cal program and assists them in obtaining federal veterans’ health care benefits; AB 1278 (Hill) which would have extended the current ban on tobacco use in workplaces, including hospitals, to include the entire hospital campus; AB 1461 (Monning) which would have required the guaranteed issue of coverage and prohibits the use of preexisting conditions as a means of setting rates; AB 1513 (Allen) which would have revised the California Retail Food Code, which governs all aspects of retail food safety and sanitation in California, to include sanitation and safety requirements for indoor and outdoor playgrounds on the premises of retail food facilities; AB 1872 (Alejo) which would have treated family child day care homes the same as child care centers by requiring them to follow the U.S. Department of Agriculture’s Child and Adult Care Food Program as a condition of licensure; AB 2034 (Fuentes) which would have required the Department of Health Care Services to prepare a report on the coverage needs of the population served by the Genetically Handicapped Persons Program after implementation of the federal Patient Protection and Affordable Care Act; AB 2152 (Eng) which would have established notification requirements on preferred provider organizations licensed at the Department of Managed Health Care and the Department of Insurance when a provider contract is terminated that affects 800 or more covered lives; AB 2206 (Atkins) which would have permitted disenrollment, regardless of any lock-in, of a person who in any demonstration project established by the Department of Health Care Services for persons who are dually eligible for Medi-Cal and Medicare, becomes eligible for the Program for All-Inclusive Care for the Elderly (PACE) while enrolled in a managed care plan participating in the demonstration project and allows the person to enroll in a PACE plan; AB 2561 (Hernandez) which would have established the Certified Surgical Technologist Act and specifies educational and certification requirements, and specific patient care activities of surgical technologists; and AB 2623 (Allen) which would have required the Department of State Hospitals and the Department of Development Services, by 6/30/13, to develop a policy for arming state hospital peace officers under their jurisdiction while those officers are performing hospital security functions outside the secure area of the hospital.

TRANSPORTATION

I. California High-Speed Rail Update

As indicated in the 2011 Digest of Legislation Transportation overview, the last action concerned the California High-Speed Rail Authority (CHSRA) release of its revised business plan.

The Legislative Analyst’s Office published a report in December 2011 indicating that the incremental development path outlined by CHSRA may not be legal. According to the State Analyst, “Proposition 1A identifies certain requirements that must be met prior to requesting an appropriation of bond proceeds for construction. These include identifying for a corridor, or a usable segment thereof, all sources of committed funds, the anticipated time of receipt of those funds, and completing all project-level environmental clearances for that segment. Our review finds that the funding plan only identifies committed funding for the ICS (San Joaquin Valley segment), which is not a usable segment, and therefore does not meet the requirements of Proposition 1A. In addition, the CHSRA has not yet completed all environmental clearances for any usable segment and will not likely receive all of these approvals prior to the expected 2012 date of initiating construction.”

In January 2012, an independent peer review panel published a report recommending the Legislature not approve issuing $2.7 billion in bonds to fund the project. The panel of experts was created by state law to help safeguard the public’s interest. The report said that moving ahead on the high-speed rail project without credible sources of adequate funding represents a financial risk to California.

On 4/12/12, the CHSRA presented its revised 2012 plan to improve high-speed rail as follows:

A. Integrates Better with Local Transportation

1. High-Speed Rail (HSR) will integrate better with existing intercity and regional rail systems to:

a. Improve existing infrastructure right now to move trains faster and safer;

b. Integrate existing local rail services with high-speed rail; and

c. Invest in Southern California, Northern California and Bay Area local rail systems right now to make those systems safer, faster and ready to connect to high-speed train service.

B. Five Steps to Faster Construction

1. Step 1: Early Investments for immediate Statewide Benefit

Construction of dedicated HSR infrastructure begins in the Central Valley with the first segment of the Initial Operating Section (IOS). Service will launch in 2018, the current San Joaquin rail system will use this new infrastructure to cut travel time on the country’s fifth busiest Amtrak line and connect with other regional commuter systems.

The revised business plan also makes immediate improvements to local rail systems using existing Proposition 1A funding, future federal funds and other sources:

a. Electrifies the Bay Area’s Caltrain Corridor and improves key rail corridors in Southern California;

b. Links the San Joaquin, Altamont Commuter Express, Capitol Corridor and Caltrain systems; and

c. Closes the existing rail gap between Bakersfield and Palmdale.

2. Step 2: Initial High-Speed Rail Operations

The next step completes the 300-mile section from Merced to the San Fernando Valley. This service will operate without a subsidy, and will have potential to attract additional private investment for HSR system expansion. Service will launch in 2022.

3. Step 3: Electrified Bay to Basin System

The third step connects the Central Valley to San Jose, establishing a connection from the Bay Area to the Los Angeles basin. The upgraded Metrolink system will connect the San Fernando Valley and Los Angeles Union Station. Bay to Basin service launches in 2027.

4. Step 4: Phase 1 Blended System

In 2029, dedicated high-speed infrastructure will extend from the San Fernando Valley to Los Angeles Union Station, linking the upgraded Metrolink corridor to Anaheim and connecting to commuter and urban rail systems throughout the Los Angeles region. The entire length of Phase 1 from San Francisco to Los Angeles/Anaheim is 520 miles.

5. Step 5: Phase 2

Phase 2 extends high-speed rail to Sacramento and San Diego, completing the 800-mile statewide system.

C. Cost Reductions

Completion of the Phase 1 blended system will cost $68.4 billion in year-of-expenditure dollars, down from $98 billion. Reductions are primarily attributable to blended infrastructure and revised inflation projections. Six billion dollars has been identified to fund the first segment of the IOS, including $3.3 billion in federal funding and $2.7 billion in voter-approved Proposition 1A bond proceeds.

D. Ridership

Projections are based on average high speed rail fares that are 83% of assumed San Francisco-Los Angeles one-way airfare of $97. High ridership scenarios assume a fuel price of $6.11 in 2030, with low scenarios assuming a fuel price of $2.60 in 2030. No operating subsidy will be required under any scenario.

Projected ridership (millions)

E. Strong Job Creation

Construction of the first segment of the IOS is expected to generate 100,000 job-years of employment over five years.  Building the Phase 1 blended system – the Bay Area to Southern California – is estimated to create 990,000 job-years over 15 years, an average of 66,000 annually.

F. Environmental Benefits and Improved Quality of Life

• 320 billion fewer vehicle miles traveled over 40 years.
• 146 million hours in traffic saved annually.
• CO2 emissions reduced by three million tons annually.
• 237 million gallons of auto fuel will be saved annually.
• 35 million gallons of aviation fuel will be saved annually.

On 4/24/12, the Legislative Analyst recommended not to fund the business plan by stating the following:  “We find that HSRA (High Speed Rail Authority) has not provided sufficient detail and justification to the Legislature regarding its plan to build a high-speed train system.  Specifically, funding for the project remains highly speculative and important details have not been sorted out.  We recommend the Legislature not approve the Governor’s various budget proposals to provide additional funding for the project.  However, we recommend that some minimal funding be provided to continue planning efforts that are currently underway.  Alternatively, we recognize that the Legislature may choose to go forward with the project at this time.  If so, we recommend the Legislature take a series of steps to increase the chance of the project being successfully completed.”

AB 1497 (Senate Budget and Fiscal Review Committee), a trailer bill to the 2012-13 Budget, provided funding for routine CHSRA staffing and planning functions.  On 7/6/12, the Legislature passed SB 1029 (Senate Budget and Fiscal Review Committee) and the Governor signed it into law on July 18th.  The 2012 High-Speed Rail Trailer Bill which included appropriations for the funding, planning, design and right-of-way acquisition activities for the CHSRA.  Specifically, SB 1029:

• Appropriates $5.8 billion to begin construction of the IOS of the High-Speed Rail System in the Central Valley.  Of this amount, $3.2 billion of these funds are Federal Funds and $2.6 billion are Proposition 1A bond funding.
• Appropriates $1.1 billion of Proposition 1A bond funding for “Bookend” funding for improvements associated with the blended approach in the San Francisco Peninsula and the Los Angeles Basin. 
• Appropriates $819 million of Proposition 1A bond funding for “Connectivity” funding for improvements on existing rail regional and inter-city systems to improve connectivity to the High-Speed Rail System.
• Includes $252.5 million for design, planning, and right-of-way acquisition activities for the High-Speed Rail System.
• Includes provisions that join the funding for the IOS, the “Bookends” allocation, and the “Connectivity” funding contingent upon the appropriation of all three elements.
• Requires funding for the IOS be subject to oversight by the Public Works Board.
• Includes oversight extensive reporting language, including:
  • A semi-annual update report that will provide an update on project milestones, expenditures, risks, and schedule.  This report must be approved by the Secretary of Business, Transportation and Housing;
  • A periodically required management plan report regarding High-Speed Rail Authority (Authority) staffing and management approach.  This report must first be received by 10/1/12, prior to the award of a contract to commence construction and must be approved by the Secretary of Business, Transportation and Housing;
  • A risk management plan report, including quantification of the effect of identified risks in financial terms, an assessment of the reserves for claims, and the plans for integrating estimates for capital and support costs.  This report must first be received prior to the award of contracts and must be approved by the Secretary of Business, Transportation and Housing.
  • Expands the scope of the 2014 High-Speed Rail Business Plan by requiring an improved demand projects, cost-benefits, and operation and maintenance cost models.  This includes the submission of a study by the Union Internationale de Chemins de Fer to compare the costs of California’s High-Speed Rail System operations to other countries.  This report must be approved by the Secretary of Business, Transportation and Housing;
  • An analysis of the net impact of the High-Speed Rail Program on the state’s greenhouse gas emissions.  This report must be approved by the Secretary of Business, Transportation and Housing; and
  • A copy of the valid memorandum of understanding with regional transportation agencies relative to the Northern California Unified Services, within 10 days of the approval.
• Prohibits the use of funding in the San Francisco to San Jose corridor to expand the blended system to a dedicated four-track system.
• Requires the CHSRA to fill the positions of chief executive officer, risk manager, chief program manager, and chief financial officer prior to the award of construction contracts.

On 9/27/12, the California Transportation Commission approved the release of Proposition 1A funds of $40 million for Caltrain’s advanced signaling option and $61 million for the Central Subway’s extension of light rail.

On September 29th, the Federal Railroad Administration approved the proposed Merced-to-Fresno route after it ensured compliance with dozens of federal regulations, including the Endangered Species Act, U.S. Fish and Wildlife regulations and the National Historic Preservation Act.  On 10/3/12, high-speed rail opponents filed a motion in Sacramento superior court to order work on the train until the lawsuits are decided.  A hearing is to be held on November 16th by Sacramento Superior Court Judge Timothy Frowdy on the motion for a preliminary injunction.  The Court is combining three different lawsuits that challenge the CHSRA’s approval in May of an environmental impact report and selection of a route between Merced and Fresno.  The consolidated suits were filed by Madera County, which was joined by the farm bureau organizations in Madera and Merced counties, Preserve Our Heritage, the Chowchilla Water District, and the Fagundes family that farms in Madera and Merced counties.

Other legislation relating to the CHSRA enacted into law included:  AB 16 (Perea) encourages the CHSRA to acquire equipment manufactured in California; AB 41 (Hill) adds members of the CHSRA to those specified offices who must publicly identify a financial interest giving rise to a conflict of interest or potential conflict of interest, and recuse themselves accordingly, under the Political Reform Act; and AB 2181 (Galgiani) clarifies that the CHSRA must promptly pay certified small businesses engaged in the development, design, and construction of California’s high-speed rail system or pay a late payment penalty under the California Prompt Payment Act.

II. Proposition 33 of 2012

 Proposition 33, on the 2012 General Election ballot, allows an insurance company to offer a “continuous coverage” discount on automobile insurance policies to new customers who switch their coverage from another insurer.  Under this measure, continuous coverage generally means uninterrupted automobile insurance coverage with any insurer.  Consumers with a lapse in coverage would still be eligible for this discount, however, if the lapse was:

• Not more than 90 days in the past five years for any reason.
• For no more than 18 months in the last five years due to loss of employment resulting from layoff or furlough.
• Due to active military service.

Also, children residing with a parent could qualify for the discount based on their parent’s eligibility.  If an insurance company chose to provide such a discount, it would be provided on a proportional basis.  The discount would be based on the number of years in the immediate previous five years (rounded to a whole number) that the customer was insured.  For example, if a customer was able to demonstrate that he/she had coverage for three of the five previous years, the customer would receive 60% of the total continuous coverage discount.

The purpose of the measure is to allow consumers to shop for better insurance deals without losing your discount.

Other transportation legislation enacted into law includes:  SB 12 (Corbett) adds aerodynamic devices to the list of equipment that may project three inches (on each side) beyond the maximum allowable outside width of a vehicle or its load as long as the devices do not adversely impact the vehicle’s swept width and turning characteristics and its primary purpose is not for advertising; SB 415 (Price) allows the state to transfer to county transportation commissions or to a regional transportation planning agency, park-and-ride lots; SB 1225 (Padilla) authorizes, until 6/30/15, the Department of Transportation (Caltrans) to enter into an interagency transfer of services agreement with a joint powers agency for the administration of intercity passenger rail service; SB 1298 (Padilla) establishes conditions for the operation of autonomous vehicles upon public roadways; SB 1303 (Simitian) revises procedures that local jurisdictions must follow when installing and operating automated traffic enforcement systems (red light cameras); AB 45 (Hill) expands the provisions concerning under-age drinking to apply to drivers of charter-party carriers, with certain exemptions; AB 296 (Skinner) states the intent of the Legislature that the California Environmental Protection Agency develop a standard definition of the term “urban heat island effect,” and, upon completion of a definition, Caltrans develop a standard specification for sustainable or cool pavements that can be used to reduce the urban heat island effective index; AB 441 (Monning) requires the California Transportation Commission to attach to its guidelines for preparing regional transportation plans a summary of policies, practices, or projects that promote health that metropolitan planning organizations can use in regional transportation plans; AB 610 (Solorio) provides an additional 12 months for the collection of the 7,500 paid applications necessary for the Veterinary Medical Board to successfully sponsor a specialized license plate; AB 812 (Ma) authorizes Caltrans to establish specifications for the use of up to 40% reclaimed asphalt pavement for hot asphalt mixes on or before 1/1/14; AB 819 (Wieckowski) requires, by 6/30/13, Caltrans to establish procedures to permit exceptions to adopted designs and markings for bikeway construction and bicycle travel; AB 1047 (Jeffries) prohibits state and local law enforcement from conducting motorcycle-only checkpoints; AB 1452 (Hill) requires medical facilities, when discharging children under age eight or younger to provide additional child safety seat information to parents and guardians; AB 1458 (Buchanan) retains the California Transportation Commission status as an independent entity if the Governor’s Reorganization Plan No. 2 of 2012 is enacted; AB 1465 (Assembly Budget Committee) makes various statutory changes to transportation-related programs necessary to implement provisions of the 2012-13 Budget; AB 1536 (Miller) authorizes the use of voice-operated devices to send and receive text messages while driving; AB 1550 (Bonilla) increases the amount of fees for veterans’ specialized license plates and makes other changes for those license plates to benefit the County Veterans Service Officer Fund; AB 1595 (Cook) defines recreational off-highway vehicles and prescribes safety regulations for their use in California; AB 1658 (Gatto) establishes a California Legacy License Plate Program which recreates license plates that replicate the look of plates from the state’s past; AB 1671 (Huffman) extends the sunset date from 1/1/14 to 1/1/20 on the section of the law prohibiting Caltrans from withholding retention proceeds on progress payments to contractors on non-federally funded contracts; AB 1854 (Brownley) makes it illegal to rewire an airbag safety system to show that the airbag is functional when it is not; AB 2068 (Portantino) increases fees for distinctive legislative and congressional member license plates and directs the additional revenue into the California Environment License Plate Fund; AB 2104 (Gordon) permits a public transportation agency overseeing parking facilities to enforce parking regulations and remove vehicles in accordance with existing laws and regulations; AB 2189 (Cedillo) authorizes an alternative procedure for renting vehicles that allows vehicle rental agencies to verify driver’s license information electronically from remote locations via information kiosks, and permits a driver’s license applicant who is not eligible for a Social Security account number , but provides satisfactory proof of legal presence in the U.S., to be eligible to receive an original driver’s license if he/she meets all the other qualifications for licensure; AB 2243 (Knight) provides qualified immunity from liability to a space flight entity for injuries to a space flight participant, so long as a written warning statement is provided to the participant and the injury was not the result of the space flight entity’s gross negligence or intentional acts, as specified; AB 2405 (Blumenfield) exempts qualifying clean alternative fuel vehicles from toll charges imposed on single-occupant vehicles in high-occupancy toll lanes, unless prohibited by federal law; AB 2477 (Garrick) permits video event recording devices to be placed on the upper center portion of a commercial vehicle’s windshield; AB 2489 (Hall) prohibits a person from altering or covering a license plate in order to avoid license plate recognition either visually or by an electronic device; AB 2498 (Gordon) permits Caltrans to use an alternative procurement method referred to as Construction Manager/General Contractor for up to four projects; AB 2502 (Blumenfield) adds, as of 7/1/13, a required disclosure regarding charges that must be itemized with respect to an automobile conditional sales contract to show any charge for an electric vehicle charging station; AB 2659 (Blumenfield) permits the Department of Motor Vehicles to waive the driving skills test required to obtain a commercial driver’s license for a person with a U.S. Armed Forces military driver’s license in compliance with federal regulations; and AB 2680 (Solorio) permits a public agency to own and operate a law enforcement vehicle on which tinting or glazing materials cover the front side windows.

Vetoed transportation legislation of note included:  SB 878 (DeSaulnier) which would have created the Office of the Transportation Inspector General; SB 1117 (DeSaulnier) which would have designated Caltrans as the state rail transportation authority to prepare, maintain, coordinate, and administer the State Rail Plan; SB 1310 (Simitian) which would have increased the base fine for violating the use of a handheld cellular phone while driving; SB 1464 (Lowenthal) which would have enacted the Three Feet for Safety Act setting requirements for safe passing of bicyclists by motor vehicles; AB 294 (Portantino) which would have permitted Caltrans to enter into design-sequencing contracts; AB 1657 (Wieckowski) which would have imposed a $1 assessment upon every conviction for a violation of any rule of the road and directs the funds, upon appropriation of the Legislature, to the University of California’s spinal cord injury research programs; and AB 2366 (Eng) which would have increased the cost of a fix-it ticket issued on a parking ticket from $10 to $25.

MILITARY AND VETERANS

With the withdrawal of combat troops from Iraq and the winding down of the conflict in Afghanistan, many soldiers will be leaving the military and will be looking for educational and job opportunities, as well as finding housing.  Also, those who have suffered physical wounds and mental trauma will need medical assistance and services.  California has always been in the forefront in extending assistance to our veterans starting with the CalVet program in the 1920s.

Legislation showing the state’s appreciation and commitment to veterans enacted into law included:  SB 663 (Correa) requires the Department of Veterans Affairs (CDVA) to include in its strategic plan a review of goods and objectives relating to homeless veterans; SB 807 (Correa) specifies that the state active duty force consists of service members in active state service when ordered by the Governor; SB 1184 (Corbett) protects senior veterans from insurance agents who mislead them about the veterans and attendance benefits program; SB 1198 (Calderon) requires CDVA to publicize information relating to the federal and state benefits that are available to homeless veterans; SB 1258 (Wolk) requires CDVA to establish a system for monitoring outcomes for veterans including employment and employment-related earnings, incidence of suicide, higher education, and involvement with the child welfare system and with the criminal justice system; SB 1287 (Harman) requires the Department of Fish and Game (DFG) to issue a reduced fee sport fishing license to active military personnel who are recovering service members; SB 1288 (Harman) requires DFG to issue a reduced hunting fee license to military personnel who are recovery service members; SB 1405 (de Leon) permits accountants to have their licenses placed on a military inactive status while engaged in active duty in the National Guard or Armed Forces; SB 1413 (Negrete McLeod) allows the Adjutant General to establish support programs, acquire facilities and solicit and accept donations for the benefit of military personnel and their families; SB 1563 (Cannella) specifies that veterans who have completed acceptable training in the U.S. Armed Forces as military law enforcement officers shall be allowed 15 additional points for any entrance examination for a peace officer position; AB 342 (Atkins) designates the Governor’s Office of Planning and Research to serve as the state liaison with the U.S. Department of Defense relative to base closures; AB 1224 (Assembly Veterans Affairs Committee) permits the CDVA to adopt implementing regulations necessary to allow financing of cooperative dwelling units; AB 1225 (Assembly Veterans Affairs Committee) establishes requirements for the sale, trade or transfer of all or any part of a veteran’s commemorative property, if certain conditions are met; AB 1505 (Pan) reinstates state veteran benefits that were denied solely on the basis of sexual orientation when the federal government first reinstates those benefits; AB 1550 (Bonilla) increases the fees required to issue, renew, and personalize specialized veterans’ license plates to fund veterans’ organizations; AB 1588 (Atkins) requires boards under the Department of Consumer Affairs to waive professional license renewal fees, continuing education requirements, and other renewal requirements as determined by the licensing board, for any licensee or registrant called to active duty; AB 1652 (Olsen) permits the building and maintenance of a memorial in the Capitol Memorial Grove to honor California American Portuguese veterans; AB 1805 (Huffman) establishes new voting procedures for military and overseas voters, as defined, to comply with the federal Uniformed and Overseas Citizens Absentee Voting Act and implement the policies of that Act and the Uniform Military and Overseas Voters Act adopted by the National Conference of Commissioners on Uniform State Laws; AB 1806 (Cook) adds requirements for the county public administrator to make specified reports about unclaimed remains and for CalVet to keep a list of unclaimed remains and reduces the time before which unclaimed remains may be released to a veterans’ remains organization; AB 1807 (Cook) clarifies the law regarding modification of child custody and visitation orders for active-duty military personnel; AB 1823 (Yamada) makes changes in the content of the statement for fees and changes that is presented to residents of a veteran’s home in order that they are in clear terms; AB 1869 (John A. Perez) adds federal veterans health benefits to the list of public programs that the Office of Patient Advocate will be required to include, commencing 1/1/13, in its efforts to provide outreach and education about health care coverage options; AB 1904 (Block) requires a board under the Department of Consumer Affairs to issue an expedited license to the spouse or domestic partner of a military member on active duty; AB 1930 (Gorell) requires the State Personnel Board to notify CalVet when any promotion examination for the establishment of an eligible list is announced or advertised; AB 2133 (Blumenfield) permits a former member of the U.S. Armed Forces to his/her four years of priority registration enrollment at the California State University and the California Community Colleges within 15 years of leaving active duty; AB 2198 (Nielsen) modifies CalVet reporting requirements in the annual county veterans service officers report to ensure these programs are maximizing support to veterans; AB 2202 (Block) extends, until 1/1/14, the sunset date regarding the reconvening of a task force to review and make recommendations regarding the Interstate Compact on Educational Opportunity for Military Children; AB 2371 (Butler) provides restorative relief to a veteran defendant who acquires a criminal record due to a mental disorder stemming from military service; AB 2462 (Block) requires the Chancellor of the California Community Colleges to determine which courses should be awarded credit for prior military academic experience using standards of the American Council on Education; AB 2475 (Assembly Veterans Affairs Committee) extends the period during which mortgage interest rates are capped for military servicemembers; AB 2478 (Hayashi) extends resident classification for up to one year to California Community College students who were stationed in California on active duty for more than one year immediately prior to being discharged; AB 2490 (Butler) requires the Department of Corrections and Rehabilitation to develop policies to assist veteran inmates in pursuing veteran’s benefits; AB 2548 (Mitchell) specifies that a member of the seven-member California Veterans Board must have experience in the issues of female veterans, which may include, but are not limited to, combat related disorders, sexual trauma, and homelessness; and AB 2659 (Blumenfield) permits licensed drivers of military commercial vehicles to qualify for a California commercial driver’s license without additional driving tests.

The Governor vetoed AB 2611 (Butler) which would have permitted superior courts to implement veterans treatment courts.

REVENUE AND TAXATION

In 2012, major activity concerning taxation was voted on at the General Election through the following propositions:

• Proposition 30 PASSED - Increases the sales tax rate by one-quarter for every dollar for four years.  Increases personal income tax rates on upper-income taxpayers for seven years.  Raises about $6 billion in additional annual state revenues from 2012-13 through 2016-17, with smaller amounts in 2011-12, 2017-18, and 2018-19.  If approved by the voters, additional revenues would be available to help balance the state budget through 2018-19, and if rejected the budget would be reduced by $6 billion.  Lastly, it guarantees local governments receive tax revenues annually to fund program responsibilities transferred to them by the state in 2011.  (The Governor’s proposal)
• Proposition 38 FAILED - Raises personal income taxes on most California taxpayers from 2013 through 2024.  The revenues raised by this tax would be spent on public schools, child care and preschool programs, and state debt payments.  It prohibits the state from directing new funds.
• Proposition 39 PASSED - Requires multistate businesses to calculate their California income tax liability based on the percentage of their sales in California.  Repeals existing law giving multistate businesses an option to choose a tax liability formula that provides favorable tax treatment for businesses with property and payroll outside California.  Dedicates $550 million annually for five years from anticipated increase in revenue for the purpose of funding projects that create energy efficiency and clean energy jobs in California.

Taxation legislation enacted into law of note includes:  SB 803 (DeSaulnier) creates an income tax checkoff whereby taxpayers can make donations for the California Youth Leadership Project for a five-year period when an existing checkoff sunsets or when there is room on the tax form; SB 874 (Hancock) permits school districts to exempt disabled persons from special taxes; SB 1015 (Senate Budget and Fiscal Review Committee) enacts the tax compliance 2012 Budget Trailer Bill; SB 1197 (Calderon) and AB 2026 (Fuentes) extend the operation of the California Motion Picture Tax Credit (Film Tax Credit) for two years, thereby authorizing the allocation of an additional $100 million annually in tax credits to qualified productions from 7/1/15 until 7/1/17; SB 1243 (Lowenthal) extends the sunset date for the current sales tax exemption for specified fuel and petroleum products (e.g., bunder fuel) sold to water common carriers; SB 1257 (Hernandez) exempts from utility user taxes, the consumption of compressed natural gas and electricity as a motor vehicle fuel for public transit vehicles by local agencies or public transit operators; SB 1544 (Hernandez) affords disaster loss treatment to taxpayers in the Counties of Los Angeles and San Bernardino affected by severe winds in 2011; SB 1548 (Wyland) extends, from 1/1/13 to 1/1/18, the sunset date for those program provisions that allow the Board of Equalization to accept an offer in compromise for businesses that are open and active; SB 1571 (DeSaulnier) creates an income tax checkoff for School Supplies for Homeless Children for a five-year period, when an existing checkoff sunsets or when there is room on the tax form; AB 233 (Hall) adds the California YMCA Youth and Government Fund checkoff to the personal income tax form upon the removal of another tax checkoff from the form or as soon as space is available; AB 318 (Skinner) conforms California’s income tax laws to the federal income tax law regarding the definition of a legal holiday for tax purposes, and imposes a $2,000 penalty on certain foreign and domestic limited liability corporations for failure to file a tax return, as specified; AB 2618 (Ma) provides that a person making a sale at auction or a dismantler licensed under the Vehicle Code that sells specified vehicles is presumed to be making sales at retail (and not for resale) under the Sales and Use Tax Law; AB 2643 (Ma) clarifies the statutes related to property tax collection and overpayment, penalty relief, and gives county treasurers a longer period of time to calculate the pool rate and report it to the State Controller; AB 2686 (Assembly Revenue and Taxation Committee) re-enacts prior law authorizing the Taxpayers’ Rights Advocate to relieve taxpayers from penalties, fees, additions to tax, and interest attributable to the Franchise Tax Board’s erroneous actions, as specified, until 1/1/16; and AB 2688 (Assembly Revenue and Taxation Committee) changes thresholds for property taxes on air taxis and alters timing for filing an election for bad debt deductions or refunds for sales taxes.

Vetoed taxation legislation included:  AB 1963 (Huber) which would have required the Legislative Analyst’s Office to submit a report to the Legislature assessing potential changes to the state income tax and sales and use tax laws to reduce revenue volatility, diversify revenue sources, and improve California’s economic climate; and AB 2638 (Eng) which would have required the Board of Equalization and the Franchise Tax Board to submit a new report to the Legislature and the Department of Finance, on or before December 1 of each calendar year, on the tax effect of tax expenditures with an annual revenue loss of more than $5 million.

ENERGY AND UTILITIES

Energy and utility legislation of importance enacted into law included:  SB 379 (Fuller) preserves federal funding coming into rural California and enhances the availability of advanced broadband services in rural areas of the state; SB 594 (Wolk) allows an electric utility customer to aggregate their electricity usage on multiple meters for purposes of establishing the maximum project size for renewable generation and fuel cells for purposes of net energy metering; SB 1018 (Senate Budget and Fiscal Review Committee) makes various statutory changes to energy programs necessary to implement the 2012 Budget; SB 1122 (Rubio) requires statewide procurement of up to 250 megawatts of renewable energy from small biomass or biogas technologies that utilize low em ission technologies; SB 1161 (Padilla) requires authorization by statute, or express delegation by federal law expressly authorized by statute, for the Public Utilities Commission (PUC) or any other state department, agency, commission or political subdivision of the state to regulate Voice over Internet Protocol (VoIP) or Internet Protocol-enacted (IP) service providers; SB 1222 (Leno) limits the fees that cities and counties charge for permits related to the installation of rooftop solar energy systems; SB 1268 (Pavley) extends the operation of the existing Energy Conservation Assistance Account at the California Energy Commission (CEC) that assists local governments from 2013 to 2018, and expands the scope of the use of the funds to include reducing peak electricity demand; SB 1332 (Negrete McLeod) requires the governing board of a local publicly owned utility (POU) to consider avoided costs of distribution and transmission upgrades, the offset of peak demand and all current and anticipated environmental and greenhouse gas reduction compliance costs, and requires that the specified POUs adopt a Feed-in-Tariff by 7/1/13;  SB 1409 (Pavley) requires state agencies, at the direction of the Office of Planning and Research, to consider the Department of Defense’s energy security and related military mission goals in addressing state energy and environmental policy matters; SB 1533 (Padilla) extends, from 1/1/13 to 1/1/16, the requirement for the Attorney General to represent the Department of Finance and 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; AB 578 (Hill) requires the PUC to formally respond to certain safety recommendations concerning gas pipeline safety made by the federal national Transportation Safety Board and federal Pipeline and Hazardous Materials Safety Administration; AB 861 (Hill) increases penalty levels for failure to comply with utility laws and requires the PUC to determine rate recovery by an electrical corporation or gas corporation that is a public utility for earnings or stock-based price-based incentive pay for its employees or directors; AB 1073 (Fuentes) specifies that the CEC may retain jurisdiction over the siting of specific solar thermal powerplants that seek to convert to solar photovoltaic technology, even if the siting of that powerplant has been challenged in court, so long as that challenge has been dismissed by the California Supreme Court; AB 1456 (Hill) requires the PUC to perform an analysis of benchmark data and adopt safety performance metrics for pipeline safety, and permits the PUC to implement are ate incentive program related to safety that contains penalties using safety performance metrics; AB 1650 (Portantino) requires the PUC to establish standards for disaster and emergency preparedness plans within an existing procedure; AB 1900 (Gatto) clarifies existing law with respect to the injection of biomethane into common carrier pipelines; AB 2196 (Chesbro) clarifies the definition of an eligible renewable electrical generation facility to include a facility that generates electricity utilizing biomethane delivered through a common carrier pipeline if the source and delivery of the fuel can be verified by the CEC; AB 2201 (Bradford) raises the civil penalties associated with violations of the Elder California Pipeline Safety Act of 1981; AB 2514 (Bradford) requires the PUC to complete a study on the cost of net energy metering to ratepayers; AB 2516 (Bradford) expands California’s Independent System Operator Management requirements; AB 2559 (Buchanan) provides the state’s gas utilities with expedited ministerial permitting for pipeline inspection, remediation, removal and replacement work undertaken pursuant to pipeline integrity management; AB 2564 (Ma) expands the application of an existing CEQA exemption for pipeline projects less than one mile in length; and AB 2584 (Bradford) requires every electrical corporation to fully cooperate with the PUC in its investigations and provide the PUC, upon its request, with access to specified information and retain documentation from an accident for five years, or a shorter period of time as authorized by the PUC.

Vetoed legislation included:  SB 1160 (Padilla) which would have prohibited a governmental entity, and a provider of communication service acting at the request of a governmental entity, from intentionally interrupting communication service for the purpose of protecting public safety or preventing use of the service for an illegal purpose except pursuant to a court order based on a finding of probable cause; SB 1537 (Kehoe) which would have prohibited the PUC from adopting any new charges that only apply to customers with a net metering tariff until 1/1/14; AB 796 (Blumenfield) which would have required the California Alternative Energy and Advanced Transportation Financing Authority to establish the Clean Energy Economy and Jobs Incentive Program to provide financial assistance to eligible California-based entities for the manufacturing of specified clean energy technologies until 1/1/18; AB 976 (Hill) which would have prohibited consultants advising Community Choice Aggregators (CCA) from bidding on CCA contracts; and AB 2551 (Hueso) which would have permitted a legislative body of a city or county to establish an infrastructure financing district (IFD) in a renewable energy infrastructure area, as defined, and exempts the creation of the IFD from voter-approval requirements.

GENERAL GOVERNMENT

One of the major pieces of legislation enacted into law was SB 1186, authored by Senators Steinberg and Dutton, which curbs frivolous lawsuits filed under the Americans with Disabilities Act (ADA).  In recent year, there has been an increase in small businesses being sued for their noncompliance of federal and state provisions of the ADA which has led many businesses to settle out of court and have been put in jeopardy of losing their business.  SB 1186 curbs abuses of this type of litigation and develops additional tools for businesses to ensure these establishments meet the requirements of the ADA.  Major provisions include the following:

1. If a business is in a location that was completed after 1/1/08 or any business in California that has received a certified access specialist (CASp) inspection, that business will have 68 days to fix that violation and their statutory damages may be reduced from $4,000 to $1,000 – a 75% reduction.
2. Small businesses with 28 or fewer employees that have not had a CASp inspection will have 30 days to fix a violation and can see their statutory damages reduced from $4,000 to $2,000 – a 50% reduction.
3. Ends so-called “demand for money” letters from attorneys.  Letters can still be sent to a business alerting them of a potential violation or infraction, but that letter cannot include a “demand for money.”  Attorneys sending those letters will be required to also send a copy of the letter to the California State Bar who will examine the letter to make sure it meets the requirements of the law.
4. Attorneys will also be required to send a copy of letters sent to businesses to the California Commission on Disabilities.  They will be required to compile a Top 10 list of violations to be posted on their Web site by 7/1/13, and also a list of those attorneys and law firms who are filing the bulk of the lawsuits.
5. Provides an avenue for local cities and counties to expand the CASp program in their communities, to help bring local businesses into ADA compliance and develop tools to help educate the business community in expanding ADA access.
6. Adds $1 to business license fees and similar instruments to pay for more local CASp, reduce costs of CASp testing and certification, and strengthen the CASp program.

Another issue that was attempted to be resolved dealt with how to provide local economic growth in light of redevelopment being repealed by the 2011 budgetary actions.  There were six bills that would have provided ways to accomplish growth.  However, they were vetoed by the Governor fearing that the new tools being proposed would distract cities from the burdensome process of winding down their former redevelopment agencies.  The following are the six bills:

1. SB 214 (Wolk) would have eliminated the voter approval requirement for a city or county to create an infrastructure financing district (IFD) and would have expanded the types of projects that could be financed by an IFD.
2. SB 1030 (Senate Budget and Fiscal Review Committee) would have removed a provision of AB 1484 (Assembly Budget Committee, Chapter 26, Statutes of 2012), the Redevelopment Budget Trailer Bill, related to “excess Educational Revenue Augmentation Fund (ERAF),” to ensure that the state continues to fully fund the replacement of local revenues under the vehicle license fee swap and the 2004 Triple-Flip in the three excess ERAF counties.
3. SB 1156 (Steinberg) would have allowed local governments to establish a Sustainable Communities Investment Authority.
4. AB 345 (Torres) would have reformed how redevelopment agencies spend their Low and Moderate Income Housing funds.
5. AB 2144 (John A. Perez) would have expanded the types of facilities and projects that can be financed under the IFD law, reduced the voter threshold for the creation of an IFD and the issuance of bonds for the IFD, authorized an IFD to utilize the powers provided under the Polanco Redevelopment Act, and renamed IFD law the Infrastructure and Revitalization Financing District Act.
6. AB 2551 (Hueso) would have permitted cities and counties to establish infrastructure financing districts and use tax increment revenues derived from project areas to finance renewable energy infrastructure or renewable energy upgrades.

Other general government legislation of importance enacted into law includes:  SB 71 (Senate Budget and Fiscal Review Committee) eliminated more than 200 reporting requirements for state agencies and departments and eliminates six dormant state boards and committees; SB 323 (Vargas) enacts, as of 1/1/14, the California Revised Uniform Limited Liability Company Act in place of the Beverly-Killea Limited Liability Company Act; SB 592 Harman) modifies procedures in the state’s dairy cattle supply lien law to provide more certainty to a dairy creditor on obtaining a lien on the proceeds of a dairy’s milk products, for contracts entered into after 1/1/13; SB 778 (Padilla) permits an authorized alcohol beverage licensee, as defined, to offer the chance to win prizes via a consumer contest, sweepstakes or by sponsoring a sweepstakes, subject to specified conditions; SB 807 (Correa) specifies that the state active duty force consists of service members in active state service when ordered by the Governor, specifies and revises conditions for state active duty for servicemembers, as provided, and authorizes the Adjutant General to promulgate regulations in conformity with these provisions; SB 829 (Rubio) prohibits the use of state funds for any charter city construction projects if the charter city has banned the consideration of the use of project labor agreements; SB 921 (Lieu) creates a statutory requirement that there be a California Military Department Inspector General and specifies many of his/her responsibilities; SB 954 (Liu) permits the State Controller’s Office to offset unclaimed property held by the state against debts owed to cities and counties; SB 991 (Runner) permits a county supervisor to solemnize a marriage ceremony while that person holds office; SB 1003 (Yee) amends local government open meeting laws to authorize legal action against a legislative body to determine if certain ongoing or past actions of that body within the last nine months have violated those laws; SB 1006 (Senate Budget and Fiscal Review Committee) makes various statutory changes related to various state administration reform proposals put forth by the Administration, including reporting requirements related to the Financial Information System for California (FI$Cal) information technology project and various other general government and state administration-related provisions necessary to implement the revised 2012-13 Budget; SB 1033 (Senate Budget and Fiscal Review Committee) makes various statutory changes necessary to help the state manage cash resources in 2012-13; SB 1045 (Emmerson) establishes civil liability upon junk dealers and recyclers for the possession of specified metal fixtures owned by a public agency; SB 1064 (de Leon) provides family and custodial protections for children of immigrant families; SB 1075 (Senate Rules Committee) adopts the Uniform Electronic Legal Material Act to ensure the authenticity of California legal material made available to the public online; SB 1099 (Wright) revises the dates in which a regulation or order of appeal becomes effective and requires the Office of Administrative Law to post certain information on its Web site for a specified period of time; SB 1140 (Leno) provides that specified religious individuals authorized to perform civil marriages are not required to solemnize a marriage that is contrary to the tents of their faith; SB 1162 (Runner) permits an animal control or humane officer to administer a tranquilizer when under the direct or indirect supervision of, and trained by, a veterinarian; SB 1170 (Leno) expands consumer protections governing the sale of insurance to any person 65 years of age or older, and adds specific protections for senior veterans; SB 1184 (Corbett) prohibits an insurance agent from providing assistance to a senior in obtaining veterans benefits through government programs, unless the agent maintains procedural safeguards designed to ensure that the agent or broker transacting insurance has no direct financial incentive to refer the policyholder or purchaser to any government benefits program; SB 1206 (Walters) limits passport application for children during dissolution proceedings and allows a court to order the freezing of certain assets when it issues a protective custody warrant for a child; SB 1241 (Kehoe) requires cities and counties to address fire risk for state responsibility areas and very high fire hazard severity zones in general plan updates and subdivision approvals, and requires the Office of Planning and Research to update the California Environmental Quality Act Guidelines and the General Plan Guidelines, as specified; SB 1327 (Cannella) requires the Governor to create a “one-stop-shop” Internet Web site to provide individuals with essential information (e.g. permitting, licensing and regulatory) for establishing a business in California; SB 1342 (Emmerson) increases, from $3 to $10, the maximum fee that a county can place on certain recorded real estate documents to fund real estate fraud prevention and enforcement; SB 1407 (Leno) prohibits the disclosure of a dependent child’s mental health records or information based on the request of the child’s parent or guardian, unless the court orders otherwise; SB 1409 (Pavley) enhances the duties of the State Office of Planning and Research concerning issues relating to the U.S. Department of Defense’s energy security and military mission goals; SB 1504 (Kehoe) specifies that interest on a claim approved by the California Victim Compensation and Government Claims Board for which funds are appropriated by the Legislature shall not begin to accrue until 180 days after the effective date of the chaptered appropriation, and specifies that interest on a judgment or settlement against the state, as approved by the Department of Justice and the Department of Finance shall not begin to accrue until 180 days from the date of the final judgment or settlement; SB 1510 (Wrights) adds additional conditions under which a certified small business or microbusiness is deemed to perform a commercially useful function, which is required in state contracts in which small business bidding preferences are applied; AB 53 (Solorio) requires major insurers to report data to the Insurance Commissioner relating to their contracting with women, minority, and disabled-veteran owned businesses; AB 342 (Atkins) requires the Governor’s Office of Planning and Research (OPR) to serve as the state’s liaison with the U.S. Department of Defense in order to facilitate coordination regarding issues that are of significant interest to the Department, particularly with regard to any proposed federal Base Realignment and Closure actions, and requires OPR to perform specifies duties in this capacity; AB 517 (Hill) ratifies the tribal-state gaming compact entered into between the State of California and the Federated Indians of Graton Rancheria, executed on 3/27/12; AB 744 (John A. Perez) requires the Department of General Services to identify and provide policy guidance for state agency management of intellectual property developed by state employees or with state funds; AB 787 (Chesbro) ratifies the amendment to the tribal-state gaming compact entered into between the State of California and the Coyote Valley Band of Pomo Indians, executed on 7/25/12; AB 845 (Ma) prohibits a local ordinance, whether approved by a city, county, or voters, from restricting or limiting the importation of solid waste into a privately-owned facility based on the place of origin; AB 929 (Wieckowski) increases the amounts of property exemptions for motor vehicles, jewelry, and tools of the trade that a bankruptcy debtor may elect to exempt from enforcement of a money judgment; AB 999 (Yamada) modifies the long-term care insurance rate development process; AB 1253 (Davis) permits a county board of supervisors to revise a recommended budget before its final adoption; AB 1337 (Alejo) creates a procedure to establish paternity when one parent has died; AB 1345 (Lara) expands the State Controller’s oversight over local government auditing practices; AB 1406 (Assembly Judiciary Committee) provides a specified timeframe for serving mandatory disclosure declarations in a dissolution proceeding; AB 1447 (Feuer) establishes basic consumer protections for vehicles bought or leased from “buy-here-pay-here” automobile dealers; AB 1508 (Carter) revised the exemption on the purchase of nonferrous materials with a value of $20 or less from certain payment restrictions by requiring that the majority of the transaction be for the redemption of beverage containers and prohibiting the purchase of materials made of copper or copper alloys, as specified; AB 1522 (Atkins) limits awards of attorney’s fees, spousal support, and community property interest in retirement and pension benefits to individuals convicted of violent sexual felonies against their spouses; AB 1534 (Wieckowski) requires buy-here-pay-here dealers to affix a label displaying the reasonable market value of the vehicle on every used car for sale; AB 1581 (Wieckowski) prohibits a floral business from misrepresenting the geographic location of its business, as specified; AB 1583 (Hernandez) prohibits junk dealers and recyclers from purchasing or receiving bulk merchandise pallets, as defined, marked with indicia of ownership, as defined, from anyone except the indicated owner, unless specified information is provided; AB 1623 (Yamada) extends the authority of a county board of supervisors to charge fees to recover the costs of the county sealer until 1/1/18, and establishes or revises a number of device fee caps; AB 1631 (Monning) removes the sunset dates for the out-of-state attorney arbitration counsel program, making the program permanent; AB 1670 (Lara) permits a foreign heir to nominate an administrator of a decedent’s estate; AB 1674 (Ma) specifies standards for supervised visitation providers in child custody and visitation matters; AB 1727 (Silva) provides an expedited method of terminating a wage assignment for child or spousal support if the support obligee has died, the child has emancipated, there is no longer a current support order, or for other limited and specified reasons; AB 1750 (Solorio) permits licensed landscaped contractors to construct a rainwater capture system; AB 1775 (Wieckowski) increases the amount of a judgment debtor’s weekly earnings that are exempt from levy under an earnings withholding order from 30 times the federal minimum wage to 40 times the California minimum wage; AB 1776 (Fong) designates the Pacific leatherback sea turtle (Dermochelys coriacea) as the official state marine reptile and establishes October 15 as Pacific Leatherback Sea Turtle Conservation Day; AB 1783 (Perea) requires the Department of General Services (DGS) to publish on DGS’ Web site, and make available to local agencies for their use, a list of small businesses and microbusinesses that have been certified as such by DGS; AB 1960 (Dickinson) requires the Department of General Services to report on business participation levels by lesbian, gay, bisexual, and transgender owners in contracts starting 1/1/13; AB 1964 (Yamada) expands the definition of religious creed in the Fair Employment and Housing Act to include dress or grooming practices; AB 1966 (Ma) requires a mineral rights owners to provide specified notices to the owner of real property if the mineral rights owner intends to enter the real property to undertake surface-disrupting or non-surface-disrupting activities; AB 1998 (Achadjian) permits the board of supervisors to authorize county welfare directors to donate surplus computer equipment directly to persons receiving public benefits as specified; AB 2012 (John A. Perez) transfers the authority for undertaking international trade and foreign investments activities from the Business, Transportation, and Housing Agency to the Governor’s Office of Business and Economic Development including establishing and terminating any international trade and investment office; AB 2030 (Olsen) requires the California Building Standards Commission, as part of the next triennial building code cycle that begins on or after 1/1/13, to adopt standards for press boxes that must provide disability access and exempts press boxes less than 500 feet, as specified, from these requirements; AB 2041 (Swanson) requires a state agency that proposes promulgating regulations to include within the notice of proposed action a specified statement regarding the availability of narrative descriptions for persons with visual or other specified disabilities; AB 2060 (Bonilla) enhances the appointment and duties of a responsible adult authorized to make educational decisions for a child under the jurisdiction of the juvenile court; AB 2084 (Solorio) expands the types of blanket insurance that may be offered by California admitted insurers; AB 2131 (Olsen) adds tax collection to the kinds of course content eligible for the continuing education requirements of county treasurers and tax collectors; AB 2149 (Butler) prohibiting the use of so-called “gag clauses” in settlement agreements involving allegations of elder and dependent adult abuse; AB 2174 (Alejo) prioritizes the funding for the Fertilizer Research and Education Program; AB 2209 (Hueso) prohibits the placement of a dependent child outside of the U.S. with any person who is not the parent of the child, absent a judicial finding that the placement is, by clear and convincing evidence, in the best interest of the child; AB 2274 (Lara) limits abusive and frivolous lawsuits by extending the vexatious litigant statute to pro se parties who had legal representation at the time of filing; AB 2327 (Feuer) permits the Attorney General to issue cease and desist orders for violations of the Supervision of Trustees and Fundraisers for Charitable Purposes Act including failing or refusing to produce required records, making a material false statement, as specified, failing to file complete financial reports, or engaging in specified prohibited acts; AB 2358 (Hagman) permits the Ronald Reagan Centennial Capitol Foundation, in consultation with the Department of General Services, to plan a statue of Ronald Reagan in the State Capitol Building Annex; AB 2365 (Nestande) requires a court when making a child custody determination to consider either parent’s habitual or continual abuse of prescribed controlled substances and removes the sunset on drug testing; AB 2374 (Hernandez) prohibits a consumer credit reporting agency from charging any fee upon a consumer 65 years of age or older for placing an initial security freeze; AB 2393 (Davis) increases the low-income adjustments to the child support guidelines; AB 2406 (Buchanan) requires the Insurance Commissioner to publish on the Department of Insurance Internet Web site all requests for a finding of eligibility to seek compensation, and all findings of eligibility to be compensated, with respect to parties intervening in rate change request proceedings; AB 2445 (Dickinson) expands the purview of the Historic State Capitol Commission to include the State Capitol Annex and extends the sunset on the Capitol Area Committee which administers the Capitol Area Plan by an additional five years; AB 2452 (Ammiano) permits local government agencies to require elected officials, candidates, and campaign committees to file campaign disclosure reports online or electronically; AB 2464 (Gatto) requires owners of professional sports facilities to post notices of emergency contact information; AB 2492 (Blumenfield) expands the ability of the Attorney General and other government prosecutors to contest dismissal of false claims actions on the basis of public disclosure, consistent with federal law; AB 2508 (Bonilla) requires a state agency contracting for call center services for public benefit programs only serving applicants, recipients, or enrollees in those public benefits programs to certify that the work will be performed solely by workers employed in California; AB 2515 (Hill) strengthens procedures governing the awarding of grants from the Indian Gaming Special Distribution Fund to ensure that the funds are properly used to mitigate costs associated with tribal gaming; AB 2554 (Berryhill) provides that the revocation of a license shall not deprive the Contractors State License Board jurisdiction to proceed with disciplinary proceedings against a licensee; AB 2567 (Carter) permits an agency providing wastewater service to adopt a schedule of fees or charges authorizing automatic adjustments that pass through increases in wholesale charges for wastewater treatment or sewage treatment, as specified; AB 2570 (Hill) prohibits licensees of any board, bureau or program under the Department of Consumer Affairs from including any “regulatory gag clause” in civil settlement agreements; AB 2583 (Blumenfield) requires the Department of General Services (DGS) and the Department of Transportation (Caltrans) to develop and implement advanced technology vehicle parking incentive programs in specified DGS- and Caltrans-operated parking facilities to incentivize the purchase and use of alternative fuel vehicles in the state; AB 2612 (increases the amount that a party must deposit with a public entity when the party requests a peace officer, firefighter, state employee, or county employee to appear in civil court pursuant to a civil subpoena from $150 to $275; AB 2641 (Skinner) requires the Governor’s Office of Business and Economic Development (GO-Biz) to post on its Internet Web site information to assist a person in starting a nonprofit corporation and to assist nonprofit corporations to achieve compliance with the state’s statutory and regulatory requirements; AB 2654 (Morrell) clarifies the definition of mine under the mining lien statute; AB 2657 (Calderon) requires a transcript derived from an electronic recording of a court proceeding to include a designation of “inaudible” or “unintelligible” for those portions of the recording that contain no audible sound or are not discernible; AB 2671 (Assembly Jobs, Economic Development, and the Economy Committee) extends, until 1/1/18, the sunset date on the maximum allowable leverage of reserve funds necessary under the Small Business Loan Guarantee Program; AB 2680 (Assembly Agriculture Committee) deletes the sunset date of 1/1/13 for the Williamson Act lot line adjustments; AB 2684 (Assembly Judiciary Committee) promotes pro bono legal services and support of nonprofit legal aid for indigent persons needing assistance with civil matters; AB 2685 (Assembly Judiciary Committee) permits the State Bar to assess active member dues of $410 for 2013; AB 2690 (Assembly Judiciary Committee) replaces references to the California “Tort Claims Act” with references to the “Government Claim Act”; and AB 2693 (Assembly Governmental Organization Committee) adds the Arkansas Derby to the group of stake races in Horse Racing Law which are exempt from the 50-race per day limit on imported races, as defined, and clarifies in statue that the California Thoroughbred Trainers sponsors the backstretch workers’ pension plan.

Vetoed general government legislation of note included:  SB 447 (DeSaulnier) which would have prohibited a state agency from sending any communication to any individual that contains more than the last four digits of the social security number of that individual, unless required by federal law, beginning 1/1/15; SB 744 (Wyland) which would have exempted water submeters from testing and approval by the county sealer prior to installation if tested, as specified; SB 956 (Lieu) which would have established the Buy-Here-Pay-Here Automobile Dealers Act; SB 977 (Yee) which would have subjected a manufacturer of nail polish that violates provisions of existing law governing misbranded cosmetics, if convicted, to a maximum fine of $2,000 and/or imprisonment for one year in the county jail, and would have clarified that the provisions of the bill would not have applied to nail salons or to distributors, retailers or wholesalers of nail polish; SB 1476 (Leno) which would have permitted a court, in appropriate cases, to find that a child has more than two legal parents; AB 345 (Torres) which would have reformed how redevelopment agencies spend their Low and Moderate Income Housing funds; AB 1098 (Carter) which would have reallocated vehicle license fee revenues to recently incorporated cities and to cities that annexed inhabited territory; AB 1625 (Allen) which would have established the Transition to Organics Act of 2012 for the purpose of providing financial assistance to persons who transition their conventional farms to certified organic farms; AB 1852 (Campos) which would have permitted county boards of supervisors and city council to increase specified fees to fund domestic violence prevention programs; AB 1978 (Galgiani) which would have protected owners of private property and tow truck operators, when acting reasonably, from civil liability for the lawful removal of an unattended collection box placed on the property without written consent of the property owner; and AB 2389 (Lowenthal) which would have prohibited a contractor entering a personal residence from wearing a uniform that bears, or driving a vehicle that bears, a contractor’s name or logo, unless information is displayed, as specified.

GOVERNOR’S REORGANIZATION PLAN NO. 2 (GRP 2)

On 3/30/12, the Governor sent GRP 2 to the Little Hoover Commission that cut the number of state agencies from 12 to 10, eliminated duplicative and unnecessary entities and consolidated them with similar roles and functions.  The plan replaced the California Emergency Management Agency, Volunteer Agency, Technology Agency, State and Consumer Services Agency, and the Business, Transportation and Housing Agency, with the following three:

• The Government Operations Agency which is to be responsible for administering state operations, such as procurement information technology and human resources.
• The Business Consumer Services and Housing Agency which is to be responsible for licensing and oversight of industries, businesses, and other professions.
• The Transportation Agency which aligns all of the state’s transportation entities.

The Little Hoover Commission heard testimony on the proposed plan in April and May 2012.  On May 22nd, the Commission recommended that the Legislature allow the plan to go into effect with the understanding that the Governor and the Legislature develop concurrent legislation that address some of the concerns raised about preserving independence and oversight of some of the agencies and departments.  Without a vote to reject the plan by a majority vote of either house of the Legislature, the plan became effective on 7/2/12, and becomes operative on 7/1/13.  The Little Hoover Commission indicated that this was the most ambitious plan of the 36 reorganizations that they have reviewed since 1968.  The following are the specifics of the plan:

I. Transportation Agency

Eliminates the Business, Transportation and Housing Agency and creates a California Transportation Agency, consolidating seven entities into one agency – the Department of Transportation, Department of Motor Vehicles, California Highway Patrol, Board of Pilot Commissioners, Office of Traffic Safety, California High Speed Rail Authority, and the California Transportation Commission.

II. Government Operations Agency

Pulls state service agencies from the State and Consumer Services Agency and the Office of Governor and consolidates them into an agency that focuses exclusively on services provided to other state agencies and to state employees.  Departments included in the new agency include:  The Department of General Services, Department of Personnel Administration, State Personnel Board, Office of Administrative Law, California Public Employees’ Retirement System, California Teachers Retirement System, Victims Compensation and Government Claims Board, Franchise Tax Board, and the Department of Technology.  The plan moves the Building Standards Commission into the Department of General Services.

III. Business and Consumer Services Agency

Eliminates the State and Consumer Services Agency and establishes the Business and Consumer Services Agency.  Recasts the Department of Real Estate and the Office of Real Estate Appraisers as bureaus in the Department of Consumer Affairs.  Moves the Alcoholic Beverage Control Appeals Board, the Seismic Safety Commission, the Board of Chiropractic Examiners, and the California Horse Racing Board into the new agency.  Merges the Department of Corporations and the Department of Financial Institutions into a new Department of Business Oversight.  Relocates the Structural Pest Control Board from the Department of Pesticide Regulation into the California Environmental Protection Agency.

IV. Governor’s Office of Small Business and Economic Development (GO-Biz)

Relocates the Infrastructure and Economic Development Bank the California Film Commission, the Office of Tourism and the Small Business Guarantee Loan Program from the Business, Transportation, and Housing Agency into GO-Biz.

V. Other Structural Changes

Moves the Delta Stewardship Council into the Natural Resources Agency.  Moves the Public Employment Relations Board into the Labor and Workforce Development Agency; Moves certain licensing functions of the California Gambling Control Commission into the Department of Justice’s Bureau of Gambling Control. Creates an Office of Exposition Park that oversees the California Science Center, the African American Museum, and the Office of Park Management.  Moves CalRecycle from the Natural Resources Agency to the Environmental Protection Agency. 

The following legislation, enacted into law, made changes to the plan agreed upon by the Governor and the Legislature:  SB 1039 (Steinberg) changes the name of the Business and Consumer Services Agency to the Business, Consumer Services, and Housing Agency, and requires the Department of Housing and Community Development, the Department of Transportation, and the California Transportation Commission to coordinate state housing and transportation policies and programs to help achieve state and regional planning priorities, and to maximize co-benefits of infrastructure investments; AB 737 (Buchanan) recreates the Boating and Waterways Commission within the Division of Boating and Waterways which is located in the Department of Parks and Recreation and specifies that the Commission is to be comprised of seven members appointed by the Governor, and subject to Senate confirmation, who are to have boating-related experience, as specified; AB 1458 (Buchanan) retains the California Transportation Commission status as independent; and AB 1498 (Buchanan) maintains a direct reporting relationship to the Governor for the State Chief Information Officer and states legislative intent for the Governor to develop a transition plan for information technology procurement authority from the Department of General Services to the Department of Technology.

PROPOSITION 8 UPDATE:  California Marriage Protection Act

On 2/7/12, a three-judge panel of the Ninth U.S. Circuit Court of Appeals on a 2-1 vote affirmed the judgment in Perry v. Schwarzenegger which declared that Proposition 8 was unconstitutional by Circuit Court Chief Judge Vaughn R. Walker.  Proponents of Proposition 8 appealed the February 7th judgment on February 21st requesting that the case be reviewed by the full Circuit Court.  On June 5th, the full court refused to rehear the case.  However, the stay barring any same sex marriage remains in place.  On 7/30/12, the Proposition 8 proponents filed a petition to the U.S. Supreme Court to review the request.  At the time of this writing, the U.S. Supreme Court has indicated they will hear the case.  Thus, a probable final ruling will be forthcoming in 2013.